Indosat reports strong profit

Indosat reports strong profit

Dow Jones, Jakarta

Publicly listed telecommunications firm PT Indosat said on Friday its first quarter net profit rose significantly due to an increase in cellular revenue and gains from a stake sale.

Net profit jumped to Rp 556.4 billion (US$65.46 million) from Rp 53.8 billion a year earlier.

Operating revenue rose 32 percent to Rp 2.52 trillion from Rp 1.90 trillion during the period, thanks to an increase in contribution from cellular services, which rose 64 percent to Rp 1.72 trillion from Rp 1.05 trillion a year earlier.

Indosat's cellular subscribers have increased by 10 percent to total 6.56 million at end-March, from 5.96 million at end- December.

The company expected the number of its subscribers to increase to 25 million over the next five years as it benefits from the low cellular penetration in the country.

The company also attributed the higher net profit to gains from the sale of its 30.55 percent stake in PT Mitra Global Telekomunikasi Indonesia, or MGTI, for around $60 million.

"Our first quarter results showed continuing cellular business growth, while we look into new initiatives to maintain our other business," Indosat President Widya Purnama said in a statement.

However, Indosat's other business, international call services, saw its revenue decline during the period due to tougher competition from voice over Internet protocol, or VOIP, operators.

Revenue from international call services fell 15 percent to Rp 440 billion from Rp 515.7 billion a year earlier.

Singapore Technologies Telemedia owns a 42 percent stake in Indosat.