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Telkomsel’s Gojek investment crucial to compete globally: Economist
There has been a lot of discussion of late on Telkomsel’s investment in Indonesia’s on-demand delivery and transportation services decacorn Gojek, now part of GoTo.
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here has been a lot of discussion of late on Telkomsel’s investment in Indonesia’s on-demand delivery and transportation services decacorn Gojek, now part of GoTo. It is interesting to look at this from the economic and investment perspectives, as the global telecommunications sector is facing many challenges as voice and message revenues continue to decline.
On the other hand, Indonesia’s internet economy continues to soar, reaching an estimated value of US$70 billion toward an optimistic projection of $146 billion according to the e-Conomy SEA 2021 report by Google, Temasek and Bain & Company.
Harris Turino, an economist and member of the House of Representatives of Commission VI overseeing trade, industry and investment, who is also a member of the working committee on stated-owned investments in sharing economy companies, said that as a corporate move, Telkomsel’s investment in Gojek was necessary to overcome the declining global trend in the telecommunications industry.
Harris added that Telkom, the parent company of Telkomsel, also needed to find a new revenue stream to support sustainable growth of the state-owned telecommunications giant.
Its investment in Gojek, the on-demand services company that has the largest user base in Indonesia, had brought synergy more than profits.
Harris said the collaboration between the two giants could bring social and economic value to a more extensive customer base. For instance, the two companies could synergize on a program that provided special packages for Gojek drivers or small and medium enterprises to use Telkomsel as their carrier service.
“Telkomsel invested in Gojek at a lower price than today’s IPO [initial public offering]. It signals a lot of potential in future growth, and unrealized gain or loss in the capital market is part of business,” said Harris.
He also explained that Telkom and other companies were making investments of this type to stay competitive in the global market.
“A sharing economy company like Gojek does not have a business plan for the short term, but for the long term, as it considers not only gains and losses, but also sustainable growth to support company fundamentally so it can continue to contribute to the Indonesian economy,” he said.
