Alfia Rahmaniar, Jakarta
NMT Cellular Network Regains Market Initiative
Nokia Telecommunications Oy of Finland has struck a US$30 million deal with PT Mobile Selular Indonesia to develop an enhanced Nordic Mobile Telephone (NMT) 450i cellular network in Indonesia.
The first stage of the cooperation agreement struck through Nokia's subsidiary in Indonesia, PT Nokia Telecommunications will provide an 80,000 lines capacity that will cover Lampung in South Sumatera, Java, Bali and Lombok in West Nusa Tenggara Island. The company expects to soft launch its analog NMT450i system in October 1996 and begin full operation by early 1997.
Under the new contract, Nokia will dispatch, install and arrange the NMT 450i main network including Nokia's DX 200 MTX switching technology, radio base station, operations and processing center plus complete microwave transmission network. The contract also includes technical support services provided by Nokia for software and hardware for a five-year period after the initial launch.
"NMT technology is highly suitable for Indonesia because of the country's size and NMT's ability to cover wide areas cost effectively," said Risto Poskiparta, President Director of PT Nokia Telecommunications.
An advanced NMT 450i system uses a higher power and lower frequency technology (479 483 MHz and 489 493.5 MHz), and offers up to four times the coverage per base station of Mobisel's nearest competitor.
Carlson Smith, executive advisor and chief officer for Mobisel, said that for the same coverage, the investment cost for the NMT 450i system was one-third cheaper than for the digital GSM system, and 50% less than an analog AMPS system.
Before the deal, Mobisel was the only NMT 450i licence holder in Indonesia. The company will now start to build a total of 145 radio base stations offering nationwide coverage with an investment of about $150 million. By the year 2000, Mobisel expects to have 300,000 subscribers accounting for 15% of cellular market share which will reach about two million subscribers, said Smith.
Indonesia presently has two other implemented cellular system besides NMT system, digital GSM (Global System for Mobile) technology from Europe and analog AMPS (Advance Mobile Phone System) technology from the US. Currently three nation-wide mobile cellular operators use GSM technology and three other operators use AMPS technology.
New Image
The new management at Mobisel together with the advanced technology of the NMT 450i network are expected to unveil a new image for NMT telecommunication system in Indonesia, offering better coverage and service among other developments; the latest NMT system handsets on the market include power saving features that include extended battery life for the small handheld terminals.
Mobisel received a $60 million credit facility from Nissho Iwai International (Singapore) Ltd, to finance the construction of stage one of Mobisel's nationwide cellular network. The five year term is a sign of Nisso Iwai's expectation of a share in the venture.
The company has also signed an agreement with Logica of the United Kingdom to implement the Business Support and Control System (BSCS), a customer service and billing package provided by LHS of Germany.
Mobisel plans to target firstly the cities and then the relatively untouched rural markets which have afforded limited coverage by other cellular operators.
With a population of 200 million the world's fourth most populous country Indonesia is considered to have the lowest telephone penetration rate with the current fixed telephone density per 100 people standing at a mere 1.79 per cent.
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