Half Year 2020 Telekomunikasi Indonesia (Persero) Tbk PT Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Niko Margaronis - PT. Danareksa Sekuritas, Research Division - Analyst : Yes. This is Niko from PT. Danareksa. My first question is about the margins. The same -- for the second quarter above 50% for the group and Telkomsel 60%, are this sustainable? I mean, is there any delayed booking? So is it from cost savings? That's question number one. Number two, with regards to Disney+ and Hotstar launching in Indonesia, is there some special partnership brewing with Telkom? And is it only for mobile? Or is it for mobile and in the home? And maybe if you can give us some more clarity with the terms of this agreement, any agreement there is. Yes -- and yes, first questions, please.

Question: Choong Chen Foong - CIMB Research - Analyst : A couple of questions from me. For Telkomsel, with the Unlimited Max having launched for about 3 weeks now, what have we seen in terms of the subscriber and revenue traction so far? And then my second question, for the 2,300 megahertz auction, I think the regulator trying to put in place for the second half, the Telkomsel has interest and would it be allowed to join the auction? And then my third question, I wanted to ask about, on the cost side, were there any one-off cost items for Telkomsel in the second quarter? And for IndiHome, as you have reported, EBITDA margin further improved Q-on-Q. Can you provide some color as to what cost decline and whether this is structural in nature? Those are my 3 questions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2020 / 8:00AM, TLKM.JK - Half Year 2020 Telekomunikasi Indonesia (Persero) Tbk PT Earnings Call

Question: Choong Chen Foong - CIMB Research - Analyst : Yes.

Question: Choong Chen Foong - CIMB Research - Analyst : Yes, Rachel, if I can just follow up, when you say ARPU was also satisfactory, you mean to say that there was some enhancement or uplift to the ARPU?

Question: Choong Chen Foong - CIMB Research - Analyst : I see. Okay. Yes. Setyanto Hantoro - Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk - VP of Strategic Business Development Yes. Foong, this is Setyanto from Telkomsel, about the 2,300 megahertz auction. Spectrum is always considered as limited resources, and it is the government territory, including the -- any auction plan or potential price of the spectrum. But Telkomsel will see the opportunity to gain the potential spectrum is always a good opportunity for us. So we always fit for that opportunity with full consideration of business value of it. So flexibility and the importance of cost avoidance will become the major consideration for us to set or to propose the price for that auction.

Question: Choong Chen Foong - CIMB Research - Analyst : Yes. All right. Got it. Leonardus Wasono;Director of Finance Okay. And on number three, I'm Leonardus from Telkomsel actually. If you look at the Q-on-Q, our cost in Telkomsel is slightly high because we allocate the cost for the marketing cost, which is to preparing for the festive -- Lebaran festive. And on operation and maintenance costs actually also increased comparing Q2 to Q1 because there is some additional of our 4G BTS, making the cost for the transmission increase. And then in the depreciation side, actually, because we also put additional network for 4G. So there is some increasing of -- for the depreciation because the impact of new accounting treatment IFRS 16, so impact to our depreciation costs also in this. So in the Q2, there is no any one-off costs that happened in second quarter.

Question: Choong Chen Foong - CIMB Research - Analyst : Okay. And if I can just throw in one more question from the -- from what I can see from the info memo. You mentioned that Mitratel's tower acquisitions will become a strong foundation for the tower value unlocking that you said is planned to be materialized in the foreseeable future. Can you provide more color on this?

Question: Choong Chen Foong - CIMB Research - Analyst : Has that been -- has Mitratel acquired towers from Telkomsel? Or is that a future plan? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2020 / 8:00AM, TLKM.JK - Half Year 2020 Telekomunikasi Indonesia (Persero) Tbk PT Earnings Call

Question: Kresna P. Hutabarat - PT Mandiri Sekuritas, Research Division - Analyst : Kresna from Mandiri. Two questions for me, please. My first question is on the fixed side. Can we just get some color on the strong interconnection income growth in the first half 2020. Is this strong growth sustainable in the second half of the year as well? That's my number one question. And second question is on the mobile side. I suppose stock also can try counter the pressures in the mass segment by encouraging higher spending in the high-value segment. And which one sharing -- I mean, what are the initiatives taken by Telkomsel to drive ARPU growth in this high-value segment during this COVID-19 pandemic? Maybe related to that, particularly on the mobile video side. And how do you see this use case as engine for traffic growth at Telkomsel and also the ARPU growth at Telkomsel? Would you mind sharing some color on mobile video user penetration at Telkomsel today and perhaps the data consumption intensity in comparison to those users who are currently not regular mobile video users?

Question: Kresna P. Hutabarat - PT Mandiri Sekuritas, Research Division - Analyst : Understood.