TELKOM’s RUPSLB of 2007 : Telkom’s Effort to maintain a trend of high working performance

Jakarta , February 28, 2007
The increasing of TELKOM’s productivity growth in 2006 couldn’t be separated from all TELKOM’s staffs hard work and cleverness who wanted to keep TELKOM’s position as the leading company in telecommunication business’s competition area. In 2006, TELKOM had booked its delightful achievement both from financial sector and operational sector. The challenge to be faced in the future is morely in how to use the momentum of the reached growth in 2005-2006 which had been responded well by the market so it might extend TELKOM’s market capitalization value to the more profitable level.
 
According to TELKOM’s ex-President Director, Arwin Rasyid, wheter it was being realized or not, TELKOM had made huge leaps which were admitted by not only in national circle but also international circle. Form the financial sector, almost all of the financial indicators had showed a significant increase. TELKOM’s consolidated income in the third quarter of 2006 reached up to 32.7 trillions rupiah or increased over than 23.4 % compared to TELKOM’s consolidated income at the same period of the former year, 2005. TELKOM’s consolidated net profit in the third quarter of 2006 reached up to 9.2 trillions rupiah or had grew for about 62 % compared to the net profit at the same period of the former year, 2005. Meanwhile, TELKOM EBITDA’s margin was also the highest among the world telecommunication operators, it was 65.85%.
 
From the operational sector, TELKOM had successfully maintained its position as the biggest customer base operator. Indeed, there was a significant leap in Telkomsel’s cellular customer growth in the third quarter of 2006 which reached up to 32.5 millions customers. Meanwhile, TELKOM’s wireless fixed phone service represented by the presence Flexi service completed with Flexicombo’s feature is predicted to keep growing and become the market leader of the CDMA phone in Indonesia . Moreover, it is supported by the regulator’s statement that both technically and operationally, Flexicombo service has been complied with the BRTI’s policy based on Letter Number 218/BRTI/X/2006 about Flexi Combo Service dated October 4, 2006 (The statement clarified that Flexi Combo had complied with the BRTI’s regulation is written in letter of Ditjen Postel Number 329/DJPT.3/Kominfo/2/2007 about Flexi service’s evaluation date of February 12, 2007)
 
During 2006, TELKOM has also brightened up the dynamic competition through its various innovation and creativity of fixed wireline service which used to be less considered. Today, it starts to be considered to have a new value for it had created a derived service in the form of Speedy broadband access and Telkomnet Instant dial-up.
Arwin continued that what made he proud of Telkom is its achievement earned by the end of 2006where Telkom’s share price had successfully broke through the rate of ten thousands rupiah per sheet. “This achievement was surely may not be achieved without a great Telkom’s fundamental support. That’s why, this achievement is also reflected the Telkom’s performance for real,” Arwin said.
 
He said that Telkom has received a positive acknowledgement from many parties both inside and outside of the country. Moreover, several prestigious acknowledgements had been received by TELKOM so that those may blow the TELKOM’s value in its public and investor’s consideration.
 
Significant Agenda
In order to guarantee Telkom’s working performance in the future, Arwin also considered that some strategic steps need to be taken to motivate the human resources. In his opening preface during the RUPSLB 2007, Arwin delivered some agendas to be approved by the stockholders. Those agendas about are :
  1. The re-structure of Dana Pensiun Telkom (Dapentel)
  2. The company’s re-plan toward buyback share
  3. The approval toward the implementation of EMSOP Program (Employee and Management Stock Option Plan)
 
About the suggestion to Dapentel’s re-structure, Arwin gave an illustration by saying that in the position of January 1, 2007, Dapentel managed employed members for as many as 27.074 persons and retired members for as many as 28.137 persons in which consisted of 20.623 persons who had retired before July of 2002 and 7.514 persons who started to retire by July of 2002. Starting form July of 2002, employees who has been recruited by the company were no longer become the members of Dapentel’s members so that the amount of Dana Pensiun Telkom’s members turned into a closed population.
 
In order to give a solution to the aspiration of employee and retired employee, Telkom has offered a solution through the Dapentel’s restructure by separating Dapentel to be two parts standing up on their owns. Dapentel 1 is the one which manages the fund of retirement for those who had been retiring before July 1, 2002 and Dapentel 2 is going to be the one which manages the fund of retirement for those who had started to retire by July 1, 2002. He also suggested the usage of Uni-Formulasi, the formula of retirement’s benefits for employees who had been registered as the members before April 20, 1992, to be the formula of retirement’s benefits used by the members started from April 20, 1992.
 
According to Arwin Rasyid, it was expected that the re-structure of Dapentel may improve the company retirement earning’s income through the Dapentel’s independency for a long term. It might also prevent the materially financing and burdening to the company in one particular year.
 
Another suggested agenda is the agenda about the Company re-plan toward the buyback share (second agenda) and the agenda about the approval toward the implementation of EMSOP Program (third agenda).
 
Having connected to the second agenda, Arwin Rasyid reported the result of buyback share program which had received the approval in the RUPSLB in December 21, 2005. Based on the RUPSLB’s decision, TELKOM had received the stockholder’s approval in buying back the share which had been published and noted in Bursa Efek Jakarta, Bursa Efek Surbaya or noted in the form of ADR in New York Stock Exchange.
 
On its continuity, by February 27, 2007, the company had bought back company share as much as 166.665.500 shares which were the 16.53 % of the maximum amount for shares that may be bought back by the company or the 0.83 % from 20.1 billions of the total company shares being allocated and fully deposited.                                   
 
Having still connected to the company share, Arwin said that TELKOM has planned for EMSOP program suggested by using the buyback share in 2007. Basically, EMSOP connects to the effort of shares buyback conducted by company.
 
EMSOP itself is an option giving to the right-reserved members to buy the EMSOP share within particular terms. EMSOP program is a LTI (Long Term Incentive) program for both employees and managements to support “Company Objectives 3010”, the increasing of market capitalization’s value as much as 30 billions USD in 2010. By the presence of the EMSOP program, Arwin continued, both employees and management’s sense of belonging will increase so that the company’s performance may be supported as well.
 
Through the EMSOP program, the total amount of the option right given to the right-reserved members will be maximally as much as 51.150.750 of option rights. This calculation equals with 0.25% from the total circulated shares or equals with 5.07% from the maximum amount of permitted buyback.
 
Extra Effort
Those suggestions over the re-structure of Dapentel, share buyback program and EMSOP program are truly based on TELKOM management’s willing to support TELKOM’s human resources so they might be motivated to perform their best performance for their company. From all of the aspects, Arwin said, the challenges forward will be much harder and for that reason, the extra efforts from all of the human resources involved in TELKOM’s management are being forced. The hope of best contribution given by all of the TELKOM’s human resources should be supported by the system. The re-structure of Dapentel and EMSOP program are the strategic steps which may answer the all hopes.
 
TELKOM’s RUPSLB of 2007 discussed five agendas which are :
 
First Agenda
 
Restucture of Dana Pensiun TELKOM
 
Second Agenda
 
Company’s Re-plan toward buyback share
 
Thrid Agenda
 
Approval to EMSOP progam’s implementation
 
Fourth Agenda
 
Adaptation
 
Fifth Agenda
 
Restructure Management Membership
 
Arwin hoped that RUPSLB of 2007 may bring the best result for TELKOM. However, Arwin considered that TELKOM is a valuable asset for Indonesia so that its potency and performance may always be kept improving.
 
For Further Information, please contact :
Muhammad Awaluddin
Vice President of Public and Marketing Communication
PT Telekomunikasi Indonesia , Tbk
Tel.      62-21-5213288
Fax.     62-21-5203322        
Email : awaluddin@telkom.co.id

Website: www.telkom-indonesia.com