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How Did Telkom Indonesia Do in 2015?

By Anders Bylund - Apr 14, 2016 at 3:49PM

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Indonesia's largest telecom is building a growth engine out of fixed and mobile broadband data plans.

Image source: Telkom Indonesia.

Telekomunikasi Indonesia (TLK 0.38%) recently reported results for the fourth quarter and full fiscal year of 2015. Here's what the leading telecom in the fourth-largest nation on Earth had to say.

Telkom Indonesia's results: The raw numbers

 

FY 2015 Actuals

FY 2014 Actuals

Growth (YOY)

Revenue

$7.4 billion

$6.6 billion

12%

Operating Profit

$2.35 billion

$2.16 billion

8.8%

EPS

$0.02

$0.02

--

Data source: Telekomunikasi Indonesia. Results reported in Indonesian rupiah, converted into U.S. dollars at the rate of 13,500 rupiah per dollar.

What happened with Telkom Indonesia?
Most of the revenue improvements in 2015 came from mobile data subscriptions, as 90% of Telkom's new mobile subscribers are selecting 3G/4G broadband plans.

  • The company now has 152.6 million mobile subscribers, an 8.6% year-over-year increase.
  • Mobile revenues grew 14.8% larger, far outpacing the company's subscriber growth thanks to rising revenues per subscriber.
  • Again, that's largely thanks to the popularity of high-speed data plans. Revenues from these increased by 37.5% and now make up 32% of Telkom's total sales.

Looking ahead, management provided some guidance in broad terms for the 2016 fiscal year.

  • Revenues are seen rising in line with or above the Indonesian telecom industry, driven by Telkom's digital business growth. Management expects industry revenues to rise by roughly 9% this year, so there's the baseline for the company's own targets.
  • Profit margins should decline slightly, as the company spends those rising revenues on network improvements in both mobile and fixed-line operations.

What management had to say
With 52.6% of Telkom's shares in the hands of the Indonesian government, the company often acts like a loosely attached arm of the state. From that perspective, it's not surprising that the company is heavily invested in giving Indonesia better access to the global Internet.

"We are in progress to develop Indonesia's global network project connecting Europe to Indonesia through a submarine cable system," said CEO Alex Sinaga in a conference call with analysts. "This cable network is expected to be completed by fourth quarter 2016. Meanwhile, a global backbone network connecting Indonesia to United States is expected to be completed by the first quarter 2017."

Looking ahead
The broadband boom still has a long way to go. Sixty percent of Telkom's mobile subscribers still don't have 3G/4G data plans, and the fixed broadband network only reaches 4 million subscribers in a nation with more than 60 million households.

Telkom's annual meeting of shareholders is slated to take place on April 22. Apart from the usual activities seen in American shareholder meetings, Telkom owners will also get to approve (or not) the company's fiscal plan for 2016 and the proposed dividend payout. This is not controversial stuff -- over 99% of shareholders voted in favor of last year's fiscal proposals.

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Stocks Mentioned

PT Telekomunikasi Indonesia Tbk Stock Quote
PT Telekomunikasi Indonesia Tbk
TLK
$28.81 (0.38%) $0.11

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