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Indosat faces off against competition to turn in outstanding performance

June 2007 / e-newsletter

Kudos to the Indosat management and employees for staying focused, delivering excellent first quarter results for 2007, and picking up an award along the way. With a 26 percent increase in profits and 1.32 million new customers in 1Q 2007 alone, Indosat is going all out to take on the competition.

This commendable performance follows an Asian Wall Street Journal Award recognizing Indosat as one of the Top Ten companies in Indonesia for 2007 under the category of Long Term Vision. Indosat was ranked fifth and was the only telco to make the list. 

These achievements are all the more phenomenal because of the rocky start to 2006. Addressing shareholders, Indosat Deputy President Director Dr Kaizad B. Heerjee said, “Indosat had a very difficult first half in 2006 as we solved our network issues and embarked on a series of marketing initiatives in the second half of 2006.” 

Today, Indosat reaps its just rewards by “delivering three straight quarters of not just topline growth, but also marked improvement in our overall financial performance,” said Dr Kaizad. 

These results are a testament to Indosat’s continued determination to assert itself in the highly competitive Indonesian telecom market which includes players like Indonesian state-owned Telkom/ Telksomsel, Malaysia-majority owned Excelcomindo (XL), Bakrie Telecom, Mobile-8, and new entrants such as Hutchison’s majority-owned cellular operator 3 and Malaysia’s Maxis’ Lippo Telecoms. 

Since December 2002, ST Telemedia’s investment in Indosat has paved the way for the company to gain its financial stability and market strength. As a strategic shareholder, it has helped to attract talented senior-level executives and board commissioners who, in turn, have played major roles in improving Indosat’s financial standing, management expertise and technological capabilities. The overhaul of the company’s vision, business direction, and systems and processes has significantly strengthened Indosat’s market position, financial management and corporate governance. 

ST Telemedia has consistently encouraged greater collaboration among its group of companies, including Indosat, to gain competitive advantages and maximize their fullest operational potential. Group collaborations include transfer of knowledge and skills for improved business performance and financial discipline, exchange of technological know-how to shorten learning curves and accelerate the time-to-market for new products and services. 

In less than five years, Indosat’s credit rating was upgraded to BB by S&P and Ba1 by Moody’s, its revenue jumped by 81% to Rp.12,239 billion, and net income recorded a whopping 314% growth to Rp.1,410 billion. The improved credit ratings have allowed Indosat to access the capital markets to fund its annual capital expenditures. Indosat’s mobile coverage was dramatically strengthened from just 2,787 BTS in 2002 to over 6,400 BTS across Indonesia. Today, its network delivers reliable and advanced services to over 18 million customers in Indonesia. 

As a firm advocate of open competition and good corporate governance, ST Telemedia operates independently with its own management team and board who make autonomous decisions on the company’s directions and policies. Similarly, its group of companies is expected to abide by the rules and regulations of the countries where they have operations. This strict discipline within the group has earned its companies international industry recognition and accolades for best managed company, best in corporate governance, best focus on shareholder value, best operational efficiency and so on. 

As a long term investor of Indosat, ST Telemedia fully supports the company in its goal to become a globally recognized telecommunications company. ST Telemedia will continue to maintain its shareholding and play a strategic role in Indosat’s future developments.