Leading digital communications provider PT Indosat Ooredoo Hutchison Tbk (ISAT) will allocate Capital expenditure (Capex) worth IDR 13 trillion (US$ 857 million) in 2023 for digitalization process and customer experience.
The company, which was established in 1967 by the government as a foreign investment company, provides international telecommunication services namely prepaid and postpaid cellular services. Since 2022, it was owned by Ooredoo Hutchison Asia, a joint venture between Ooredoo and Hutchison Asia Telecom Group (a part of CK Hutchison Holdings). Its cellular brands include IM3 and 3. It also provides other services such as IDD (international direct dialing), fixed telecommunications and multimedia. Its subsidiaries include:Â
- Indosat Singapore Pte Ltd (with 100% ownership)
- PT Indosat Mega Media and subsidiary (99.85%)
- PT Starone Mitra Telekomunikasi (99.94%)
Focusing development in eastern part of Indonesia
Indosat Director and Chief Financial Officer Nickly Lee said the 2023 Capex would be used to increase the digitalization efforts and customer experience.
“We will continue our rollout of network and customer conductivity. The company will invest in transportation, data transportation and also networks. We have to invest and place network capacity,” he said on February 13, 2023, as quoted by beritasatu.com.
Lee added that the digitalization process would focus on the digital establishment in the eastern part of the country, especially Nusa Tenggara as the main priority, as well as Papua and Kalimantan.
Indosat recorded a solid performance in 2022 as its total revenue increased by 48.9% yoy or IDR 31.38 billion to IDR 46.75 billion. Meanwhile, its net income reached IDR 19.46 billion. The profit for the year was attributable to owners of the parent entity amounted to IDR 4.72 billion, normalized net profit increased by 76.2% compared to the previous year. The number of cellular subscribers also raised by 62.5% to 102.2 million subscribers by the end of 2022.
The company would commit to give the best experiences to its subscribers and increase the productivity and contribution to the telecommunications industry’s growth and digital economy in the future, said CEO Vikram Sinha.
Risks in telecommunication business
However, Indonesia is still far behind in terms of digitalization and internet penetration. The majority of internet penetration only concentrates on Java Island, leaving other regions especially the eastern part of the country lack of access to internet.
Indosat, as well as other telecommunications providers, needs to continually invest in new and emerging technologies to stay competitive. The failure to do so could lead to the loss of market share, as customers increasingly demand faster and more innovative services.
