Business

Indosat to maintain capital
expenditure of Rp 6.5t
in 2012

Telecommunications company PT Indosat will maintain its capital expenditure at Rp 6.5 trillion (US$721 million), the same as this year’s figure.

Indosat president director Harry Sasongko said on Wednesday night that although expenditure would remain at the same level, the company was committed to increasing its spending in following years.

He said that spending would focus on improving Indosat’s network quality.

“Rapid network growth and high data usage have challenged us to improve our network’s quality,” Harry announced after the 2011 Frost & Sullivan Indonesia Excellence Awards, the fourth annual award held by the research and consulting firm, in which Indosat snatched two awards as Mobile Service Provider of the Year and Telecom Service Provider of the Year.

Besides allocating expenditure, Indosat also aims to acquire more cash that may enable the company to provide more services and is in negotiations with a potential partner to sell some of its cellular towers located in the country’s regions.

Harry refused to reveal the potential partner’s identity and the number of towers to be sold. Indosat currently owns 11,000 cellular towers across the country.

“We are still negotiating the number of towers and their locations,” Harry said, “We expect the sale of the towers to improve our asset value.”

In the first three quarters of this year, the total assets of Indosat were valued at Rp 50.5 trillion. In 2010, the value was Rp 52.8 trillion. The company is 65 percent owned by Qatar Telecom.

Harry said that an agreement on the tower purchase was expected by mid-December.

“Our agreement will include the number of towers to be sold, their prices, their condition, etc and will be followed by the signing of a non-binding agreement,” he said.

Meanwhile, Bloomberg reported that a non-binding agreement was signed on Tuesday between Tower Bersama Infrastructure, an Indonesian cell-phone infrastructure provider, and Indosat.

The transaction will provide Tower Bersama with additional assets in Southeast Asia’s biggest economy, as Indosat was said have sold about 3,000 towers in a deal that could be worth $500 million.

In the first three quarters, Indosat reported an 86.9 percent increase in total attributable profits to Rp 992 billion, up from Rp 530.9 billion in the same period last year.

At the same time, the company’s revenue increased 3.5 percent to Rp 15.36 trillion over Rp 14.84 trillion year-on-year. (fem)

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