Indosat goes all-out to expand network, boost competitive edge

Agustina Wayansari, The Jakarta Post, Jakarta

The country's second-largest telecom company, PT Indosat, is to issue bonds worth a total of Rp 1.5 trillion (around US$163 million) to support its expansion drive.

The company is also seeking another $400 million in external funding in the form of bank loans or global bonds. The company's expansion plan this year is expected to cost up to $1.2 billion.

President director Johnny Swandi Sjam said Monday Rp 1.5 trillion in bonds, currently entering the book-building process, would be offered in a conventional bond amounting to Rp 1 trillion and in a sharia-based bond of Rp 500 billion.

"I am optimistic investors will accept the offerings as both of the bonds have very good ratings of idAA(sy)+ from the Indonesian rating company PP Pefindo," Johnny said, adding that the book-building period would take place between Feb. 25 and March 6.

Both bonds will officially be listed on April 10.

"We'll use the proceeds to finance our business expansion in developing a base station subsystem and transmission for the cellular networks," Johnny told a press conference.

He said Indosat had 9413 base transceiver stations (BTS) as of September last year and was targeting to add 3,000 more this year.

The company boasts around 28 percent of the country's cell phone users.

By the end of last year, around 24.5 million people had subscribed to Indosat's GSM services, the postpaid Matrix and prepaid Mentari and IM3, and some 600,000 people to its CDMA-based service, StarOne.

Indosat is targeting an increase of six million GSM customers. The company is 44 percent owned by the public, 40 percent by Singapore Technology Telemedia and 14 percent by the government.

Johnny said Indosat also planned to lease some of its BTS towers to other operators to help boost revenue.