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Telkom to spend Rp 800b for enterprise, business services

State-owned telecommunications company PT Telekomunikasi Indonesia (Telkom) plans to spend around Rp 800 billion (US$62

Khoirul Amin (The Jakarta Post)
Jakarta
Fri, February 20, 2015

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Telkom to spend Rp 800b for enterprise, business services

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tate-owned telecommunications company PT Telekomunikasi Indonesia (Telkom) plans to spend around Rp 800 billion (US$62.1 million) to develop its enterprise and business services this year, aiming to outperform market growth.

'€œOur budget for [large] enterprise and small-medium enterprise services will be around Rp 700 to Rp 800 billion this year,'€ Telkom'€™s director for enterprises and business service Muhammad Awaluddin said on Wednesday.

The allocation was higher than the budget from last year, which ranged between Rp 600 and Rp 700 billion.

Telkom'€™s enterprise and business services include IT services for enterprises, small-to-medium-sized business and government agencies, among others.

The allocated budget will come from Telkom'€™s annual capital expenditure that stood at around Rp 20 to Rp 25 trillion, Awaluddin added.

While refusing to comment on revenue targets from his division, Awaluddin stated Telkom aimed to outperform IT market growth that was forecast to grow by 7 to 8 percent in the enterprise segment and around 10 to 11 percent in the small business segment.

'€œWe are upbeat that we can outperform the market as demand for IT services from both [private] enterprises and government [agencies] will continue to surge,'€ he said.

Under the administration of President Joko '€œJokowi'€ Widodo, the government is pushing e-government systems to boost transparency and budget saving.

Awaluddin said around 60-65 percent of IT services demand was usually demand for connectivity and the remainder was maintenance services such as network and applications.

The company would mainly develop its IT services for the government, tourism, smart cities and maritime logistics.

To develop the maritime logistic business, the publicly listed company established a joint venture with state-owned port operator PT Pelindo II in 2012 with starting capital of Rp 100 billion.

Telkom has a 49 percent stake in the joint venture, named PT Indonesia Logistic Community System (ILCS), and Pelindo II holds the remaining 51 percent.

For this year alone, Telkom plans to spend around Rp 200 billion out of the Rp 800 billion-budget to develop a digital ecosystem in 18 ports across the country, including those in Banda Aceh, Pangkal Pinang (Bangka Belitung Islands), Kuala Tanjung (North Sumatra), Dumai (Riau) and Padang (West Sumatra).

Last year, Telkom spent Rp 90 billion to develop a digital ecosystem in six ports, including those of Batam (Riau Islands), Tanjung Priok port (North Jakarta) and Sorong (West Papua).

The digital ecosystem, dubbed broadband ports, will provide greater time efficiency for the ports'€™ waiting and dwelling time.

With Telkom'€™s vessel monitoring system, port users could trace and track any ships and cargo heading to the concerned ports, easing traffic in the ports, Awaluddin explained.

Harry Boediarto, the Transportation Ministry'€™s sea transportation director, said the digitalized system in the six ports had successfully reduced the dwelling time in the ports to around three days.

Dwelling time in most of Indonesia'€™s ports was between seven and eight days, compared to four days in Malaysia, according to data from Jakarta-based Centre for Strategic and International Studies (CSIS).

Besides developing logistics systems in the ports, Telkom has also been developing digital ecosystems for fishermen and the defense industry.

Telkom'€™s shares, which are traded at the bourse under the code TLKM, remained unchanged at Rp 2,895 apiece at Wednesday'€™s close from the previous closing.

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