ISAT - Reports higher capex realization in 1Q23

Indosat Ooredoo Hutchison (ISAT) has reported capex realization of IDR2.4 tn as of 1Q23, increased 2.9% yoy. For 2023, the company earmarks IDR13 tn for capex spending, mostly aimed to ramp up networks in Eastern Indonesia. The company eyes to strengthen mobile segment followed by MIDI, infrastructure and IT. (Source : Emiten News) Comment : ISAT's 2023 capex is higher than last year's, yet fell short of our expectations at 18.5% due to seasonality. Yet, we expect capex realization to improve in coming quarters with 4Q normally being the peak of spending. Meanwhile, expansion in ex-Java area has become ISAT's key strategy for the long run, as it provides higher growth opportunities in relatively underserved market compared to maturing Java areas. Also, utilization of MOCN network technology also help it to accelerate network expansion, enabling it to use one spectrum for sharing, more efficient network utilization and better user experience.