PT Indosat Tbk's (Indosat) overall 9M 09 performance was significantly below our estimates due to subscriber losses for three consecutive quarters and mounting costs. We believe the subscriber losses attributable to Indosat's volume for value strategy (for details refer our 2Q 09 update report) are likely to subside by the next quarter and the strategy is expected to pay rich dividends over the long term. However, near term woes persist, with costs mounting and churn aggravating the impact on the bottom-line. Taking into consideration 9M 09 performance, we are likely to revise our estimates and target price downwards. As a result we maintain our SELL rating on the common stock. We will reassess the common stock rating for Indosat in the coming weeks. Although we expect a significant positive currency impact over the long term, in light of the muted fundamental outlook on the common stock and considering the current target price we maintain our HOLD rating on the ADR. We will reassess the ADR rating (1 ADR =50 common shares) in our next update report.

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