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Premier Insight : TLKM, attended hearings meeting with House of Representative
Friday, January 11, 2019       09:19 WIB

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Telkom Indonesia ( IJ; Rp3,800; Hold) attended hearings meeting with House of Representative. During the meeting, mentioned its intention to invest Rp44tn in 2019F for and its subsidiaries with 30% of capex allocated for digital infrastructure development, incl. network, platform, application. Regarding Papua, said network component still has big contribution (c.30%) in communication tariff structure due to geographical challeges in building network and caused fiber optic link less reliable (has to rely on satellite link). Responding to one of comment from member of Commision VI regarding tariff difference between Papua and Java (mentioning voice tariff amunt for 1 minute call in Papua), Telkomsel's CEO mentions possibility to give more competitive offering for subscribers in Papua. (Indotelko).
Comment: Neutral for now. The Rp44tn of investment amount is higher than our 19F capex by 23%. We will check with company regarding the investment breakdown. Regarding Telkomsel's tariff, we assume Telkomsel's to be able to effectively use its cluster pricing strategy (pricing in one area might be different to other area) considering nation-wide network coverage. Thus we expect insignificant impact for now to our estimates from news above. We have a Hold with TP Rp4,000.

Sumber : IPS RESEARCH

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