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Jakarta Post

Telkom'€™s Q3 earnings lifted by Internet, data services

  • Khoirul Amin

    The Jakarta Post

Jakarta   /   Tue, October 28, 2014   /  10:16 am

Telecommunications giant PT Telekomunikasi Indonesia (Telkom) booked a rather positive performance in the first nine months of this year, driven by surging contribution of its data and Internet services.

The state-owned company booked a 4 percent increase in net profit from January through September to Rp 16.3 trillion (US$1.3 billion), from Rp 15.6 trillion year-on-year (y-o-y), according to its latest financial report published Monday.

The firm'€™s revenue surged 7 percent to Rp 65.8 trillion as of the third quarter of this year, from Rp 61.5 trillion in the same period last year.

Single digit revenue growth and positive net profit growth are already an achievement for local telecommunication firms that have been struggling to compete in a saturated market as the number of SIM cards circulating have exceeded the total population.

'€œTelkom'€™s growth was mainly driven by data, Internet and IT services and cellular business,'€ said Arief Yahya, former Telkom president director who has been appointed the new tourism minister.

From all of its business lines, the telephone business (cellular and fixed phone) accounted for nearly half of Telkom'€™s revenue. It grew by 2.4 percent to Rp 31.8 trillion from Rp 31.06 trillion.

The highest growth was in the firm'€™s data, Internet and IT services with 15.4 percent growth to Rp 26.9 trillion, with voice over internet protocol (VoIP) growing 44 times to Rp 3.7 trillion from only Rp 84 million y-o-y.

VoIP is a group of technologies used to deliver voice communications and multimedia sessions over the Internet. Among communications by VoIP are voice calls through telecommunications software Skype or messenger applications, such as BlackBerry Messenger (BBM), WhatsApp and Line.

According to a Nielsen study, 79 percent of Indonesian smartphone users use BBM for about 23 minutes a day. Meanwhile, 57 and 30 percent of smartphone users use WhatsApp and LINE for only six and five minutes a day, respectively.

Reza Priyambada, the head of research at Woori Korindo Securities Indonesia, said that most people had shifted to utilize data and Internet services instead of using voice and SMS services to connect. '€œI think we can clearly see that many people are now communicating via BBM [and other messenger platforms]. They can also use media share,'€ he said.

Reza said that Telkom'€™s revenue growth was among the highest in the country'€™s telecommunications industry.

The Indonesia Cellular Phone Provider Association (ATSI) estimates that the telcom industry will grow only by single digits of about 6 percent this year.

Arief said previously that Telkom expected to see a 10 percent increase in its annual revenue to Rp 91.25 trillion from Rp 82.96 trillion last year. '€œTelkom also expects to see its international business make up 4 percent of its total revenue this year,'€ he said.

The firm is currently waiting for a new person to take the helm of the company. Newly installed State-Owned Enterprises Minister Rini Soemarno assured on Monday that she would soon appoint a new Telkom CEO after getting recommendations from shareholders.

Telkom'€™s shares, which are traded on the stock exchange under the code TLKM, traded 2.26 percent lower at Rp 2,805 per piece on Monday'€™s close compared with the previous trading session.

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'€œTelkom also expects to see its international business make up 4 percent of its total revenue this year.'€

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