Indosat sees cellular users to reach 4.5m

Indosat sees cellular users to reach 4.5m

Dow Jones, Jakarta

Telephone operator PT Indonesian Satellite Corp. expects its cellular phone users to rise to 4.5 million this year from 3.6 million last year, Chief Executive Officer Widya Purnama said on Monday.

Widya told reporters that Indosat expects cellular customers to rise 21 percent-23 percent annually for the next five years.

Indosat has two cellular units - PT Satelit Palapa Indonesia, or Satelindo, and PT Indosat Multi Media Mobile. The telephone operator is preparing to merge the two companies later this year.

Indonesia's cellular-phone penetration rates are among the lowest in Southeast Asia. Some analysts expect cellular-phone subscribers in the country to nearly double to about 21 million in 2004 from about 11 million last year.

Indosat this year will also install 700,000 fixed telephone lines in Jakarta and Surabaya after installing 20,000 lines last year, he said.

Indosat's main business is overseas call services. But last year it entered the domestic fixed-line sector after the government ended the monopoly of its sister company, PT Telekomunikasi Indonesia.

Singapore Technologies Telemedia Pte. Ltd. in December bought a 42 percent stake in Indosat from the Indonesian government.

Indosat's Finance Director Junino Yahya said that the company plans to invest around US$330 million in its cellular and fixed- line businesses this year using internal cash.

If demand for cellular-phone and fixed-line services are higher than expected, Indosat may invest more, he said.

Indosat may seek bank loan or issue bonds to raise the additional cash if needed, he said.

The company's management is seeking the government's approval to distribute 30 percent of last year's net profit as dividends, down from 40 percent of the 2001 net profit paid out to shareholders last year, Junino said.