Digital Business Income Grows Rapidly, Surpassing Cellular Voice & SMS Business

Tuesday, 01 August 2017 , 17:00:00 WIB - Advertorial

Launching of Telkom satellite. (Doc. Telkom)

Jakarta, July 26, 2017 - While industries are becoming more competitive, PT Telekomunikasi Indonesia Tbk (Telkom) shows a very satisfying performance as it gets higher income from data, internet & IT services for the first time, surpassing the income from cellular voice & SMS services. In the first semester of 2017, Telkom earned Rp27.12 trillion income from data, internet & IT services, and Rp26.02 trillion income from cellular voice & SMS services. The contribution of data, internet & IT services to the company income increases by 42.4 percent.

"Data, internet & IT services make a big contribution to the company income, with the growth of 19.8 percent to Rp27.12 trillion. Besides that, the contribution of data, internet & IT services to the total income of the company increases by 42.4 percent or growing by 19.8 percent," Financial Director of Telkom, Harry M Zen, explained in Jakarta, Wednesday (26/7).

In the first semester of 2017, Telkom records another triple-double-digit growth, where the income reaches Rp64.02 trillion or growing by 13.4 percent compared to last year that reached Rp56.45 trillion. Telkom’s earnings before interest, taxes, depreciation, and amortization (EBITDA) reaches Rp33.23 trillion or growing by 15.4 percent, and the net income reaches Rp12.10 trillion or growing by 21.9 percent.

The increasing income from data, internet & IT services aligns with the increasing number of cellular customers and mobile data traffic that reaches 118.7 percent. The current number of cellular customers reaches 178 million or growing by 13.1 percent compared to the same period last year.

The number of broadband customers also increases significantly, it includes the number of Telkomsel Flash customers that grow by 63.9 percent to 81.72 million users. The growth is followed by the increasing number of fixed broadband customers that grow by 4.7 percent to 4.52 million users.

Besides that, the number of IndiHome fixed broadband service also grows by 34.2 percent. In the first semester of 2016, the number of IndiHome customers only reached 1.5 million, and the number increases in the first semester of 2017 to 2 million customers.

To increase the number of IndiHome customers, Telkom introduced a dual play service called "IndiHome Netizen" package at the end of 2016. The new package gets a warm welcome from the public as IndiHome Netizen has 389,000 customers since its launching in the first seven weeks. The Average Revenue Per User (ARPU) of IndiHome also reaches Rp344,000.

Meanwhile, Telkomsel as a subsidiary is also capable of maintaining its performance and shows another triple-dobule-digit growth. The income of Telkomsel grows by 11.9 percent, EBITDA grows by 14.0 percent, and net income grows by 15.6 percent Year-on-Year (YoY). In the first semester of 2017, Telkomsel sales reached Rp45.99 trillion, EBITDA reached Rp27.19 trillion, and net income reached Rp15.50 trillion. The contribution of Telkomsel digital business shows a significant growth that reaches 26.9 percent to Rp18.07 trillion.

The growth of the digital business is supported by the expansion and improvement of Telkomsel 3G/4G network service by adding new 17,538 Base Transceiver Stations (BTS). The total number of Telkomsel’s BTS at the end of the first semester of 2017 reaches 146,571 BTS, where 65.7 percent of them are BTS that are capable of providing 3G/4G network service.

During the first semester in 2017, the company’s expenses increased by 10.0 percent from Rp36.57 trillion last year to Rp40.23 trillion this year. The operations and maintenance costs make the most contribution to the increasing expenses; it increased from 13.8 percent in the last year’s period to Rp18.41 trillion. The increasing operations and maintenance costs align with the acceleration of network infrastructures development to support the performance of mobile business and broadband.

Until the end of the first semester of 2017, TelkomGroup has spent its capital expenditure (Capex) for Rp16.7 trillion or growing by 21.4 percent compared to last year. Capex is used to support broadband business, both fixed and mobile, such as the development of backbone fiber optic infrastructure, Telkomsel BTS development, satellite development, inter-continental submarine communications cable infrastructure (IGG and SEA-US) and telecommunications tower development.

Harry hopes that Telkom could maintain its performance in the first semester of 2017. "The achievement in the first semester of 2017 is supported by the company’s strong performance in the last period, and we hope we could maintain this moment of growth in the next semester," Harry M Zen said.