When Telkom's Transformation is Shadowed by Issues of Fictitious Projects, Startup Investments, and Weaknesses...

The narrative surrounding digital transformation in recent years has positioned Telkom Indonesia as a symbol of Indonesian state-owned enterprise (SOE) modernisation. The red-plate telecommunications company has aggressively built data centres, cloud computing, digital infrastructure, and entered the technology startup ecosystem.

At various forums, Telkom is positioned as the backbone of the national digital economy. The government discusses AI, cloud, data centres, and the aspiration to make Indonesia a digital hub in Southeast Asia.

However, behind this modernisation narrative, a series of cases have emerged that reveal another side of SOE digital transformation: weak governance, fictitious projects, and investment decisions now under question.

In the last two years, Telkom’s name has repeatedly surfaced in legal proceedings and state audit findings. From fictitious project cases worth hundreds of billions of rupiah to the Supreme Audit Agency’s (BPK) spotlight on Telkomsel’s investment in Gojek.

These cases stand alone. But if traced further, they all stem from a more fundamental question: is SOE digital transformation truly accompanied by governance reform, or does it merely expand business without improving old systems?

Projects That Never Existed

The earliest case to emerge was the alleged corruption in fictitious projects within Telkom from 2016 to 2018.

This case was investigated by the Jakarta High Prosecutor’s Office and developed into one of the largest corruption cases in Telkom’s business environment in recent years. The state loss stated in the indictment reached approximately Rp464.9 billion.

According to prosecutors, the pattern was relatively simple but systematic.

Telkom’s Enterprise Service Division (DES) is said to have collaborated on projects with several subsidiaries and private vendors. These projects included procurement of technology equipment, smart systems, storage, digital dashboards, and medical equipment procurement.

However, after funds were disbursed, some projects were said to have never actually been carried out.

In the trial, prosecutors revealed that several project documents were allegedly created merely to meet administrative requirements for budget disbursement. Meanwhile, on-site work realisation did not match the contract, and some were even fictitious.

Some projects mentioned in the indictment include smart mobile energy storage, procurement of lithium batteries and gensets, smart supply chain management, smart cafe projects, and monitoring dashboards.

Most of these projects involved Telkom subsidiaries such as PT Infomedia Nusantara, PT Telkom Infrastruktur Indonesia, PT PINS Indonesia, and PT Graha Sarana Duta.

Interestingly, this case arose amid Telkom’s intense expansion into the digital and new technology sectors.

Transformation Moving Too Fast?

Several observers see this issue not just as an ordinary procurement case. Digital transformation in many SOEs, including Telkom, has indeed moved very aggressively in recent years. The companies are pushed to enter cloud business, AI, startups, smart platforms, and digital ecosystems.

However, at the same time, changes in governance and internal oversight systems often do not move as fast as business expansion.

In that context, digital projects become a highly vulnerable area.

Unlike conventional infrastructure projects that are easier to verify physically, digital projects often have abstract specifications, new business models, and valuations that are difficult to measure traditionally.

As a result, the grey area of oversight becomes much larger.

Gojek Investment and BPK Spotlight

Scrutiny of Telkom intensified when the BPK’s audit results on Telkomsel’s investment in Gojek began to be publicly discussed.

That investment was previously seen as a strategic step by the Telkom Group to strengthen its position in the digital economy and national startup ecosystem. At the time, many SOEs began actively entering the venture capital and technology investment sectors.

However, in its examination, the BPK found several issues related to the governance of that investment during Erick Thohir’s tenure as Minister of SOEs.

The BPK report highlighted the due diligence process, investment decision-making, and valuation aspects deemed not fully meeting optimal prudence principles.

Those findings then sparked widespread speculation in the public, especially since startup investments during the technology boom were made at very high valuations.

Although to date this matter has not developed into a criminal corruption case, the spotlight on the Gojek investment shows that oversight of SOE digital investments is becoming a serious concern.

And here emerges a larger problem.

SOEs and Persistent Unresolved Issues

The cases at Telkom have brought public discussion back to the classic problems of SOEs in Indonesia.

For years, SOEs have often been positioned not only as state business entities but also as tools for political and economic power interests.

SOEs are frequently used as “cash cows” by the government for various interests, from political assignments, financing certain projects, to becoming sources of economic power distribution.

In many cases, business decisions are not entirely based on professionalism and long-term corporate interests.

Another issue often highlighted is the pattern of management appointments.

Rather than being fully based on meritocracy and the competence of the nation’s best sons and daughters, strategic positions in SOEs are often perceived by the public as part of political compromises and power sharing.

As a result, corporate professionalism often clashes with non-business interests.

In such a situation, digital transformation risks becoming merely a modernisation jargon without fundamental changes in governance culture.

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