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PT Telekomunikasi Selular, the country’s biggest cellular network operator, is looking to boost Internet use among customers to offset slowing revenue growth from its traditional voice and SMS business.

Sarwoto Atmosutarno, president director of the company, also known as Telkomsel, said on Tuesday that data services were expected to account for more than 10 percent of revenue this year, up from 7 percent last year.

“We aim to keep increasing it in the coming years,” Sarwoto told the Jakarta Globe.

More people are using smartphones to surf the Internet, accessing such sites as Facebook and Twitter, and boosting revenues at companies like Telkomsel, which charge for the data transmitted.

Sarwoto said data will be an important source of revenue growth as the voice and SMS market nears saturation. Other cellular operators are also looking to increase revenue from data.

He explained there are already about 165 million cellphone subscribers out of a population of 240 million, and the market is expected to reach full saturation of 200 million subscribers in the next two years. “There is now limited room for expansion [of the subscriber base],” he said.

Telkomsel has said it aims to increase the number of its subscribers to 103 million this year from about 85 million now.

Akhmad Nurcahyadi, an analyst at PT BNI Securities, acknowledged the huge growth potential of the data-service business but warned that growth could be held back by a lack of infrastructure.

To help boost data revenue and cope with the rising number of subscribers, Telkomsel has earmarked Rp 13 trillion ($1.42 billion) toward capital expenditure this year, including 60 percent for infrastructure development, including broadband wireless technology.

Telkomsel will test the LTE, or Long Term Evolution, technology, which is a new high-performance air interface for cellular communications systems. LTE is the last step toward fourth-generation (4G) cellular technology, which will have a download speed of 100 megabytes per second, about six times faster than the 3G speed.

Sarwoto said the fact that most Indonesians lived on 6,000 islands has made it more difficult and expensive to build the necessary infrastructure.

“It is four times more expensive to plant undersea fiberoptic cable compared to land,” he said.

Sarwoto said telecom companies needed government support to build infrastructure. “Sadly, there are no incentives from the government for this,” he said.

Another challenge for the cellular operators will be persuading subscribers to switch from using basic handsets, which can only provide voice and SMS services, to smartphones that can provide Internet access.

“We will try to provide affordable smartphones to our subscribers to improve growth in data use,” Sarwoto said.

Telkomsel, which controls more than 50 percent of the domestic cellular market, has yet to release its 2009 financial results.

The company is expected to release the numbers along with its parent company, PT Telekomunikasi Indonesia (Telkom), at the end of this month or in April.

Through the first three quarters of 2009, Telkomsel booked revenue of Rp 30.34 trillion, up 11 percent from the same period a year earlier.