Indosat may sell 10 year notes

Indosat Palapa Co., a unit of Indonesia's second-largest phone operator, PT Indosat Tbk may sell 10-year senior notes in a benchmark offering.

The notes may be rated Ba1 by Moody's Investors Service and BB by Standard & Poor's. Indosat Palapa hired Citigroup, DBS Bank Ltd., Deutsche Bank AG, HSBC Holdings Plc and Royal Bank of Scotland Group Plc to manage the sale.

Indosat claims it was able to bolster its number of subscribers by 17.6% to 39.1 million in the first quarter of 2010 from 33.3 million in the first quarter of 2009.

Such a significant growth has bolstered the company's consolidated operating income by 2.6% to IDR4.73 trillion.

Such a growth boosted the company's net profits in the first quarter of 2010 to IDR285.9 billion from IDR119.5 billion in the first quarter of last year. Of the total net profits, 75% was contributed by the cellular business.

Indosat gradually will replace the existing BTS with a device with multi standard radio (MSR) capacity enabling one radio base station (RBS) cabinet to broadcast multi GSM, WCDMA, and LTE (long term evolution) signals.
With the MSR technology, Indosat will be ready to adopt evolution in the cell phone technology and will be able to quickly realize the LTE and 4G services ahead.

The company would prepare US$1 billion-US$2 billion in capital expenditure to realize the efforts. For this year, the company projects to allocate US$550 million-US$700 million in capital expenditure.