Telecommunications giant Telkom has spent 60 percent of its Rp 17 trillion ($1.8 billion) capital expenditure for this year, and is also on track to meet its revenue target, the company said on Wednesday.
“Capex is used mostly to develop the infrastructure of Telkomsel, expand networks and a build base transceiver stations,” said Telkom finance director Honesty Basyir.
Telkom, the country’s biggest telecommunications company, has spent Rp 10.2 trillion. It owns a 65 percent stake in Telkomsel. Honesty said the capex is 90 percent financed by internal cash, with the rest coming from bank loans.
In the first half, the company’s revenue is estimated to have grown 11 percent, delivering it 50 percent of this year’s total target of Rp 76.95 trillion. In the first quarter, Telkom’s revenue rose 6.5 percent to Rp 17.7 trillion. It will report first-half earnings by the middle of next month.
Honesty said the biggest revenue contributor remained Telkomsel, which has 110 million registered subscribers.
Other businesses that provide information, media and entertainment, are expected to play a greater role in generating revenue in coming years.
Katarina Setiawan, an analyst at Kim Eng Securities, said she was confident Telkom could boost its IME businesses given its large cash reserves. “The company’s balance sheet is healthy,” she said.
Triwira Tjandra, an analyst at Ciptadana Securities, agreed, saying that Telkom’s ability to contain its costs reflected a success in operational efficiency.
Mobile-phone providers and telecommunication companies are gradually shifting their sources of revenue from calls and text messaging charges to data services.
According to consultancy MarkPlus Insight, at the end of 2011, the number of Internet users in Indonesia rose by 32 percent to 55 million users from a year earlier.
Business research group Frost & Sullivan estimated that e-commerce transactions in Indonesia last year amounted to $1 billion.
Last year, Telkom revenue from data and information technology services increased 21 percent to Rp 23.9 trillion. The growth was attributed to its fixed broadband Internet service and its mobile broadband.