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Brief Presentation September 2005 Page 1

Corporate PresentationPT Indosat TbkFirst Half 2005


Key Business Segment

Cellular Business Fixed Telecom MIDI

Description – Second largest cellular operator in Indonesia

– Revenue comes primarily from IDD business (87%)

– Corporate Data Communications, Leased Lines, Satellite, Internet

Contribution(1H 2005) – 75% of revenue – 11% of revenue – 14% of revenue

Target Market Segment

– Corporate – Youth – Mass

Services • Matrix – Postpaid for high end with advanced features

• Mentari –Prepaid for general users

• IM3 – Prepaid for the young & trendy

• IDD 001• IDD 008• Flat call• StarOne

– Corporate– SME – Residential

– Wholesale – Corporate– Residential

• Frame Relay• Leased Circuits• Data Comms• Internet Access• VSATs

Indosat’s key businesses are Cellular, Fixed Telecom and MIDI


Ownership Structure

Public

Listed on the JSX, SSX and NYSE with market cap of around Rp29.1 trilion(1)

Note:(1) Per 30 Juni 2005

Republic of Indonesia

41.0% 44.2% 14.7%

§ Indosat’s shares are majority owned by public investors (44.2%)

§ ST Telemedia through Indonesia Communications Limited owns (41.0%)

§ Indonesian Government owns 14.7% including Series A share


Vision and Strategy

Focus on cellular subs growth

Maintain IDD business and entering into DLD and FWA business

Nurturing MIDI business through synergy among business lines

Increase efficiency and synergy development

VISION : To become a leading cellular / wireless focused telecommunication network and service provider in Indonesia

Strategy


Main Initiatives 2005-2006

Enhanced Customer Focus• Enhance services in new regions

• Enhance market segmentation and targeting

Committed to Good Corporate Governance due to the listing in the Jakarta, Surabaya and NY Stock Exchanges

Acceleration of network roll out and investment

(Around US$900 mio in 2005 and US$670 mio in 2006, 85% for cellular)


Major Achievements in First Half 2005

12.87 cellular subscribers with a cellular revenues growth of 31% (YoY)

IDD traffic increased 6% despite a decline in its revenues due to a tighter competition

The succesful financing program (US$ note and IDR bond) and decrease in cost of borrowing/debt

MIDI revenues increased 13% (YoY)

Realization of merger benefits (cost efficiencies)


0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

35,000.0

40,000.0

45,000.0

2002 2003 2004 Jun-05

Indosat Indonesia

Cellular Services

§ Recording a high subs growth in recent years (CAGR 65% 2002-2004)

§ In first half 2005 Indosat recorded net add of 3.1 mio subs, hence the cellular subs base on June 30, 2005 was 12.9 mio subscribers.

§ Indonesian cellular penetration is relatively lower compared to other countries.

4.5%

17.5%

26.0%

36.4%

41.9%

49.9%

91.0%

India

Indonesia

China

Phillippines

Thailand

Malaysia

Singapore

Cellular Penetration (GSM) 1(dalam ribu)

Cellular Subscriber Growth

2002 -2004

Indosat CAGR 65%

Indonesia CAGR 62%

Notes : (1) Penetration data as of end 2004, except Indonesia per 30 June 2005


Cellular Subscribers Composition

Subs composition as at June 30 2005 (in 000)

Postpaid4%

Prepaid96%

ARPU

0

50,000

100,000

150,000

200,000

250,000

300,000

30 Juni-04 30 Juni-05

Prepaid Postpaid Blended

Subs Composition as at June 30 2005

Non Java, 25.5%

Java, 74.5%

Cellular Operating Revenues(Rp billion)

2002 -2004 CAGR 51%

3,272

5,118

7,451

3,3704,404

2002 2003 2004 1H-04 1H-05


MIDI14%

Cellular75%

SLI11%

Revenues Composition (1H 2005)

§ Fixed telecommunication contributed 11% to operating revenues. IDD contributed 87% to fixed telecom revenues.

§ MIDI revenues increased 13.1% (YoY), mainly due to continued demand in the domestic wholesale market.

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2002 2003 2004 1H-05Outgoing Incoming

Fixed Telecommunication and MIDI

Trend in IDD Traffic(in thousands minutes))

60% 78%

27%40%

73% 83%

22% 17%


Cellular Network Coverage

124Base Station Controllers

41Mobile Switching Centers

4,564Base Stations

1H-05

Indosat Cellular CoverageNumber of BTS

Java67%

Non-Java33%


International and National Backbone Network

Duri

BogorPacet

SoloMadiunKertosono

Batam

Lampung

Pk.Pinang

existing (International)

existing (Domestic)

Plan 2004-2005

Plan 2006-2008

Palapa C2 (113o BT)

Sea-Me-We 3

APCN


Organization Structure

Deputy President Director

Ng Eng Ho

Deputy President Director

Ng Eng Ho

Network Ops & Quality

MgmtDirector

Raymond Tan

Network Ops & Quality

MgmtDirector

Raymond Tan

Information Technology

Director

Joseph Chan

Information Technology

Director

Joseph Chan

Planning & Project Dev

Director

Wityasmoro S. H.

Planning & Project Dev

Director

Wityasmoro S. H.

Finance Director

Wong Heang Tuck

Finance Director

Wong Heang Tuck

Corporate ServicesDirector

S. Wimbo S. Hardjito

Corporate ServicesDirector

S. Wimbo S. Hardjito

Corporate Market

Director

Wahyu Wijayadi

Corporate Market

Director

Wahyu Wijayadi

Consumer Market

Director

Johnny S. Sjam

Consumer Market

Director

Johnny S. Sjam

President Director

Hasnul Suhaimi

President Director

Hasnul Suhaimi

Regional Jawa Timur &

Kalimantan

Regional Jawa Timur &

Kalimantan

Regional Sulawesi, Maluku &

Papua

Regional Sulawesi, Maluku &

Papua

Regional Jawa Barat

&JawaTengah

Regional Jawa Barat

&JawaTengah

Regional Sumatera

Regional Sumatera

RegionalJabotabek &

Banten

RegionalJabotabek &

BantenSenior Vice PresidentsSenior Vice Presidents


Human Resources

Employees Composition (Total Headcount 7,931 per 30 June 2005)

Non-permanent

39%

Permanent61%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

30/06/04 30/06/05

IndosatLintasartaIM2Sisindosat

Indosat employees comprise of permanent employees (61%) and non-permanent employees (39%).

Non-permanent employees are hired for support functions.


Financial Performance (1H 05 vs 1H 04) In billion Rupiah

Operating Revenues Rp5,884.3 16.0%

Operating Profit Rp1,916.4 10.6%

EBITDA Rp3,393.713.9%

Net Income1,2) Rp786.3 4.6% (increased 9.6% before restatement)

Total Assets Rp32,252.8 17.1%

(1)Restated for the early adoption of ‘SAK’’ 24 (Revised 2004), ‘‘Accounting for Employee Benefits’’, and SAK 38 (Revised 2004), ‘‘Accounting for Restructuring Transactions of Entities under Common Control’’.

(2) In 1H-04 we recorded gain from the sale of our shares in MGTI amounting to Rp278.7 billion and gain from the sale of our shares in PINamounting to Rp110.9 billion.


3,6624,386

6,053

3,394

54.1%

57.7%57.4%

53.3%

2002 2003 2004 1H-05

EBITDA EBITDA Margin

Revenues and EBITDA growth

Indosat recorded strong revenues and EBITDA growth

(Rp billion)

Revenues EBITDA and EBITDA Margin(Rp billion)

2002 -2004 CAGR 25%2002 -2004 CAGR 29%

6,767

8,235

10,549

5,884

2002 2003 2004 1H-05


Sound Balance Sheet

1.7x 1.6x

1.2x 1.2x

2002 2003 2004 1H-05

Net Debt (1) / EBITDA Interest Coverage

Net Debt (1) / Capitalization Gross Cash Flows / Debt (1)

6.2x

5.2x 5.5x 5.8x

2002 2003 2004 1H-05

46%49% 47%

43%

2002 2003 2004 1H-05

32%38%

46% 48%

2002 2003 2004 1H-05

Notes: (1) Including procurement payables(2) Annualized EBITDA Per 30 June 2005

Notes: (1) Cash flows calculated as EBITDA minus tax (2) Annualized cash flow per 30 June 2005

(2)

Notes: (1) Annualized EBITDA per 30 June 2005

(1)

(3)

Notes: (1) including procurement payables


Composition of Assets & Liabilities

Cash& Equivalent(Total US$703 million as at 30 June 2005 )

Rupiah53%

US$47%

Outstanding Borrowings(Total US$1.285 billion as at 30 June 2005)

including current maturities)

US Dollar, 42.7%

Rupiah, 57.2%

0

100

200

300

400

500

600

700

800

Others 311Payables 213Bonds Payable 548Receivables 118

Cash & Equivalent 332

Liabilities Assets Net

In US$ million as at 30 June 2005

§ Indosat is relatively hedged against currency and interest rate fluctuations (98% of debts had fixed interest rate as at 30 June 2005).

§ Net liabilities in US$ was US$311 million and US$225 million was hedged as at 30 June 2005.


Recent Development

§ Trial until end of the year with 5MHz in Jakarta and 10 MHz in Surabaya.

§ DG Postel announced plan to tender 2 x 5 MHz of 3G spectrum this year and 25 MHz in 2007.

§ DG Postel will evaluate the existing spectrum allocation and utilization.

§ Government Regulation No 28/2005 issued on 5 July 2005 regulates, among others, the USO contribution.

§ USO Contribution defined as 0.75% of operating revenues.

§ Sale of investment in Camintel amounted to US$1.5 million and in Patrakomindo amounted to Rp3.5 billion, both at around carrying book value.

§ Closing will be subject to fulfillment of conditions.

3G Trial

USO

Divestment of non-core subsidiaries


Thank You

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Corporate Presentation PT Indosat Tbkassets.indosatooredoo.com/Assets/Upload/PDF/Presentasi Perusahaan... · Corporate Presentation PT Indosat Tbk ... Maintain IDD business and entering