Smartfren full-year losses spiral to USD149 million

12 Apr 2017

Struggling Indonesian mobile operator Smartfren Telecom booked losses of IDR1.974 trillion (USD148.6 million) in 2016, up from IDR1.565 trillion in FY 2015. In a filing to the Indonesia Stock Exchange (IDX), the CDMA operator-turned-LTE provider achieved revenue of IDR3.630 trillion last year, a significant 20% improvement when compared to IDR3.025 trillion in 2015. Broken down, the operator confirmed that data services generated the lion’s share – IDR3.130 trillion – of turnover, followed by voice call services (IDR258.60 billion), SMS (IDR120.59 billion), subscriptions (IDR29.60 billion), VAS (IDR23.56 billion) and other (e.g. interconnection) services contributed IDR66.09 billion. Operating losses, however, were also up at IDR1.980 trillion from IDR1.330 trillion as operating costs climbed to IDR5.600 trillion from IDR4.350 trillion. Smartfren attributed the rising losses in part to increased interest expenses of IDR562.23 billion.

In January 2017 Smartfren, working in partnership with ZTE Corp of China, began trials of Massive Multiple Input, Multiple Output (Massive MIMO) and Multi-Antenna Space Division Multiple Access (SDMA) technology, as part of plans to optimise the development of its 4G LTE Advanced (LTE-A) services. Smartfren CTO Christian Daigneault said that the trials are part of its preparations for the ‘5G era’, noting that Massive MIMO and SDMA will help push peak throughput up to 400Mbps. The pilot has been put in place in Jakarta and Surabaya, and Smartfren plans to implement the technology at 100 other locations by the third quarter of this year. The cellco is keen to migrate users to 4G and is finding it a slow process. By end-June 2016 only 20% of its total customer base had shifted to LTE, with the majority sticking with its legacy CDMA services at that date (latest available information), although in December 2016 Smartfren Telecom deactivated its CDMA network operating at 1900MHz, in accordance with the Minister of Communication and Information Technology (MCIT) Regulation No: 22 of 2014, which covers the reallocation of the use of existing personal communications services (i.e. CDMA) in the 1900MHz band to the 2300MHz band. The firm’s director Merza Fachys confirmed at the time that the 1900MHz band had been switched off in preparation for the upcoming auction of 3G spectrum in the 2100MHz band.

Indonesia, PT Smart Telecom (Smartfren)