Bakrie Telecom to sell affordable cell phones

The Jakarta Post, Jakarta

PT Bakrie Telecom, whose cellular business trades under the Esia brand, is to sell handsets at relatively affordable prices, in cooperation with China-based vendor Huawei, so as to help boost the number of its subscribers to 3.6 million by the end of the year.

Vice president Erik Meijer said Monday that the handsets, plus Rp 50,000-worth of Esia talktime, would be sold at Rp 199,000 (US$21), excluding tax.

The handsets, he added, were locked and could only be used on the Esia network.

"We won't make any profit on the handset sales," Meijer claimed.

However, he said that Bakrie Telecom was not subsidizing the sales of the handsets either, as it only provided telephone numbers and sales promotion services, while Huawei provided the handsets.

"During the first stage, we will make 500,000 handsets available in our outlets across Indonesia, and hopefully all will have been sold by the end of this year."

"If the sales are good, we will then cooperate with other vendors that can offer low prices next year," he said, explaining that his company was involved in "bundled" sales arrangements with a number of cell phone vendors, including LG.

Meijer said that higher sales would help increase the use of mobile phones in Indonesia. He estimated that out of the 80 million cell phone numbers sold nationwide, only 40 million were actively used as many people stopped using their phone numbers after their expiry dates and bought new numbers.

"This phenomenon has increased the growth of cell phone numbers, but actually it doesn't increase the number of subscribers. We hope that bundled sales of cell phones at low prices will encourage people to become loyal subscribers."

The number of Esia subscribers as of the first semester of 2007 stood at 2.25 million, a 700,000 increase from the 1.55 million recorded in 2006.

"I'm optimistic that our target of 3.6 million subscribers by the end of 2007 can be achieved as handset sales usually increase in the second semester of the year."

The company is aiming for 875,000 new customers in Greater Jakarta, West Java and Banten, and 500,000 others in 17 regions where Bakrie Telecom plans to expand, including Surabaya and Malang in East Java, and Semarang and Surakarta in Central Java.

The company will also launch Esia services in Medan and Yogyakarta later this week, and in Padang in the middle of the month.

"We will provide 30,000 numbers in each new city, and hopefully 75 percent of them will be sold." (14)
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