PT Indosat Tbk · §New Interconnection scheme will be implemented in January 2007. New Interconnection Scheme §Indosat launched Fixed Wireless Access (FWA) through its brand Jagoan

First Half 2006 Results Page 1

PT Indosat Tbk

First Half 2006 Results

First Half 2006 Results Page 2

Key Highlights in 1H 2006 (YoY)

Operating revenues Flat (-0.2%)

IDD traffic increased by 14.3 %

EBITDA increased by -2.6%

MIDI revenues increased by 13.1%

Net Income increased by -30.2%

Cellular Subscribers growth by 7.7%

First Half 2006 Results Page 3

Key Business Segment

Cellular Business Fixed Telecomm (Voice) Data Com & Broadband

Matrix – Postpaid for high end with advanced features

Mentari –Prepaid for general users

IM3 – Prepaid for the young & trendy

Indosat• International Leased Circuit• International Frame Relay/ATM• VSATs• Wholesale Internet Access

IDD 001 – Premium IDD

IDD 008 – Budget IDD

FlatCall 016 – Flat Rate IDD

StarOne – Fixed Wireless Access

GlobalSave – VoIP Service

• Domestic Leased Circuit• Domestic Frame Relay/ATM• VSATs• Corporate Solutions

• IP – Virtual Private Network• Dedicated and Dial Up Internets• Wi-Fi & HotSpots

First Half 2006 Results Page 4

TELKOM, 54.1%

BAKRIE TELCO, 17.9% MOBILE8,

24.7%

StarOne, 3.3%

Operators & Market Share at 1H-06

Source: Company reports and estimates

GSM Operators (Major Holders)• Indosat (ST Telemedia)• Telkomsel (Singtel & Telkom)• Excelcom (Telekom Malaysia)

Fixed Wireless CDMA• Bakrie Telecom (Bakrie)• Telkom Flexi (Telkom)• “StarOne” (Indosat)

Mobile CDMA • Mobile-8 (Bimantara)

New License Holders• Hutchison CP Tel• LippoTelecom (Maxis)

INDOSAT, 26.9%

TELKOMSEL, 56.8%

XL, 16.3%GSM, 89%

CDMA, 11%

First Half 2006 Results Page 5

Cellular Subscribers Composition

Cellular Subscribers(Rp billion)

ARPU

0

50,000

100,000

150,000

200,000

250,000

300,000

1H-05 1H-06

Prepaid Postpaid Blended

Subs Composition as end of 1H06

Non Java, 19%

Java, 81%

Subs composition as end of 1H06 (in 000)

Prepaid95%

Postpaid5%

4,312

7,355

12,87513,860

1H03 1H04 1H05 1H06

First Half 2006 Results Page 6

MIDI Revenue

Revenue

-

100

200

300

400

500

600

700

800

900

1,000

1H03 1H04 1H05 1H06

Reve

nue

(In

Mil

lion

Rup

iah)

Change1H061H05UnitDescription

Data Communications & Broadband

Indosat : (Accumulated Numbers) Wholesale International High Speed Leased Circuit cct/64k 3,342 7,816 133.9% Domestic High Speed Leased Circuit cct/64k 21,618 37,638 74.1% Satellite Transponder Leased (external usage) # transp 12.7 12.3 -3.1% Datacom International High Speed Leased Circuit cct/64k 581 861 48.2% Domestic High Speed Leased Circuit cct/64k 4,276 6,381 49.2% Frame Relay port 929 982 5.7% IPVPN cct/64k 645 4,214 553.3% Lintasarta : (Accumulated Numbers) High Speed Leased Line (SDL) link 1,626 1,226 -24.6% Frame Relay access 4,450 4,381 -1.6% VSAT terminal 1,736 1,775 2.2% IPVPN link 1,598 2,565 60.5%

IM2 Internet Dial Up user 29,048 28,883 -0.6% Internet Dedicated link 717 1,149 60.3% IPVPN link 319 159 -50.2%

§ MIDI revenues increased 13.1% (YoY).

§ The main driver of growth is the increase from corporate IP-related services such as IP-VPN, Internet Access and Frame Relay

First Half 2006 Results Page 7

Fixed Telecommunication (Voice)

MIDI16.1%

Cellular74.4%

SLI9.5%

0

100,000

200,000

300,000

400,000

500,000

600,000

1H03 1H04 1H05 1H06Outgoing Incoming

Trend in IDD Traffic(in thousands minutes))

70% 75%

30% 25% 17% 13%

83% 87%

Revenues Composition (2Q06)

§ Fixed telecommunication contributed 9.5% to operating revenues mostly from IDD revenues.

§ Increasing contribution from FWA, fixed line and DLD but not yet significant at this moment.

First Half 2006 Results Page 8

Cellular Network Coverage

167Base Station Controllers47Mobile Switching Centers

6,248Base Transceiver Stations1H06

Indosat NationwideCellular Coverage

Number of BTS

Java, 67.4%

Non Java, 32.6%

First Half 2006 Results Page 9

Financial Performance (YoY) In billion Rupiah

Operating Revenues Rp5,767.1 -0.2%

Operating Income Rp1,567.8 -18.2%

EBITDA Rp3,306.1 -2.6%

Other Income (Expenses) (Rp744.5) 2.6%

Net Income Rp548.8 -30.2%

First Half 2006 Results Page 10

6,767

8,230

10,430

5,781 5,767

11,590

2002 2003 2004 2005 1H05 1H06

3,394 3,3063,6624,386

6,0176,732

57.3%

58.7%

54.1%

58.1%57.7%

53.3%

2002 2003 2004 2005 1H05 1H06

EBITDA EBITDA Margin

Revenues and EBITDA growth

Indosat recorded healthy revenues and EBITDA growth

(Rp billion)

Revenues EBITDA and EBITDA Margin(Rp billion)

First Half 2006 Results Page 11

Sound Balance Sheet

53.3%

57.7% 58.1% 58.7%57.3%

2003 2004 2005 1H05 1H06

EBITDA Margin Interest Coverage

Debt to EBITDA Net Debt to Equity

190.7% 191.9%224.5% 222.5% 220.8%

2003 2004 2005 1H05 1H06

48.9%41.6%

54.4%

42.5%

56.0%

2003 2004 2005 1H05 1H06

531.4%

559.2%542.6%

578.9%

536.7%

2003 2004 2005 1H05 1H06

First Half 2006 Results Page 12

Composition of Assets & Liabilities

0

100

200

300

400

500

600

700

800

900

Others 512

Payables 293Bonds Payable 550Receivables 121Cash & Equivalent 210

Liabilities Assets Net

In US$ million as of 30 June 2006

§ Indosat is relatively hedged against currency and interest rate fluctuations (94% of debts had fixed interest rate as of 30 June 2006).

§ Net liabilities in US$ was US$512.3 million of which US$375 million was hedged as of 30 June 2006.

Cash and its Equivalent(Per 30 June 2006 Total Rp 3,671.5 bio)

Rupiah41%

US$59%

Payables(Per 30 June 2006 Total Rp11,633 bio)

54%

46%

First Half 2006 Results Page 13

Public

Listed on the JSX, SSX and NYSE

Note:(1) Per 30 June 2006

Republic of Indonesia

41.06% 44.56% 14.38%

§ Indosat’s shares are majority owned by public investors (44.56%)

§ ST Telemedia through Indonesia Communications Limited owns (41.06%)

§ Indonesian Government owns 14.38% including Series A share

Committed Shareholders

First Half 2006 Results Page 14

Key Initiatives in 1H-2006

Established Sales and Performance Focus OrganizationNew Structure Launch in April

Expand regional offices from 5 regions to 8 regions

Confidently launch innovative marketing and promotion initiatives

Enhance network Coverage, Quality and CapacityResolved the network swap issues

Roll-out additional BTS

Improve capacity and quality (in Java) and coverage (ex-Java)

First Half 2006 Results Page 15

Marketing initiatives

Mentari Freetalk, FlatZone, Bundle with Nokia

Raja SMS IM3, Long Validity Voucher, Bundling with Motorola C-113

Initial Results Intention

• Daily Sales increased by 12.2%• Average Daily User at Freetalk period

increased by 376% • Reload voucher increased by 5.9%• MoU increased by 31.4% (local) and

67.5%(on-net)

• Daily Sales increased by 23% • Traffic SMS IM3 (delivered)

increased by 43%• Cheapest bundle for GSM Handset

(Rp299K)

To position Mentari as a best offer in voice services

To position IM3 as the best offer in SMS services

• Innovative Value Added Services:

• I-Ring (Ring backtone)• I-Say (Voice SMS)• I-mofis (Mobile Office)

To increase revenue through various Value Added Services

First Half 2006 Results Page 16

Recent Development

§ The regulator requires operator to complete mandatory prepaid registration by September 2006. Unregistered customers should deleted from the system.

§ As of August 15 2006, we have registered 13.37 million customers or around 97% of our total customers.

Prepaid Registration

§ All operators have submitted Reference Interconnect Offer (RIO) to and approved by regulator.

§ New Interconnection scheme will be implemented in January 2007.

New Interconnection

Scheme

§ Indosat launched Fixed Wireless Access (FWA) through its brand Jagoan and StarOne Postpaid for Palembang area as part of its plan to expand FWA services in 15 cities during year 2006.

§ In addition to Palembang, currently, StarOne is available in 8 cities in Indonesia, Jakarta, Bogor, Surabaya, Malang, Medan, Batam and Pekanbaru.

Fixed Wireless Access (StarOne)

First Half 2006 Results Page 17

Moving Forward

§ Continue Network Improvement : simplifying and integration

§ Prepare the roll-out of 3G Network for launch in the second half of 2006

§ Opening up new cities for GSM and FWA

Network and Services

§ Following up the next phases of Marketing Initiatives

§ Allocating additional marketing and promotion dollars

§ Fine tuning the distribution network and strategy

Marketing Strategy

§ Committed US$700 million for 2006

§ Business growth justifies aggressive roll-out moving forward

§ Planning had started and will be announced after 3Q-06 results release

Capex

First Half 2006 Results Page 18

Thank You