Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PT Indosat Tbk (PTITF, Financial) reported a 13.4% year-on-year increase in cellular revenue, reaching IDR28 trillion, driven by strong growth in rural areas.
- The company's EBITDA increased by 18% year-on-year to IDR13 trillion, reflecting a focus on sustainable profitability.
- PT Indosat Tbk (PTITF) has successfully increased its home broadband customer base to 345,000, with home passes reaching around 1.5 million homes.
- Strategic partnerships with NVIDIA and Google are expected to drive advancements in AI initiatives, enhancing the company's technological capabilities.
- The company has made significant progress in deleveraging its balance sheet, reducing net debt to EBITDA from 0.45 times to 0.36 times, indicating strong cash flow generation from operations.
Negative Points
- The liquidity of PT Indosat Tbk (PTITF)'s stock remains a concern, with limited free float deterring global investors.
- The uptake of home broadband services is slower than expected, with only 6,000 net additions on a quarter-on-quarter basis despite 1.5 million homes passed.
- There is increased competitive intensity in the market, which may impact the company's ability to achieve its ARPU targets.
- Marketing expenses have increased significantly, raising questions about the effectiveness and efficiency of these expenditures.
- The company faces challenges in expanding its rural distribution network, which is crucial for capturing growth in underserved areas.
Q & A Highlights
Q: What can be done to improve the liquidity of PT Indosat Tbk's stock, given its limited free float?
A: Chi Hung Lee, CFO, mentioned that the management team is exploring various ways to improve stock liquidity and has engaged shareholders in discussions. While no specific actions can be announced yet, efforts are ongoing to address this issue.
Q: Can you provide an update on 5G licensing in Indonesia and expectations on timing and terms?
A: Vikram Sinha, CEO, stated that 5G licenses are expected next year, with the real investment cycle starting in 2026. The focus is on ensuring readiness to monetize 5G, rather than just focusing on speed.
Q: Why is there not a faster take-up on broadband, given the 1.5 million homes passed?
A: Ritesh Singh, CCO, explained that the company is expanding into new areas and building a robust sales system to attract profitable customers. They expect an increase in subscriber base in the coming months as infrastructure and distribution systems are completed.
Q: Are you still targeting a 40,000 ARPU for the year, and what strategies are in place to achieve this?
A: Ritesh Singh, CCO, noted that while the target is ambitious, the company is close to achieving it through growth in rural areas and offering products that customers want. The focus is on sustainable growth and improving ARPU over time.
Q: What is the update on the GPU as a service business and the AI center of excellence?
A: Vikram Sinha, CEO, announced that the GPU as a service will launch on August 21, along with updates on the AI center of excellence. There is significant interest from sectors like finance and oil and gas, and these initiatives are expected to contribute to EBITDA next year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
