The fixed mobile convergence initiative is beginning to show positive signals through the Telkomsel-IndiHome synergy. Data, internet & IT services, and IndiHome contributed to the company's revenue with 4.8% and 4.3% growth rates respectively.

Jakarta, 1 November 2023 – PT Telkom Indonesia (Persero) Tbk (Telkom) closed the third quarter of 2023 with strong performance and sustained profitability. The company reported consolidated revenue of 111.2 trillion rupiah, marking a positive growth of 2.2% year-on-year. This growth was driven by the data, internet & IT services, and IndiHome businesses, which saw increases of 4.8% and 4.3% respectively compared to the same period last year.

Telkom achieved an EBITDA (Earnings before Interest, Tax, Depreciation, and Amortization) of 59.1 trillion rupiah, with an EBITDA Margin of 53.1%, showing significant improvement from 52.2% in the first semester. The company also recorded a net profit of 19.5 trillion rupiah, marking a robust growth of 17.6% year-on-year. Marketing costs decreased by 6.9% year-on-year to I2.6 trillion rupiah due to effective promotional strategies and targeted initiatives.

The company's transformative steps include five key moves, notably the fixed mobile convergence (FMC) initiative through IndiHome and Telkomsel integration in July, which is beginning to yield positive results. Efficiencies in both capital and operational expenditures are being implemented and are expected to yield positive outcomes as planned. The synergy between IndiHome and Telkomsel, carefully orchestrated, is anticipated to generate revenue growth starting early next year.

Additionally, Telkom launched Indibiz in the business-to-business digital IT services segment, offering connectivity solutions with digital platforms and services tailored for small and medium enterprises (SMEs).

"Thankfully, Telkom's commitment to accelerating transformation through the FMC initiative is showing positive progress in synergy and cost efficiency. The other key strategies under the 'Five Bold Moves' framework, such as InfraCo, data centers, and business-to-business digital IT services, are also on track. While achieving greater results requires time and process, we are optimistic that these transformational steps will yield positive outcomes for the company's future sustainability," Telkom President Director, Ririek Adriansyah said.

In the mobile and consumer segments, including mobile and home broadband, Telkomsel achieved notable performance with revenue reaching 73.2 trillion rupiah, reflecting a growth of 10.6% year-on-year and 29.6% quarter-on-quarter. This growth was primarily driven by the Digital Business, which grew by 7.0% year-on-year and now contributes 86.1% of total revenue, up from 80.1% in the same period last year.

Operationally, Telkomsel continues to lead the market with 158.3 million mobile customers and 9.8 million fixed broadband customers. Healthy ARPU growth, coupled with high telecommunications traffic in both mobile and fixed businesses, demonstrates increased productivity and customer quality, supported by ongoing network enhancements and automation.

In the Enterprise segment, Telkom achieved revenue of 14.6 trillion rupiah, a growth of 6.6% year-on-year, driven by business-to-business solutions, digital IT services, and enterprise connectivity. Telkom is enhancing its cloud business capabilities through strategic collaborations with global technology leaders while continuously improving digital solutions for customers. The enterprise segment also introduced Indibiz, targeting small businesses with solutions such as Indibiz Ruko, Indibiz Finance, Indibiz Education, and Indibiz Hotel. Telkom's focus extends to potential business opportunities with government, state-owned enterprises, and private corporations served by its seven regional Telkom across Indonesia.

Furthermore, the wholesale and international segment reported revenue of 12.3 trillion rupiah, up 9.1% year-on-year, driven by growth in international wholesale voice services and digital infrastructure businesses. TelkomGroup manages 32 data centers across Indonesia, Singapore, Hong Kong, and Timor Leste, with an average utilization rate of 70%. Most data centers hold tier 3 and 4 classifications, boasting a total capacity of up to 42 MW. In addition to data centers, the company is prioritizing cloud services to meet the diverse digital needs of customers.  Until September 2023, TelkomGroup's data center and cloud business recorded revenue of 1.4 trillion rupiah.

In the telecommunications tower business, Mitratel stands as the largest tower provider in Southeast Asia by tower ownership, boasting 37,091 towers with a tenancy ratio of 1.5x. Mitratel achieved revenue of 6.27 trillion rupiah, marking an 11.9% year-on-year growth driven by tower rental income. EBITDA and net profit grew by 14.8% and 16.6% year-on-year respectively, with margins improving to 80.6% and 22.8%. Operationally, collocations and tenants increased by 21.3% and 10.5% year-on-year respectively. Mitratel demonstrated robust financial performance with a low leveraging ratio, indicated by a net debt to EBITDA ratio of 1.9x, underscoring the company's stability and future growth prospects.

Following the implementation of the FMC initiative, Telkom will establish InfraCo as a new entity in the fourth quarter of 2023. This entity is expected to drive company value by facilitating extensive fiber penetration, ensuring reliable telecommunications services, and fostering increased customer value creation.

Until September 2023, Telkom allocated 22.1 trillion rupiah in capital expenditure, representing 19.9% of total revenue. This expenditure is focused on enhancing telecommunications network infrastructure to improve digital customer experiences. In the fixed broadband business, capital is allocated for developing fiber optic access, submarine cable infrastructure, and projects such as telecommunications towers and data centers. In the mobile business, capital is used to enhance the quality and capacity of the 4G network, develop 5G technology, and strengthen IT systems.

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