PERUSAHAAN SATLT CP (IIT)

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IIT is a sponsored American Depositary Receipt for the Indonesian integrated telecommunications provider, P.T. Indosat, Tbk. PT Indosat (the company) provides a comprehensive offerings of domestic and international telecommunications solutions.

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Company Analysis

Company History

PT Indosat was established in 1967 as a foreign investment company to operate Indonesian's satellite telecommunication system, providing domestic and international long distance call services to complement PT Telkom's TLK local fixed line telephone services. In 1980, the Indonesian government acquired all assets of Indosat. As of 2001, as part of government's effort to deregulate telecommunications services, all cross ownership between PT Telkom and PT Indosat was eliminated and gradually eliminating exclusivity rights of the two telecommuncation providers, allowing them to compete freely against each other. ^[1]

Business Segments ^{[2] [3]}

Then company is organized in three reportable revenue segments: cellular business, data and broadband, and fixed line voice telecommunications.

Cellular Business

In 9 month ending 2006, this business Segment accounts for about 75% of Indosat's operating revenue, with about 26% market share among GSM operators, behind PT Telkom's Telkomsel that has 59% share. This segment includes revenues from its GSM based cellular services. This figure does not include revenue from "starone" CDMA based fixed wireless service that is reported under fixed voice telecommunications segment.

Nine Month Subscriber and ARPU Data 2006^[2]

Indosat currently operates three brands of GSM based cellular services.

• Matrix: high-end postpaid service for consumers and businesses. This product was Indosat's original GSM product, but now only accounts for 5.5% of total subscription.
• Mentari: prepaid GSM card for general consumers
• IM3: prepaid GSM card targetted to the youth market

While in the 9 months ending September 2006, Indosat managed 12% subscriber growth compared to 9 months ending in September 2005, the segment's operating revenue grew only by 1.4%, mainly due to the declining Average Revenue per User (ARPU), consequence of pricing pressure and increased competition. ^[2]

Fixed Line Telecommunications

This segment includes International Direct dialing services (IDD), VoIP services and CDMA based fixed wireless service (branded as "starone").

As the sole satellite operator, Indosat used to have monopoly as provider of International calling services and ultra long distance domestic calling services. However, this segment only accounts for 9% of Indosat's total revenue in 2006. On year to year basis, 9 month operating revenue in 3Q2006 from this segment fell about 8% to 956 billion rupiahs (about US$ 100 million) compared to the same period in 2005. ^[3] The company attribute this decline to increased competition. ^[2]

Data Communications and Broadband

Note: the company also refers to this segment as Multimedia, Data and Internet (MIDI)

This is the company's fastest growing segment. In general this segment includes all consumer and business related IP services. In the first 3 quarters of 2006, this segment had revenue of 1.4 trillion rupiah (about US$ 150 million), a 14% increase from same period in 2005. ^[3]

Revenue History

Revenue History^[4]       Note: MIDI = Multimedia, Data Communications and Internet

Share Ownership^[2]

• Indosat’s shares are majority owned by public investors (44.90%)
• Singapore Technologies Telemedia owns 40.81% through Indonesia Communications Limited and Indonesia Communications Pte Limited
• Indonesian Government owns 14.29% including Series A share that has special rights to veto changes in bylaws and appointments and dismissals of management and directors

Leadership

Corporate leadership from Indosat website. Note: In Indonesian companies, Board of commissioner is equivalent to Board of Directors in the US companies; and Indonesian Board of Directors is equivalent to US Management

Management

• Dr Kaizad B. Heerjee: Deputy President Director
• Wong Heang Tuck: Finance Director
• Wityasmoro Sih Handayanto: Regional Sales Director
• Johny Swandi Sjam: Jabotabek (Jakarta Metro Area) & Corporate Sales Director
• Wahyu Wijayadi: Marketing Director
• S. Wimbo S. Hardjito: Corporate Services Director
• Raymond Tan Kim Meng: Network Director
• Joseph Chan Lam Seng: Information Technology Director

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Notes

1. ↑ Brief History of Indosat from company's website
2. ↑ ^{2.0 2.1 2.2 2.3 2.4} Indosat Public presentation for the 9 months ending in September 30, 2006, Accessed on Feb 24, 2007.
3. ↑ ^{3.0 3.1 3.2} Consolidated Financial report for the quarter ending in September 30, 2006, accessed on Feb 24, 2007
4. ↑ http://www.indosat.com/Download/20-F_2005.pdf Annual report and form 20F for the year ended December 31, 2005. Accessed 2/23/2007.