Growth plans of Indosat with Qatar as a shareholder

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Pak Alex2
Alexander Rusli, CEO Indosat

Inside Investor met with Alexander Rusli, CEO of Indonesia’s mobile network operator Indosat, to discuss how its shareholder Qatar Telecom (recently rebranded as Ooredoo) has impacted Indosat’s business and its potential role in the Middle East, as well as to get an update on Indosat’s current growth and innovation plans within Indonesia.

Q: What has changed since Qatar Telecom has become your shareholder?

A: Previously from Qtel acquiring a majority stake in Indosat, we had Singapore Telecommunication Technologies, or STT, as a largest shareholder, and they were very different compared to the Qataris. But there has also been a structural change in the industry. Middle East shareholders tend to be more bottom-line oriented, and of course it relates to having less attachment within the region. The Singaporeans of course were much more sensitive towards the relationship between Singapore and Indonesia and how the ownership actually reflects upon them, whereas QTel has less of an issue in this respect.

Q: All your subsidiaries will now be refurnished under the new brand name?

A: Well, now there is going to be a rebranding activity but we also realize that Indosat brand itself has strong brand awareness in Indonesia and this will be our key consideration too.

Q: How is the competitive environment in Indonesia?

A: The country is a nine operators market, whereas others just have two or three operators at the most and competition isn’t anywhere close to what it is here. I do not believe that this will change in the foreseeable future

Q: Where does the majority of your customers come from?

A: In the consumer market, we are almost entirely a prepaid provider. It makes 98 to 99 per cent of our customers, and most of them are the youth.

Q: Are there any new innovations that you have recently implemented?

A: Well, a lot of our customers are potential data users or 3G customers, so what we are doing now is actually adding more capacity to provide better 3G services. We have launched Indosat Super WiFi – a seamless wifi service – to enhance customers experience in data space where the customers can use internet speed up to 20Mbps. Not to mention our network modernisation of 3G900 where customers will experience better coverage and speed in their mobility, again, in data space.  Meanwhile, we also refreshed our Mentari brand which will focus to give more services for smartphone users. We also increase more bundling services with mobile devices such as the recent launches of Iphone 5 and Blackberry Z10.

Q: Do you provide corporate packages?

A: Yes we do. Indosat has been very well known for addressing the corporate market. We have launched Indosat Cloud – first cloud based services in Indonesia – last year. We also have been addressing the SME segment for some time now.  In terms of growth, the SME and corporate market is much more vibrant than the consumer market.

Q: Are foreign companies coming to Indonesia using Indosat?

A: Yes, because we are traditionally known to be the leader in the corporate market, so when they arrive their aspiration is to use Indosat. Even though there is competition we have managed to stay on top and continue to attract new foreign companies.

Q: What have you done in the Middle East in terms of bringing your brand into that market?

A: We are 65 per cent owned by Oooredoo, but when we go there people don’t know who we are. This is truly ridiculous, and we need to be out there more and let the people know that we are part of a Middle Eastern company one way or another, and if they look for some collaboration between the Middle East and Indonesia in the mobile business it should be with us. We have done road shows, but it seems that it is not enough.

Q: What is your strategy for the short-term?

A: We have put some things on hold because we knew that the branding would help push us. Now that the new brand is out we are trying to put a communication strategy together in order to grow. Other initiative is about people/employees. We believe that engaged employee will drive toward engaged customers. It becomes our main reason to focus on employee enhancement program.

Q: Where do you see growth opportunities within Indonesia?

A: There is still much need for growth in core services. Areas connected to data also have much room for growth. Applications that run on top of the data are in high demand. Go to youth market will be important. But we also start to look into other communities such as women and to understand how mobile services could give benefit for their life.

Q: What about the need for infrastructure?

A: Infrastructure is there but quality and capacity need to be improved. We are actually going into a modernization project this year that could give better user experience including more efficient data use.

Q: How do you see your growth in the next six-months?

A: At the moment growth is hindered by the ongoing modernization works within our network. It is a major undertaking that we are going through and it is facing a lot of challenges that we have to deal with.

Q: Do you see any regional integration with providers from other countries?

A: Should there be any efforts to venture into other countries we would think about a specific angle on what we can offer and how it will mutually grow all parties.

Q: What can you provide to potential partners within Indonesia?

A: Well, if they come in and want to become a large operator they definitely need an operator with size such as us, as we can provide the revenue stream and the customer base. Another thing is content that we can share.

Q: Where do you see Indosat in five years?

A: In medium term we have aspiration to become Leader in Data & Smart Devices; Best Customer Experience; Lean Cost Structure and Great Employees & Stakeholders Engagement. All of those previously mentioned aspiration will convey Indosat toward promising revenue growth. Therefore, within five years’ time I believe we will have a stronger revenue share in the market. By that time we will also have a better hold on data user.

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[caption id="attachment_8708" align="alignleft" width="281"] Alexander Rusli, CEO Indosat[/caption] Inside Investor met with Alexander Rusli, CEO of Indonesia’s mobile network operator Indosat, to discuss how its shareholder Qatar Telecom (recently rebranded as Ooredoo) has impacted Indosat’s business and its potential role in the Middle East, as well as to get an update on Indosat’s current growth and innovation plans within Indonesia. Q: What has changed since Qatar Telecom has become your shareholder? A: Previously from Qtel acquiring a majority stake in Indosat, we had Singapore Telecommunication Technologies, or STT, as a largest shareholder, and they were very different compared to the...

Reading Time: 4 minutes

Pak Alex2
Alexander Rusli, CEO Indosat

Inside Investor met with Alexander Rusli, CEO of Indonesia’s mobile network operator Indosat, to discuss how its shareholder Qatar Telecom (recently rebranded as Ooredoo) has impacted Indosat’s business and its potential role in the Middle East, as well as to get an update on Indosat’s current growth and innovation plans within Indonesia.

Q: What has changed since Qatar Telecom has become your shareholder?

A: Previously from Qtel acquiring a majority stake in Indosat, we had Singapore Telecommunication Technologies, or STT, as a largest shareholder, and they were very different compared to the Qataris. But there has also been a structural change in the industry. Middle East shareholders tend to be more bottom-line oriented, and of course it relates to having less attachment within the region. The Singaporeans of course were much more sensitive towards the relationship between Singapore and Indonesia and how the ownership actually reflects upon them, whereas QTel has less of an issue in this respect.

Q: All your subsidiaries will now be refurnished under the new brand name?

A: Well, now there is going to be a rebranding activity but we also realize that Indosat brand itself has strong brand awareness in Indonesia and this will be our key consideration too.

Q: How is the competitive environment in Indonesia?

A: The country is a nine operators market, whereas others just have two or three operators at the most and competition isn’t anywhere close to what it is here. I do not believe that this will change in the foreseeable future

Q: Where does the majority of your customers come from?

A: In the consumer market, we are almost entirely a prepaid provider. It makes 98 to 99 per cent of our customers, and most of them are the youth.

Q: Are there any new innovations that you have recently implemented?

A: Well, a lot of our customers are potential data users or 3G customers, so what we are doing now is actually adding more capacity to provide better 3G services. We have launched Indosat Super WiFi – a seamless wifi service – to enhance customers experience in data space where the customers can use internet speed up to 20Mbps. Not to mention our network modernisation of 3G900 where customers will experience better coverage and speed in their mobility, again, in data space.  Meanwhile, we also refreshed our Mentari brand which will focus to give more services for smartphone users. We also increase more bundling services with mobile devices such as the recent launches of Iphone 5 and Blackberry Z10.

Q: Do you provide corporate packages?

A: Yes we do. Indosat has been very well known for addressing the corporate market. We have launched Indosat Cloud – first cloud based services in Indonesia – last year. We also have been addressing the SME segment for some time now.  In terms of growth, the SME and corporate market is much more vibrant than the consumer market.

Q: Are foreign companies coming to Indonesia using Indosat?

A: Yes, because we are traditionally known to be the leader in the corporate market, so when they arrive their aspiration is to use Indosat. Even though there is competition we have managed to stay on top and continue to attract new foreign companies.

Q: What have you done in the Middle East in terms of bringing your brand into that market?

A: We are 65 per cent owned by Oooredoo, but when we go there people don’t know who we are. This is truly ridiculous, and we need to be out there more and let the people know that we are part of a Middle Eastern company one way or another, and if they look for some collaboration between the Middle East and Indonesia in the mobile business it should be with us. We have done road shows, but it seems that it is not enough.

Q: What is your strategy for the short-term?

A: We have put some things on hold because we knew that the branding would help push us. Now that the new brand is out we are trying to put a communication strategy together in order to grow. Other initiative is about people/employees. We believe that engaged employee will drive toward engaged customers. It becomes our main reason to focus on employee enhancement program.

Q: Where do you see growth opportunities within Indonesia?

A: There is still much need for growth in core services. Areas connected to data also have much room for growth. Applications that run on top of the data are in high demand. Go to youth market will be important. But we also start to look into other communities such as women and to understand how mobile services could give benefit for their life.

Q: What about the need for infrastructure?

A: Infrastructure is there but quality and capacity need to be improved. We are actually going into a modernization project this year that could give better user experience including more efficient data use.

Q: How do you see your growth in the next six-months?

A: At the moment growth is hindered by the ongoing modernization works within our network. It is a major undertaking that we are going through and it is facing a lot of challenges that we have to deal with.

Q: Do you see any regional integration with providers from other countries?

A: Should there be any efforts to venture into other countries we would think about a specific angle on what we can offer and how it will mutually grow all parties.

Q: What can you provide to potential partners within Indonesia?

A: Well, if they come in and want to become a large operator they definitely need an operator with size such as us, as we can provide the revenue stream and the customer base. Another thing is content that we can share.

Q: Where do you see Indosat in five years?

A: In medium term we have aspiration to become Leader in Data & Smart Devices; Best Customer Experience; Lean Cost Structure and Great Employees & Stakeholders Engagement. All of those previously mentioned aspiration will convey Indosat toward promising revenue growth. Therefore, within five years’ time I believe we will have a stronger revenue share in the market. By that time we will also have a better hold on data user.

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