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)