Telkom issues IDR1.5tn worth of medium term notes to restructure debt, fund network developments

6 Sep 2018

PT Telekomunikasi Indonesia (Telkom) has announced it has issued IDR1.5 trillion (USD10 million) of medium term notes (MTNs) to improve its debt structure. Indonesia’s largest telco by subscribers and revenue says it will use the proceeds for the ongoing construction of its national backbone network and to improve access to its ‘IndiHome’ branded triple-play services. In a disclosure to the Indonesia Stock Exchange (IDX), the company confirmed that the MTNs were issued in four parts, valued at IDR758 billion, IDR262 billion, IDR200 billion and IDR296 billion, respectively.

In the first half of 2018, Telkom spent IDR14.1 trillion in capital expenditure, with fixed infrastructure investment primarily utilised ‘to develop access and backbone infrastructure, including satellite and submarine cable systems to support fixed as well as mobile broadband businesses’. Additionally, a portion of its first-half CAPEX was used for other projects such as towers, while in terms of its mobile business, first-half CAPEX was mainly utilised for radio access network (BTS) development and IT system enhancement, including installing 14,978 new BTS, all of which are 4G capable.

The operator reported that net profit in the first six months of this year stood at IDR8.698 trillion, down 28.1% from IDR12.104 trillion in H1 2017, on revenues which edged up 0.5% on an annualised basis to IDR64.368 trillion, from IDR64.021 trillion. First-half EBITDA declined by 14.7% to IDR28.343 trillion from IDR33.235 trillion. Whilst noting that revenue growth had been impinged by ‘tight competition’ in the local market, Telkom did experience strong growth from its Data, Internet & IT Services segment, which contributed IDR32.742 trillion of total revenue, up 20.7% when compared to 1H17 and 50.9% of total revenue in the period under review. Meanwhile, IndiHome take-up exploded in the year to 30 June 2018, more than doubling to 4.14 million subscribers, with ARPU of IDR251,000 per month, and sales derived from such services increasing by 46.8%.

Indonesia, Telkom Indonesia