As part of its aggressive expansion plans, growing CDMA operator PT Bakrie Telecom is set to invest about Rp 1 trillion (about US$105.2 million) to develop its telecommunications infrastructure.
Bakrie Telecom president Anindya N. Bakrie said Friday that the company would use about Rp 600 billion of the proceeds from its initial public offering (IPO) to partly finance the expansion plan.
"The cash from the IPO will be part of the Rp 1 trillion to be spent this year on investment," he said at a press conference following the listing of the company's shares on the Jakarta Stock Exchange (JSX).
The company sold about 5.5 million new shares, about 29.29 percent of its total shares, at Rp 110 per share during the IPO two weeks ago.
Anindya also said that the firm would issue warrants in August to raise an additional Rp 150 billion, and would consider other possible financing schemes to achieve the investment target.
Bakrie Telecom, under the brand name Esia, now provides mobile services on the 800 MHz frequency to almost 400,000 customers in Jakarta and Bandung.
The company will also expand its services to 15 cities outside Jakarta, West Java and Banten, bringing on board a total of 1.3 million additional customers. It has signed an agreement with another telecommunications operator, PT Indosat, to use the latter's network in these areas. In return, Indosat will be able to use Esia's network to provide coverage in Jakarta, West Java and Banten.
Although Bakrie Telecom suffered total losses of Rp 112 billion up to September last year, Anindya was optimistic that the firm would turn the corner this year.
Bakrie Telecom is also one of five companies participating in the government tender for 3G high-speed mobile telecommunications services.
The Directorate General of Posts and Telecommunications confirmed Friday that Bakrie Telecom, along with PT Telkomsel, PT Exelcomindo, PT Telkom and Indosat, had passed the pre-qualification process in the 3G competition. They will now submit final bids on Tuesday and Wednesday.
If Bakrie Telecom wins a 3G license, it will finance the construction of its 3G infrastructure from other financial sources, Anindya said. "But this is an entirely different project from our network expansion this year. Whatever happens as regards the tender, it will not affect our plan to develop our CDMA infrastructure in West Java and Banten," he said.
The Jakarta Post, Jakarta
February 04, 2006