BRANDING: Indonesian telecom giant plans rebrand

The 37-year-old corporation has tapped Landor to revamp its brand identity and positioning as the company prepares to channel an estimated 80 per cent of its planned US$580 million in capital expenditure this year into developing the cellular operations.

Landor has been tasked to create a new brand positioning and evaluate the degree of change that will be needed for Indonesia's second-largest cellular operator to assume the new identity.

The relaunch follows a reorganisation of Indosat's business to counter the competitive pressures brought on by the gradual deregulation of the country's telecoms industry.

Michael Ip, Landor's Asia-Pacific managing director, said the consultancy would begin evaluating Indosat's extensive product base after Chinese New Year as the first step in revamping the telco's branding. "Indosat's main cellular GSM products that people know are IM3, Mentari and Satelindo, but there are so many more products within these brands," said Ip.

Indosat's positioning has grown increasingly unclear as the once state-owned corporation has been involved in a series of divestures and acquisitions in the last few years in line with the sector's gradual deregulation.

In late 2002, the Indonesian Government sold 42 per cent stake of the former state-owned corporation to Singapore Technologies Telemedia group, an arm of the Singapore Government.

Indosat has also acquired Satelindo, then Indonesia's second-largest cellular telecoms provider, and plans to complete the operational merger in late 2005.

The acquisition and the development of Indosat Multi Media Mobile (IM3) form a key plank in a strategy to focus on the high margin mobile business.

Both Satelindo and IM3 have retained their brands as they target different market segments.

Indonesia has one of the lowest mobile phone penetration rates in Asia, offering enormous upside potential for telcos such as Indosat and its main rival PT Telkomsel, the mobile arm of state-owned PT Telekomunikasi Indonesia.

Analysts estimate that only eight per cent of the country's 220 million people have a mobile phone - six million subscribers are with Indosat and 10 million at Telekomsel.