Telkom books 7% rise in Q1 profit

The Jakarta Post, Jakarta

Telecommunications firm PT Telkom reported a 7 percent increase in profit in the first quarter, capitalizing on an expanding market for used cellular phone handsets that has attracted more subscribers to its mobile-phone unit.

Net income rose to Rp 1.76 trillion (US$202 million), or Rp 174 per share, from Rp 1.65 trillion, or Rp 164 per share in the same period of last year.

The firm, which is the largest counter on the Jakarta Stock Exchange with a 17 percent market capitalization, also recorded a 29 percent rise in sales to Rp 7.71 trillion.

Indonesian mobile-phone companies are enjoying higher revenue as increased spending power prompts more people to buy mobile phones. An estimated one-tenth of the country's 213 million people carry cellular phones.

Telkom's mobile-phone unit PT Telkomsel enjoyed a whopping 40 percent rise in profit to Rp 1.23 trillion. Sales jumped about 44 percent to Rp 3.33 trillion, mostly due to the sales of its pre- paid cards.

"The surge in cellular subscribers is also helped by the huge market for second-hand handsets that are sold at 40 percent of the price of new ones," Telkomsel vice president Wim Timmermans was quoted by Bloomberg.

Telkomsel, which controls more than half of Indonesia's mobile-phone market, managed to add another 1.15 million subscribers within the last three months, making a total of 10.8 million subscribers.