Business Context and Reporting Period
This Form 6-K filing by Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (TELKOM) was submitted on February 12, 2008. The report addresses a regulatory update regarding a new government-mandated interconnection rate scheme scheduled for implementation on April 1, 2008, and outlines the company's strategic response and growth targets for 2008.
Key Financial Metrics and Operational Data
The filing does not provide specific financial statements, revenue, profit, cash flow, or debt figures for the reporting period. However, it includes the following operational metrics and rate data:
- Interconnection Rates (Fixed-to-Fixed): 2007 rate was Rp 157/minute; new cost-based calculation adjusts this to Rp 137/minute. TELKOM has been using a lower rate of Rp 73/minute since 2007.
- Interconnection Rates (Mobile-to-Fixed): 2007 rate was Rp 268/minute; new cost-based calculation adjusts this to Rp 203/minute. TELKOM has been using a lower rate of Rp 152/minute.
- Flexi Market Share: Approximately 55% at the end of 2007.
- Speedy Broadband Subscribers: Approximately 240,000 at the end of 2007.
Material Changes and Strategic Outlook
TELKOM views the new interconnection rate scheme as within expectations and acceptable, noting that the company has already been operating at rates lower than the new government-mandated cost-based calculations. The company anticipates that the new scheme will drive telephony rates lower and plans to respond by increasing its client base and traffic volume.
Key strategic initiatives for 2008 include:
- Infrastructure Expansion: Plans to add a minimum of 3,000 Base Transceiver Stations (BTS) for Flexi services and 5,000 BTS for the cellular subsidiary Telkomsel.
- Market Share Targets: Aiming for 60%-65% market share in Flexi by end of 2008 and a minimum 50% increase in market share for the corporate segment.
- Broadband Growth: Targeting a minimum of 1.2 million additional Lines in Service (LIS) for Speedy broadband.
- Acquisition Activity: Plans to acquire 80% of PT Sigma, an IT and Disaster Recovery services provider for the finance sector, with completion expected by late February or early March 2008.
Management Commentary and Risks
Management emphasizes compliance with government policies aimed at protecting lower-end consumers through tariff balancing. While the company accepts the new interconnection rates, it notes that a detailed review is required before implementing any adjustments to retail tariffs. The primary risk identified is the potential reduction in interconnection tariffs, which the company intends to mitigate through infrastructure investment and market expansion.
Investor Verification Checklist
- Verify the final terms and closing date of the 80% acquisition of PT Sigma.
- Monitor the actual implementation of retail tariff adjustments following the April 1, 2008 interconnection rate changes.
- Track progress against the 2008 infrastructure targets (3,000 Flexi BTS and 5,000 Telkomsel BTS).
- Confirm the achievement of the 1.2 million additional Speedy Lines in Service target.
- Review upcoming financial reports for the impact of the new interconnection rates on revenue and margins.