Jakarta. Indonesian telecommunications operator Indosat is unlikely to meet its target in refinancing its dollar-denominated debt this year amid the persistent volatility of the Indonesian rupiah, the company’s president director said.

“The situation between the US dollar and the rupiah isn’t the same as it was last year. We want to refinance as much of our debt  that’s due in 2020 to rupiah this year, but looking at how expensive it’s going to be we may not complete the plan entirely this year,” said Alexander Rusli, the president director of Indosat, on the sidelines of the Economist’s Indonesia Summit 2015 in Jakarta on Wednesday.

Indosat initially planned to convert as much as $ 675 million of its debt -- which is set to mature on July 29, 2020 -- to rupiah this year. It raised Rp 2.5 trillion ($197 million) in a combination of conventional bonds and sukuk in November last year as part of its refinancing efforts.

The depreciation of the rupiah amid the improvements of the US dollar has taken a toll for companies such as Indosat, which has accumulated a significant amount of debt from overseas.

The rupiah depreciated by 2.1 percent in 2014 to trade at 12,440 per US dollar. Since the end of last year, the rupiah has weakened by 2.1 percent to 12,700 to the dollar, according to Bank Indonesia.

Alexander said that the telecommunications industry is set to grow by roughly 5 percent this year, or in line with the country’s economic growth.

“We haven’t, though, added the planned infrastructure projects to the equation. If all of the infrastructure projects kick in, it would help [growth], but we haven’t seen that so far,” he said.

Moreover, Indosat’s capital spending is likely to remain flat this year as the company continues its network modernization efforts, according to the president director.

Indosat earmarked as much as Rp 8 trillion for capital expenditure last year, which was mostly used to boost, as well as modernize, its network capacity.

GlobeAsia