Two tower operators expect solid growth this year

JAKARTA. Tower operators booked strong profit growth last year from services to telecom companies, and expected the performance to continue this year amid tough competition in the telecom industry.

Independent operator PT Tower Bersama Infrastructure Tbk (TBIG) saw net profits surge about 45 percent to Rp 474.36 billion (US$52 million) last year, from Rp 326.73 billion in 2010, on higher revenues.

Tower Bersama’s revenues also jumped 45 percent to Rp 970 billion in 2011 from Rp 671.36 billion a year earlier, while assets rose about 32 percent to Rp 6.88 trillion from Rp 5.18 trillion in the same period. The company’s liabilities stood at Rp 4.17 trillion in 2011.

While some analysts thought the industry had reached saturation point, Tower Bersama was confident business would still grow in Indonesia, where growth was forecast slowing slightly to 6.3 percent this year.

“The company has succeeded in achieving organic growth by establishing more than 1,100 towers and is expecting further growth this year after a deal with Indosat,” Tower Bersama said in a statement.

Tower Bersama recently signed a deal to purchase 2,500 towers worth $519 million from PT Indosat Tbk (ISAT), the second-largest telecom company in the country.

The country’s growing economy has been followed by more technology-savvy middle-class consumers who are willing to spend on new mobile phones and are addicted to social network sites such as Twitter and Facebook.

Tower Bersama said the lending of its tower increased about 48 percent to 7,002 units as of December 2011 compared to 4,729 units on Jan. 1, 2011.

Its main customer was telecom giant state-run PT Telekomunikasi Indonesia Tbk (TLKM), more commonly known as Telkom, which contributed sales of Rp 322 billion or about 33 percent to Tower Bersama last year. Telkom’s subsidiary, PT Telekomunikasi Seluler, was Tower Bersama’s second main customer, with sales reaching Rp 160.11 billion.

Another tower operator, PT Sarana Menara Nusantara Tbk (TOWR) also reported that net profits jumped 183 percent to Rp 283.88 billion last year, from Rp 100 billion in 2010, due to higher revenues and lower costs.

Sarana Menara’s revenues rose 23 percent to Rp 1.65 trillion in 2011 from Rp 1.36 trillion in 2010, and its financial expenses declined to Rp 443.39 billion from Rp 787.9 billion.

The company’s total assets were at Rp 8.57 trillion as of December 2011 and its liabilities stood at Rp 7.05 trillion in total.

About 43 percent of Sarana Menara’s sales were to PT Hutchison CP Teleommunications. Sarana Menara’s second-biggest customer was telecom company PT XL Axiata Tbk (EXCL), with sales contributing to about 15 percent of total revenue.

Shares of Sarana Menara traded at Rp 13,050 apiece on Friday’s trading close, unchanged from the prior day, while Tower Bersama’s jumped 3.64 percent during the day to Rp 2,850 a share.

The companies’ stocks have outperformed the broader stock index so far this year, with gains reaching 30.5 percent for Sarana Menara and 20 percent for Tower Bersama, versus the Jakarta Composite Index’s (JCI) 4.4 percent increase. Both companies respectively have about a Rp 13 trillion market value. (Raras Cahyafitri/The Jakarta Post)