This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Indonesia's Satellite of Love

If you want to know just how pervasive wireless phones are becoming in Indonesia, just ask the country's president, Susilo Bambang Yudhoyono. No, seriously. Ask him.

On Saturday, Yudhoyono gave out his mobile phone number to a gathering of farmers in his homeland and invited them to call or text-message him with complaints any time of day or night. The media broadcast the number nationwide and within minutes the president's cell phone lit up with the first of thousands of complaints.

Yudhoyono's gambit made two miscalculations: He not only underestimated the discontent of Indonesians, but also their ready and increasing access to wireless phones.

Two clear beneficiaries of the rising demand for mobile phones in Indonesia are the country's largest cell-phone providers: Telkomsel, 65% owned by government-controlled Telkom Indonesia (TLK - Get Report) and 35% owned by Singapore Telecom; and PT Indosat (IIT - Get Report), largely owned by the Indonesian government and Singapore Technologies Telemedia.

Last year, Indosat saw a 59% increase in cellular subscribers to 9.8 million users, pushing cellular revenue up 46% to $802 million. Telkomsel saw its subscriber base expand by 87% to 16 million in 2004. Since then, both companies have continued to add subscribers, with Indosat reaching 12 million and Telkomsel topping 20 million out of a total population of 242 million residents.

Of the two companies, Indosat, which has moved away from its roots as the state-run international call carrier to a company driven by wireless service, offers U.S. investors a purer exposure to the growing wireless market. Its ADRs are actively traded on the NYSE. Nearly 70% of Indosat's revenue comes from its wireless business.

Telkomsel has the larger share of the Indonesian market, but direct ownership is limited to its parent companies. U.S. investors, however, can buy ADRs of the larger of its two shareholders, Telkom Indonesia. Telkomsel controls 52% of the Indonesian cellular market, with Indosat controlling 32%, and smaller players such as Excelcom make up the remaining 16%.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
IIT $28.39 0.00%
TLK $43.12 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs