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Indosat to let go of ‘uncompetitive’ satellite business
The company no longer deemed its satellite communications business “competitive” and shrunk its satellite fleet from three satellites to one.
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Illustration of a satellite. (Shutterstock/Tatiana Shepeleva)
P
ublicly listed PT Indosat, one of Indonesia’s top three telecommunications providers, has reaffirmed plans to let go of its satellite business after a year-long problem that has crept up to the international stage.
Indosat chief legal and regulatory officer Natasha Nababan said on Tuesday that the company no longer deemed its satellite communications business “competitive” and, thus, shrunk its satellite fleet from three satellites to one.
“It’s not efficient. We can’t give competitive prices for satellite communications,” she said at a virtual investor meeting. “The company, going forward, will not own and operate satellites.”
Letting go of the satellite business is part of Indosat’s “three-year turnaround strategy” to improve its financial standing after booking a net loss of Rp 2.4 trillion (US$170.63 million) in 2018 amid tightening competition in the Indonesian market.
Read also: Indosat, Tri team up for stronger position in telcom industry
The decision also follows the failed launch of Indosat’s jointly owned $220 million Nusantara Dua satellite in April of last year. Indosat owned 35 percent of the satellite, which reportedly exploded before reaching orbit, through joint venture PT Palapa Satelit Nusa Sejahtera (PSNS).
Indosat, listed under the ticker ISAT, saw its net loss widen by 54 percent year-on-year to Rp 436.16 billion in the January-September 2020 period, despite having booked higher revenue, its latest financial report shows.
