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Jakarta Post

Sarana Menara Nusantara to expand fiber-optic cable network amid high demand

  • Eisya A. Eloksari

    The Jakarta Post

Jakarta   /   Thu, August 27, 2020   /   05:09 pm
Sarana Menara Nusantara to expand fiber-optic cable network amid high demand Telecommunications tower cells for mobile communications (Shutterstock/Rigelp)

Publicly listed telecommunication tower operator PT Sarana Menara Nusantara plans to expand its network of fiber-optic cables a total of 47,000 kilometers by the end of the year to boost 4G connectivity, amid the country’s high data demand accelerated by the pandemic.

Vice president-director Adam Gifari said the company would add more than 12,000 km of fiber-optic cables to its existing infrastructure of 34,200 km.

“I think the 4G technology still has a few more years to develop as the government prepares for 5G,” he said during a press briefing on Wednesday.

He added that he believed the country could increase the 4G penetration rate, which currently stood at 70 percent of the country’s 174 million users. Most of them accessed the 4G network through mobile phones, the company noted.

Adam said the pandemic had also led to an acceleration of digitalization for everyday needs, including video-conferencing and online shopping, resulting in higher traffic and demand for data on mobile devices.

Communications and Information Minister Johnny G. Plate stated on Aug. 22 that the government would establish and extend the geographic coverage of 4G services nationwide by 2022 at the latest, as it strove to accelerate a so-called national digital transformation.

Meanwhile, Indonesia’s digital economy is on track to dominate Southeast Asia, as its market value is projected to triple to US$130 billion by 2025 from $40 billion in 2019, according to the latest e-Conomy Southeast Asia study.

In its presentation, the company also stated that surging data demand in Indonesia would require more towers and that Sarana Menara Nusantara would focus on Java, Bali and Sumatra for its tower network.

Adam said the company’s number of towers had grown to 21,271 in the second quarter from around 18,000 a year earlier. Over the same time, it saw the number of tenants grow to 38,122 from around 29,000 tenants.

According to an announcement by the company published by Indonesia Stock Exchange (IDX) in June, the company has continued the process for the acquisition of 1,723 towers from telecommunication firm PT XL Axiata through its subsidiary PT Profesional Telekomunikasi Indonesia (Protelindo). For the first handover of 1,399 towers from XL in April, Sarana Menara Nusantara spent Rp 1.9 trillion ($129.6 million).

“Our strategy to grow this year is to increase colocation with lower capital expenditure,” Adam said, referring to the practice of locating two or more pieces of transmission equipment on the same cellular antenna tower.

Sarana Menara Nusantara business development director Indra Gunawan stated that the company still saw growth potential in internet services in Indonesia.

“Internet penetration in Indonesia still has potential to continue developing, supported by the demographic composition of Indonesia, which is dominated by young people. And with the rising usage, users keep demanding better internet services,” Indra said.

Sarana Menara Nusantara booked a 21.8 percent year-on-year (yoy) revenue increase to Rp 3.68 trillion in the first half of the year, which it attributed to tower acquisition and colocation.

Meanwhile, its profit jumped by 31.3 percent yoy to Rp 1.3 trillion in the first half.

In the second quarter of the year, Sarana Menara Nusantara secured long-term contracts amounting to Rp 53.1 trillion, which will last until 2033, the company’s data show.

The company also announced on its website on Aug. 17 that it would buy back 84.9 million of its shares with a total value of approximately Rp 90 billion.

The telecommunication tower operator’s shares have gained 27.95 percent so far this year. TOWR was trading at Rp 1,030, up about 0.5 percent, early in the afternoon trading session on Thursday.