Telcos set to break APAC revenue record

September 8, 2022

JAKARTA – Telecommunications (telecom) companies in Asia-Pacific are expected to see their revenues grow next year at the fastest rate since 2016, thanks to growing demand for data and broadband in the region.

Investment in 5G networks is expected to increase further in emerging Asia-Pacific markets such as Indonesia, China, India, Malaysia and the Philippines, with a capital expenditure intensity (capex) of around 30 33%, according to a report published by Moody’s Investors. Service on Wednesday.

Capex intensity is the ratio of capex to sales.

Annalisa di Chiara, senior vice president of Moody’s, pointed out that the growth of capital expenditure by telecommunications operators in the region’s most developed markets, namely Australia, Hong Kong, South Korea, the Japan, Singapore and New Zealand, was estimated at only 16-18%. ‘

“APAC’s data and broadband consumption will thrive, while continued consolidation will temper competition over the next few years. These dynamic conditions will propel revenues at a rate of 4-4.5% through 2023,” she said, quoted in the report.

Meanwhile, Moody’s Vice President and Principal Analyst Nidhi Dhruv noted that most APAC telecom operators face pressure on profitability due to fierce competition, even though they could still fund their capital expenditures from cash flow.

“Average industry-wide leverage will remain stable between 2.3x and 2.5x, supported by EBITDA growth and leverage levels relatively unchanged from 2021,” she said. .

PT Telkom Indonesia recorded consolidated annual revenue growth of 3.6% to 72 trillion rupees ($4.81 billion) in the first half of this year.

Telkom’s EBITDA over the same period increased by 4.5% to reach 39.4 trillion rupees, while its net income reached 13.3 trillion rupees, up 6.9% year-on-year.

A tower belonging to PT Dayamitra Telekomunikasi (Mitratel) is pictured in an undated photograph in Langsa, Aceh. (Mitratel/-)

According to Telkom’s latest financial report, this achievement was underpinned by the company’s focus on digitization.

Telkom Chairman and CEO Ririek Adriansyah said the public telecommunications company continues to strengthen its competitive edge, for example by listing its Miratel subsidiary last year and consolidating its data center business.

“We are also preparing new growth engines with fixed-mobile convergence, B2B IT services as well as selected investments in digital businesses,” he said in a statement last month. [

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During the first half of this year, Telkom’s revenue mix evolved in line with the company’s ambition to derive more revenue from its digital business, the contribution of traditional revenue streams, such as SMS and MMS, continuing to drop.

Telkom’s mobile communications subsidiary, Telkomsel, recorded revenue of Rs 43.6 trillion in the first six months of 2022 on the back of a 21.4% year-on-year growth in data traffic.

Telkomsel dominates the domestic market with 169.7 million users at the end of June, including 119.3 million data users.

To develop the infrastructure supporting its digital business, Telkomsel has built 154,000 4G base transceiver stations (BTS) and is gradually building 5G BTS.

In total, Telkomsel owned 255,107 BTS at the end of the first half of 2022, up 7.5% year-on-year, of which 204,908 were 3G/4G/5G BTS.