PT Telekomunikasi Indonesia Tbk (Telkom) is Indonesia's largest telecommunication and network provider. The company, which is majority owned by the Indonesian government, has a dominating market share of between 45 and 50 percent in terms of mobile phone subscribers in Indonesia. Telkom is one of the largest Indonesian companies in terms of market capitalization. It is the parent company of the Telkom Group, which is engaged in a wide range of businesses including telecommunication, multimedia, property and financial services.
|Industry Sector||Infrastructure, Utilities & Transportation|
|Industry Sub Sector||Telecommunication|
|Established||24 September 1991|
|Listed||14 November 1995|
|Listed Company Code||TLKM|
|Major Shareholders (>5%)||Government of Indonesia (51.19%)|
|Key Subsidiaries||Telekomunikasi Indonesia International
Stock Quote Telekomunikasi Indonesia - TLKM:
Telkom Indonesia offers a wide range of network and telecommunication services. These include include fixed wireline and fixed wireless telephone connections (CDMA), cellular services (GSM), network and interconnection services, as well as internet and data communication services. Telkom also provides services in information, media and edutainment, including cloud-based and server-based managed services, e-Payment and IT enabler services, Pay-TV, as well as e-Commerce and other portal services.
The company has become too large for the domestic market only and thus expanded its focus to international expansion in order to sustain growth. Telkom provides services in various countries, including Myanmar, Macau, Hong Kong, Malaysia, Taiwan, Singapore and USA.
Through its subsidiary Telekomunikasi Selular (Telkomsel), Telkom is one of the dozen Indonesian companies that compete to tap the lucrative Indonesian telecommunications market. According to data from the Indonesian Cellular Phone Association (ATSI), there were more than 250 million Indonesian cellular service subscribers (a number that exceeds the total number of Indonesians) in 2012. The large and young population in combination with its rising per capita GDP are reasons that Indonesia is one of the world’s most crowded telecommunication markets.
Telkomsel, the group's GSM and UMTS Mobile phone network operator, is the major revenue contributor for Telkom, accounting for about 60 percent of Telkom's consolidated revenues.
Telkom’s shares are traded on the Indonesia Stock Exchange (IDX), the New York Stock Exchange (NYSE), the London Stock Exchange (LSE) and publicly offered without listing in Japan (POWL). However, per 5 June 2014, Telkom withdrew from the London Stock Exchange due to the small proceeds obtained in combination with the high listing fee.
Telkom's Operational Highlights:
(Simpati & Kartu As)
|Fixed Line Subscribers||26.8||16.1||14.1||10.3||10.7|
Source: Telekomunikasi Indonesia, Annual Report 2016
Telkom's Financial Highlights:
in billion IDR rupiah, except stated otherwise
¹ in IDR rupiah
Source: Telekomunikasi Indonesia, Annual Report 2016
Future Outlook of the Indonesian Telecommunication Sector
Indonesia is unique in the sense that mobile phones are the primary tool for telecommunication. Not only with regard to telephony but also in terms of internet usage. Mobile phones are used as main tool device to access the internet by Indonesians. Mobile phone penetration has surged from 20 percent in 2005 to - currently - over 80 percent (although about 30 percent of Indonesian subscribers hold more than one SIM card). This indicates that the mobile phone subscription market is heading towards saturation; growth in voice and SMS revenue is stagnating. Internet penetration, however, is relatively low, thus having ample room for growth in the near and middle term future. High-speed broadband services are now the new focus of telecommunication companies. However, profit from call services remains to be the primary source of income for Indonesian mobile operators.
Indonesia is also unique in the sense that the country is predominantly a voice market due to low voice tariffs set by operators. Over 60 percent of total revenue in the mobile service sector is derived from voice services, while the remainder comes from non-voice or data services. The growing popularity of smartphones, however, contributes heavily to the growing data revenues. According to data from Frost & Sullivan, a consulting firm, smartphone penetration in Indonesia will exceed 50 percent in 2015 from only nine percent in 2012. The firm believes that the Indonesian market is in the early to middle stage of data usage increase.
Due to the promising perspectives of the mobile phone sector in the last decade, a number of companies are in fierce competition for market shares. Out a total of 11 telecommunication operators, five companies control a combined market share of around 90 percent. These five are: Telekomunikasi Indonesia - and its subsidiary Telekomunikasi Seluler (Telkomsel) -, Indosat, XL Axiata and Bakrie Telecom. Competition has brought tariffs for mobile phone services down significantly, while a new group of subscribers (from the poorer segments of society) has limited spending capacity. Instead, companies now focus on data services (broadband services) and value added service to attract subscribers, both of which are estimated to grow by 35 percent up to 2014. In 2011, there were around 70 million mobile phone data services users. This is estimated to increase to 160 million by 2015.
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