State-controller Telekomunikasi Indonesia (Telkom) posted a 21.9 percent year-on-year (y/y) growth in net profit to IDR 12.1 trillion (approx. USD $909.8 million) in H1-2017, while its revenue growth was also good at 13.4 percent (y/y). Telkom's growth was particularly supported by a 19.8 percent increase (to IDR 27.1 trillion) in earnings originating from data, Internet and IT services. As such, this business line now accounts for 42.4 percent of Telkom's total sales. Growth of this business line comes on the back of burgeoning data consumption in Indonesia as well as actions taken by the company to improve data monetization.

Meanwhile, voice and SMS services contributed IDR 26.0 trillion to total sales of Telkom in the first half of 2017.

Telkom now reportedly has 178 million mobile phone customers through the Telkomsel service brand, up 13 percent (y/y) from customers in June 2016. Furthermore it has 81.7 million 3G and 4G wireless data plans, and 2 million fixed broadband customers through the IndiHome internet service.

But there is no time for complacency and therefore Telkom said it is to use around 25 percent of its 2017 revenues for capital expenditure (capex) next year, particularly for infrastructure upgrades. The company's capex rose by 21 percent this year.

So far this year shares of Telkom have climbed 17.34 percent to IDR 4,670 a piece.

Stock Quote Telekomunikasi Indonesia - TLKM:

Its rival XL Axiata, on the other hand, experienced a 36.3 percent drop in net profit to IDR 143.1 billion (approx. USD $10.8 million) in H1-2017, while its sales were rather flat (+0.7 percent) at IDR 10.9 trillion. Data services now account for about 53 percent of the company's total sales. Since 2015 XL Axiata has been consistently implementing the 3R Transformation Agenda that aims to turn XL Axiata into a data focused company.

Meanwhile, Smartfren Telecom reported a net loss of IDR 1.1 trillion in H1-2017, weakening from its IDR 667 billion net loss in the same period one year earlier. Smartfren Telecom's sales, on the other hand, rose 35.4 percent (y/y) to IDR 2.1 trillion in H1-2017. Data services account for 88.8 percent of the company's total sales.

Indosat Ooredoo, the second-largest telecom provider of Indonesia, is yet to release its H1-2017 earnings.

However, the telecommunication sector of industry is in the "sunset" stage. After the significance of voice and SMS services waned (in the saturated market), growth is now led by data and Internet services (in line with Indonesia's rapidly rising Internet and smartphone penetration). However, in the next couple of years this segment is also expected to run out of steam.

Stock Performance Comparison Listed Telecom Operators Indonesia:*

TLKM = Telekomunikasi Indonesia
ISAT = Indosat Ooredoo
EXCL = XL Axiata
FREN = Smartfren Telecom

* normalized stocks, 1 January 2017 = 100