Indosat contemplates merger to aid growth

27 Aug 2010

Indonesia’s second largest telco by subscribers, PT Indosat, is said to be considering entering into some form of partnership. Jakarta Globe quoted company CEO, Harry Sasongko on the subject who said: ‘We are open to any option for possible consolidation.’ The operator appears to be open-minded and accepts it could either acquire or be acquired. With the Indonesian market suffering from a glut of operators, the opportunities to grow the business organically are limited. Consolidation between the existing eleven active operators seems certain at some stage soon and could be a sensible option for Indosat to pursue in a highly competitive market.

As TeleGeography’s CommsUpdate reported on 17 August, Indosat reported a massive 71.5% drop in first-half 2010 net income year-on-year at IDR287.1 billion (USD32.2 million), from IDR1 trillion in the corresponding year-earlier period. The sharp fall came despite a 5.8% rise in revenue to IDR9.66 trillion from IDR9.14 trillion previously, while its subscriber base increased to 37.8 million from 28.1 million. Indosat did not provide any explanation for the sharp decline in net income, saying it was still conducting a review of its operations.

Indonesia, Indosat Ooredoo (incl. IM2)