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Telkomsel's revenue fell by 3% due to competition outside Java

14 February 2020 14:09

JAKARTA. PT Telekomunikasi Selular or Telkomsel, a subsidiary of PT Telekomunikasi Indonesia (Persero) Tbk (TLKM), recorded a 3% year-on-year (YoY) decline in its revenue in the fourth quarter (Q4) of 2019 to Rp 23.25 trillion.

Kresna Hutabarat and Henry Tedja, analysts from Mandiri Sekuritas, said the decline was caused by high business competition outside Java. "Competition in the cellular telecommunications business is still tight, but strong expenditure management can still protect the profitability of the company," they explained through an official statement today. 

Telkomsel's profit margin in Q4 2019 remained at the level of 29.2%. This is still considered relatively stable, compared to the profit margin for the period of January-September (9M) 2019 at the level of 28.1%.

In SingTel's information disclosure, Telkomsel is trying to face competition outside of Java by launching "by.U". One of the largest telecommunications companies in Indonesia is also recalibrating the selling price of a number of its premium products.

Mandiri Sekuritas predicts that the mobile business competition in Indonesia is still quite tight. Given a number of small-scale operators are playing with the price war strategy. (KR/AR)

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