Indosat to spend up to IDR7.5tn of CAPEX projects in 2015

13 Apr 2015

Indonesian operator PT Indosat, which is 65%-owned by Ooredoo Asia, has revealed it plans to spend between IDR6.5 trillion and IDR7.5 trillion (USD503.75 million and USD581.25 million) on capital expenditure projects this year, using a mix of internal funding, bonds and loans. Indosat spokesman and investor relations officer Andromeda H. Trisanto confirmed the plan recently, noting that Indosat’s financial position is healthy enough to fund the CAPEX, although he declined to provide a breakdown on how much would come from its own resources and how much from bonds or its revolving loan facility. The publicly-listed operator closed out December 2014 with IDR3.5 trillion in cash and cash equivalents, and inked a USD300 million loan facility in Q1 this year. Further, last year it issued bonds totalling IDR2.5 trillion to help fund its network upgrade programmes, and has clearance from the country’s financial services authority, or OJK, to issue IDR10 trillion in sustaining bonds for a two-year period.

TeleGeography’s GlobalComms Database writes that Indosat is Indonesia’s third largest telecoms operator by subscribers, and reported consolidated revenues of IDR24.085 trillion for the twelve months ended 31 December 2014, up 1.0% when compared to IDR23.855 trillion the previous year. Growth was driven primarily by cellular revenues, which increased by 0.5% y-o-y to IDR19.481 trillion, fuelled by higher data and value added service (VAS) contributions, although lower fixed telecom sales of IDR1.096 trillion (down 9.8%) were only partially offset by a 7.4% increase in fixed data turnover to IDR3.509 trillion. Indosat closed out December 2014 with a total of 63.2 million mobile subscribers, up 6.1% (or 3.6 million) over FY 2013, of which 62.4 million were pre-paid (+6.2%). Monthly blended ARPU of IDR27,200 was slightly below the IDR27,500 reported in the year-earlier period, and average minutes of use fell faster to 78.4 per month, from 93.0 minutes in FY 2013. The company said it operated 40,229 base transceiver stations (BTS) as of 31 December 2014, including 22,166 2G and 18,063 3G BTS, having added a total of 15,949 BTS in the twelve-month period (2G: 3,295, 3G: 12,654). Further, Indosat’s FWA CDMA network counted 1,550 BTS, 37 base station controllers and eight mobile switching centres at the same date.

Indosat’s president Alexander Rusli has said that up to 80% of this year’s total CAPEX spend will be set aside for network improvement and building more BTS. Although he declined to provide a breakdown on how the money will be spent, or what portion is being ploughed into 4G/LTE, he did confirm that the company is working towards the completion of a two-year network modernisation plan – which includes upgrading BTS with 4G capability. By late-2014 Indosat had successfully completed its modernisation programme in 23 cities, including Greater Jakarta, Bandung, Sukabumi, Semarang, Yogyakarta, Surabaya and Makassar.

Indonesia, Indosat Ooredoo Hutchison (IOH)