Telkom’s new CEO set
to expand data services

Like many other entry-level employees, Arief Yahya might have joined the nation’s top telephone company PT Telekomunikasi Indonesia (TLKM) in 1986 with hopes of making it to the top.

Twenty six years on, the little steps made — from a staff worker, regional head in East Java and Kalimantan, to director of enterprises and wholesale — turned fruitful as Telkom’s shareholders on Friday agreed to replace Rinaldi Firmansyah, who held the president director position at the company since 2005, with Arief.

The 51-year-old new chief, who studied telecommunications engineering at England’s University of Surrey, promised to accelerate the path created by his predecessor - to grow Telkom’s revenue by 8 percent by focusing on information, media and education (IME) services that require broadband technology.

“We will accelerate telecommunication and IME business lines and expand broadband and Speedy [Internet service] throughout Indonesia,” said Arief, who is also a graduate of the electrical engineering department at the Bandung Institute of Technology (ITB).

Indonesia’s telecommunication companies have shifted focus to broadband and data services as the cellular business has reached a saturation point, with revenue from cellular businesses coming under pressure from tight competition.

Telkom booked a 17.5 percent year-on-year increase in net income in the first quarter of this year to Rp 3.3 trillion amid profit slumps suffered by rivals PT Indosat (ISAT) and PT XL Axiata (EXCL) — supported by demand for Internet and data services from its cellular subsidiary PT Telekomunikasi Seluler (Telkomsel).

“The conservative overall revenue target [of 8 percent] reflects the rationale that it is not an easy job to achieve above 10 percent growth,” MNC head of research Edwin Sebayang said.

“About the new president director, I think it’s a good move, considering that Arief is an internal executive and he has worked there for a long time.”

Arief, born in the so-called Banyuwangi “sunrise of Java”, also lauded the new management team of Telkom, which he called the “bright and young generation” who would grow Telkom further.

Telkom has set sights to acquire Asia’s leading undersea cable operator, Pacnet, and float shares of subsidiary PT Dayamitra Telekomunikasi (Mitratel) to grow its business.

“I might be the only one in my 50’s while the other directors are now in their 40s,” he said, citing new 43-year-old network and solution director Rizkan Chandra as the youngest.

Telkom’s other new directors include Honesti Basyir (finance), Sukardi Silalahi (consumer), Priyantono Rudito (human capital and general affair), Muhammad Awaludin (enterprise and wholesale) and Ririek Adriansyah (compliance and risk management).

Indra Utoyo retained his position as solutions and strategic portfolio director.

Telkom’s directors received almost Rp 6.5 billion (US$708,500) compensation each in 2009, of which Rp 1.6 billion are annual salaries, according to Forbes business magazine.

There are also three new commissioners, namely Parikesit Suprapto and Hadiyanto, who are Echelon I officials at the state-owned enterprise and finance ministries, as well as Virano Nasution.

Former transportation minister Jusman Syafii Djamal maintained his post as president commissioner. (yps)

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