Indosat expands and improves competitiveness

Indosat expands and improves competitiveness

JAKARTA (JP): PT Indosat, the state-owned international
telecommunications operator, is expanding its operations into
three telecommunication-related businesses while improving its
competitiveness domestically and globally, its president says.

Tjahjono Soerjodibroto said in a discussion at The Jakarta
Post yesterday that under its "1 plus 3" expansion programs,
Indosat will continue focusing its operations on international
telecommunication services besides expanding into the development
of telecommunications facilities within the country and in the
region as well as providing mobile telephone services.

In dealing with the development of domestic telecommunications
facilities, Indosat has joined a consortium which will
participate in a tender for the establishment of two million
telephone lines opened by the government. The consortium includes
cooperatives as well as domestic and international
telecommunications firms, he said.

Indosat is also eying telecommunication projects offered by
countries in the region, he said.

Indosat recently won a tender for telecommunication facility
construction and refurbishment in Cambodia.

"We are also considering involvement in the development of the
global mobile satellite system," Tjahjono said, adding that
Indosat is participating in the Inmarsat-P project by placing an
equity of $20 million.

"We are evaluating a number of global mobile satellite system
projects including ACeS, Odyssey, Global Star and Iridium," he
said.

In cellular telephones, Indosat will run mobile telephones
using the global system for mobile telecommunications (GSM)
digital technology in cooperation with PT Telkom, the state-owned
domestic telecommunication company, later this year, he said.

He said that besides diversifying its operations with an aim
of increasing its added value, Indosat is also taking measures to
improve its efficiency to face competition both domestically and
internationally.

Domestically, Indosat now has a competitor -- PT Satelindo,
which also provides services for international telecommunications
and cellular telephones using GSM technology.

Satelindo is 60 percent owned by PT Bimagraha Telekomindo, an
affiliate of the Bimantara Group, 30 percent by Telkom and 10
percent by Indosat.

"There is no difference in prices set by both Satelindo and
Indosat, so we are competing on the quality of services,"
Tjahjono said.

Profit

In a press conference held on Wednesday, Tjahjono said that in
the fourth quarter of last year, the number of Indosat's
subscribers for international calls increased by four percent to
303,000 over the previous quarter.

The company reported a 14.9 percent increase in an after-tax
profit to Rp 289 billion ($131.3 million) last year from Rp 251.5
billion (US$114.3 million) in 1993.

Indosat's total revenues also increased to Rp 909.3 billion
(413.3 million) from Rp 765.2 billion ($347.8 million) in 1993.
About 92.9 percent of the revenues came from international calls.

Indosat was established through the acquisition in 1980 of the
American Cable and Radio Corporation, a subsidiary of ITT of the
United States, which was set up in 1967, by the government.

Indosat floated its shares both on the domestic capital market
and on the New York Stock Exchange last October.

The company raised $799 million from the sale of 25 percent
of its shares in the United States and around Rp 650 billion
($295.4 million) from the sales of another 10 percent of its
shares on the local capital market. (icn)