First Media to spend US$85m on growth

Publicly listed Internet provider and pay television company PT First Media plans to spend up to US$85 million in capital expenditures and boost its subscribers by 200,000 by the end of the year.

Finance director Thelma S. Victorio told reporters Wednesday the company would allocate 40 percentof the capital to expand its broadband network, and another 25 percent to set up modems and smart cards for subscribers.

The money will be spent on increasing Internet bandwith and content for television and Internet services, she said.

"We will extend our broadband network to 6,000 kilometers to reach 600,000 homes this year, up from last year's 400,000 homes," thelma said.

Last year, the company's broadband network was 3,700 kilometers, reaching 400,000 homes in Greater Jakarta, up fro 2,859 km serving 300,000 homes in 2006, she said. Thelma said the expansion would boost revenue, projected to reach Rp 800 billion (US$ 88 million) by the end of this year - almost double last year's Rp 435 billion. The company reported revenue of Rp 390 billion in 2006.

She said First Media's combined pay TV and Internet package, sold since February, would increase revenue this year, as it was the only company to offer such a package. "We offer a different service to our subscribers, they can enjoy both cable TV and the Internet from the same network, from us," Thelma said.

She said the integrated service was available from Rp 188,000 per month. Deputy president director Roberto Feliciano said with more than 139 subscribers, pay TV was the biggest contributor to the company's revenue last year, generating more than RP 215.34 billion.

He said FastNet Internet contributed Rp 89 billion to total revenue, while data communication services provided to 200 corporations brought in Rp 63.5 billion in 2007. Feliciano said advertising and other services contributed Rp 49.9 billion and Rp 17 billion respectively.

He said the pay TV service would continue to be the highest revenue-raiser for the company, which would also seek to expand Internet subscriptions andadvertising revenue from cable TV.

Feliciano said the different channels the company offered were attractive to advertisers who wanted a cost-effective way to reach segmented audiences.