Hay Group named as Indosat consultant

Hay Group named as Indosat consultant

Dow Jones, Jakarta

State-owned telecommunications company PT Indosat said on Monday it has named U.S. company Hay Group Ltd. as its strategic management consultant.

Indosat plans to change its focus from overseas and domestic fixed-line services to cellular services. Indosat's chief executive Widya Purnama said Hay Group will advise Indosat in this transformation process.

Indosat indicated its intended change of focus soon after it took over cellular unit PT Satelindo, in the middle of last year.

Purnama said Indosat expects the change of focus to enhance its fundamental value, strengthen its financial structure, and improve its competitiveness in cellular business and efficiency in capital expenditure.

As part of the move, Indosat also plans to merge its two cellular units Satelindo and Indosat Mobile Multimedia, or IM3.

Indosat is 42 percent owned by Singapore Technologies Telemedia Pte. Ltd., a subsidiary of Singapore Technologies Ltd, and the Indonesian government holds a 15 percent stake.

The company said it expects its cellular phone subscription rate to rise to 4.5 million this year from 3.6 million last year.

Only 3 percent of Indonesia's 200 million population currently use a mobile phone. Analysts expect the number of Indonesian cellular phone subscribers to nearly double to 21 million in 2004 from 11 million last year.

Indosat said it will name financial and legal advisers to support the transformation of the company soon, but didn't say exactly when.