News Column

Indosat surges back into profit after years of losses

May 9, 2014



Indonesia's third largest mobile phone operator by subscribers, PT Indosat, has reported a return to profitability in Q1 2014 following years of losses, with net income soaring to IDR800 billion (USD69 million) for the period under review, from a net loss of IDR71.1 billion a year ago, fuelled by the popularity of its data and internet services. It must be noted though, that the single largest chunk of its first-quarter profit came as a result of the sale of its shares in the tower operator PT Tower Bersama Infrastructure, which generated IDR1.39 trillion. In a filing to the Indonesia Stock Exchange (IDX), Indosat noted however, that revenue for 1Q14 slipped 0.3% year-on-year to IDR5.78 trillion, after a 10.4% rise in sales from its multimedia, data communication, and internet services arm, to IDR861 billion, failed to offset a 2.1% decline at its cellular business to IDR4.65 trillion. Fixed telecommunication revenue also grew 1.6% y-o-y to IDR261 billion. Cellular services remain the operator's key revenue engine with an 81% contribution in Q1 2014, while fixed data and fixed voice brought in the remaining 15% and 4%, respectively.*With data proving an increasingly important revenue stream for the carrier, in 1Q14 Indosat invested IDR1.6 trillion in its networks and services with a key focus on network modernisation and expanding its data services capability and regional coverage. It has set aside a total of IDR16 trillion for CAPEX in 2014/16 of which IDR8 trillion-IDR8.5 trillion will be committed this year alone. Indosat says it has added a total of 4,158 base transceiver stations (BTS) for 2G and 3G services since March 2013, bringing the company's total count to 26,255 BTS by 1 April. As at 31 March 2014, Indosat reported a total of 59.7 million cellular subscriptions, up 6.8% y-o-y; average revenue per user (ARPU) however, fell by 2.7% to IDR25,800 per month, short messaging service (SMS) traffic went down by 9.7% to 60 million, and average revenue per minute (ARPM) rose by 10.3% to IDR140.


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Source: TeleGeography CommsUpdate


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