Indonesia's third largest cellular operator PT Excelcomindo Pratama reported a fourteen-fold jump in net profits during the first half of this year, as against the same period last year, on the back of increasing subscribers and outgoing call minutes.

In the six months ended June the Telekom Malaysia-controlled operator made Rp 631 billion (US$68 million) profit, compared to Rp 41 billion a year earlier.

Revenues from operations rose by 59 percent to Rp 5.8 trillion as a result of a surge in number of subscribers, up to 22.9 million from 10.2 million and higher call utilization up to 19.3 billion minutes from 1.7 million.

Excelcomindo president director Hasnul said in a statement that rising subscribers and traffic were attributable to the company's pricing strategy, implemented in the third quarter of last year, amid fierce competition.

Indonesian cellular operators are racing to expand networks to get more subscribers and improve call quality, to stay ahead of the competition.

Excelcomindo also announced a plan to sell its tower business in a bid to increase returns on asset investment and focus more on improving its cellular operation business. The towers are usually rented out to other operators.

"We plan to sell up to 7,000 telecommunication towers and rent them back," Hasnul said.

The company is in the process of receiving bids for the towers, which may be worth about $945 million. The company is slated to wrap up the sales in the fourth quarter of this year.

During a meeting Tuesday, the company also secured shareholders approval to raise capital expenditure this year to $1.25 billion from $1 billion last year.

The expenditure is mostly aimed at setting up 4,000 new transceiver stations.

Hasnul said around one third of the expenditure would be unloaded from internal cash flow, while the rest would be raised from bank loans and bonds.

Last month, Excelcomindo bought back 49 percent of its bonds, worth $122.29 million, in a bid to reduce expenses on tax. The bonds are slated to mature in 2013.

The shareholder meeting also agreed on the appointment of new commissioners, including former transportation and telecommunications minister Giri Suseno Hadihardjono, president director of JP Morgan Indonesia Gita Wirjawan and president director of PT Hewlett Packard Indonesia Elisa Lumbatoruan. (mri)

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