Smartfren targets USD200m CAPEX in 2018; extends ‘unlimited’ internet offerings; Q1 losses moderate

23 Jul 2018

Indonesian mobile operator PT Smartfren Telecom (Smartfren) is spending USD200 million in capital expenditure in FY 2018, with a significant portion of the monies being spent on increasing the total number of base transceiver stations (BTS) on-air to 20,000 by the end of the year. The operator invested USD300 million in FY 2017, it said, to deploy 3,000 new BTS and envisages building another 2,000 base stations this year to meet its target. Smartfren finance director Antony Susilo told journalists that the CAPEX funding will come from a mixture of bank loans (85%) and internal cash (15%), with Smartfren president Merza Fachys adding that infrastructure strengthening is needed to boost double-digit revenue growth in fiscal 2018. Fachys noted that Smartfren closed out 2017 with a total of eleven million subscribers, but this figure had dropped sharply to seven million by 31 March 2018, due to the re-registration of pre-paid subscribers under the government’s Native Identification Number (NIK) and Family Card (KK) schemes. The president also stated, however, that the company’s preliminary estimates put its user base at roughly ten million by the end of June, while by the year end it hopes to have boosted the total to around 15 million subscribers.

To help drive subscriber take-up, Smartfren says it plans to extend its ‘unlimited’ internet offerings until the end of this year. The promotion was meant to end in August, but in light of a strong positive response from users, Smartfren has opted to continue the offer which – for example – reduces the cost of a basic ‘Super 4G Unlimited’ IDR149,000 (USD8.83) monthly plan to IDR60,000.

Smartfren, which is controlled by the Sinar Mas Group, posted a net loss of IDR684.9 billion in Q1 2018, a 9% improvement from a loss of IDR754.3 billion in the corresponding period of 2017. First-quarter revenues totalled IDR1.205 trillion, up 17.6% year-on-year from IDR1.021 trillion, although operating losses widened to IDR716.03 billion from IDR518.02 billion previously.

Indonesia, PT Smart Telecom (Smartfren)