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PT Indosat, the country's second largest telecommunications
operator, saw its profit fall by 9 percent in the first nine months of
the year on rising costs.
Indosat's net income in the nine months ended Sept. 30 fell to Rp 927.2
billion (US$101.8 million), as compared to Rp 1.01 trillion in the same
period last year, the company said in its 2006 third-quarter report
released Thursday.
Indosat managed to up its sales revenues only 1.4 percent to Rp 8.87
trillion from last year's third quarter, despite a 12 percent rise in
its cellular customer base to 14.2 million subscribers.
The company's cellular business -- which includes the postpaid Matrix
and the prepaid Mentari and IM3 services -- contributed almost three
quarters of third-quarter revenues, with Indosat having recently
boosted its marketing efforts to regain market share lost to rivals
Telkomsel and Excelcom. The company's fixed telecommunication and
Internet-based multimedia services made up the rest.
Indosat also saw its operating costs in the nine months rising by 9.1
percent to Rp 6.42 trillion from the same period last year, which
proved a significant drain on its profits.
This was despite the company managing to reduce other costs, a
foreign-exchange gain of Rp 175.2 billion compared with last year's Rp
357.6 billion loss, and higher interest income, up Rp 30 billion at Rp
168.6 billion.
Looking forward, Indosat says it expects to improve its financial
performance, and plans to invest at least $1 billion next year, of
which 80 percent will be used for cellular network expansion, the
company's finance director, Wong Heang Tuck, told reporters.
Shares in Indosat, which is 41 percent owned by Singapore Technologies
Telemedia Pte., ended up 3.6 percent at Rp 5,750 in Thursday's trading
on the Jakarta Stock Exchange, prior to the release of the report
Thursday evening.
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