Telkom Indonesia 9M19 net income climbs 16% on data growth

1 Nov 2019

State-controlled telco Telekomunikasi Indonesia (Telkom) said net profit for January-September 2019 totalled IDR16.46 trillion (USD1.18 billion), up 15.6% from IDR14.232 trillion in the same period a year ago, largely attributed to strong growth from its data business. Consolidated revenue for the nine-month period grew by 3.5% year-on-year to IDR102.631 trillion as mobile digital revenue rose 27.9% and the Data, Internet & IT Services division’s contribution to total turnover increased to 59.1% from 51.9% in 9M18 – reaching IDR60.615 trillion in the period under review – while group EBITDA rose 11.4% on an annualised basis and the EBITDA margin rose 3.4pp to 48.7%. Telkom’s residential broadband business IndiHome booked a dramatic 52% increase in revenue to IDR13.7 trillion thanks to a 38% increase in customers to 6.512 million at 30 September 2019, when compared to 4.707 million at the same time last year.

Telkom’s mobile subsidiary Telkomsel recorded a 1.8% y-o-y increase in customers to 170.9 million at end-September 2019, which boosted the firm’s data traffic, with 65% subscribing to data services. 9M19 mobile revenue edged up 1.2% to IDR68.308 trillion and mobile broadband traffic increased by 55.2% to 4,673 petabytes, generated from 112.1 million data users. Furthermore, mobile data consumption reached 5GB/user in the period (up 57.1% y-o-y) which Telkom said ‘is aligned with Telkomsel’s strategy to increase data penetration’. However, cellular voice and SMS revenues dropped by 19.1% y-o-y because of lower voice and SMS traffic (down 13.3% and 30.2% respectively) as a result of cannibalisation from instant messaging (OTT) applications, and fixed line voice revenues declined 14.4% due to mobile substitution that resulted in a decline of fixed line traffic.

Continuing its focus on the burgeoning Digital Business, Telkom and its subsidiaries accelerated network development with the rollout of 77,501 additional 4G BTS, increasing the total number of 2G/3G/4G BTS on air to 209,910 units at 30 September 2019 (up 14.5% y-o-y), of which 159,605 are 3G/4G BTS (up 20.0%).

Telkom finance director Harry M Zen said that the state-controlled company’s improved financial performance was largely built on its growing digital business. ‘The positive digital business performance is in line with our main focus of developing our digital services going forward,’ he said, adding: ‘As our performance has continued to improve as of the third quarter of this year, we’re upbeat that we can close 2019 with better performance by focusing on stable and profitable business lines’. Telkom’s CAPEX for 9M19 reached IDR22.2 trillion to support its business growth, with spending primarily focused on network and infrastructure development for both mobile and fixed broadband.

Indonesia, Telkom Indonesia, Telkomsel (Telekomunikasi Selular)