Indosat Sells 4,000 Towers, Attempts To 'compensate' For Losses Of Rp. 716 Billion In 2020 To Be Profitable In 2021?

Photo: Doc. Indosat Ooredoo

JAKARTA - Telecommunication company PT Indosat Ooredoo Tbk stated that the sale of 4,000 units of towers is part of an effort to improve the company's performance in 2021. This is mainly due to the increase in net profit for the issuer coded as ISAT shares.

Chief Operation Officer Indosat Ooredoo Vikram Sinha said, tower sales have been carried out since 2019 as part of the company's normalization to be able to improve performance while lowering costs.

"If you see in 2019 we sold a number of towers when these things were normalized, we had a significant increase in cost reduction, this is reflected in our increased performance," he said in a written statement, quoted on Sunday, February 21.

Tower sales are part of normalization efforts by selling towers to improve performance and there has been a significant increase in the previous period.

"Regarding tower sales this year it is too early to be able to convey, because we have just started the process, at this time it is too early to discuss about it," he said.

However, this tower sale is part of a strategy to rebound and improve performance throughout the 3 years, in line with various activities.

Vikram emphasized that 5G is a very important investment in the telecommunications industry. During the last six quarters, Indosat has ramped up network deployment, including the deployment of fiber optics, so that the services provided are more excellent and at the same time prepare for 5G.

"We are also working closely and closely with regulations and preparing the infrastructure provided. We have a very high focus on preparing the 5G network," he said.

He also said that the benefits of investing in 5G will be felt even more when the 5G ecosystem is ready. Indosat continues to communicate with regulators to see the frequency roadmap for 5G.

For information, Indosat recorded a loss of IDR 716.7 billion in 2020, even though revenue has increased. Quoting Indosat's report on the Indonesia Stock Exchange (IDX) website, the current year's loss attributable to the owner of the parent entity or Indosat's net loss of IDR 716.7 billion in 2020. This value is reversed from the net profit of IDR 2.28 trillion in 2019.

"In 2019, the achievement of net profit was mainly due to tower sales profits," said Indosat management.

In 2019, ISAT had already released 3,100 towers to Mitratel and Protelindo with a total value of IDR 6.39 trillion. Mitratel took 2,100 towers, while the other 1,000 towers were taken over by Protelindo.

On the other hand, in 2020 ISAT recorded an increase in expenses to IDR 25.53 trillion. That number increased 16.6 percent compared to expenses in 2019 amounting to IDR 21.89 trillion.

The increase in expenses was primarily due to employee severance pay and depreciation and amortization expenses, which were offset by decreases in general and administrative expenses, marketing expenses, and service costs.

According to ISAT management, 2020 was a year full of challenges in various aspects, both from COVID-19 and pressure from other operators.

However, Indosat Ooredoo still managed to maintain its growth momentum, especially in terms of revenue. In 2020, total revenue grew by 6.9 percent to IDR 27.9 trillion, cellular revenue grew by 11.6 percent to IDR 23.1 trillion, and EBITDA reached IDR 11.4 trillion, grew by 16 percent.