Indosat spends Rp 10 billion
replacing stolen underwater

Indonesia’s second-largest mobile phone operator PT Indosat has had to spend Rp 10 billion (US$1 million) to replace its 31.7 kilometers of undersea cables which have been stolen.

The incident has interrupted voice and data services between Singapore and Indonesia for more than a month and inflicted more damage on the company’s afflicted finances.

Indosat’s backbone transmission division head Syafnedi said on Friday that the company found the broken undersea cables around Mapur Island, Bintan, Riau Islands province, when it investigated the disruption on its communications between Jakarta and Singapore.

The company then reported its findings to local police.

“We needed Rp 10 billion only to fix the cables. That excludes other stolen materials and losses. Now the situation is back to normal,” he told reporters in Batam.

“These broken cables have caused us major losses as the voice, data, and internet connections were disrupted for more than a month, from early May until now.”

No figures of losses the company had suffered from disturbed operations are available.

Indosat representatives in Jakarta did not immediately respond to calls and text messages made by The Jakarta Post.

According to Syafnedi, the undersea cables, which were set up in the 1990s, were made of fiber optic comprising steel fibers and other materials.

Riau Police chief Brig. Gen. Endjang Hidayat said the police had secured 418 tons of undersea cables cut into several parts, 12 trucks, one excavator, five boats and diving equipment.

He added that the police had arrested two fences and five divers, all of whom had been named suspects. The suspects are Syamsuri, 32, Awaluddin, 33, Ali Mahmud, 43, Herman, 51, and Nasruddin, 45, while the two fences were Riki, 22, and Edy, 29.

“It’s a theft case. There’s no indication of sabotaging telecommunications between Indonesia and Singapore,” Endjang said.

According to Endjang, the suspects allegedly stole the cables from September 2012 until this June at the depth of 30 to 40 meters.

The suspects will be charged with article 363 on theft and face maximum punishment of seven years if found guilty.

Indosat, a publicly listed company, is poised to keep booking losses in the second quarter of the year due to continued downward pressure from foreign exchange and depreciation.

Indosat recorded Rp 71 billion losses in the first quarter largely due to foreign exchange losses, changes in the calculation of depreciation value and high tower leasing costs.

This first quarter loss is 214.4 percent higher than that suffered in the same period last year.

The company also has to pay Rp 4 trillion in debts this year, approximately Rp 1.8 billion of which has been paid in the first semester with internal cash.

Indosat also reported that cellular subscriptions increased 7.4 percent year-on-year to 55.9 million as of the first quarter of 2013, while average revenue per user (ARPU) rose 5.9 percent to Rp 26,500.

However, quarter-to-quarter wise, the number of cellular subscribers decreased 4.4 percent while ARPU fell 1.1 percent. Indosat’s former chief commercial officer Erik Meijer attributed the quarterly decrease to “seasonality”.

Indosat shares, traded under the code ISAT, closed at Rp 5,250 on Friday, up 2.94 percent.

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