JAKARTA: State-run telecommunication provider PT Telekomunikasi Indonesia (Telkom) seeks to secure loans of up to Rp 10 trillion for working capital this year.
The publicly-listed firm’s finance director, Heri Sunaryadi, said the company would also need between Rp 5 trillion and Rp 10 trillion in total to finance operational activities this year, such as for network maintenance and purchasing new SIM cards.
“We are going to raise the funds from a syndicated loan involving three banks, possibly state-owned lenders,” he said last week, adding that the funds would be withdrawn in stages as needed.
The company’s president director Alex Sinaga earlier announced that the company had achieved its target to book total revenue of more than Rp 100 trillion (US$7.3 billion) last year. He said its cellphone provider subsidiary PT Telekomunikasi Selular (Telkomsel) had contributed most to revenue growth.
The company has not yet published its audited 2015 financial report, but Alex said that it was almost certain that total revenue would be slightly above Rp 100 trillion, an 11.5 percent increase from the Rp 89.7 trillion booked in 2014.
This year, the company expects total revenue to increase by 8 to 10 percent.
In order to achieve the revenue target, Telkom plans to prepare at least Rp 25 trillion for capital expenditure (capex) this year. The company has previously said it would use internal cash and funds from its continuous bond program to finance its capex.
The company also plans to issue bonds in the first half of this year. “Probably in May or June,” Heri said.
Telkom received approval last year from the Financial Services Authority (OJK) to issue a total of Rp 12 trillion in bonds in a two-year period. In the first bonds issuance, the state-controlled company raised Rp 7 trillion to finance infrastructure development as well as strategic mergers and acquisitions.
UOB KayHian’s Jonathan Koh said Telkom’s aggressive roll-out of fixed-broadband bundle IndiHome Triple Play — launched early last year — would put some strain on capex, albeit the prospects being favorable. The company announced that it managed to attract a million users for the package, which includes telephone, internet-on-fiber and interactive television, toward the end of last year.
“Telkom incurred capex of $300 per connection to roll out the last mile for fibre-to-the-home (FTTH) broadband services. Additional capex would be Rp 4.2 trillion, assuming Telkom secures 1 million new IndiHome subscribers each year,” he said in a published reported.
“Management guided that EBITDA [earnings before interest, taxes, depreciation and amortization] margin for IndiHome is lower at about 30 percent due to the high cost of content.”
Telkom — Indonesia’s biggest telecommunications company and one of the country’s biggest firms by market capitalization — is at the forefront of the government’s $24 billion drive to expand the country’s broadband capacity and widen internet access over the next four years.
Communications and Information Minister Rudiantara said previously that the government wanted Telkom to lead the broadband plan, hinting that the company would spend more on the project than its peers.