Telekomunikasi Improves in 1Q11

P.T. Telekomunikasi Indonesia Tbk. (TLK), the largest integrated telecom operator of Indonesia, declared solid financial results for the first quarter of 2011. Quarterly, total revenue was $1,918.6 million, up 2.1% year over year. This was primarily attributable to the increase in Cellular revenue coupled with increase in Network revenue and Other telecommunications services revenue.

Net income in the first quarter of 2011 was $438.3 million, up 0.6% year over year. Quarterly EPADS (Earnings per American Depository Share) was 8 cents, up 1.5% year over year. The Indonesian wireless services market is maturing rapidly as several operators are offering more or less similar services. Telekomunikasi competes fiercely with P.T. Indosat Tbk () and P.T. Excelcomindo Pratama. Despite this competitive pressure, management is at present expecting its wireless subscriber base to reach 115 million in 2011.

Total operating expenses in the first-quarter 2011 was $1,322.1 million, up 4.3% year over year. This increase was primarily attributable to Personnel, General, Administrative, and Marketing charges coupled with higher operations, maintenance, and telecommunications services expenses. Operating income in the reported quarter was $596.5 million, down 2.4% year over year.

Telekomunikasi generated $820.3 million cash from operations during the first-quarter 2011, up 2.3% year over year. Free cash flow (cash flow from operation less capital expenditure) in the reported quarter was $500.6 million, up 66.2% year over year.

At the end of the first-quarter 2011, Telekomunikasi had $1,295.1 million of cash & marketable securities on its balance sheet compared with $1,081.5 million at the end of fiscal 2010. Total debt was $1,720.2 million at the end of the reported quarter compared with $1,809.4 million at the end of fiscal 2010. At the end of the previous quarter, debt-to-capitalization ratio was 0.20 compared with 0.27 at the end of fiscal 2010.

Segment wise Revenue

Fixed Lines revenue in the first-quarter 2011 was $336.4 million, down 11.4% year over year. Cellular revenue was $775.7 million, up 1% year over year. Interconnection revenue was $97.2 million, down 19.5% year over year. Data, Internet, & Information Technology Services revenue was $626.1 million, up 14.4% year over year. Network revenue was $35 million, up 9.9% year over year. Other Telecommunication Services revenue was $48.1 million, up 58.3% year over year.

Subscribers Statistics

As on March 31, 2011, Telekomunikasi had a total of 27.041 million fixed line subscribers, increasing 11.1% year over year. Out of the total, wireline fixed line customers were 8.333 million, down 0.6% year over year and wireless fixed line customers were 18.708 million, up 17.3% year over year Total Wireless subscribers base was 99.365 million, up 21.3% year over year. Out of this, postpaid wireless subscribers were 2.165 million, up 5.8% year over year and prepaid wireless subscribers were 97.200 million, up 21.6% year over year ADSL (Speedy) subscribers’ base was 1.791 million, up 39.6% year over year.