Smartfren 1H16 losses narrow aided by solid data revenues

24 Aug 2016

Sinar Mas Group-backed Telekom PT SmartFren (Smartfren) reported a net loss of IDR667.773 billion (USD50.6 million) for the six months ending 30 June 2016, compared to losses of IDR815.519 billion in the corresponding period of 2015, according to IndoTelko citing a company filing with the Indonesia Stock Exchange (BEI). First-half revenue increased by 4% year-on-year, to IDR1.580 trillion, it said, although operating losses spiralled to IDR1.042 trillion from IDR517.600 billion previously. Broken down, Smartfren reported that data services were the biggest contributor to revenue (IDR1.320 trillion), followed by voice services (IRD139.450 billion), SMS (IDR63.470 billion) and ‘other’.

The struggling operator has set aside CAPEX of USD100 million in 2016 to support its ambitious 4G network rollout programme. The Indonesian CDMA operator-turned-LTE provider’s finance director Antony Susilo was quoted last month as saying that over the next twelve months the cellco will strengthen and develop its coverage – which already stands at 200 cities and towns. ‘The funds will be from an undisbursed existing loan from China Development Bank (CDB),’ Susilo said, noting that while Smartfren has successfully upgraded its CDMA network to LTE, it will not ditch the older system entirely – at least not this year. According to CommsUpdate, in April this year SmartFren claimed to have boosted LTE coverage to 188 urban centres, more than doubling the 85 cities served in January 2016. At the time, however, the operator admitted that subscriber take-up had not been proportional to the number of cities covered, blaming issues such as the availability of suitable handsets for the slow growth.

Indonesia, Smart Telecom (Smartfren)