Indosat Tbk PT Q1 2019 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Wei Shi Wu - BNP Paribas, Research Division - Analyst : Firstly, does the company expect any recurring gains or losses to be booked in relation to the 800 and 900 megahertz frequency rearrangements? And if so, how much should we be expecting in the coming quarters? Secondly, could you please provide some context around the bonus reversal in the first quarter? I see that the first quarter '19 employee expenses are very low compared to historical. Should this be viewed as the run rate going forward? And finally, there was a comment in the IM that the increase in marketing expenses in first quarter was due to a transformation in marketing strategy. So just would like to get some details around what the changing strategy is and what the objectives are?

Question: Wei Shi Wu - BNP Paribas, Research Division - Analyst : Sorry, I missed the answer to the second question. Could you please repeat? Apologies.

Question: Ranjan Sharma - JP Morgan Chase & Co, Research Division - Analyst : 2 questions from my side. Firstly on the leadership, I mean, Indosat has seen a lot of flux in the top management. You are now I think in the fourth CEO in 2 years, what is the reason for this? Especially considering that Indosat is operating in a tough environment and they need leadership stability to execute on the consolation plans. So if any -- any thoughts you can share will be appreciated. Secondly, the net debt-to-EBITDA has been rising. How does Ooredoo see this? Also considering -- like, the share price of Indosat is I think 1/3 of when Ooredoo invested in the company, will they be looking to put more money in the company in terms of a rights issue if the need arises? The third question is on your debt covenants. If you can share if the lease liability -- the capital leases are included in the translation of your debt

Question: Ranjan Sharma - JP Morgan Chase & Co, Research Division - Analyst : The third question is that your debt covenants are set at net debt-to-EBITDA of less than 4x. Does the covenant include capital leases in the debt

Question: Ranjan Sharma - JP Morgan Chase & Co, Research Division - Analyst : And in terms of your execution, are you contending that you will be able to get execute faster now? And also the transformation that you're talking about -- like, if I see your operating profit, actually it's a loss this time compared to profits over the last couple of quarters, and that's something -- if I adjust for the asset sales -- or asset gains that you've recorded in the first quarter of this year?

Question: Choong Chen Foong - CIMB Research - Analyst : Couple questions from me. Firstly, can you provide some explanation as to how the gain on the 900 megahertz reforming has come about? Did you give up any sort of spectrum? Number Two, the EBITDA of IDR 2157 billion has that taken into account the reforming gain and the bonus reversal or should we deduct those numbers to get the core or underline EBITDA for the quarter? Third question of churn rate that -- you see that is declined to about 8.2%. Can I ask where -- what was it in the fourth quarter last year and the first quarter of 2018 and how do you see this going forward? And my last question on CapEx. I think when Pak Chris Kanter was CEO he had mentioned the plan was to spend about USD 2 billion over the next 2, 3 years of to upgrade the network, is that still the plan?

Question: Choong Chen Foong - CIMB Research - Analyst : Okay. Can I also get the first quarter last year's churn rate? Yavuz Fatih Yavuz Let us get back to you on that one. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 10, 2019 / 9:00AM, ISAT.JK - Q1 2019 Indosat Tbk PT Earnings Call

Question: Prem Jearajasingam - Macquarie Research - Analyst : Could you just help me understand -- your improvement I can see in terms of -- at least your churn is reducing et cetera, ARPU is on the rise. But from a competitive situation, your data yield seem to be coming down. Are you -- what's your view with regard to the competitive environment and who do you think flinches, if you start getting back some massive ground, do you see the industry going back into a price war situation? I just like to hear your version of the competitive dynamics. And 2, at which point do you think your network will be sufficient enough for you to substantially take back share just as a quality operate as opposed to using price? Vikram Sinha Okay. So I'll try to answer it in 3 parts. One is on yield it is very important that we have sustainable pricing strategy and we're very aligned to it, because in a market like Indonesia it is very important to focus on experience. So we will make sure that we're able to improve our experience and that will also help us improve our yield. So that whole rollout strategy which we have is to support that we have value for money proposition and better experience. And while doing that we foresee some improvement on yield. So this is what on yield. The other question is, we are trying to make sure that we improve our speed of execution. So this year we have our plan and the moment we fast track we see that 2020, quarter 4 is where we will be coming close more competitively in terms of our network infrastructure, which will help us ensure that our both, customer market share and revenue market share also improves.

Question: Siward Ludin - Goldman Sachs - Analyst : Just wanted to ask a quick one here. So how has your network investment or rollout progressed so far? Are there any areas that you're focusing more? And could you disclose what's your plan here and where are the low hanging fruits that you're aiming for? Vikram Sinha Our focus is both on rollout and improving on experience. So last year we focused on 4G over -- and we were able to make sure that we complete that as per our plan. In next 6 to 12 months you will see lot of new sites, BTS coming in and that is where we're trying to improve our speed and make sure that we rollout as per our plan.