T

he largest mobile phone operator PT Telekomunikasi Selular (Telkomsel) said the company was back on track in achieving their business targets after going through a seasonal slump in the first quarter.

Alex Sinaga, the CEO of Telkomsel, said the telecommunication operator started the year with a dip in subscription numbers.

'Our subscription numbers sank by around 4 million during the first quarter owing to seasonal trends,' he said.

Operators often see that business in the first quarter is slower, after the end of seasonal festivities.

However, Alex pointed out that the growth in subscription numbers was back on track in the second quarter of the year.

'We have got nearly 3 million new subscriptions within the past two months,' he said.

He added that the accretion of new subscriptions would become more pronounced during the upcoming Lebaran season, when people significantly increased their communication by phone.

'And that is why we have been ramping up efforts to increase our subscription numbers to 136 million by the end of the year,' he said.

Telkomsel aims to increase subscription numbers by up to 10 percent by the end of the year as compared to last year.

With a subscription number of at least 125 million, Telkomsel has come to dominate the mobile operator market with its 40 percent and above share.

Telkomsel earned Rp 54.5 trillion in revenues throughout 2012, and booked an earnings before interest, tax, depreciation and amortization (EBITDA) of Rp 30.6 trillion.

Telkomsel and two other major mobile phone operators, PT Indosat (ISAT) and PT XL Axiata (EXCL), form the big three operators that own 70 percent of the urban mobile operator market.

Alex added that Telkomsel would achieve their subscription target this year by constructing more third generation (3G) base transceiver stations.

Base transceiver stations (BTS) connect mobile phones with the network and those running on 3G technologies could transmit higher volumes of data traffic at faster speeds.

Operators across the board have been ramping up the number of their 3G transceivers to prepare themselves for the data boom as an increasing number of consumers embrace mobile Internet.

Alex noted that 70 percent of the 15,000 new base transceiver stations (BTS) the operator would erect this year would run on 3G mobile broadband technology.

'As of May, we have deployed 6,000 new transceivers in total,' he said.

With the additional transceivers, Telkomsel is expected to augment their overall transceiver number by 27.6 percent while growing their amount of 3G transceivers by 36.6 percent, when compared to end of 2012 figures.

Alex added that the additional transceivers would improve coverage, which would in turn allow the operator to increase subscriptions.

'We have established facilities in districts where telecommunication is sparse because, although these places may not always be viable for business, their economies benefit much from telecommunication,' he said.

'And economic viability will turn into business viability down the line,' he said.

He added that the eastern part of Indonesia was the least connected with telecommunication facilities due to the sparsely located population hubs. 'But we have set up facilities to provide coverage in 95
percent of Indonesia,' he said.

Overall, SIM card penetration has surpassed 120 percent although the data is skewed, given that mobile phone penetration in Java is higher than other areas.

Alex added that Telkomsel has spent at least one third of its Rp 10 trillion annual capital expense budget as of May to fund its expansion.

'We will spend 80 percent of our overall capital expense fund on strengthening our network,' he said.