Telkom Indonesia looks to bond markets to fund CAPEX

12 Jan 2015

State-controlled telecommunications operator Telekom Indonesia (Telkom) is mulling a move into the bonds markets to support its CAPEX funding for 2015, the Jakarta Post reports. As well as issuing bonds, Telkom president Alex J Sinaga says the telco is also looking to raise the money needed this year on the stock market. ‘There are many choices available … We plan to enter the stock exchange this year, but we can’t announce the size [of the bonds] yet,’ he is quoted as saying, although he stopped short of divulging an exact date. According to the official, the telco has ‘plenty of room’ to source external funding as its current debt to equity ratio stands at 35%, compared to the average 60% in the country’s wider telecoms industry. Last month, Alex told the market that Telkom would look for external sources of funding – bank loans and bonds – to finance half of its IDR23 trillion (USD1.8 billion) CAPEX this year. The operator will build 12,000 new base transceiver stations (BTS) for wireless arm Telekomunikasi Selular (Telkomsel) in 2015, at an anticipated cost of IDR10 trillion. The parent group typically spends 10% of its annual CAPEX on infrastructure; 20% on towers, information and technology (IT), media and international expansion; and the remaining 70% for its cellular business.

Indonesia, Telkom Indonesia, Telkomsel (Telekomunikasi Selular)