Indosat records stellar growth in Q1 2024 and strengthens collaborations to empower Indonesia with AI

Under the leadership of CEO Vikram Sinha, Indosat has transformed into one of Indonesia's leading telecommunications firms.

In the first quarter of 2024, Indosat Ooredoo Hutchison (Indosat or IOH) delivered another set of outstanding financial results driven by strong growth across all business lines, coupled with a continued focus on cost optimisation and operational excellence.

In the first quarter, Indosat’s revenue increased 15.8% year-on-year (YoY), whilst EBITDA grew even faster, increasing an impressive 22.1% YoY. This performance continued the strong growth trajectory achieved by Indosat ever since the $6b merger of Indosat Ooredoo and Hutchison 3 Indonesia, which was completed in January 2022. 

Since the merger, the combined company has gone from strength to strength under the inspired leadership of its President Director and CEO, Vikram Sinha. 

Today, Indosat is one of the leading telecommunications companies in Indonesia, providing mobile connectivity, digital services, and home-broadband to over 100 million consumer and business customers across the country. 

Before the merger, the company’s market cap stood at around $2.3b. Today, it is more than $5b, said Vikram. Indosat’s share price has increased by over 50% in the last 12 months. 

The merger has given Indosat the scale and financial strength to make further strategic investments in enhancing its 4G network and expanding into new rural areas of Indonesia, helping to bridge the nation’s urban-rural digital divide, explained Vikram. 

Analyst research predicts that around 23 million Indonesians will become connected to the internet over the next four years and Vikram believes Indosat can play an important role in achieving that ambition. 

In 2023, Indosat invested around $800m in capital expenditure; around 60% of which was spent on strengthening its network in rural Eastern Indonesia, including Nusantara, which is planned to be the nation’s new capital city.

According to Indosat, it had increased its number of 4G base transceiver stations (BTS) by 20.8% YoY by the end of the first quarter of 2024. This investment helped to ensure seamless connectivity and an elevated customer experience for the company’s expanding user base. This contributed to a 13.9% YoY jump in Average Revenue Per User (ARPU) as each customer spent more time online with their phone. 

In parallel, Indosat is expanding revenue from services other than cellular connectivity. This includes new digital services that ride on top of the company’s mobile network and a move into Indonesia’s fast-growing home-broadband market. In this way, Indosat is strategically positioning itself to capitalise on the vast opportunities presented by Indonesia's fast-growing digital economy.

In line with this strategy, Indosat acquired the customer assets of MNC Kabel Mediacom, a major Indonesian provider of home fibre-optic internet and television services, in November 2023. The deal added 300,000 customers to Indosat’s base and transformed the scale of the company’s Fiber-to-the-home (FTTH) business. 

“I expect our FTTH brand, which we call Indosat HiFi, to become an increasingly important contributor to Indosat’s growth in the future and contribute positively to EBITDA in 2024,” explained Vikram. 

This strategic move beyond providing cellular connectivity is part of Indosat’s larger transformation journey from a traditional telco into an AI-powered techco.  
“If you look at the telco space, the industry is growing four or five percent. But if you look at the digital economy, the industry is growing 18 percent. This is where we want to play,” said Vikram. 

Indosat is changing from a company that provides connectivity to one that leverages new technologies - cloud, data, AI, and partnerships with technology companies to offer digital services and experiences. “It’s about innovation, co-creation, coming up with new products that solve real challenges for our people in Indonesia and which have the potential to deliver a step-change in our growth trajectory,” explained Vikram. 

In July 2023, Indosat launched its Marvelous Xperience Center (Indosat MX Center) on the first floor of its Jakarta headquarters. The centre is a hub for innovation and collaboration and showcases new products and systems developed with partners such as Google, Cisco, Ericsson, Nokia, Huawei, and ZTE. 

According to Vikram, the goal is to attract global technology giants to partner with Indosat to help deliver a “Marvelous Experience” for its customers and support the growth of the country’s digital economy. 

"Gotong-royong, or mutual cooperation and partnership, lies at the heart of our strategy as we transform into a techco and help turn Indonesia into a digital nation.” 

In February 2024, Indosat announced a ground-breaking new deal with NVIDIA to provide AI-cloud services that have the potential to reshape Indonesia’s technological landscape. Through the collaboration, Indosat and its subsidiary Lintasarta have become the first NVIDIA Cloud Provider Partner in Indonesia and will bring NVIDIA’s full-stack AI-cloud platform to enterprise customers through a portfolio of high-density data centres. 

This collaboration exemplifies the important role partnerships are playing in Vikram’s growth strategy for Indosat. “Through this partnership with NVIDIA, we aim to democratise access to AI-cloud services, making them accessible to enterprises in Indonesia and across the region,” said Vikram. 

At the start of 2024, Indosat also announced other important partnerships with industry giants Cisco and Mastercard aimed at strengthening Indonesia’s digital ecosystem by enhancing cybersecurity skills and capabilities. 

Indosat’s collaboration with Cisco will enable the delivery of state-of-the-art cybersecurity solutions to enterprises, particularly small and medium-sized businesses (SMBs), fortifying their digital resilience and security posture. 

With Mastercard, Indosat has agreed to establish the Indosat-Mastercard Cybersecurity Center of Excellence, which will help to foster cybersecurity talent development and spearhead industry-wide collaboration in scam detection and mitigation.

Vikram’s growth strategy for Indosat appears to be working as demonstrated by the company’s outstanding financial performance. This was acknowledged recently by the international ratings agency, Fitch, which upgraded the company’s Outlook to Positive from Stable in February. In recent weeks, ISAT was also inserted into the LQ45 Index as one of the most liquid stocks in the Indonesian Stock Exchange (IDX). 

But Indosat also has a wider purpose, which is to connect and digitally empower every Indonesian. In this area, the company appears to be achieving even greater success. 

“Through the adoption of the latest technologies and with the support of our partners working together in spirit of mutual cooperation, we will continue our infinite journey towards realising Indosat's grand ambition to connect and empower all Indonesian society and accelerate the nation's digital transformation," concluded Vikram.