Telkom boss sees double-digit growth

JAKARTA. State-run PT Telkom, the nation’s largest telecommunications company, forecast its revenue and net profit would grow by double digits this year and the next, supported by broadband and data business expansion.

Telkom president director Arief Yahya told The Jakarta Post recently that he expected at least a 10 percent rise in revenue this year and the following year, which is higher than the industry’s expected overall growth of between 6 percent and 8 percent.

“As for net profit, perhaps it will grow by at least 10 percent this year and next year,” said Arief recently.

Telkom’s net profit soared by 17 percent to Rp 12.85 trillion (US$1.16 billion) in 2012 from Rp 10.96 trillion in 2011. Its revenues rose by 8.3 percent to Rp 77.14 trillion in 2012 from Rp 71.25 trillion in 2011.

During the first half of the year, the company’s net profit jumped by 10.8 percent, while revenue
increased by 9.4 percent.

Arief’s optimism for next year hinged on the projection that cellular business would remain stable and data and broadband business would expand “by 30 percent, which will compensate for the flat growth in voice business”.

“I am upbeat that data and broadband will account for about 20 percent of our total revenue next year, from around 15 to 17 percent expected this year.”

Telkom, the parent of the country’s largest cellular carrier PT Telkomsel, will spend between US$1.2 to $2 billion in capital expenditure (capex) next year, with more than 55 percent allocated to its breadwinner Telkomsel and around 35 percent to its data and broadband firms.

This year, Telkom allocated around $1.5 billion in capex.

“Our concern for next year will be on our exposure to foreign-exchange [forex] pressure as most of our investment is in forex,” said Arief.

“But our debt exposure to such pressure will be limited as dollar-denominated debts account for less than 30 percent of our total debts,” he said.

As part of its ambition to go global, Telkom is looking toward foreign markets to help diversify its business.

Its latest project in the pipeline includes a call center business in Australia, which will cement Indonesia’s global entry into a sector dominated by the Philippines and India.

“We expect the business to start next year. We have the technology and we will probably need around 100 people with fluent English skills in the first phase to run the job,” he said.

Telkom already runs a business in Australia, which facilitates document management.

Overseas business still accounts for around 3 percent of Telkom’s portfolio. Aside from Australia, Telkom also has a presence in countries such as Singapore, Malaysia, Hong Kong, Timor Leste and Myanmar.

“Our foreign expansion will based on the strategy that business follows the people. This will also include plans to serve our migrant workers in the Middle East,” Arief said. (Rendi A. Witular)