Ooredoo is dead serious about Indosat and Indonesia
By Ervina Anggraini June 6, 2016
- Pumping in 30% of its revenue into business in Indonesia
- Will expand 4G and fibre-to-the-home service availability
DOHA-headquartered Ooredoo Group, which holds a 65% stake in operator PT Indosat Tbk that has rebranded itself into Indosat Ooredoo, said it plans to invest 30% of its group annual revenue into its Indonesian operator over the next three years.
A key focus would be the data business. Since rebranding into Indosat Ooredoo last November, the Indonesian telco says its data services grew by 52.5% in the first quarter of 2016.
That 30% investment will be major: Ooredoo Group recorded revenue QAR32.2 billion (US$8.84 billion) in 2015, with 37% from data services.
According to Ooredoo Group deputy chief executive officer Waleed Muhamed al-Sayed (pic above), the amount it is allocating to Indosat is higher than the group’s allocation for its other overseas subsidiaries.
“Normally, we allocate about 14% of group revenue as capital expenditure (capex) for our subsidiaries.
“The size of the country [Indonesia] has made us consider boosting our investment, especially to strengthen data services and revenue,” he told Digital News Asia (DNA) last week.
To do so, the capex will be aimed at increasing Indosat’s network capacity and speed. As at the end of March, Indosat had 52,326 BTSes (base transceiver stations), 3,544 of them 4G-ready, covering 35 cities in the archipelago.
“The most important thing to do is increase our 4G (Fourth Generation) coverage and to roll out our fibre-to-the-home (FTTH) service in the next three years, especially outside the Java area,” Waleed said.
Data is the future
Meanwhile, Indosat Ooredoo chief executive officer Alexander Rusli (pic) said data services can potentially make up 90% of his company’s revenue in the future – it was already 46% in 2015, and the company is expecting it to breach the 50% mark this year.
“Data will be the future of telecom industry – in particular for us,” he said.
As at March 31, Indosat Ooredoo had 69.8 million subscribers, with an average revenue per user (ARPU) of Rp26,400 (US$2) a month.
To boost data revenue, the company will push relevant content and continue to ‘digitalise’ its business, according to Alex.
“Pushing related content such as mobile money for rural people, and digitalising services to help people access and pay everything through an app, is our strategy to migrate 2G users to 4G,” he said.
Meanwhile, Waleed said that Ooredoo would like its long-term investments to make a difference to the markets it enters, and one way would be to strengthen Indosat’s data service, which should overtake revenue from voice or 2G services.
“As an operator, we have to be the enabler in digitising all customer activities by harnessing the versatility of the smartphone,” he said, adding that this would include getting consumers to use apps that could benefit them – which, in turn, would drive up data consumption too.
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