Indosat Revenue Increases, Net Profit Declined Over 56%

Indosat's net profit this year declined more than US$68 million or around 56% in 2010 compared to 2009, said Director Harry Sasongko Tirtotjondro earlier today. Harry blamed the instability of foreign exchange rates of Indonesia's IDR to USD, justified by the 5% increase from their revenue stream, just slightly over US$2 billion.

Their cellular business also gaining 12% in revenue to US$1.8 billion collected from over 44 million cellphone subscriber using their mobile products and services. Harry also announced that based on the shareholder meeting, the Finance Director position is now run by Curt Stefan Carlsson, after the resignation of former director Peter Kuncenwicz whose been in the position for the last 2 years.

Indosat is also trying to sell one of its subsidiary FWA (Fixed Wireless Access) company, StarOne. Rumor has it that Telkom is likely to be the buyer of StarOne, Harry said that Telkom hasn't made any concrete move for the M&A process.

They also launched a sale of 4,000 telecommunications towers and the company aims to raise over USD 500 million. Indosat has invited several potential bidders, including Profesional Telekomunikasi Indonesia, a unit of Sarana Menara Telekomunikasi, Tower Bersama Infrastructure, and Solusi Tunas Pratama to assess data on the towers. The company will not offer its tower to main rivals Telekommunikasi Indonesia and XL Axiata. Bids are due by late June. The company earlier revealed it is considering selling around 10,000 towers.

Overall, it is evident that Indosat is trying really hard to keep their head above water by maintaining their revenue and scraping for margin from their cellular business, their main source of income. And I think almost all carriers have the same problem with Indosat, margin, product variety and value added services.