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ublicly listed cellular operator PT Smartfren Telecom (FREN) plans to spend around Rp 10 trillion (US$854.1 million) to migrate its 1.9 GHz-network frequency to 2.3 GHz, as requested by the government as well as to prepare the launch of its 4G network.

Smartfren deputy CEO Djoko Tata Ibrahim said on Monday that the Rp 10 trillion expenditure would be funded from various sources, including through vendor financing and syndicated loans from China Development Bank (CDB).

'We will probably also find other sources of funding,' he said, declining to reveal details of the proportions of the funding.

In June, Smartfren announced that it would issue mandatory convertible bonds valued at Rp 8 trillion to finance future operations, one of which is to provide technology for the frequency diversion.

The firm's director Merza Fachys said that Smartfren was currently reviewing as many as five bidders who had submitted their bids for the migration.

'We expect that we will finish evaluating all the bidders by the end of this month so that we can start the migration soon,' he said.

Merza said that apart from the Rp 10 trillion, his firm had already allocated between Rp 3 trillion and Rp 5 trillion to pay usage fees for the 2.3 GHz-network frequency.

The Communications and Information Ministry previously required Smartfren to divert its operation in the 1.9 GHz spectrum to 2.3 GHz to avoid frequency interference in the 1.9 GHz.

Merza said he expected the frequency migration would be complete within two years, allowing Smartfren to deliver its 4G services in 2016.

To cater to the anticipated growing need for the 4G network, Smartfren will start manufacturing mobile devices next year with 4G-enablers.

Smartfren is also adding a new portfolio to tap a greater market share in the country by launching its first Android-based QWERTY phone, the G2 QWERTY, with a price tag of less than Rp 1 million.

Head of Smartfren's smartphone division, Sukaca Purwokardjono, said that his firm would provide 50,000 units of the G2 QWERTY for initial sales.

'As of August, we have already sold 1.8 units of smartphones. With the G2 QWERTY, we aim to sell 3 million units more by year-end,' he said.

Smartfren, controlled by the Sinar Mas Group, had 11.7 million subscribers as of the first half of this year. It is aiming to have signed up around 15 million subscribers by the end of the year.

The company, which has suffered a string of losses since 2011, successfully slashed its losses by up to 22 percent in the first six months of this year.

The firm's total losses declined to Rp 652.14 billion in the January-to-June period this year from Rp 831 billion in the same period last year.

Its revenues grew to Rp 1.43 trillion from Rp 1.13 trillion year-on-year.

Smartfren's shares remained unchanged closing at Rp 66 on
Monday.