PT Indosat buys stake in Japanese cable TV firm

JAKARTA (JP): State-owned PT Indosat has spent US$2.1 million acquiring a 5 percent stake in the Japanese cable-television firm Suginami, majority owned by Jupiter, in its bid to enter the cable television business in developed countries.

Company president Tjahjono Soerjodibroto said yesterday the deal, completed Oct. 31, was one of Indosat's moves to diversify and enter the multimedia industry.

Indosat has also acquired a 40 percent stake in PT Yasawirya Tama Cipta, a Jakarta-based video recording firm, and set up PT Indosat Mega Media, he said following a teleconference on Indosat's financial report for the January-September period.

Indosat reported a 5.4 percent increase in its after-tax profit to Rp 361.1 billion ($154 million) in the first nine months of this year over the same period of 1995.

Tjahjono said the January-September profit represented a net income of Rp 348.7 per share, or $1.5 per American Depository Share.

Indosat floated shares on the New York and Jakarta Stock Exchanges in October 1994. The company's share price was unchanged Tuesday at $30.75 per American Depository Share on the New York Stock Exchange. Its share price on the Jakarta Stock Exchange closed Rp 25 higher at Rp 7,325 yesterday.

In the first half of this year, the company's profit increased 6.42 percent to Rp 235.1 billion.

Tjahjono said Indosat expected its profit to rise between 7 percent and 9 percent this year over last year's Rp 459.4 billion profit.

He said operating profit for the first nine months of this year rose 9.5 percent to Rp 420.5 billion ($179 million) from Rp 384.1 billion in the corresponding period last year.

"During the January to September period, we witnessed stronger growth of international telephone traffic and high-speed leased line services as compared to that of the same period of last year," he said.

"This performance strengthens our confidence that the declining trend in international accounting rates and increasing competition will not affect our operational performance significantly."

Stronger

Indosat's international telephone traffic from January to September was 426.6 million minutes, 17.6 percent higher than in the same period last year. Incoming international traffic was 243.2 million minutes, up 14.3 percent from 210.6 million in 1995, while outgoing international traffic was 183.4 million minutes, up 22.4 percent from 152.2 million minutes.

Indosat's international call revenue for the first nine months of this year rose 13.9 percent to Rp 810.8 billion from Rp 711.7 billion in the same period of 1995.

Tjahjono said that despite the healthy figures, demand for some Indosat services had fallen. Forty-eight low-speed leased- line circuits were occupied in the first half of this year, down 22.6 percent from 62 circuits in the same period of 1995. Telex services were used for 4.8 million minutes, down 16.3 percent from 5.7 million. Packet Switched Data Network services were used for 1.4 million minutes, down 29.7 percent from 1.9 million during the same period last year.

Indosat's marketing vice president Bambang Sulistyo said the company had a 91.7 percent market share of the country's international telecommunication services in the first nine months of this year: 89.8 percent of the market for outgoing services and 93.2 percent for incoming services.

Besides Indosat, the ministry of tourism, post and telecommunications has awarded exclusive rights to operate the country's international telecommunications services to PT Satelindo until the year 2005. (icn)