Feb 28, 2011

Flexi-Esia merger may be dropped

Indonesian largest telecommunication company PT Telekomunikasi Indonesia (Persero) Tbk (Telkom) may drop a proposed merger of its unit Flexi and Esia, owned by PT Bakrie Telecom Tbk (BTEL).
"Talks on merger currently is put on hold after board of commissioner has urged Telkom to review such corporate action," said Telkom President Director Rinaldi Firmansyah said today.
He said that in this year the company will allocate capital expenditure of Rp17 trillion. If the acquisition plan is still under consideration, then the allocation of capital expenditure can reach to Rp20 trillion.
"We plan to spend Rp1 trillion to support acquisition. One of them is an expansion to Kamboja by acquiring a company in the country. Besides, we will also develop new wave business,” he said.
Telkom estimated revenue over 2010 may slightly increase between 2%-4% from the previous year.
Rinaldi said the slight increase of revenue is mainly supported by revenue from cellular business which also predicted to increase.
“The condition may increase Telkom’s revenue between 2% and 4%. For the net income, we can not inform it now,” he said.
According Rinaldi, until now the company is still auditing and financial report is expected to be finish in the near time.
During 2009, the revenue of Telkom (TLKM-coded stock) was Rp64.6 trillion. Referring to the data, the company as of 2010 will be able to book between Rp65.89 trillion and Rp67.18 trillion.
One of the businesses that will be developed by Telkom is IP TV, or interactive television show with high resolution. The service is targeted to Telkom’s internet consumers with minimum bandwidth of 6 Mbps.
“For this need, in the early stage we allocate required funds Rp50 billion. In the first stage, we will eyes on our consumers who are living in Jakarta,” said Rinaldi.

Disclosure: No position at the stock mentioned above.

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