Telkom profit jumps 11%

Telkom profit jumps 11%

Dow Jones, Jakarta

PT Telekomunikasi Indonesia (Telkom) said on Wednesday its
first quarter net profit jumped 11 percent on year, thanks to
higher revenue from its cellular unit and from fixed-phone
operations.

Telkom's net profit rose to Rp 1.660 trillion (US$191 million)
from Rp 1.499 trillion, beating analyst forecasts of between Rp
1.4 trillion and Rp 1.5 trillion.

"They are good earnings," said Sjed Al-Idid, an analyst with
ING in Singapore.

Telkom shares were up 1.3 percent in the afternoon session at
Rp 4,050, rebounding from a low of Rp 3,975 hit earlier as the
market worried Telkom would book a lower net profit.

ING's Al-Idid said he is still recommending investors buy
shares in Telkom given its sound fundamentals and promising
growth outlook.

Telkom's total revenue during the quarter grew 34 percent to
Rp 5.945 trillion from Rp 4.431 trillion last year.

Telkom said its fixed phone revenue, which accounted for 34
percent of total revenue, jumped 21 percent to Rp 2.007 trillion
from Rp 1.664 trillion last year.

Higher fixed phone revenue came on the back of an increase in
average fixed phone revenue per user, or ARPU, to Rp 173,384 per
month from Rp 144,344.

As of March 31, Telkom had 7.82 million fixed telephone lines.

Telkom said revenue from its cellular services contributed
30.2 percent to total revenue, thanks to a higher contribution
from its leading cellular unit, PT Telekomunikasi Selular
Indonesia, or Telkomsel.

In the first quarter, Telkomsel booked revenue of Rp 2.319
trillion, up 52 percent from Rp 1.524 trillion last year. Its net
profit leapt 51 percent to Rp 1.266 trillion from Rp 840.49
billion during the same period last year.

Telkomsel's subscribers rose 77 percent to 6.6 million people
from 3.732 million last year.

During the first quarter of this year, Telkomsel invested
IDR1.173 trillion to build base transceiver stations in Indonesia
to support its cellular network.

Telkom has a 65 percent stake in Telkomsel, while the rest is
owned by Singapore Telecommunications Ltd.

Analysts said Telkomsel will become a key earner for Telkom in
the future given Indonesia's low cellular market penetration.

Only around 6 percent of Indonesia's 220 million population
have cell phones, allowing huge room for growth in coming years.
Analysts forecast the number of cellular customers will grow to
around 15 million next year from around 12 million currently.

"Given its promising growth, Telkomsel will become the main
driver for Telkom's revenue in the coming years," said Bernardus
Irawan, head of the equity sales at Mandiri Sekuritas.

The government has a 51.19 percent stake in Telkom, while the
rest is owned by the public.