Indosat to set up new cellular phone venture

Indosat to set up new cellular phone venture

JAKARTA (JP): The country's international telecommunications
carrier PT Indonesian Satellite Corporation (Indosat) plans to
set up a new subsidiary which will operate an improved digital
mobile cellular telecommunications system.

The company's president, Tjahjono Soerjodibroto, said here
yesterday that the planned subsidiary, which will operate the
Personal Communications System (PCS)/Personal Handy-phone System
(PHS), would be established with funds to be raised from the sale
of Indosat's shares in PT Telkomsel.

PHS is a new mobile phone system developed in Japan, while PCS
in Europe. Both work at 1,900 megahertz.

Indosat recently announced its plan to sell 7.1 percent of its
shares in Telkomsel, which operates a global system of mobile
telecommunications (GSM) cellular telephones.

Telkomsel is currently 42.72 percent owned by state-owned PT
Telkom, 35 percent by Indosat, 17.28 percent by PTT Telecom of
the Netherlands and 5 percent by PT Setdco Megacell Asia.

The shares will be offered first to PTT Telecom and Setdco,
owned by businessman Setiawan Djody, because Telkom has decided
not to increase its equity in the company.

Because Telkomsel, which plans to start full GSM operation in
Jakarta later this month, is now worth about $1.9 billion, while
Indosat's offer is estimated to have a value of $47.5 million.

Indosat last year acquired 1.4 percent of the shares in Astel,
a PHS operator in Japan.

Profit

Indosat yesterday also reported a net profit of Rp 114.6
billion (approximately US$49 million) in the first three months
of this year, 8.62 percent up from the same period in 1995.

Tjahjono said Indosat's earnings per share were Rp 110.7, or
$0.47 per American Depository Receipt, up 8.7 percent from the
corresponding period of last year.

"The first quarter's results are based on the performance of
our international telecommunications core business," he said.

"Indonesia's strong economic growth and consistent improvement
in customer services were the real engines behind this. Our new
ventures in international telecoms support businesses have also
got good prospects."

He said the company's international telephone traffic rose 18
percent from 114.1 million minutes in the first quarter in 1995
to 134.7 million minutes in the first quarter of this year.

The 18-percent increase in international telephone traffic is
a little higher than the 17.1 percent rise in 1995.

Tjahjono said that Indosat's operating revenues rose 16.45
percent to Rp 278.1 billion in the first quarter from Rp 238.8
billion in the same period of last year because of a 14.8-percent
rise in international telephone revenues and a 42.3-percent
increase in other telecommunication service revenues.

The company reported yesterday that it had signed agreements
with four other telecommunications operators in the Association
of Southeast Asian Nations (ASEAN) to set up a one-stop shopping
service for multinational companies.

The company is currently evaluating a potential joint venture
with a Kazakstan firm to provide telecommunications services in
that country.

Indosat plans to invest $5 million in the 1996-2000 period in
this project.

Indosat, whose shares were floated in New York and Jakarta in
October 1994, reported a net profit of Rp 459.4 billion in 1995,
a 59 percent increase over 1994.

Indosat's shares closed at $36.125 per ADR in New York on
Tuesday and at Rp 8,350 on the Jakarta Stock Exchange yesterday.
(icn)