Business

Telkom eyes more earnings
from overseas

Ready for expansion: PT Telekomunikasi Indonesia’s (Telkom) president director Arief Yahya (third left) and other members of the company’s board of directors huddle after an annual shareholders meeting on Friday. Telkom will focus on international expansion this year to maintain growth. (Antara/Audy Alwi)
Ready for expansion: PT Telekomunikasi Indonesia’s (Telkom) president director Arief Yahya (third left) and other members of the company’s board of directors huddle after an annual shareholders meeting on Friday. Telkom will focus on international expansion this year to maintain growth. (Antara/Audy Alwi)

State-owned telecommunication operator PT Telekomunikasi Indonesia (TLKM) plans to open shop in 10 countries by the end of this year to boost the contribution of foreign businesses to 10 percent of its total revenue by 2015.

Arief Yahya, president director of Telkom, said that foreign businesses currently contributed 3 percent on average to the firms’ revenues. “We hope that this figure will rise to 10 percent by 2015.”

Arief said that the operator was present in five countries: Singapore, Hong Kong, Timor Leste, Australia and Malaysia. “We will be focusing on expanding into neighboring Southeast Asian countries as well as Middle Eastern and North African [MINA] countries.”

He said that the operator would continue working to set up shop in Myanmar by the end of the year, adding that Telkom “still wanted to be there”.

Telkom recently failed in the pre-qualification process to compete on a tender to provide mobile services in Myanmar. “There’s been a difference in views between us and the committee in Myanmar.

Arief said that Telkom would continue to operate as a mobile virtual network operator (MVNO) when expanding overseas by renting out the networks of other operators in that country.

He said that the company wanted to do business overseas due to the higher average revenue per user (ARPU) that could be earned.

“The ARPU in Australia, for example, is US$40, at least ten times more than ours,” he said, adding that the language barrier was the biggest challenge in doing business overseas.

“However, we remain confident after seeing countries like South Korea and China dominating the world,” he added.

Telkom booked Rp 77.1 trillion (US$8 billion) in total revenue for 2012, recording 8.3 percent growth, while its earnings before income, tax, depreciation and amortization (EBITDA) touched Rp 40.2 trillion, up 9.1 percent from the previous year and net profits rose 17.2 percent year-on-year to Rp 12.9 trillion.

The operator is also considering a stock split. According to Arief, the operator was considering to split its stocks with a 1:5 ratio. “The aim of this stock split is to improve the affordability, liquidity and market perception of our shares,” he said.

However, the plan has yet to receive approval from the State-Owned Enterprises Ministry.

Honesti Basyir, the finance director of Telkom, said that the operator was considering releasing its treasury stock.

The first due date of treasury stock release would be by August this year, Honesti said. “We plan to release 211.3 million shares worth Rp 1.8 trillion,” he said.

The treasury stocks are part of 1.01 billion shares bought back from the market between 2005 and 2012. Based on bourse rules, the shares must be refloated into the market within three years.

Telkom closed at Rp 11,700 per share today.

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