S I N G T E L INVESTOR DAY 2019
H e r i S u p r i a d i Alistair Johnston
Singapore, 11 June 2019 1 TABLE OF CONTENTS
T E L K O M S E L 1 PERFORMANCE
CHALLENGES & 2 TRANSFORMATION
DIGITAL 3 INITIATIVES
1 T E L K O M S E L 1 PERFORMANCE
CHALLENGES & 2 TRANSFORMATION
DIGITAL 3 INITIATIVES
2 TELKOMSEL IN BRIEF Company’s Profile • Started operations in 1995, Telkomsel is the subsidiary of PT Telekomunikasi Indonesia Tbk (65%) and Singapore Telecom Mobile Pte Ltd (35%) • Within 24 years, Telkomsel has established itself as the leading cellular operator in Indonesia with around 169 million customers and more than 5,500 employees • It has the widest network coverage with more than 197,486 BTS On-Air with more than 74% are 3G/4G BTS (>65,000 4G BTS), covering ± 99% of population
Main Products Positioned as the postpaid brand of choice for Positioned as an affordable and value prepaid brand for professionals and corporate customers segment the mid-low segment
Positioned as the prepaid brand for the savvy middle Positioned as youth segment prepaid brand with focus class segment on offering attractive Data and Digital Services
Key Performances 1Q-2019 REVENUES EBITDA & MARGIN Net Income & MARGIN Customer Base Total BTS On Air In Rp Trillion In Rp Trillion In Rp Trillion In Million & Total BTS 3G/4G In Thousands +17.8% YoY +1.4% YoY +1.3% YoY +0.9% YoY -12.5% YoY 23.0 23.5 12.8 7.2 177.9 197.5 20.9 22.2 12.4 12.1 6.6 6.5 167.8 163.0 168.6 175.7 183.4 189.1 10.3 5.3 3G/4G 29.2% 49.1% 53.9% 54.5% 54.7% BTS 25.4% 28.6% 30.8% 125.4 133.0 138.8 147.2
Q218 Q318 Q418 Q119 Q218 Q318 Q418 Q119 Q218 Q318 Q418 Q119 Q218 Q318 Q418 Q119 Q218 Q318 Q418 Q119
4 3 TELKOMSEL IN BRIEF Population Coverage: ± 99% with 3G Coverage: ± 85% & 4G Coverage: ± 93% Papua, Maluku, Sulawesi, Kalimantan CB portion: 21%
Sumatera CB portion: 27%
Greater Jakarta & West Java Java & Bali CB portion: 29% CB portion: 23%
Indonesia Telco Industry Overview
Mature industry with estimated Encouraging growth in Digital >120% SIM-card penetration. Growing Data Business supported Business with Data traffic and Data Rapidly shifting dynamics industry by more than 74% of BTS are revenue grew by around 63% and with transition of Legacy to Data 3G/4G BTS and 65% 3G/4G 25% YoY for Big 3 operators in services capable device penetration average, respectively in March 2019
5 4 PERFORMANCE HIGHLIGHTS 1Q-2019 Industry is going toward a healthier and rational condition for the overall telecommunications industry TSEL recorded a positive performance of Revenues, EBITDA & Net Income in 1Q-2019 YEAR-ON-YEAR REVENUES EBITDA NET INCOME CAPEX In Trillion In Trillion In Trillion +1.4% +1.3% In Trillion +0.9% -26.2% 21.9 22.2 12.1 3.6 12.0 2.6 +29.5% 6.5 Digital 10.5 6.4 Business 13.6
-24.6% 1Q19 1Q18 1Q19 Legacy 11.4 1Q18 1Q19 1Q18 8.6 Margin Margin
1Q18 1Q19 55% 55% 29% 29%
TOTAL ASSET CUSTOMER BTS ON AIR In Trillion In Million In Thousand -2.4% -12.5% +17.8%
91.9 197.5 192.8
89.7 168.6 167.6 -1%
1Q18 1Q19 1Q18 1Q19 1Q18 1Q19
5 PERFORMANCE HIGHLIGHTS 1Q-2019 Continue to Focus on Digital Business Engine of growth and accounted for 61% of Total Revenues YEAR-ON-YEAR DIGITAL BUSINESS REVENUE DATA USER DATA TRAFFIC Digital Business: In Trillion In Million In PB +29.5% +56.6% 13.6 +2.2% 10.5 1,375.9 108.7 111.1 878.5 +29.7% 11.9 Broadband 9.2
Digital +28.6% Services 1.3 1.7 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19
3G/4G CAPABLE 3G & 4G BTS DEVICE ON AIR In Million In Thousand -3.2% +25.4% 147.2 113.3 109.6 117.3 +85.3% 65.1 4G 35.1 -0.1% 3G 82.2 82.1
1Q18 1Q19 1Q18 1Q19
6 BIG-3 PERFORMANCE (1Q-2019 YoY)
Cellular Revenue (Rp.Tn) EBITDA (Rp.Tn) Net Income (Rp.Tn) XL Industry Growth (BIG-3) +3.4% 0.9% +1.4ppt XL -1.5ppt +0.6ppt -0.6ppt 13.8% XL +0.8ppt 18.1% ISAT Net Income +0.1ppt 13.0% EBITDA Rev share ISAT share TSEL share 73.2% +0.5ppt 14.7% TSEL +1.3% TSEL +1.4% 67.2% 99.1% -1.3ppt +0.9% 12.0 12.1 22.2 +14.7% 21.9 +4.2% +269.3% 6.4 6.5 +23.2% +8.5% +6.9% 2.1 2.2 2.0 2.3 0.0 0.1 -0.4 -0.3 12% 5.5 6.0 3M18 3M19 3M18 3M19 3M18 3M19 4.5 4.9 3M18 3M19 3M18 3M19 3M18 3M19 Margin Margin 3M18 3M19 3M18 3M19 3M18 3M19 55% 55% 36% 36% 36% 38% 29% 29% -6% -5% 0% 1%
Customer Base (Mn) BTS On Air (000) BTS Addition (000) Industry Growth (BIG-3) -19.4%
XL +4.0ppt 19.9% +4.8ppt Market +17.8% +21.0% ISAT TSEL -8.8ppt share 60.9% 19.2% +15.5% 8.4 -12.5% 197.5 -23.8% 167.6 +26.6% 122.2 4G 6.9 33% +118.0% 192.8 -44.6% 105.8 168.6 +1.0% 21% 4.7 27% 3G 3.6 12% 81.5 19% 3.0 96.2 64.4 100% 61% 6.6 59% 49% 42% 27% 53.3 54.5 55.0 14% 45% 43% 100% 29% 93% 75% 10% 48% 47% 42% 3M19 3M18 3M19 2G 21% 3M18 3M18 3M19 30% 25% 36% 30% 46% -1% (Rp.000) 38% 26% 0% 0% 0% 0% ARPU -21% -14% 35 45 12 27 30 33 3M18 3M19 3M18 3M19 3M18 3M19 3M18 3M19 3M18 3M19 3M18 3M19 7 2019 GUIDANCE
Revenue Inline with or slightly above market growth
EBITDA Margin Slightly decline compared to last year
CAPEX Approximately 15-16% over revenue
BTS roll out Focus on 4G roll out
8 T E L K O M S E L 1 PERFORMANCE
CHALLENGES & 2 TRANSFORMATION
D I G I TA L 3 INITIATIVES
9 Indonesian market is facing accelerated Legacy decline in parallel with competition in Data
Top 5 market size1 (2014 – 2018; IDR Tn)
-3% Legacy market growth2 (%YoY) 158 +8% 153 148 -3% -2% 135 -10% -13% 126 Legacy decline -21% -24% acceleration -27% -29% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18
Market RpMB2 (IDR/MB)
%QoQ: -6% -14% -9% -22% -17% +4% -4%
16 15 13 12 Aggressive data 9 price competition 7 8 7
Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 2014 2015 2016 2017 2018
1. Top 5 mobile telco players include Telkomsel, XL, ISAT (excluding fixed connectivity revenue), Smartfren and Tri 3; market size includes connectivity and digital; Hutchison 3 revenue for 2014-2016 are based on its 2017-2018 proportion of Hutchison Asia Telecommunications’ (HAT) revenue 2. Calculation based on Top 3 telco players i.e. Telkomsel, XL and ISAT (excluding fixed connectivity revenue) 12 Source: Telkomsel, Company annual reports and press releases, A.T. Kearney Several market forces require us to transform
Increased Changing Customer Digitalization Competition Needs
13 We have set up transformation program focusing on specific drivers and enablers linked to our strategic priorities
Growth Drivers B2C B2B Digital Enabling the Data Connectivity and Compelling services growth solutions
New operating model to support our growth priorities
Cost transformation and digitization for sustained profitability Critical Enablers
Digital culture and competencies
14 T E L K O M S E L 1 PERFORMANCE
CHALLENGES & 2 TRANSFORMATION
D I G I TA L 3 INITIATIVES
9 Our transformation in digital business has shown significant milestones to become a digital telco company and leading mobile digital business
Video Music Games E-money
Digital Products
. 15 Mn downloads . 9 Mn music users . 5.5 Mn MAU . 24 Mn registered . 3 Mn MAU . 60% of share of . #1 game portal in users industry revenue Indonesia . 3.5 Mn MAU
MyTelkomsel Big Data Digi Ads Enterprise Solutions
Digital Solutions
. 16.5 Mn MAU . 400 Peta Byte . 2.6 Bn ads . >35 business . >40% of Telkomsel data streamed per inventories across solutions for the package revenue month channels nations MyTelkomsel app will be the main channel to deliver personalization to drive business based on customer needs
What we have done What’s next
Best Deal Program & Payment Expansion . Always Best Deal in MyTelkomsel . Payment expansion . Personalized loyalty reward . Assisted touch point
Lifestyle experience to encourage people to use . Single Hub Entertainment (Video, Music, Games) Gold Winner . QR code MyTelkomsel App Public Relationship Indonesia Award 2019 . Biometric login . Rewards unlock
Net Monthly Active Install Users Customer Segment Identification Mn Mn . Provide tiers of customer segment identification 43.2. 16.5 . Personalized benefit based on tiers YoY +74.2% YoY +42.0%
Monthly YTD Package Gamification Package Users Revenue (IDR) . Daily check-in reward Mn Bn . Wheel of rewards 7.4 4,085 . Scratch and win program YoY +89.9% YoY +194.9% Telkomsel Digital Lifestyle products grew 35% by Q1’19 driven by massive growth on Games
Games Video Music & VAS
. Games revenue Q1’19 grew by 92% YoY . Video revenue Q1’19 grew by 16% YoY . Music revenue Q1’19 grew by 26% YoY
Gross rev (IDR Bn) Gross rev (IDR Bn) Gross rev (IDR Bn) +92% +16% +26%
715 276 319 195 371 155 214 187 102 Q1’17 Q1’18 Q1’19 Q1’17 Q1’18 Q1’19 Q1’17 Q1’18 Q1’19
. Dunia Games is #1 game portal in . MAXstream has became #5 Video apps . RBT Platform enhancement has Indonesia by payloads in our network maximized monetization Gross rev (IDR Bn) +7% Monthly Visitor . Content enrichment has successfully 5.3 Mn grew & retained MAXstream user 136 146 Reseller 95 Downloader >1 Mn Q1’17 Q1’18 Q1’19 15 Mn . Launched in Feb’18, Loan service has . DG E-sport audience grew significantly MAU became #3 VAS revenue contributor 3.0 Mn 250K visitor Gross rev (IDR Bn) +264% Streaming views Minutes watched 8.5 Mn 210 Mn 59 Minutes watched 16 60 Mn Q1’18 Q1’19 To sustain the growth, Games and Video will be focusing on scaling-up platforms, while Music and VAS to maximize monetization
What we have done What’s next
Take control of Games ecosystem Scale up Dunia Games platform . Deliver E-sport & features for DG resellers . Deliver Dunia Games international version . Billing integration to other telcos . Payment integration with cash & E-Money . Build publishing capability: 2 games . Expand Games publishing to SEA published to the market
Grow MAXstream users Scale up MAXstream platform . OTT playout integration for seamless user . Support for user generated content experience . Build capabilities for B2B model . Build advertising capability (AVOD) . Gamification & loyalty engine . Non-TSEL integration
Music and VAS monetization Music and VAS monetization . RBT system enhancement . Enable Appstore payment for Langit Musik . DCB integration to monetize music OTT . Scale-up Loan service platform . Maximize loan service platform . Launch health service THANK YOU!
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