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Jakarta Post

Ooredoo stays '€˜committed'€™ to RI market

Connected: A techinician conducts regular maintenance on Indosat’s base transceiver station (BTS) facilities in Jakarta

Mariel Grazella (The Jakarta Post)
Jakarta
Sat, February 8, 2014

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Ooredoo stays '€˜committed'€™ to RI market Connected: A techinician conducts regular maintenance on Indosat’s base transceiver station (BTS) facilities in Jakarta. The mobile phone operator is controlled by Qatar-based telecommunications company, Ooredoo QSC. (JP/Ricky Yudhistira) (BTS) facilities in Jakarta. The mobile phone operator is controlled by Qatar-based telecommunications company, Ooredoo QSC. (JP/Ricky Yudhistira)

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span class="inline inline-none">Connected: A techinician conducts regular maintenance on Indosat'€™s base transceiver station (BTS) facilities in Jakarta. The mobile phone operator is controlled by Qatar-based telecommunications company, Ooredoo QSC. (JP/Ricky Yudhistira)

Qatar-based telecommunications company Ooredoo QSC said it remained committed to the Indonesian market despite stifling competition and a weak currency on the promise of '€œpositive growth dynamics'€ that would sustain its domestic unit, PT Indosat (ISAT), in the years ahead.

Besides Indonesia, Ooredoo has units spanning diverse markets such as Qatar, Iraq, Algeria and Myanmar.

'€œWe see our commitment absolutely continuing,'€ Ooredoo chief commercial officer Cynthia Gordon said recently in Jakarta.

She added that Ooredoo, through Indosat, had invested heavily, injecting approximately US$2.6 billion in the past four to five years to build up network coverage and the capacity of Indosat.

Based on Ooredoo'€™s nine-month financial report in 2013, 38 percent of the group'€™s overall capital expense of QAR 6.1 billion ($1.6 billion) was related to the Indonesian market. Last year, Indosat announced that it was allocating $800 million for annual capital expenses.

A majority of the budget was allocated to the modernization its networks across Bali and Jakarta. The mobile operator plans to carry on work in other areas, including outside Jakarta and Java, this year.

Gordon added that the building of network capacity outside Java was one of three aspects, in addition to network modernization, that would facilitate business further down the line.

'€œThe third factor is the whole dynamics in data usage. Smartphones are increasing in popularity and that is the reason behind increasing our network capacity '€” we want people to find the possibility to different things through our data networks,'€ she said.

She pointed out that these '€œpositive growth dynamics'€ would lead Ooredoo to continue investing in the Indonesian market through Indosat.

'€œIndosat represents about 26 percent of revenues and 60 percent of customers in the group,'€ she said, adding that Qatar, Iraq and Algeria were robust markets for Ooredoo as well.

However, Gordon pointed out that the challenge with Indonesia was in booking high profits given the average revenue per user (ARPU) in the country was '€œlower than some of our other markets'€.

Indosat CEO Alexander Rusli said that the low ARPU was partly due to the overcrowded telecommunication industry.

'€œNot all countries the group operates in has nine operators,'€ he said, adding that the churn rate '€” or the rate at which people switched operators '€” was a high 15 percent.

'€œThis is an ongoing challenge we face,'€ he noted.

Ooredoo has a 19 percent market share in Indonesia, one of the smallest compared to in other markets.

Indosat also suffered net losses of Rp 1.7 trillion ($139 million) in the first nine months of 2013, chiefly due to foreign exchange losses. Ooredoo also booked a 25.7 percent annual decline in profits to QAR 2.6 billion in the first nine months of last year.

'€œThis is primarily impacted by currency, but we still see strong revenue growth across our different operations,'€ Gordon noted.

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