Telkom Rings in a Bumper Year

Call Me: Cellular voice remains the largest revenue generator, with a 6.7 percent increase last year

Jakarta. Indonesia’s state-owned telecommunications company, Telekomunikasi Indonesia, dialed in a 3 percent increase in net income last year on the back of rising data revenue, which analysts attributed to higher data consumption to access news during elections.

In a filing to the Indonesia Stock Exchange on Monday, the country’s biggest telecommunications company reported a net profit of Rp 14.6 trillion ($1.1 billion) last year up from Rp 14.2 trillion a year earlier.

“Last year was a political year with the general elections and presidential elections,” William Surya Wijaya, an analyst at Indosurya Securities said on Monday. “They were benefitted with people looking for information through telecommunication services and their smartphones.”

Telkom’s revenue from internet, data communications and informatics services jumped 22 percent to Rp 23.6 trillion last year, compared with Rp 19.3 trillion in 2013. As of mid-2014 Telkom has more than 137 million subscribers according to its official website.

Telkom’s revenue from cellular voice services, through its unit Telekomunikasi Selular (Telkomsel), also rose 6.7 percent to Rp 34.3 trillion last year compared to Rp 32.2 trillion a year earlier.

Cellular voice services remain the largest single contributor to the company’s revenue at 38 percent.

As a result, Telkom’s total revenue rose 8.1 percent over the previous year to Rp 89.7 trillion.

The company managed to tamp down its total costs, which rose just 6.4 percent to Rp 61.4 trillion in 2014. The biggest costs were for operations, maintenance and telecommunication services, which rose 15 percent to Rp 22.3 trillion.

The Bandung-based company’s performance was assisted by a lower exchange rate loss, which narrowed to Rp 14 billion from Rp 249 billion a year earlier.

“The slight increase in profit is pretty normal for a telecommunication company. Generally profit increases in the telecommunication business are not huge, so a three percent increase is pretty decent,” Indosurya’s William said.

XL Axiata Axis Capital Group, Indonesia’s second-largest telecommunication provider by subscribers, swung to Rp 891 billion losses last year from a Rp 1 trillion profit in 2013 as the company acquired rival Axis Telekom Indonesia and coped with the rupiah’s weakening against the US dollar.

Another top telecommunications operator Indosat has yet to release its 2014 financial report.

Telkom’s shares declined 1.3 percent at the Indonesia Stock Exchange on Monday to Rp 2,945 per share, amid a 1.3 percent drop in the benchmark index.

Telkom is allocating $1.8 billion for capital expenditures in 2015 to expand its infrastructure.

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