Telkom Indonesia sees revenue rise 13.8% to US$6.6 bil in 9M16

• Data was the main growth driver in 9M16, contributing 37.7% of total revenue
• The cellular voice and SMS segment contributed 46.8% of total revenue

 

INDONESIA’s biggest telecommunications provider, Telkom Indonesia announced their nine-month financial results (9M16) with saw data as the main growth driver.

Telkom recorded a 13.8% increase in total revenue to Rp86.2 trillion (US$6.6 billion) versus Rp75.76 trillion (US$5.8 billion) in the same period last year, thanks to its data and digital business segments.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased 20% to Rp44.38 trillion (US$3.4 billion), while its net profit surged 27.6% to Rp14.73 trillion (US$1.13 billion).

 

 “The company is on its way to becoming a full-fledged digital telecommunications company. We want to be an enabler of digital society and our 9M16 results reflect that we are on the right track,” its president director Alex J Sinaga (pic, above) said in a statement.

Telkom’s revenue contributors comprise five business segments, namely, cellular voice and short messaging service (SMS), data, Internet and IT service, fixed line voice, interconnection and network as well as other telco services.

Contributing 37.7% of total revenue, data, Internet and IT service revenue posted a 37.2% increase to Rp32.53 trillion (US$2.5 billion) in 9M16, the highest growth of all the revenue contributors.

Its cellular voice and SMS segment, which contributed 46.8% of the total revenue, grew 4.6% to Rp40.37 trillion (US$3.1 billion), thanks to voice and combo packages that were promoted to overcome pressure from over-the-top (OTT) players.

“We were able to sustain our legacy business despite OTT cannibalisation in SMS by successfully executing cluster-based pricing, utilising better market segmentation and leveraging on our superior network,” said the statement.

However, Sinarmas Sekuritas equity analyst Evan Lie Hadiwidjaja is of the view that average revenue per user (ARPU) in voice and fixed line will continue to decline as the industry matures, and the only driver left for the legacy business is through increasing the number of subscribers.

Data business on other hand will continue to shine, with the research firm predicting that by 2020, the biggest revenue contributor for Telkom will be data, Internet and IT services segment.

According to local research firm Samuel Sekuritas, the company’s success in its data growth strategy not only comes from its mobile broadband led by Telkomsel, but also from its fixed broadband product Indihome.

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