Moody’s Investors Service has revised the outlook on Indosat Ooredoo ratings to negative from stable. At the same time, Moody’s has affirmed the company’s Baa3 issuer rating. “The negative outlook reflects a weakening in Indosat’s financial metrics driven by the company’s plans for accelerated 4G capex amid an intensely competitive operating environment for the Indonesian mobile sector,” says Nidhi Dhruv, a Moody’s Vice President and Senior Analyst.
Indosat Ooredoo‘ operating and financial profile has weakened significantly over past quarters, mainly due to the introduction of registration for pre-paid SIM cards in Indonesia and a more rapid decline in traditional voice and SMS revenue in 2018.
Specifically, the company’s revenue declined by 23% to Rp23.1 trillion in 2018 from a year earlier, primarily driven by a 26% decline in the cellular business. Indosat Ooredoo’ subscriber base also fell 47% to 58 million at the end of 2018 from 110 million at the end of 2017, while average revenue per user (ARPU) declined 8% to Rp18,700 over the same period.
