Telkom foresees rebound

JAKARTA: For PT Telekomunikasi Indonesia (Telkom), the first increase in data tariff in more than two years is a signal that the era of bruising industry price war has ended.

Revenue at the mobile unit of Indonesia’s largest telecommunication services provider had been rising since May and a nationwide data price increase last month was set to sustain the momentum, according to chief financial officer Harry Mozarta Zen.

Telkom’s second-quarter net income slumped 45 per cent with earnings before interest, taxes, depreciation and amortisation margin sliding to its lowest since at least 2001, according to data compiled by Bloomberg.

“The second quarter was the lowest point in the history of our cellular business. Once you are past this, the only trajectory is to go up and we have seen these signals of a rebound,” said Zen.

Revenue of Telkom’s mobile unit PT Telekomunikasi Selular rose 7.3 per cent in May from a month earlier and further grew 9.8 per cent in June, said Zen.

The company was open to raising prices if the competitors followed suit, but Telkom would seek to keep “a healthy level of premium gap” over its rivals, he said.

Telkom raised its data prices between 4 and 11 per cent last month after converting more than 80 per cent of its prepaid mobile phone holders to register as mandated by a government regulation, said Zen.