Digitizing The Nation, Telkom Indonesia Posted 11.5% Growth in Net Income During Pandemic

As industrial conditions remain battered by the COVID-19 pandemic, which continues to rage in Indonesia, PT Telkom Indonesia (Persero) Tbk (Telkom) managed to record a good performance by yielding positive income growth, with its EBITDA (Earning Before Interest, Tax, Depreciation, and Amortization) and net income recorded double-digit growth in 2020. The Company recorded a consolidated revenue of IDR136.46 trillion, grew positively by 0.7% compared to 2019. The Company's EBITDA in 2020 was recorded at IDR72.08 trillion with a net income of IDR20.80 trillion, or reached double digit growth of 11.2% and 11.5% year-on-year respectively. It indicated optimism that digitalization could become a driving force for the handling COVID-19 and national economic recovery.

Telkom President Director Ririek Adriansyah said 2020 was a very challenging year during which pandemic-induced changes had shifted people's needs and lifestyles, with a significant increase of consumers adopting a digital lifestyle.

"The pandemic has accelerated digital transformation couple years faster and for Telkom, this is a valuable momentum for acceleration. In line with the company's transformation into a digital telco, Telkom continues to actively support the government's efforts in handling COVID-19 and recovering the national economy through connectivity, platforms and digital applications, as well as social assistance. We are committed continuing to provide ease for people who because of the pandemic have to carry out their activities digitally from home, including to work and study," Ririek said in Jakarta (29/4).

The COVID-19 pandemic provides an impetus to the greater need for fixed broadband access. Telkom seized the moment to meet the increasing demand throughout 2020 by having more than 1.01 million new IndiHome subscribers, Telkom's fixed broadband flagship product. By the end of 2020, the number of IndiHome subscribers grew to 8.02 million, or went up by 14.5% compared to the end of 2019. It had a positive impact on the company, to which IndiHome posted a significant increase in revenue of 21.2% to IDR22.2 trillion compared to last year. IndiHome's growth will remain promising, given that the fixed broadband penetration rate in Indonesia is relatively low at around 15% of Indonesian households and IndiHome's ARPU increasing from IDR253,000 in the third quarter to IDR262,000 in the fourth quarter of 2020.

For the mobile segment, Telkom's subsidiary Telkomsel recorded a significant increase in data traffic to 9,428 petabytes or increased by 43.8% compared to the same period last year, with the growing demand for data services, particularly due to changes in people's lifestyles triggered by the pandemic. As of end of 2020, Telkomsel served 169.5 million subscribers, of which 115.9 million were mobile data users, increased by 5.2% compared to last year. Throughout 2020, Telkomsel's Digital Business revenue grew by 7.0% to IDR62.33 trillion, which has been a catalyst of consumer behaviour shift from the legacy business to digital business services. The Digital Business revenue contribution increased to 71.6% out of Telkomsel's total revenue, from 63.9% in the previous year. In 2020, Telkomsel built 27,700 new 4G LTE Base Transceiver Stations (BTS), brought Telkomsel's BTSs reached more than 231,000 by the end of 2020, 78% of which were 3G/4G BTS.

In the Enterprise segment, business fundamentals became more robust as a result of strategy implementation to focus on higher profitability business lines, yielding lower operating costs, especially in terms of customer equipment cost in this segment. As a result, the segment posted IDR17.7 trillion revenue in 2020. In the fourth quarter of 2020 alone, revenue for the Enterprise segment reached IDR6.3 trillion, a significant growth of 67.9% compared to the third quarter of 2020. Revenue from data center & cloud, application services, and enterprise broadband contributed to this achievement.

For the wholesale & International Business segment, the strategic enabler of the whole TelkomGroup business segments, also performed well with its revenue increased by 27.3% year-on-year to IDR13.5 trillion. Improvements in the telecommunications tower business, voice wholesale, data centers, and inorganic initiatives have been accounted for this achievement. Currently, the company is preparing a plan to unlock Mitratel's value in order to increase valuation and strengthen TelkomGroup's telecommunication tower business portfolio. In this segment, Telkom is also expanding neuCentrIX as an initiative to serve the wholesale market of the telecommunications industry and digital ecosystem by providing integrated data center services with the widest coverage of backbone infrastructure and global competitiveness.

In accordance with its transformation into a digital telecommunications company, Telkom continues to develop a variety of digital services for the Consumer and Enterprise segments through collaboration and synergy with digital players as the strategic partners and/or strategic investors. The company also supports the digital ecosystem development, which focuses in five ecosystems: MSME, education, health, logistics and agriculture. In order to boost the national economic recovery, Telkom with eight other SOEs took the Ministry of SOE's initiative and launched an e-commerce aggregator digital platform namely Pasar Digital UMKM (PaDi UMKM), to help the MSMEs to gain wider market place especially for SOEs.

Telkom also nurtures startup companies in Indonesia through a synergy program to build a digital ecosystem. Through MDI Ventures, Telkom has invested in more than 50 startups in Indonesia and globally with up to IDR600 million investment. MDI's consistency in investing in startups shows TelkomGroup's commitment in bolstering digital business in the country and supporting the acceleration of digitalization in Indonesia.

The company's total capital expenditure in 2020 was IDR29.4 trillion or 21.6% of total revenue. The capital expenditures absorption in 2020 was lower than the projected plan due to the pandemic and the implementation of social and travel restrictions (PSBB). Our capital expenditures were mainly utilized to strengthen our networks and other infrastructures, including 4G LTE network, home fiber optic access network, submarine fiber optic backbone network as well as telecommunication towers and data centers to strengthen our digital capabilities, and to provide the best digital experiences for our customers.

"Amidst the pandemic that we still have to face, we would like to thank the Indonesian people for their trust to TelkomGroup various services. We will continously strive to offer the best digital solutions to assist customers to face the pandemic and revive the national economy, in line with our commitment to become the driver of Indonesia's digitalization. We believe that with the digitalization, we could face the pandemic hand in hand and make Indonesia better," Ririek said.

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Source: PT Telkom Indonesia (Persero) Tbk