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.