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Indonesia's biggest mobile telephone operator Telkomsel plans
to seek a minimum of US$750 million to help finance its capital
expenditure this year, which is expected to range from $1.5 billion to
$1.7 billion.
"The majority of the financing will be in the form of bank loans,"
Telkomsel's parent company PT Telekomunikasi Indonesia (Telkom)
president director Rinaldi Firmansyah told reporters Friday.
"We expect to gather about $200 million to $300 million through a
combination of Medium Term Notes (MTN) and bonds," he added.
Meanwhile, Rinaldi said, Telkom planned to spend around $800 million
this year and would seek half of it through financing.
"For Telkom, the combination of MTN and bonds would likely amount to
$100 million, while the remainder would come from bank loans."
Telkomsel president director Kiskenda Suriahardja said about 40 percent
of the total capital expenditure would be used to finance the expansion
of its network coverage. He added that 45 percent would be allocated to
a service quality enhancement program and the rest would be used on
strategic investments in related businesses.
He said the company was targeting about half of the estimated 18
million new mobile phone subscribers this year. As of noon Friday, the
company had a subscriber total of 49.1 million.
"We are now waiting for our 50 millionth subscriber celebration," he
said.
Kiskenda said Telkomsel would this year launch "a new wave" of
businesses, such as a broadband service, data communications, IT
service, mobile wallet (T-cash) service and the long-awaited
infrastructure sharing business.
"This year we are ready to share our infrastructure with other mobile
operators, but of course we would like to prioritize our parent company
with its fixed wireless access service, Telkom Flexi," Kiskenda said.
He added around 80 percent of the company's 20,884 existing base
transceiver stations were technically ready for sharing.
Meanwhile, Telkom plans to go ahead with acquiring 80 percent of IPT
Sigma Cipta Caraka shares next month, in line with its target to boost
its market share for corporate, financial and banking customers from 47
percent last year to 50 percent this year.
"We are also committed to our investment in the Palapa Ring project,
where we will contribute about 40 percent of the $225 million total
investment," Rinaldi said.
Commenting on the government's plan to introduce new formula on tariffs
that is expected to lower service charges by 10 to 30 percent this
year, Rinaldi said both Telkom and Telkomsel's total revenue growth
would not decrease.
According to Kiskenda, Telkomsel's total revenue grew by more than 24
percent last year. Telkom's financial report is still being processed,
but Telkomsel is expected to contribute about 60 percent of its total
revenue.
"Of course, the earnings-per-minute rate will decrease, but we expect
to make up for it by increasing the number of subscribers and network
usage. People tend to use more when it's cheaper," Rinaldi said.
However, he said according to the company's calculations, Telkomsel's
earnings before interest, taxation, depreciation and amortization could
drop by two to three percent.
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