Indosat Analysts Day 2013 Presentation PDF

Indosat Analysts Day
2013
Indosat IR - New Template v23 1220.pptx
Agenda
Strategy Overview
Consumer Business
Corporate Business
Wrap Up
Indosat Analysts Day 2013
2
Strategy Overview
A Market of Opportunities
246 million people , 4th largest population

50% of the population is under 30 years old
US$ 4,540 GDP per capita and growing
57% of the population is middle class
6% average economic growth for the past 5 years
22% Internet penetration
15% Smartphone penetration
4
Indosat Today
Covered by 10 Areas; 69 Sales Areas and 338 Sales Clusters
Segmented Revenue
IDR 22.7tn Revenue
Fixed
Telecom,
4%
IDR 10.6tn EBITDA

58.5mn Subscribers
19% Market share
Cellular,
83%
Fixed
Data,
13%
IDR 27,8k ARPU

21,930 Number of BTS
FY-2012 figures
Fixed Data
Cellular
Integrated and reliable total
Indosat Matrix
Postpaid Cellular Service
Services
&
Segments
solution for industry

services
Corporate and institutional
Indosat IM3
Prepaid Cellular Service
Indosat Mentari
Premium Prepaid Cellular
Service
services for VPN,

International Internet
Backbone and Multimedia
Specialist in data
communications, internet
and value added service.
Fixed Telecom
Indosat International Direct
Dialling Service
Voice over Internet Protocol

(VoIP) Service ; for
domestic and international
Fixed Wireless Service Postpaid and Prepaid
5
We are part of ooredoo

Fastest growing telco group 2006 2012(1)
Tunisia
Qatar
Iraq
Palestine
Pakistan
Saudi Arabia
Algeria
Kuwait
Oman
Cambodia
Maldives
2006
Laos
Singapore
RECORD GROWTH
Philippines
Indonesia
2012
Markets
15
CAGR
Customers
<2mn
>92mn
90%
Employees
2,200
17,000
41%
Revenue
US$ 1.2bn
US$ 9.3bn
41%
EBITDA
US$ 726mn
US$ 4.3bn
35%
Note: (1) Revenue CAGR

3
6
Financial highlights
In IDR billion
FY-11
FY-12
YoY
3Q-12
4Q-12
QoQ
Operating Revenue
20,577
22,719
10.4%
6,132
6,209
1.3%
EBITDA
9,591
10,574
10.2%
2,768
2,927
5.7%
EBITDA Margin
46.6%
46.5%
-0.1ppt
45.1%
47.1%
2.0ppt
880
417
-52.5%
1,760
-1,211
-168.8%
Profit Attribution to
Owners of the Company
Improvement in the top line and cost efficiency continue to drive positive EBITDA growth
Note: unaudited figures from FY-2012 Highlights. Subject to change upon full release FY-2012 results
7
Our Medium Term Ambitions
Integrated
Telco Provider
Customers
Choice
2012
2015
Limited Data Focus
Leader in Data & Smart Devices
Telco Product Focus
Best Customer Experience
In-efficient Cost Structure
Lean Cost Structure
Average Employees &

Stakeholders Engagement
Great Employees &

Stakeholders Engagement
8
Leader in data & smart devices

Key Focus Areas
Optimum
Channels
Develop
Optimum channels for

distributing our products and
services
Options / right to play in new

business opportunities
Implement
Competitive
Products and
Services
New
Opportunities
and
Partnerships
Competitive products and services

for consumer and corporate
segments
Strategic partnerships for

cloud, content, apps, OTT and
Device initiatives
Great experience data network
Quality
Data Network
Secure
Optimal pricing strategy for

effective monetization
9
Best customer experience

Key Focus Areas
Best Touch
Points
Experience
Deliver
Exciting
Brands
Customer
Value
Management
Excellent customer experience in Exciting & fresh brands

our touch points
Customer value management - align customer experience efforts with

respective segments
Improve
Great
Quality
Service
Improve network quality and

reliability where it matters
Align
Improve IT system capability and

reliability
10
10
Lean cost structure

Key Focus Areas
Cost
Optimization
Program
Save
Strategic
Sourcing
New
Mindset
Take the Cost Optimization Program Explore infrastructure sharing

to the next level
where possible
Leverage Ooredoo group position in

strategic sourcing
Improve
Infrastructure
Sharing
New operating models to improve

agility & cost structure
Organization effectiveness and

Business Process
Create
Cost conscious culture & mindset
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11
Great employee & stakeholders

engagement
Key Focus Areas
Culture
Transformation
New corporate culture to elevate

customer experience and value
centric behavior
Transform
Capture motivation
through inspirational
change
Develop
Performance
Management
Showmanship and
leadership qualities
Leadership
People
Development
Performance management
practices
Strengthen leadership
at all levels
Lead
People development across all levels Promoting the best as well as

managing the non-performing
to unlock the people potential
12
12
Expanding our position in the value

chain
Community & Ads Platform
Financial Service Systems
Closely Involved with Digital Consumer

Lifestyle And Narrowing the Gap of the
Local Content (new Kongkoow 2.0)
Kongkoow
OTT Cache/Hosting Services

Powered by
Cloud Computing Platform
Provide local services to OTT partners

to enhance the service experience on
local environment; while monetizing the
growth
Integration w/ Local Developers
Partnership and win-win culture with OTT

players as key part of strategy
13
13
We are modernizing our infrastructure

Leverage IP-based Network to
Serve Different Segment Needs
BTS
Provide Seamless Access to the

highest QoS Networks
Develop Domestic Content

Delivery Network
WiFI AP
CDN
Indosat IP/MPLS
Backbone
VSAT
Wireline
CDN
CDN
CDN
Corporate
Mobile
SME
Retail
Wider coverage, Robust,

& Scalable Network
Mobile Data Experience
Speed & Data Quality
Providing robust infrastructure to capture value in the mobile data traffic explosion
14
14
and implementing best-in-class RAN

Radical change in RAN design resulting in
(4)
and dramatic improvement in cost efficiency
Multi-band antenna
Remote Radio Units (RRU)
MM-SDR
IP-MW
UMTS 2100 (3G)
GSM 1800 (2G)
GSM 900 (2G/3G)
leap improvement in customer experience
Network modernization commenced in 4Q-12 after

receiving the regulatory approval to use 3G in our
existing 900 MHz band
We target the key areas with significant smartphone
penetration in Java to be ready by 2013 and outside
Java in 2014
15
15
Even Miss Universe is Excited with the

Modernization!
16
16
Consumer Business
17
Maturing industry with continuous growth

from data
Subs (mn) and Penetration (%)
Industry Revenue (USD bn)

Revenue
9.1
10.0
8.0
6.5
6.8
31%
33%
9.9
10.3
31%
100%
80%
7.0
6.0
4.0
Data Contribution
36%
41%
41%
Subs
250
197
200
60%
150
40%
100
20%
50
0%
141
95
61%
Penetration
247
220
160%
162
69%
91%
83%
200%
101%
120%
80%
42%
2.0
0.0
2007
2008
2009
2010
2011
2012
40%
0%
2007
2008
2009
2010
2011
2012
Source: Merrill Lynch, Indosat analysis
More than 100% SIM penetration in 2012, however some people are still un-served
Industry revenue grew more than 1.5 times and mobile subscriber base grew more than 2.6 times
between 2007-2012
While the growth is expected to be slower, mobile is expected to be the primary mean to access
the Internet, therefore market growth opportunity will mainly be driven by data usage
18
18
Potential upside from smartphone growth

and low internet penetration
Handset (000 Units)
Mobile Phone
Internet Penetration (%)
Smart Phone
100
60,000
50,000
11,693
40,000
30,000
20,000
10,000
14,302
20,981
40
1,870
30,010
2009
2010
39,853
41,598
39,339
20
75
75
80
83
61
60
4,465
25,269
75
80
11
22
30
32
34
40
0
2011
2012
2013 (e)
Source: GFK 2013, Internet World Stats
The smartphone market is expected to grow fast

Indonesian market treasure potential of more than 100 million handset sales/year
Low internet penetration relative to other countries in the region
Internet penetration is driven by social networks and smartphone growth
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19
Immersion of Digital lifestyle

22:0
0
Watch Youtube or
read e-book
00:0
0
01:0
0
Wake-Up, take a bath,

get dressed
02:0
0
21:0
0
03:0
0
20:0
0
Check News, Online

game using WIfi
Travelling to home,
receive phone call on
cellular or Skype
23:0
0
04:0
0
19:0
0
05:0
0
18:0
0
06:0
0
17:0
0
07:0
0
Lunch with friends, update

Facebook and chatting via
BBM
16:0
0
Coffee Break, retrieve file

from Cloud
Breakfast, read online

news. Powered by
home broadband
15:0
0
14:0
0
13:0
0
12:0
0
11:0
0
10:0
0
08:0
0
09:0
0
Travelling to
campus/office while
browsing through
Mobile Broadband
Start campus/office activity

powered by LAN
Source: Markplus research
20
20
The way people interact is changing

4 LEVELS OF INTIMACY IN
YESTERDAYS COMMUNICATION
10 LEVELS OF INTIMACY IN TODAYS

COMMUNICATION
EMAIL/
LETTER
TEXT MSG/IM
Source: Frost & Sullivan analysis, Tumblr.com
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providing significant revenue upsides

Indonesia mobile data plan tariff is
considerably low compared to other countries
Mobile data traffic grows much faster than

telco operator data revenue
Traffic
Voice
centric
Data centric
We will transform ourselves to be able to capture the value opportunity in data-centric world
Source: BMI, EU SME Centre, CIA The World Factbook, IMF, IDC, Buddecomm, KPMG, news clippings, Value Partners analysis
22
22
Our Segmented Approach to Market

The Youth and Mass-market Darling
The Preferred Choice for Smartphone Users
core prepaid brand for youth and

mass market segment
for premium prepaid segment

22% of our total customers
23% of total revenue

68% of total revenue
Strengths: attractive packages for the

smartphone users
Strengths: attractive offerings for

voice, SMS, data
The Prominent Customers Choice

for the high-end, postpaid customers
9% of total revenue
Strengths: total solution for the highend customers
We approach the segment we are targeting with their

preferred ways using our popular brands
We deliver the services they need, want and desire
based on our brands promise while applying
appropriate charging packages
We want to convert our happy customers to become
our Fans
23
23
Our Key Consumer Initiatives

Elevating Total Customer Experience
Executing Cluster-based Sales & Distribution
Continuously review and improve

critical customer journey
Salumpa:
Low
Set-up >300 clusters nation-wide to

cope with very diverse markets
Specific, appropriate objectives and
strategies for individual clusters
Targeted micro-campaigns based on

in-depth customer analytics
GDP MAP
<Rp5M
5M 10M
Mobile
Penetration
Capturing New Revenue Streams
10M 15M
Riding on the Smartphone Growth
Structured, win-win partnership with

OTT players
Partnership with key smartphone

vendors with deep integration
Developing internal competence in

OTT business models
Leveraging our strength in community

relationships
We design and execute our initiatives based on the customer needs, wants and desires
24
24
Corporate Business
25
Corporate Market Segments

All Telecom & ICT 2012
In USD
The LE segment is
already well penetrated by
all players,
While the SME segment is

relatively less penetrated
Indosat aim to strengthen

its position in Large
Enterprise and gain
market share in the SME
segment
Number of companies
Large
Enterprise
SME
Micro will be addressed via consumer mobile
Current market
revenue
Average per
client
Large
29.000
~1.9B
65K
Medium
72.000
0.3B
4K
Small
540.000
0.3B
0.5K
Micro
~60M
3.5B
58
Source: Ministry of small medium business and cooperatives; McKinsey, Indosat analysis
26
26
Corporate Market is growing fast

CAGR (%)
3,343
Market Revenue
in USD mn
Corporate segments are growing

faster than consumer mobile
Capturing higher share of this
growth is critical to Indosat growth
aspiration
2,639
1217
7
1066
Large Enterprise
IT Services1
2
SME mobile
2
SME fixed voice
2
SME fixed data
1589
20
1106
7
209
174
94
2012
Source: McKinsey, Indosat analysis
12
-1
10
256
171
111
2014
1 Includes large, medium, small and micro; 2 Includes medium and small
27
27
Corporate Services
Segments
Large
Enterprise
Medium
Enterprise
Small
Enterprise
Infrastructures
Services
Connectivity Solutions
Mobile B2B
Ethernet
IPVPN
Leased Circuit
Transponder
TV Link
IP Transit
Dedicated Internet Access
Closed User Group

Blackberry Enterprise
Unified Communication
Wireless VPN
M2M: EDC, ATM & Vehicle
Tracking
IT Services
Fixed Voice
Data Center
Disaster Recovery Center
Cloud Computing
Managed Services
System Integration
Indosat Fixed Phone

IDD
Nationwide
Cellular Network
Satellite Services
Nationwide &
International
Backbone Fiber
Optic Services
Multi-sites Data
Center & DRC
Global and Regional
Partner Networks
28
28
Key Corporate Business Initiatives

Strengthening Connectivity Solutions
Mainly focus on large enterprise
segment with full fledged offerings
Mediums segment penetrate in
existing coverage for connectivity &
internet
Growing Mobile B2B

Mobile B2B will address all segments
and leverage data & VAS as engine
of growth while revamp our
proposition on voice solution
Growing Small Medium Market
Growing IT Services
IT services will address large segment
Some and only appropriate product
for medium segments
Focus on mobile and internet

solutions
Penetrate on key cities
We continue to develop and strengthen our integrated solutions for the corporate market
29
29
Wrap Up
30
Our Vision:
To be the customer's preferred choice for all
information and communication needs
Highest Revenue Growth
Leader in
Data & Smart
Devices
Best
Customer
Experience
Lean
Cost Structure
Great Employees & Stakeholders Engagement

31
31
To Deliver Our Promise, we are driven by

a set of Renewed Values
Trust
Think positively, walk the talk and can be relied on.
Care
Demonstrate concern, respect and serve whole heartedly.
Passion To Be The Best
Strive for excellence through continuous improvement and refinement.
Fast
Quick in problem solving, making decisions, taking actions and adapting.
Youthful Spirit
Energetic, dynamic and dare to be a change driver.

32
32
We are pleased with our current

momentum, but will not rest
We are continuously enhancing our strategy
execution
We are strengthening our data business

We are rolling out the modernization program
We are continuously improving our cost

structure
We are continuously developing our people
and redefining our corporate culture
33
33
We Continue to Strive to Connect with

Our Customers and Potential Customers
34
34
Thank You
Any further questions?
Indosat Investor Relations

Jl. Medan Merdeka Barat No. 21
Jakarta - 10110
Tel: +62 21 30442615
Investor@indosat.com
Upcoming events
Indosat 1Q-2013 Results - May 2013
35
35
Disclaimer
PT Indosat Tbk cautions investors that certain statements contained in this document state management's intentions,
hopes, beliefs, expectations, or predictions of the future are forward-looking statements
Management wishes to caution the reader that forward-looking statements are not historical facts and are only
estimates or predictions. Actual results may differ materially from those projected as a result of risks and uncertainties
including, but not limited to:
Our ability to manage domestic and international growth and maintain a high level of customer service
Future sales growth
Market acceptance of our product and service offerings
Our ability to secure adequate financing or equity capital to fund our operations
Network expansion
Performance of our network and equipment
Our ability to enter into strategic alliances or transactions
Cooperation of incumbent local exchange carriers in provisioning lines and interconnecting our equipment
Regulatory approval processes
Changes in technology
Price competition
Other market conditions and associated risks

The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of
future events, new information, or otherwise
36
36
37
Supplemental Information
38
2013 Guidance
FY 2012 Actual
FY 2013 Guidance
Consolidated Revenue Growth
10.4%
In line with Industry

or better
EBITDA Margin
46.5%
Mid 40s
IDR 6.3 trillion
IDR 8 trillion +10%
Cash CAPEX
39
39
Spectrum overview for top 3 cellular

operators
900 Mhz
in Mhz
Indosat
1800 Mhz
2100 Mhz
2300 Mhz
10.0
20.0
10.0
15.0
Telkomsel
7.5
22.5
15.0
15.0
XL Axiata
7.5
7.5
15.0
0.0
Telkomsel and XL each acquire 5Mhz on the last auction

40
40
We Continue to Strive to Connect with

Our Customers and Potential Customers
41
41

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Indosat Analysts Day

Indosat Analysts Day 2013

246 million people , 4th largest population

Indosat Analysts Day 2013

IDR 10.6tn EBITDA

IDR 27,8k ARPU

Integrated and reliable total

solution for industry

Corporate and institutional

services for VPN,

Voice over Internet Protocol

Fixed Wireless Service Postpaid and Prepaid

Indosat Analysts Day 2013

We are part of ooredoo

Note: (1) Revenue CAGR

Indosat Analysts Day 2013

Indosat Analysts Day 2013

Our Medium Term Ambitions

Limited Data Focus

Leader in Data & Smart Devices

Telco Product Focus

Best Customer Experience

In-efficient Cost Structure

Lean Cost Structure

Average Employees &

Great Employees &

Indosat Analysts Day 2013

Leader in data & smart devices

Optimum channels for

Options / right to play in new

Competitive products and services

Strategic partnerships for

Great experience data network

Optimal pricing strategy for

Indosat Analysts Day 2013

Best customer experience

Excellent customer experience in Exciting & fresh brands

Customer value management - align customer experience efforts with

Improve network quality and

Improve IT system capability and

Indosat Analysts Day 2013

Lean cost structure

Take the Cost Optimization Program Explore infrastructure sharing

Leverage Ooredoo group position in

New operating models to improve

Organization effectiveness and

Cost conscious culture & mindset

Indosat Analysts Day 2013

Great employee & stakeholders

New corporate culture to elevate

People development across all levels Promoting the best as well as

Indosat Analysts Day 2013

Expanding our position in the value

Financial Service Systems

Closely Involved with Digital Consumer

OTT Cache/Hosting Services

Cloud Computing Platform

Provide local services to OTT partners

Partnership and win-win culture with OTT

Indosat Analysts Day 2013

We are modernizing our infrastructure

Provide Seamless Access to the