Indosat ups CAPEX to USD1.2 billion to meet wireless demand

23 Aug 2007

Indonesia’s Jakarta Post reports that the country’s second largest telecoms operator by subscribers, PT Indosat, is upping its capital expenditure for this year from USD1 billion to USD1.2 billion to expand and improve its networks and services. Indosat president director Johnny Swandi Sjam told the paper that around 15%-20% of the total would be spent on network expansion, including work on new base transceiver stations (BTSs), while the remainder would be used to improve services. By the end of June 2007 Indosat’s mobile arm Satelindo had deployed 8,366 BTSs, up 33.9% on the 6,248 it had in June last year. It is understood that around USD300 million of the proposed CAPEX will be derived from internal funds while the remaining USD700 million will come from loans and bonds.

Satelindo’s increased network spending is a result of strong subscriber gains which have seen its base growing from 13.9 million in June 2006 to 20 million a year later. In addition, Indosat reports that its fixed wireless subscriber base has leapt 132.3% from 208,100 in mid-2006 to 483,400 by end-June 2007. Buoyed by the strong first-half performance, Indosat has revised upwards its target for subscriber growth in 2007 from six million to seven million, it said. The firm’s revenues have also benefited from the rise in customer numbers. Overall revenues climbed 33.3% in the first six months of this year to IDR7.69 trillion (USD826.8 million), compared with IDR5.76 trillion in 1H06. Cellular turnover rose 37.4% year-on-year from IDR4.30 trillion to IDR5.89 trillion and fixed-data service revenues grew 9.9% to IDR1.01 trillion from IDR927.3 billion previously. Sales of traditional voice telephony services climbed 41.1% y-o-y from IDR548.9 billion to IDR774.4 billion, driven by higher demand for international calls and fixed wireless services.

Indonesia, Indosat Ooredoo Hutchison (IOH)