Driven by data, Telkom aims to become ‘digital company’
By Ervina Anggraini April 28, 2016
- Developing services for personal, home, and enterprise use
- 80% of its capex to be used to strengthen digital infrastructure
PT Telekomunikasi Indonesia (Telkom), which posted a 45.1% surge in data, Internet, and IT services revenue to Rp10.3 trillion (US$780 million) in the first quarter of 2016 versus Q1 2015, is committed to becoming a ‘digital company.’
It recorded net profit growth of 20.2% to Rp4.59 trillion (US$350 million) and revenue growth of 16.6% to Rp27.54 trillion (US$2.05 billion) compared with the same period in 2015, saying that data revenue was the main driver.
“This is beyond our expectations,” Telkom president director Alex J. Sinaga told a recent media briefing on its Q1 financial performance.
“This was also the first time when our data, Internet, and IT services segment contributed more than 35% or our total revenue,” he added.
Telkom’s fixed broadband subscriber base grew to 4.2 million users in Q1 2016, an increase of 20.7% over the same period the previous year.
To keep Telkom’s digital momentum going, Alex said that the state-owned telecommunications company this year will spend 80% of its capital expenditure (capex) – or around Rp22.4 trillion (US$1.72 billion) of the total capex of Rp28 trillion (US$2.1 billion) – to strengthen its digital infrastructure, by expanding its 3G, 4G, and fibre optic networks.
Last year, it only spent 26% or Rp5.72 trillion (US$440 million) of its capex total of Rp22 trillion (US$ 1.69 billion) to develop its data services and digital infrastructure.
The investments will also cover its mobile subsidiary PT Telekomunikasi Seluler (Telkomsel), which contributed to 57% of Telkom’s growth, compared with its other subsidiaries’ contributions of between 3% and 20%.
As of end-2015, Telkomsel had 152.6 million customers, with revenue growing 14.8% and net profit up 15.4% in Q1 2016 over Q1 2015.
“We have already built 17,869 BTSes (base transceiver stations), 4,500 of them for 4G,” said Telkomsel president director Ririek Adriansyah.
“We currently have five million 4G users and are targeting 13 million users by the end of this year,” he added.
The digital business
To become the digital company it envisions, Telkom will be looking at segmenting its digital services into three main areas: Personal, home and enterprise services, according to Alex (pic).
The telco is also looking to ‘internationalise’ itself this year, either through joint ventures or acquisitions. It is already looking at Guam’s GTA Teleguam, but that proposed acquisition is waiting to clear regulatory hurdles.
Joint ventures and acquisitions are also part of its tactic to enter different industry sectors, which would also include providing apps for different verticals, according to Alex.
He said that while Telkom has yet to determine its budget for such moves, the company has a few instruments from which it can draw funds.
One such joint venture it is currently working on is with US giant eBay, through Telkom’s e-commerce business blanja.com.
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