JAKARTA, Oct 6 (Reuters) – Indonesia’s second largest telecommunications company, PT Indosat Tbk , says it has lost around 9 percent of its mobile phone subscribers due to a government decision to register pre-paid phone users.Wahyu Wijayadi, a director at the company, said late on Thursday the operator, controlled by Singapore’s ST Telemedia, has around 14 million users and has not revised its target of picking up between 3-4 million new mobile phone users this year.

“We lost 1.29 million of our subscribers. It was around 9 percent of our total customers. The target of 3-4 million new users this year does not take the subscribers we lost into account,” Wijayadi told reporters.

“We have to see whether we can achieve that target or not,” he added.

The Indonesian government has ordered phone companies to register all holders of pre-paid services — which account for around 90 percent of the total number of users — in an effort to tackle hoaxes and other misuse of the technology.

As a result, an estimate of around 5 million prepaid mobile phone accounts from all operators in the country were wiped out after the government-set deadline to register them by late September expired.

Indosat had around 14.4 million users by the end of 2005, a year when its number of subscribers expanded by around 50 percent.

But in the first quarter of this year the company’s customer base fell by around 10.7 percent from the end 2005 levels to 13 million, partly due to tough competition in the industry.

Revenue from cellular operations accounted for about threequarters of Indosat’s total revenue. In the first half of this year, its net profit fell by around 30 percent due to higher operating costs.

Indonesia has more than 50 million mobile phone users and industry officials see the number expanding to 100 million by 2010 with rapid growth in the sector in recent months.

Despite the huge numbers and rapid expansion, the country’s mobile phone penetration rate is still low compared with other countries in the region such as Malaysia where around 80 percent of the population has signed up for a cell phone service.

The company, with a market capitalisation of around $3 billion, has been facing tough competition from its rivals, such as PT Telekomunikasi Selular (Telkomsel) and PT Excelcomindo Pratama Tbk .

Source- http://sg.news.yahoo.com