Indosat faced another difficult quarter as revenue and subscriber growth slowed to less than 1 per cent and it continued to operate in the red.
Indonesia’s third largest mobile player suffered a net loss of IDR211 billion ($17.3 million) in Q3. Last year the company had a net loss of IDR2.78 trillion.
Indosat last week reissued its H1 financial statement after the Supreme Court on 21 October imposed a IDR1.358 trillion fine on its subsidiary, Indosat Mega Media, for allegedly misusing its frequency licences. The company is appealing the decision. Its original IDR236 billion net profit in the interim report was changed to a IDR1.11 trillion loss.
Fitch Rating said the fine doesn’t affect its rating but the agency expects Indosat’s EBITDA margin to narrow to 40-42 per cent in Q4 from 43.5 per cent last year due to intensifying competition in the data segment.
The operator’s Q3 EBITDA fell 3.2 per cent to IDR2.57 trillion year-on-year. Its EBITDA margin dropped from 43.6 per cent in Q3 last year to 42.1 per cent.
Overall revenue increased just 0.2 per cent to IDR6.1 trillion, with mobile (accounting for 80 per cent of the total) up just 0.4 per cent from a year ago. Fixed data revenue rose 6.5 per cent and fixed voice was down almost 17 per cent.
Its mobile subscriber base edged up from 53.8 million in Q3 2013 to 54.2 million in the most recent quarter. Over the last two quarters it has lost 5.5 million customers. ARPU was fairly stable, dropping just IDR200 to IDR28,300 ($2.32).
While data usage jumped 222 per cent from last year, SMS traffic was down 18.5 per cent to 57 billion.
Capex during the quarter was down sharply from a year ago (by almost IDR1 trillion) to IDR1.56 trillion and accounted for 25.7 per cent of revenue compared to 41.3 per cent a year ago.
Over the past year it added 11,000 4G base stations and now has almost 16,000 nationwide. The total number of base stations deployed increased 61 per cent from a year ago to 37,400.
The company said its network upgrade outside of Java was completed at the end of October but the project continues in key cities in Java and Bali.
Last week it announced a IDR2.2 trillion ($181 million) bond issue designed to reduce its forex exposure. The rupiah bond issue scheduled for early December will replace US dollar debt and Islamic bonds.