Indosat profit more than doubles

The Jakarta Post, Jakarta

Publicly listed PT Indosat, the country's second largest telecommunications company, announced on Friday that net profit in the first nine months of this year more than doubled as compared to the same period last year on higher revenue from the cellular phone business.

The company's net profit from January to September rose significantly to Rp 1.37 trillion (US$152 million) from Rp 556 billion in the same period last year. Operating revenues surged by 29.8 percent to Rp 7.8 trillion from Rp 6.01 trillion.

"The strong nine month performance is mainly attributable to the growth in cellular business," said Indosat vice president director Ng Eng Ho in a statement.

Indosat cellular subscribers soared by 78.5 percent to 8.97 million as of the end of September this year compared to last year.

The total number of the company's cellular subscribers is expected to reach at least 9.5 million by the end of 2004, up from 5.2 million in 2003.

According to the Indonesian Association of Cellular Telephone Operators, there will be about 28 million cellular subscribers by the end of the year throughout the country, and 40 million next year, mainly spurred by the wider availability of cellular services and lower rates.

Indosat, which has three cellular brands including IM3, Matrix and Mentari, currently has a market share of about 30 percent.

The company said 68.5 percent of its revenues from operation were contributed from its cellular business, 16.4 percent from international call service, 14.2 percent from multimedia and internet business, and the remaining 0.9 percent from other businesses.

Regarding growth in its international call service, Indosat said there was a slight growth of 2.1 percent in terms of usage in minutes, despite a 15.7 percent decline in terms of outgoing traffic due to the stiff competition.

Indosat has previously said its market share for its international service, which was once one of its main businesses, is likely to decline 50 percent in the next couple of years from the current 79 percent.

The decline is mostly caused by the rapid increase of international call services using voice over internet protocol (VOIP) and a head-to-head competition with archrival PT Telkom, the country's largest telecommunications firm.

Indosat also announced that there were currently 22,500 subscribers for its newly launched fixed wireless access service called StarOne.

Indosat is 41.94 percent owned by Singapore-based STT Telemedia, 15 percent by the government and the remainder by the investing public.

The company's shares ended lower by Rp 25 to Rp 4,725 on the Jakarta Stock Exchange on Friday.