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ublicly listed telecommunications operator PT Indosat has said it aims to improve the contribution of its data service to the company'€™s overall revenue by up to 60 percent in the next four years, on the back of growing data consumption.

'€œAs we get more mature, our target is to be more like the advanced mobile operators in South Korea and Japan, where data services have brought in approximately 60 percent of their revenue,'€ Indosat CEO Alexander Ruslie said.

'€œWe should have already moved close to that number in three to four years'€™ time, or even sooner, given that novel services tend to see an accelerated pick-up rate among Indonesian consumers,'€ he said.

He added that currently, the industry saw data services contribute up to 30 percent to overall revenue.

As of September last year, Indosat saw multimedia, data and internet (MIDI) services bringing in
Rp 2.4 trillion (US$197 million), or 13.6 percent of its total revenue.

Meanwhile, information from the International Data Corporation (IDC) estimates that mobile data subscriptions in the telecommunication industry reached 58.7 million subscriptions as of June 2013. The number is expected to rise by around 30 percent annually, up to 125 million by 2017, although growth had reached 91.5 percent between the first halves of 2012 and 2013.

Alexander added that the operator '€œmay see a triple-digit growth in traffic'€ as it pushed the modernization of its networks further toward completion this year.

Indosat has been enhancing its networks by introducing Universal Mobile Telecommunications System (UMTS) technology for its third generation (3G) network that occupies the 900 megahertz frequency. Through the combination of the technology and the frequency it is applied on, Indosat expects signal coverage to widen.

'€œWe have completed the modernization of our networks in Bali, and are currently in the process of
tuning up our networks in Jakarta,'€ he said.

He further added that, this year, Indosat would push for the completion of its modernization projects in cities in East Java such as Surabaya, and cities in West Java, including Bandung, Sukabumi and Garut.

'€œWe will also get to work on our networks outside of Java, such as those in Banjarmasin, Batam, Lampung, Medan and Palembang,'€ he said.

He further noted that, to finance these projects, Indosat has '€œkept the capital expenditure guidance'€ close to that of last year.

The mobile operator allocated roughly $800 million for its capital expenses in 2013, the majority of which went to enhancing its networks.

'€œWe are also aiming for our business to grow higher than the predicted 6 percent to 7 percent industry growth,'€ he added.

'€œIndosat is also targeting growing its business-to-business [B2B] above the estimated 15 percent to 16 percent industry growth,'€ he noted.

As of September 2013, Indosat saw revenue climb 9.4 percent year-on-year to Rp 17.8 trillion. However, the operator suffered a Rp 1.7 trillion net loss which it considered an '€œaccounting'€ loss due to pressure from its foreign-denominated debts of nearly US$1 billion in the first six months of last year.

Alexander added that the operator has kept capital expense budgets fairly similar to last year, despite inflation and a still-elevated rupiah exchange rate, because the mobile operator was not expecting major US-dollar denominated purchases.

'€œNot all our expenses are in US dollars. In general, only about 50 percent of our capital expenditures are US-dollar denominated,'€ he said.

He added that if rupiah exchange rates weakened close to the election period, Indosat could defer US dollar payments to after this year.

Indonesia will hold general elections this year, the first round of which is scheduled for April while the second round is slated for midyear.

'€œHowever, there is usually a spike in business around the elections. During the elections five years ago, the spike was in voice services but, this year, we will have to see whether the growth is still in voice, or has already shifted to data,'€ he said.

'€œThis all depends on the way campaigners wish to connect with their constituents,'€ he noted.