Smartfren swings into the red in 1Q15; confirms 4G contracts with ZTE, Nokia

13 May 2015

Indonesian CDMA operator Smartfren Telecom booked net losses of IDR551.48 billion (USD41.8 million) in the first quarter of this year, reversing a net profit of IDR235.56 billion in the corresponding period a year ago. In its financial filing to the Indonesia Stock Exchange, Smartfren said that revenue for January-March 2015 reached IDR748.30 billion, up 3.5% from IDR722.80 billion in 1Q14, of which IDR606.12 billion was derived from data services. The telco’s operating loss in the first quarter stood at IDR263.68 billion, down slightly compared to IDR288.60 billion previously; pre-tax losses in 1Q15 of IDR712.2 billion compared to IDR11.35 billion in 1Q14.

Smartfren’s filing also confirmed its plan to build out a new 4G Long Term Evolution (LTE) mobile network in Indonesia, and the signing of supply contracts with ZTE and Nokia. On 20 December 2014, Smartfren said it inked a USD401.977 million deal with ZTE Corporation for the design, procurement, installation, upgrade, testing, integration, commissioning, optimisation and maintenance of LTE and LTE-Advanced (LTE-A) networks in the country. Additionally, on 8 December its Smartel subsidiary signed a similar agreement with Nokia valued at USD383.58 million. Furthermore, the operator also confirmed that it has agreed terms of its network contract with fellow operator Bakrie Telecom (BTel). The deal covers leasing of capacity in the 800MHz band – for one channel – for an initial period of three years, for IDR30 billion per month. In November 2014, BTel and Smartfren confirmed plans to merge their respective network operations, with the former intending to lease part of Smartfren’s network to serve its own customers. The following month Indonesian CDMA operator BTel said that it would take a 6% stake in Smartfren as part of the deal.

Indonesia, Bakrie Telecom (BTel), Smart Telecom (Smartfren)