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#49017 - 05 Apr 07 12:06 JP/Telecoms war hots up as 'Hutch' joins the fray
biznews Moderator Offline
Pujangga Besar

Registered: 24 Apr 08
Posts: 7508
Loc: Jakarta
Telecoms war hots up as 'Hutch' joins the fray

Andi Haswidi, The Jakarta Post, Jakarta

With the services on offer mostly the same, the tight competition in Indonesia's crowded wireless telecoms market has led to a no-holds-barred price war and massive ad spending.

This month, the war is about to get even fiercer with the established operators set to react to the arrival of upstart Hutchison Charoen Pokphand Telecom (HCPT), dubbed "Hutch" in the business.

HCPT is a subsidiary of Hong Kong-based global cellular giant Hutchison Telecommunications International (HTIL) and Thai agroindustry group Charoen Pokphand.

Through its GSM-based "3" brand, HCPT offers wireless access throughout Java, to be followed soon by other areas, with promo tariffs so cheap that they make a mockery of the generally accepted price distinction between GSM and fixed wireless CDMA -- CDMA has to date been cheaper due to its coverage limitations.

Local calls to other "3" users cost Rp 150 (1.6 U.S. cent) per minute, while calls to other operators cost Rp 1,000 per minute.

The new kid on the block is also running a "buy one, get three" promotion, meaning that if you buy Rp 10,000-worth of prepaid credit, you can make Rp 30,000-worth of calls.

This promo means that a one-minute local call only costs Rp 50, which is the same price as a one-minute call from Esia, the CDMA operation of Bakrie Telecom.

Hutchison has also been spending big on advertising, including running full-page color ads in the country's largest daily, Kompas, every day since the launch of "3" on March 29.

The other operators have hit back by running similar ads and promos. For example, Indosat's Mentari is offering a promo price of Rp 50 per 30 seconds until Aug. 31, while Excelcomindo's XL Bebas is offering a flat rate of Rp 25 per second for all calls, Rp 40,000 in free credit upon SIM card activation, and 50 percent discounts on credit top-ups.

On its initial startup, Hutchison has so far invested $400 million, said president Rajiv Sawney during the launch of 3 on March 29, and said he expected the figure to increase to about $1 billion next year.

"Analysts are predicting some 30 million new subscribers in Indonesia in the coming years. We believe we can secure a good share of that market," Sawney told the press during the launch ceremony.

At present, Telkomsel leads Indonesia's mobile market, with some 35 million subscribers, followed by Indosat with 16 million and Excelcomindo with 9 million.

Telkomsel, with its pre-paid product Simpati, charges Rp 1,500 per 30 seconds during peak hours and Rp 300 during off-peak hours, while its other product, As, costs Rp 1,500 per minute during peak hours and Rp 300 per minute during off-peak hours.

For advertising in all media, Telkomsel was the biggest spender in 2005 on Rp 93 billion, followed by Rp 223 billion in 2006, and is expected to fork out even more this year as competition increases, according to a survey by AC Nielsen.

Meanwhile, Indosat's other GSM product, IM3, costs Rp 500 per 30 seconds for local calls during peak hours and Rp 250 during off-peak hours. Last week, IM3 announced that it would invest up to $1 billion this year.

Following Hutchison's arrival on Indonesian shores, major Russian conglomerate, Alfa Group, is set to invest up to $2 billion on setting up yet another wireless telecoms operation later this year.

"We see that a lot remains to be done in Indonesia in order to increase mobile penetration. The telecoms market is overly concentrated. There's not enough competition in that sense, and that severely limits the development of the sector," said Alfa vice president Andrei Zemnitsky.
_________________________ Indonesian Business and Investment News Aggregator

#49023 - 05 Apr 07 12:10 Re: JP/Telecoms war hots up as 'Hutch' joins the fray [Re: KuKuKaChu]
Dilli Offline
Pujangga Besar

Registered: 26 Feb 06
Posts: 8044
Loc: Nearest Bar
So where the fuck is Starsky?
Menace to Sobriety

#49029 - 05 Apr 07 12:24 Re: JP/Telecoms war hots up as 'Hutch' joins the fray [Re: Dilli]
KuKuKaChu Moderator Offline
Pooh Bah

Registered: 09 Oct 05
Posts: 10790
Loc: Centre of the Universe
Quoting: Dilli
So where the fuck is Starsky?

you really show your age with jokes like that. (i only know because someone explained it to me)
KuKuKaChu: dangerously too sophisticated


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