C

ompetition among cell phone operators is indeed becoming stiffer, prompting them to prepare large sums of fresh funds to strengthen their positions in the market.

Just take a look at the increasing volume of capital expenditure of leading operators for next year and you will agree that they are well prepared.

Telkom, for instance, has prepared a capital expenditure of about Rp 21 trillion (US$2.2 billion) for 2010.

Not wanting to lose out in the race, Indosat has also increased its expenditure for next year to $720 million, a 20 percent increase.

In the meantime, PT Excelcomindo Pratama Tbk (XL) is boosting its capital expenditure to $500 million, which is an increase of 66.6 percent from this year's $300 million. Another major player, PT Bakrie Telecom Tbk (BTEL) has prepared $200 million or Rp 1.8 trillion.

Generally, the operators are preparing most of the capital expenditure for the development and expansion of their networks. BTEL, for example, will develop another 1,000 base transceiver stations next year. Recently, it spread its wings for its service for Esia and Wifone customers to cover Mataram in Lombok, West Nusa Tenggara.

This expansion naturally widens the service coverage area of Esia and Wifone in eastern Indonesia, which includes Makassar and Manado in Sulawesi; five regencies in Bali; Balikpapan and Samarinda in East Kalimantan; Banjarmasin and Martapura in South Kalimantan; and Pontianak and Singkawang in West Kalimantan. This year, Bakrie Telecom's service coverage also includes regency capitals such as Pematang Siantar, Kisaran, Tanjung Pinang and Madiun.

The latest news in this service business is from Telkom, which will build the Mataram-Kupang cable network, a 1,041-km fiber-optic network backbone that will be part of the Palapa Ring configuration. This cable system by Telkom will speed up its service expansion in eastern Indonesia.

The development of telecommunication infrastructure in eastern Indonesia obviously has strategic value. However, the development of such infrastructure in this area has not been as fast as in the western part of Indonesia due to the difficult conditions there. With thousands of small islands in eastern Indonesia, the development of services is quite a challenge.

The 1,041-km Mataram-Kupang fiber-optic cable network will be undersea and have a capacity of 300 Gbps and six landing points in Mataram, Greater Sumbawa, Raba, Waingapu and Kupang as well as 810 km of land network with 15 hubs in the following cities: Mataram, Pringgabaya, Newmont, Taliwang, Greater Sumbawa, Ampang, Dompu, Raba, Labuhan Bajo, Ruteng, Bajawa, Ende, Maumere, Waingapu and Kupang.

Meanwhile, Indosat has also officially commenced the operation of its latest backbone telecommunication transmission system, that is, the Jakabare Submarine Cable Communication System (SKKL Jakabare) and the Jakabare Palapa-D satellite, both of which are proof of Indosat's commitment to keep innovating by enhancing its telecommunication network quality and reliability.

SKKL Jakabare (JAva-KAlimantan-BAtam-SingapoRE) is a more than 1,300 km of sea cable connecting Jakarta, Pontianak (Kalimantan), Batam and Singapore. With the operation of this submarine cable, Indosat now has additional bandwidth capacity of 80 Gbps in the initial stage, which will be used for both IP (Internet Protocol) based services as well as non IP.

The SKKL Jakabare system has four landing points on each island: Tanjung Pakis (Karawang, West Java), Kakap River (Pontianak, West Kalimantan), Tanjung Bemban (Batam) and Changi (Singapore).

In the meantime, the Palapa-D satellite, which was recently launched from Xichang, China, is orbiting at 113* East Longitude. With the operating combination of the Palapa-D satellite and SKKL Jakabare - which complement each other and bring added value while expanding the terrestrial network service and voice and data communication - Indosat now covers the entire area of Indonesia with almost no blind spots.

XL has also enhanced its network coverage and quality by using the hardware and software provided by Juniper Networks, Inc., which is a leading company in the network field. XL uses M Series Multiservice Routers and J Series Services Routers to boost its IP network core and MPLS.

Since the launch of its 3G mobile service in September 2006, Excelcomindo has tripled the number of its customers from 8.4 million to 24.7 million in June 2009. Its network usage has also increased 10 times since the end of September 2006 from 25 minutes per customer per month to 268 minutes per customer per month in June 2009.

Currently, there is indeed tough competition among operators in providing services, because the number of customers has gone up to reach 130 million, more than half the country's population.

Therefore, the operators have wisely decided to strengthen their Internet services, because currently the number of Internet users is only 30 million. Another wide open niche is data transmission technology. However, the huge amount of funds required for building telecommunication infrastructure is hampering development in this sector.

The presence of WiMAX, the provider of sophisticated technology for data services, poses another aspect of competition for mobile operators, but today the penetration of 3G usage is quite prominent.