From The Jakarta Post

Excelcomindo sinks deeper into the red

PT Excelcomindo Pratama, an Indonesian cellular operator controlled by Malaysian telecommunications giant Telekom Malaysia, fell deeper into the red last year, with its net loss increasing almost fourfold to Rp 224.09 billion (US$23.5 million).

Accountants Haryanto Sahari and Partners reported Wednesday that the telecommunications firm booked an 18 percent increase in total revenue to Rp 3.1 trillion, but the company's bottom line remained in the red due to high levels of outlay.

The firm's operating costs increased by 29.09 percent to Rp 2.48 trillion on the back of salary increases and higher fees paid to consultants.

The company also paid out Rp 362.3 billion in additional expenses arising from currency fluctuations.

"The increased costs were also due to a major expansion involving the building of additional transceivers and a decrease in average revenue per user (ARPU)," said Excelcomindo corporate communications manager Ventura Elisawati.

The company, which built an additional 2,300 transceivers last year, suffered a drop in its ARPU from Rp 70,000 to Rp 60,000.

By the end of 2005, the company had built a total of 4,300 transceivers and had more than six million subscribers nationwide.

The accountants also reported that Excelcomindo's total assets grew by 44.5 percent to Rp 9.35 trillion last year.

Excelcomindo, the country's third largest operator, is owned by Telekom Malaysia (56.92 percent), Khazanah National Berhad of Malaysia (16.81 percent), PT Telekomindo Primabhakti (15.97 percent) and AIF (Indonesia) Limited (10.14 percent).

Along with PT Telkomsel and PT Indosat, the company won a government tender offering three 3G frequency blocks last month, which will require the company to pay Rp 408 billion for the license this year.

Market analysts Fitch of Singapore predicted that the fees would put further stress on Excelcomindo's liquidity profile, which was already under pressure from high capital expenditure targets.

However, Ventura said that payment of the license fee would not affect the company's cash flow as it had been factored into its 2006 budget. In addition, the company would bring a greater variety of services onstream to generate higher income this year.(06)
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