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Telkom to spend $170m for network
Indonesia’s largest telecommunications provider PT Telkom has allocated US$170 million in investment to construct a submarine cable connecting Java-Kalimantan-Sulawesi-Denpasar and Mataram
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ndonesia’s largest telecommunications provider PT Telkom has allocated US$170 million in investment to construct a submarine cable connecting Java-Kalimantan-Sulawesi-Denpasar and Mataram. The nickname for the project is “Jaka2ladema”.
The project is important to improve telecommunication traffic capacity and to compete with
other telecommunication operators in the country.
Telkom president director Rinaldi Firmansyah revealed to journalists on late Saturday that the project financing would be arranged based on loans and internal cash.
“We have secured some loans from the Japan Bank for International Cooperation [JBIC] worth $60 million to help finance the project,” Rinaldi said.
“Meanwhile, the rest of the budget needed for the project will be provided by Telkom’s capital expenditure this year,” said Rinaldi.
It was reported that the loan from JBIC was for a five-year-tenure.
Rinaldi said Friday that the direct loan from JBIC was Telkom’s first in corporate-to-corporate loan settlement as usually the company was using government-to-government arrangements.
This year Telkom allocates $2.2 billion of capex of which 70 percent of the total is contributed by Telkom’s subsidiary Telkomsel, which is also the biggest contributor to overall revenue.
The submarine network system has a total 2,600 kilometers in length.
The capacity of the proposed system is about 320 gigabits per second (Gbps), which will improve
telecommunications capacity to facilitate data communication, transmission of video and voice and other e-commerce functions between islands in Indonesia.
“The network connecting Java to Mataram has been 50 percent finished. We are aiming that the project will be accomplished this year,” Rinaldi said.
He confirmed that the telecommunications system between Mataram and Kupang would be finished
by 2011.
The system would improve communications in eastern Indonesia which is currently often neglected.
In order to help mobilize the $2.2 billion of capex this year, Telkom reportedly will issue bonds in June. Telkom finance director Sudiro Asno has confirmed that the bond’s proposed value might be increased to Rp 3 trillion ($328 million) up from the previous target of Rp 2 trillion.
Sudiro said Telkom had appointed four underwriters; PT Danareksa Sekuritas, PT Bahana Securities, PT Mandiri Sekuritas and PT Trimegah Securities to issue the bonds.
Telkom is aiming that its net profit for 2009 might grow by 5 to 7 percent, mainly due to the solid performance of Telkomsel.
In 2008, Telkom’s net profit dropped by 17.4 percent to Rp 10.6 trillion due to foreign exchange losses.
Meanwhile, in the third quarter of 2009, its revenue grew by 5.5 percent to Rp 47.1 trillion from the
same period of last year, while net profit jumped by 4.3 percent to Rp 9.3 trillion.
Previous reports said that Telkom also planned to take over one small telcom company this year to strengthen its fixed-line business. The company is also considering purchasing three telecommunications application service providers this year.
Telkom is aiming that its net profit for 2009 might grow by 5 to 7 percent.
