Jakarta, 24 November 2021 –  PT Telkom Indonesia (Persero) Tbk (Telkom) ended the third quarter of 2021 by recording a satisfactory performance with double digit net profit growth. As of September 2021, the company's consolidated net profit was Rp18.9 trillion or grew by 13.1% YoY. The company recorded a consolidated revenue of Rp106.0 trillion or grew 6.1% from the same period last year. The company's profit before interest, taxes, depreciation and amortization (EBITDA) also grew by 8.1% YoY to Rp57.9 trillion. EBITDA margin and net profit margin also increased to 54.6% and 17.8% as per the third quarter of 2021. This achievement resulted from Telkom's commitment and consistency for transformation to become a digital telecommunications company, and it is beginning to yield results. IndiHome's fixed broadband service is the engine of the company's performance growth, followed by Telkomsel's digital business which continues to get stronger from time to time.

In the Mobile segment, Telkomsel managed to record Rp65.12 trillion in revenue for the third quarter of 2021, with 7.8% YoY net profit growth. Telkomsel's digital business revenue reached Rp50.5 trillion or grew 6.0% YoY, contributing 77.5% to total revenue in the third quarter of this year, an increase from 73.2% in the third quarter of 2020. This achievement was possible with the support of a continuously increasing customer base reaching 173.5 million subscribers, or growing 2.0% YoY with 120.9 million mobile data users (growing 3.0% YoY). Data traffic grew significantly by 50.4% from the same period last year to 9,812 Petabytes, with a total data consumption of 10,059 Megabytes per data subscriber or grew 38.6% YoY. Infrastructure development continues aggressively so that Telkomsel's digital services run optimally. In September 2021, Telkomsel built 132,293 4G-based Base Transceiver Stations (BTS). By the end of the third quarter of 2021, Telkomsel owned 245,710 units of BTS or grew 7.6% YoY, of which 79.5% were 3G/4G BTS that grew 9.7% compared to the third quarter of 2020.

IndiHome's revenue in the Consumer segment grew 21.9% YoY to Rp19.6 trillion with IndiHome's EBITDA margin increasing to 50.0% at the end of Q3/2021. This was driven by 450 thousand new customers so that the total IndiHome subscribers at the end of September 2021 was 8.47 million or grew 9.2% YoY. IndiHome's ARPU increased from Rp270 thousand in the second quarter of 2021 to Rp274 thousand in the third quarter of 2021. The increase in ARPU was influenced by the revenue from add-ons which grew quite large to IndiHome's revenue. IndiHome continuously enriches its content by forging strategic partnerships with global content providers, such as Viu, a video streaming service for various Asian shows in a bid to improve the quality and the best digital experience for customers. IndiHome also added Neptune TV channel, a marine life documentary channel in collaboration with the Ministry of Marine Affairs and Fisheries.

Until September 2021, the Enterprise segment recorded an increasingly better and impressive performance with Rp13.8 trillion revenues or 20.5% YoY growth. The segment showed IT services and connectivity solutions for corporations were still the largest contributors. Meanwhile, the Wholesale and International segments recorded Rp 10.5 trillion revenue or grew by 2.6% YoY due to the growth of the telecommunication tower, data center and A2P services business.

Telkom President Director Ririek Adriansyah said, "Praise be to God, until the end of the third quarter of 2021, Telkom was able to record better performance and on the right track with what we plan. This achievement is, of course, greatly influenced by the transformations that Telkom has been intensively undertaking, including the strategy to strengthen our capabilities, whether through self-development, forging strategic partnerships or inorganic strategies such as acquisitions. Telkom will continue to accelerate the transformation and structuring of its portfolio for optimal value creation for the TelkomGroup, stakeholders and the nation and state."

From the telecommunications tower business, Mitratel as a subsidiary of Telkom has just conducted an initial public offering which was listed on the Indonesia Stock Exchange on 22 November 2021 with MTEL listing code. Mitratel raised up to Rp18.8 trillion funds from this corporate action, of which 90% of it was used for capital expenditures to develop Mitratel's business organically and inorganically, in line with the company's strategy, while the remaining 10% will be used for working capital and other company needs.

Until the third quarter of 2021, Mitratel recorded double-digit revenue, EBITDA and net profit with positive growth. Currently Mitratel manages more than 28,079 telecommunication towers across Indonesia with a tenancy ratio of 1.5x. Mitratel's telecommunication towers are in strategic locations and 57% of them are outside Java. Mitratel's business potential will get better along with the presence of 5G, which increases the operator's need for telecommunication towers. In addition to its main business in telecommunication towers, Mitratel also expands its portfolio of tower derivative services such as project solutions, managed services, fiberization and digital services to accelerate the digital climate in Indonesia.

On digital platforms, data centers and clouds are still the focus of Telkom's business, which continues to grow significantly along with the increasing activity of digital business players. A strong data center and cloud platform is an important key for Telkom in providing a variety of digital services and solutions to improve customers' digital experiences. The company recorded data center and cloud business revenues as of the third quarter of 2021 at Rp1.1 trillion or grew by 19.7% YoY. Telkom has 26 data centers consisting of 21 domestic data centers and 5 data centers located abroad, including tier 3 and 4 data centers in Jurong, Singapore.

In order to provide a greater valuation, Telkom is reviewing and assessing the data center consolidation plan into one entity under the TelkomGroup. This plan is still under evaluation to obtain the best option for optimal value creation for TelkomGroup and stakeholders. This process is expected to be completed in the next 2-3 years.

“Mitratel's IPO is an important milestone for TelkomGroup in strengthening its marks as a digital telco. This has also spurred our enthusiasm to prepare for the next milestone, namely unlocking the data center business value. We are currently reviewing the best options for optimal value creation so that later we can provide significant support in the development of the digital ecosystem," Ririek said.

In the digital business, Telkomsel's investment in Gojek in November 2020 and May 2021 has strengthened the strategic initiatives of the two companies in providing new benefits for users and supporting the acceleration of digitalization in the MSME sector. So far, Telkomsel has recorded a capital gain of Rp350 billion.

In terms of business growth, investment in Gojek also showed positive results based on growth in the third quarter of 2021 compared to the first quarter of 2021. ARPU drivers who became users of self-subsistent collaboration packages increased by 4%, drivers who became Telkomsel resellers grew by 51% followed by an increase in the number of transactions by 97%, and the growth of GoFood merchants using MyAds through the Gobiz application increased by 146%. In addition to having an impact on society, it also contributes positively to Telkomsel's business growth.

Apart from forging strategic partnerships, to increase the company's digital capabilities, Telkom has also consistently added value and the amount of investment in potential startups from within and outside the country with its investment vehicle MDI venture company. The investment strategy in startups that the company carries out is focused on increasing the investment value (capital gain) and on collaboration opportunities that may be carried out by startup companies in various business lines in the TelkomGroup to build synergies in increasing the company's business and profitability. MDI has funded more than 50 startups from 12 countries, 28 of which are the home-grown ones. Currently, there are three startups in the MDI portfolio that have had their IPOs and three that have reached the unicorn level. 

The company has spent Rp18.6 trillion in capital expenditures until the third quarter of 2021 or 17.5% of total revenue. The capital expenditures were mainly spent to strengthen network infrastructure and support to increase capacity in fixed line and mobile business for a better customer digital experience.

"Telkom's continuously improving performance is also due to the pandemic response in Indonesia, which serves the right momentum for national economic recovery. We hope and are optimistic that the company's performance until the end of 2021 will also grow positively. Hopefully this will also have an impact on stock performance, which will continue to strengthen and can attract more local and foreign investors to invest in Indonesia,” Ririek said.

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