Telkom Prepares Usee TV Monetization

The rapid growth of UseeTV users has made PT Telekomunikasi Indonesia, Tbk (Telkom) prepare the monetization (change or improve) of Streaming Internet Protocol TV (IPTV) service more seriously. Telkom Vice President of Public Relations, Arif Prabowo, said in Jakarta, in 2013, there were 1.3 million subscribers using Usee TV service. It has made Telkom feels optimistic in preparing UseeTV monetization in 2014.

“Our optimism is increasing with the development of UseeTV. In 2013, there were about 1.3 million subscribers using the service. This is something extraordinary and a signal that the service is ready to be monetized,” said Arif.

Arif explained that for the initial phase to prepare UseeTV monetization, Telkom has prepared the vehicle for this product: establishing Metra TV on January 8th, to replace the management that formerly handled by the Multimedia Unit. This step was taken so that UseeTV could be more competitive and independent.

“We established Metra TV on January 8th. This new subsidiary will manage the service of UseeTV. Metra TV will start its operation approximately in the third quarter of 2014,” he said.

He also explained that the Telkom shares in Metra TV was held by its other subsidiary PT Multimedia Nusantara (Metra).Metra TV will serve cable-based pay-TV service packed with high speed Internet access. Streaming could be accessed via UseeTV portal.

“We will synergize Metra TV content with TelkomVision. The emmerging of Metra TV will create a value-added Fixed Broadband Telkom ecosystem,” he explained.

Arif said that maximizing Usee TV was also part of optimizing the capacity of true broadband that was being established by Telkom.

“So, capital expenditure for UseeTV was already in place as a part of the modernization, that is changing copper cord to optic fiber. We might will provide some working capital for Metra TV as they begin their operation in the third quarter of 2014,” he said.

Arif felt optimist that UseeTV would be one of the company’s revenue booster in the future, given the potential of streaming content in Indonesia that was quite large.

“According to Markplus survey in 2013, internet usage for downloading and uploading video was about 56,1%. In addition, the average annual growth of pay-TV subscribers in Indonesia was about 26,7%. So, this is a promising business,” he concluded.

Separately, SIMB Securities analyst, Kevin Goh in his research, stated that Telkom stepped in the entrance of the year 2014 in a strong position. Supported by its success in developing 3G infrastructure in recent years and the huge market potential for developing fixed broadband services.

According to Kevin Goh, Telkom gained the potential to grow from the fixed broadband business.Currently, Telkom just had 2.5 million subcribers for fixed broadband services, it is 4% from their landline total subcsribers. “It demonstrates that the market potential of the fixed broadband business and the ecosystem is still enormous,” he concluded.