TLKM will allocate Rp 23 trillion capex

JAKARTA. PT Telekomunikasi Indonesia Tbk (TLKM) is ready to launch expansions this year. In order to support the expansion, TLKM has prepared capital expenditures (capex) for 2017. Vice President of Corporate Communications of TLKM Arif Prabowo said that the capex will consist of the company’s 20%-25% of 2016 total revenues.

TLKM revenues throughout 2016 are estimated to reach Rp 118.07 trillion. This prediction was calculated based on the target of increasing the revenues in 2015, which amounted to Rp 102.47 trillion, by 15%. If the target was realized, the capex of TLKM for this year will amount to at least Rp 23 trillion.

Until the third quarter of 2016, TLKM booked as much as Rp 86.19 trillion revenues, or 73% of the target. In 2016, TLKM’s revenues per quarter were always in the upward trend. During the third quarter of 2016, TLKM’s revenues amounted to Rp 29.73 trillion, up by 3% from Rp 28.91 trillion in the second quarter of Rp 28.91 trillion. The revenues of the second quarter also grew by 5% compared to Rp 27.54 trillion in the first quarter.

TLKM will allocate most of the capex, as much as Rp 15 trillion, to its subsidiary PT Telkomsel, which is the mainstay of TLKM.

Telkomsel is planning to spend the funds to construct 10,000 base transceiver stations or BTS to enhance the services qualities, including 4G. In the future, BTS will reach remote and border areas. "We will use the capex to support business growth, including mobile business, broadband, and other infrastructures growth,” Arif said.
Two-digit growth

Arif said that this TLKM will face many challenges, due to the tight competition in information and communication industries. “This industry has speed turbulence. We keep anticipating this (turbulence),” he stated.

TLKM will maintain two-digit growth in this year, at above the industry’s average. According to 2017 Memorandum of Financial, as well as 2017 State Budget Plan, the government sets a 10.6% growth in state owned enterprises (SOEs) in telecommunication sector.

TLKM business has been in the phase of mature. However, this does not necessarily mean that this company has limited space. Analyst at NH Korindo Securities Arnold Sampeliling in his research mentions that the potential demands for internet in Indonesia remain high, due to the lack of internet penetration in this country.

At the same time, the number of smartphone users is also increasing. This is an opportunity for TLKM to increase its revenues. The Palapa Ring Project also brings positive impacts to TLKM. “The project will create new revenues sources for TLKM,” Arnold said.

(Muhammad Farid/Translator)