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Telkom books 11.5% growth in net profit as digital demand rises
The telco giant booked an 11.5 percent growth in net profit to Rp 20.80 trillion (US$1.43 billion) last year, driven in part by new subscribers to its internet service provider and cellular operator subsidiaries IndiHome and Telkomsel.
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ublicly listed PT Telekomunikasi Indonesia (Telkom) booked a net profit growth of 11.5 percent annually to Rp 20.80 trillion (US$1.43 billion) last year as the COVID-19 pandemic led to a rise in internet use.
Telkom, Indonesia’s biggest telecommunications company, pocketed Rp 136.46 trillion in revenue, marking a 0.66 percent increase from a year earlier, led by higher earnings in its mobile data and home internet business segments, its latest financial report shows.
However, the company’s telephone revenue dropped a steep 22.77 percent annually to Rp 21.61 trillion as Indonesians continued reducing credit-based communication.
“The pandemic has accelerated the country’s digital transformation by a few years and this offers room for Telkom to accelerate as well,” Telkom president director Ririek Adriansyah was quoted in a press release as saying on Thursday.
Telkom’s latest financial performance followed the pandemic-induced boom in the domestic digital economy as COVID-19 restrictions drove people to use online platforms to work and learn from home.
Out of all digital service consumers, 37 percent were new and a majority plan to continue using at least one digital service even after the pandemic, according to the e-Conomy SEA 2020 Report by Google, Temasek and Bain & Company.
With surging internet use, IndiHome, the company’s home internet subsidiary, recorded 1.01 million new subscribers last year, bringing its total subscribers to 8.02 million as of Dec. 31, 2020. The new subscribers led to a 21.2 percent annual growth in IndiHome’s revenue to Rp 22.2 trillion.
Telkom’s financial report also shows the company saw an 18.1 percent annual decrease in operational expenses to Rp 34.59 trillion, led by lower maintenance fees and device-related fees such as tower leases, SIM cards and prepaid vouchers.
“The business’ strengthening fundamentals is a result of Telkom’s focus on highly profitable business segments, thus, lowering operational costs, especially from customer device costs,” said Ririek.
Indonesians on average spend 4.3 hours online every day, marking an increase from the average 3.5 hours spent online before the pandemic, according to the Google, Temasek and Bain & Company report. During the height of pandemic restrictions, they spent an average of 4.5 hours online a day.
Telkom’s capital expenditure reached Rp 29.4 trillion last year, which equals around one-fifth of its revenue, which the company spent on expanding its network and infrastructure, such as telecommunication towers and data centers.
Telkom, traded on the Indonesia Stock Exchange (IDX) under the ticker TLKM, saw its stock price grow by 0.94 percent to Rp 3,230 apiece at 11.30 a.m. on Friday from the previous close, which is better than the benchmark Jakarta Composite Index’s (JCI) dip of 0.33 percent.
