The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Ranjan Sharma - JPMorgan Chase & Co, Research Division - Analyst
: A couple of questions from my side. Firstly, on the Data Center business, what is your current infrastructure? And what are the revenues that you're
expecting from this business in the next 3 to 5 years? And then if you can just highlight also like the investments that you're making.
Second is on wireless competition, if you can just remind us what you're seeing on the ground now. Have you seen any further increases in tariffs
or reduction in data allowances?
Question: Ranjan Sharma - JPMorgan Chase & Co, Research Division - Analyst
: Sorry, sorry to interrupt, but we can barely hear you. I am not sure if it's on my side, but the voice is coming very soft.
Unidentified Company Representative
Okay. Can you hear?
Question: Ranjan Sharma - JPMorgan Chase & Co, Research Division - Analyst
: Yes. But I think the line is still a bit soft for me, so. I'll take it off-line.
Question: Choong Chen Foong - CIMB Research - Analyst
: This is Foong from CIMB. A couple of questions from me. Firstly, I just want to go back to the mobile competition and just some clarifications there.
I wanted to understand whether you have seen the market turning more competitive in recent months. Is that what you were implying? And do
you believe that the market is still conducive for tariff optimization in the coming months? That's question number one.
Second question with regards to Par Heri's comments earlier about EBITDA margin staying stable. My question is with inflation seemingly hitting
higher this year, do you see substantial cost pressures in 2022 and downside risk to your expectations for margins to be stable? That's question
number two.
And thirdly, on the data center business under STS and the unlocking of the values there, I note that in your info memo, you mentioned that you
are currently in the process of consolidating the assets under STS and that this process will take place over the next 2 to 3 years. So my question is
why does it take so long to consolidate these assets into STS? And does it mean that the STS IPO will only take place after the consolidation is
completed? Or are we still on track for 2023? Yes, those are my 3 questions.
Unidentified Company Representative
Yes. Maybe I'd like to address on mobile competition. I think from an environment perspective, not just Telkomsel but we also see our competition
shifting towards data monetization to support a healthier industry. From a -- if you look at some of the initiatives that's been rolled out, whether
it is from a winning share perspective of the increased pay loan, Telkomsel has not shifted towards data monetization, so we have already started
applying fair usage obviously not just in Telkomsel, but it's also welcoming that our competition has already pulled back to unlimited in order to
drive a more sustained business model.
So from a package perspective, we look at driving more customized packages especially to our existing customers to drive relevant packages that
have been (inaudible) for their need. So we monitor very closely to avoid price war and to have a sustainable business model moving forward. And
what we want to drive together is the focus on a healthy ARPU market repair for a positive industry growth. So that's where the competition is
gearing.
Question: Choong Chen Foong - CIMB Research - Analyst
: Can I just quickly follow up on the recent MOU signed with Singtel on the data center business? So with regards to the MoU and, as you were saying,
the consolidation of the assets into STS and potentially listing in first quarter, second quarter next year, so how does that MOU sort of play into this
Telkom's plan for unlocking of value?
Question: Choong Chen Foong - CIMB Research - Analyst
: Okay. So -- but that means that the Hyperscale Data Centers and all that will continue to remain owned by Telkom. It would not be part of this
collaboration with Singtel. Am I right?
Question: Kresna P. Hutabarat - PT Mandiri Sekuritas, Research Division - Analyst
: Congratulations again on the strong earnings growth in 2021 and also the successful corporate restructuring initiatives as well as the digital
investments to date. My first question, only have one question actually related to 5G CapEx. So the guidance on CapEx to revenue to be 25%, that
should imply a total CapEx of over IDR 35 trillion in 2022. My question is, how much of that would be associated to 5G network investments? And
should we expect CapEx upside if the government will kick off some auction in the next 12 to 24 months? And how would management finance
that CapEx growth going forward?
Question: Kresna P. Hutabarat - PT Mandiri Sekuritas, Research Division - Analyst
: Do we have any visibility whether there's going to be any spectrum auction related to 5G in the next, let's say, 6 to 12 months? Is it something that
Telkomsel is talking with the regulators or should we rule out the possibility for now?
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APRIL 19, 2022 / 5:00AM, TLKM.JK - Full Year 2021 Telkom Indonesia (Persero) Tbk PT Earnings Call
Question: Niko Margaronis - PT. BRI Danareksa Sekuritas, Research Division - Analyst
: Congratulation on the good results. I just want to ask about Telkomsel down the line with these divestments, increase in financial leases. What is
the profitability going forward for -- on the Telkomsel standalone? Yes, what do you see EBITDA margin going in the next 1 to 2 years? Yes, that's
my first question. Yes.
Question: Niko Margaronis - PT. BRI Danareksa Sekuritas, Research Division - Analyst
: Maybe my second question is about following up from question from a colleague earlier. The -- 2025, it was mentioned that you expect to estimate
about IDR 14 trillion top line. This is with what kind of margins you see developing by then? Yes. And maybe on the data centers, I mean, why you
think is necessary to have foreign investors co-investing together in this side of the business? I understand the Singtel cooperation on the fixed
mobile convergence, but why is it necessary to -- for other investors to join in data center business in Indonesia?
Unidentified Company Representative
I think on the -- first, on the data center margin, it is supposed to be based on the international benchmark that we see, is around 35% to 40%,
deciding our direction to a similar (inaudible) on this one.
Why it is necessary to have foreign co-investing partner in the data center? Basically, like when we talk about data center, there's some very
distinguished players in the world. They are having a technology. They have also a network in terms of the customer base. And they also think can
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APRIL 19, 2022 / 5:00AM, TLKM.JK - Full Year 2021 Telkom Indonesia (Persero) Tbk PT Earnings Call
bring many synergies to this one. I think that also can refresh our position in terms of our competitive advantage in Indonesia and also bring more
potential in the future. So basically, like a puzzle, we see it as some puzzle that they can bring to us in keeping the value added to this business.
When we see also the data center like Hyperscale Data Center, most of the users is also a hypertech company that's using the data center. To have
paying them as a part of the partner going to also think the business I think having kind of a strategic position compared to our competitors. Of
course, there's not necessarily kind of exclusive partnership, but I think that's kind of a use of the data center itself that we can consider as a partner.
But we'll be (inaudible) I think that's I think explanation why we need this one.
Question: Niko Margaronis - PT. BRI Danareksa Sekuritas, Research Division - Analyst
: Okay. Okay. Thank you, Pak Ririek. If I may squeeze one question on the IndiHome and this potential fixed mobile convergence. Definitely, I expect
some ARPU pressure if you should produce double play or triple play. Is this something that you expect also, yes, for -- yes. And I noticed also that
in IndiHome in the fourth quarter, ARPU also kind of slowed down. Is this going to pick up again moving into 2022 -- as we are in 2022? That would
be my last question.
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