2013 Annual Report PT Telekomunikasi Indonesia, Tbk 2013 Annual Report 2013 Annual Report PT Telekomunikasi Indonesia, Tbk PT Telekomunikasi Indonesia, Tbk
• Telkom’s Solid Increasing in Net Rp 14.2 trillion Profitability Income Creating Global Talents and Opportunities 10.5%
• Increasing Increasing number of 131.5 million number of cellular subscribers customers above Industry 5.1%
Increasing number of 27.8 million broadband subscribers 45.4%
Increasing number of 9.3 million Fixedline subscribers 4.5% PT Telekomunikasi Indonesia, Tbk.
Investor Relations • Network Number of BTS 75,579 BTS Grha Merah Putih 5th floor Strengthening Jl. Jend. Gatot Subroto Kav. 52 Jakarta 12710, Indonesia Creating Global Talents T +62 21 521 5109 F +62 21 522 0500 and Opportunities 25.9% email : [email protected]
IDX : TLKM NYSE : TLK LSE : TKID www.telkom.co.id PT Telekomunikasi Indonesia, Tbk PT Telekomunikasi Indonesia, Tbk 2013 Annual Report Laporan Tahunan 2013 2013Laporan AnnualTahunan Report 2013 Laporan2013 Annual Tahunan Report 2013 PTPT Telekomunikasi Telekomunikasi Indonesia, Indonesia, Tbk Tbk PTPT Telekomunikasi Telekomunikasi Indonesia, Indonesia, Tbk Tbk
•• ProfitabilitasTelkom’s Solid IncreasingPeningkatan in Net RpRp14,2 14.2 trilliontriliun TelkomProfitability yang IncomeLaba Bersih Creating Global Talents and Opportunities
Menciptakan Peluang dan Talenta Global Solid 10.5%10,5%
•• PeningkatanIncreasing IncreasingPeningkatan number Jumlah of 131.5131,5 million juta jumlahnumber pelanggan of cellularPelanggan subscribers Seluler diatascustomers industri above Industry 5.1%5,1%
IncreasingPeningkatan number Pelanggan of 27.827,8 million juta broadbandBroadband subscribers 45.4%45,4%
Increasing number of Peningkatan Pelanggan 9.3 million Fixedline subscribers 9,3 juta Fixedline 4.5%4,5% PTPT Telekomunikasi Telekomunikasi Indonesia, Indonesia, Tbk. Tbk.
InvestorInvestor Relations Relations •• Network Penguatan NumberJumlah BTSof BTS 75,57975.579 BTS BTS GrhaGrha Merah Merah Putih Putih 5 Lantaith floor 5 StrengtheningJaringan Jl.Jl. Jend. Jend. Gatot Gatot Subroto Subroto Kav. Kav. 52 52 JakartaJakarta 12710, 12710, Indonesia Indonesia CreatingMenciptakan Global Peluang Talents dan TT +62 +62 21 21 521 521 5109 5109 25,9% FF +62 +62 21 21 522 522 0500 0500 andTalenta Opportunities Global 25.9% emailemail : :[email protected] [email protected]
IDXIDX : :TLKM TLKM NYSENYSE : :TLK TLK LSELSE : :TKID TKID www.telkom.co.idwww.telkom.co.id
PT Telekomunikasi Indonesia, Tbk Laporan Tahunan 2013 Laporan Tahunan 2013 Laporan Tahunan 2013 PT Telekomunikasi Indonesia, Tbk PT Telekomunikasi Indonesia, Tbk
• Profitabilitas Peningkatan Rp14,2 triliun Telkom yang Laba Bersih
Menciptakan Peluang dan Talenta Global Solid 10,5%
• Peningkatan Peningkatan Jumlah 131,5 juta jumlah pelanggan Pelanggan Seluler diatas industri Daftar isi CONTENTS
Highlights BusinessTinjauan Overview Bisnis Management’sAnalisa dan Pembahasan Discussion TataCorporate Kelola GovernancePerusahaan SocialTanggung And Environmental Jawab Sosial ProfilCompany Perusahaan Profile AdditionalInformasi Information Tambahan 5,1% andManajemen Analysis danResponsibility Lingkungan (For Adr(Bagi Shareholders) Pemegang PrefaceIkhtisar Industri Telekomunikasi 42 Konsep dan Landasan 136 Riwayat Singkat Telkom 224 Saham ADR) Telecommunicationdi Indonesia 42 Analisa danManagement’s Pembahasan 100 Concept and Foundation 136 CSRStrategi Strategy CSR 201 A Brief History of Telkom 224 Summary of Significant 254 Legal Basis and 262 Kerangka Kerja dan 137 Kegiatan Usaha 225 FinancialIkhtisar HighlightsKeuangan 14 Industry in Indonesia DiscussionManajemen and Analysis atas RangkumanDifferences Perbedaan between 254 DasarRegulation Hukum 262 Strategi Perusahaan 43 KinerjaTelkom’s GCG Telkom GCG 137 PelestarianEnvironment Lingkungan 202 Line of Business 225 of the PerusahaanCompany’s Struktur Organisasi 225 SignifikanIndonesian antara Corporate Praktik dan Peraturan Peningkatan Pelanggan OperationalIkhtisar Operasional Highlights 16 Corporate Strategy 43 Framework and Preservation Competition 268 27,8 juta Performance Organizational Structure 225 TataGovernance Kelola Perusahaan Practices Prospek Usaha 45 Tinjauan Operasi per 102 StrukturPerformance Tata Kelola 141 Ketenagakerjaan, 206 Perusahaan Persaingan 268 Broadband CommonIkhtisar Saham Stock danand 18 BusinessPerusahaan Outlook 45 Perusahaan Employment,Kesehatan Health dan 206 Indonesiaand dan theStandar NYSE’S Tata Licensing 272 OperationalSegmen Review Usaha 102 Subsidiaries and 230 Bond HighlightsObligasi Corporate Governance 141 and Work SafetyKeselamatan (“K3”) Entitas Anak 230 CorporateKelola Perusahaan Governance NYSE Perizinan 272 BusinessPortofolio Portfolio Bisnis 46 by Segment Dewan Komisaris 145 Associateddan Companies Asosiasi Standards Trademarks, Copyrights, 276 Tinjauan Keuangan 107 Structure Kerja (“K3”) Anggaran Dasar 256 EventsPeristiwa Highlights Penting 22 Financial Overview 107 Social and Community 212 IndustrialMerek, Hak Designs Cipta, 276 DistribusiDistribution dan Strategi and 54 Perbandingan Laba 109 Board of CommissionersDireksi 149145 PengembanganDevelopment Sosial 212 Telkom’sStruktur Subsidiaries Kelompok 236 Articles of Association 256 Desainand Industri Patens PenghargaanAwards 24 MarketingPemasaran Strategy Usaha TelkomChart Hubungan dengan 256 ComprehensiveRugi Komprehensif Income 109 Komite - Komite di Bawah 158 dan Kemasyarakatan RelationshipPemerintah with danthe 256 dan Paten Comparison Board of Directors 149 Responsibility 220 45,4% CertificationsSertifikasi 26 TarifTelecommunication Jasa Telekomunikasi 56 Perbandingan Arus 119 Dewan Komisaris Tanggungto Consumer Jawab 220 ProfilProfile Dewan of TheKomisaris Board 238 LembagaGovernment Pemerintah and Services Tariffs Committees Under 158 of Commissioners Net CashKas BersihFlows 118 Komite - Komite di Bawah 172 Kepada Konsumen Government Agencies Appendices Layanan kepada 58 the Board of Profil Direksi 240 Mekanisme 258 Lampiran CustomerPelanggan Services 58 Direksi Profile of The Board 240 Definitions 278 ManagementLaporan Manajemen Report ObligationKewajiban and Dan Commitment Komitmen 120119 Commissioners Informasi Efek 242 Capital MarketPerdagangan Trading 258 Daftar Istilah 278 of Directors PasarMechanism Modal danand PerlindunganConsumer Protection Konsumen 61 Sekretaris Perusahaan/ 175 Cross Reference 284 Peningkatan Pelanggan ReportLaporan from Dewan the 28 LikuiditasLiquidity 120121 Committees Under 172 Alamat 249 ADSTelkom Telkom ADS Referensi Silang 284 9,3 juta Investor Relations (“IR”) Stock Overview 242 to Bapepam-LK President CommissionerKomisaris Tagihan,Billing, Pembayaran Payment 62 Board of Director Peraturan Fixedline Receivable KemampuanCollectibility 122121 Regulation No.X.K.6 Unit Internal Audit 178 PerpajakanTaxation 260 Bapepam-LK No.X.K.6 ReportLaporan from Direksi the 34 danand PenagihanCollection Membayar Utang Corporate Secretary/ 175 Addresses 249 Capital Structure 122 President Director Investor Relations (“IR”) ResearchRiset danand 262 Faktor-FaktorRisk Factors Risiko 64 Struktur Modal 123 Sistem Pengendalian 180 Capital Expenditures 122 Internal PengembanganDevelopment Internal Audit Unit 178 NetworkInfrastruktur Infrastructure Jaringan 82 Belanja Modal 123 Material Commitment 123 Akuntan Independen 182 4,5% Internal Control System 180 PengembanganNetwork Development Jaringan 86 ForIkatan Capital Material Investment Untuk 124 Perseroan Investasi Barang Modal Independent Auditor 181 PT Telekomunikasi Indonesia, Tbk. SumberHuman Daya Manusia Capital 88 Changes In Accounting 124 Manajemen Risiko 182 PerubahanPolicies 125 Risk Management 182 SEKILASABOUT OUR MENGENAI ANNUAL LAPORAN REPORT TAHUNAN 2013 memuatassurance risiko that dansuch ketidakpastian, expectations will termasuk prove toakibat be correct. perubahan-perubahan These forward-looking dalam Jumlah BTS Kebijakan Akuntansi Litigasi dan Perkara 183 lingkunganstatements ekonomi,are subject politik to a numberdan sosial of dirisks Indonesia. and uncertainties, Pada bagian including “Faktor-faktor changes Investor Relations • Penguatan 75.579 BTS Exchange Controls 124 HukumLegal yang Proceeding Sedang 183 PT Telekomunikasi Indonesia, Tbk, oratau “Telkom”, disebut “The“Telkom”, Company”, “Perusahaan”, and “we”, dan is proud“Kami”, Risiko”in the economic, dan bagian-bagian social and lain political di Laporan environments Tahunan in ini Indonesia. diungkapkan This Annualfaktor-faktor Report Grha Merah Putih Lantai 5 Pengendalian Nilai Tukar 125 and dihadapi Lawsuits Perusahaan Involving menyajikanto present Annual Laporan Report Tahunan for theuntuk year periode ended tahun December yang berakhir31, 2013. Ourpada Annual 31 Desember Report pentingdiscloses, yang under dapat “Risk menyebabkan Factors” and hasil-hasilelsewhere, aktual important yang factorsberbeda that secara could material cause Quantitative And 125 Jaringan the Company 2013,is furnished yang disusun according sesuai to the dengan decree Keputusan of the Indonesian Otoritas JasaFinancial Keuangan Services (“OJK”), Authority, denganactual results ekspektasi to differ kami. materially from our expectations. Jl. Jend. Gatot Subroto Kav. 52 PengungkapanQualitative Disclosures Kuantitatif 126 Sanksi Administratif 185 penggantithe successor dari of Bapepam-LK Bapepam-LK No.X.K.6. (“OJK”) BeberapaNo.X.K.6. Certainbagian tertentuinformation dalam in this Laporan Annual Jakarta 12710, Indonesia Aboutdan Kualitatif Market Risks atas Administrative Sanctions 185 TahunanReport is ini also juga contained berisi informasi in the Form yang 20-F, dimuat with dalam the United Form 20-FStates sesuai Securities peraturan and ApabilaTo obtain Anda further ingin information mengetahui on informasiTelkom, please mengenai contact Telkom Investor lebih Relations, lanjut, Anda Grha dapat Akses Informasi Publik 185 Menciptakan Peluang dan Risiko Pasar SecuritiesExchange andCommission. Exchange However, Commission no part (“SEC”) of this Amerika document Serikat. has beenNamun, incorporated tidak menghubungiMerah Putih, 5 thInvestor floor, Jl.Relations, Jend. Gatot Grha Subroto Merah Putih,Kav. 52 Lantai Jakarta 5, 12710,Jl. Jend. Indonesia. Gatot Subroto Related Party 130 Public Access 185 T +62 21 521 5109 Etika Bisnis dan 186 adaby reference bagian dari into dokumen the Form ini 20-F. yang The digabungkan information untuk and datamerujuk presented pada Form in this 20-F. Annual Kav.Tel.: (62-21)52, Jakarta 521 5109,12710, Fax: Indonesia. (62-21) Tel: 522 (62-21) 0500 or521 e-mail: 5109, Fax:[email protected]. (62-21) 522 0500 atauYou 25,9% TransaksiTransactions dengan 130 to Information InformasiReport draws dan upondata yangthe consolidated disajikan pada financial Laporan data Tahunan of the ini Company bersumber and pada our data email:can download [email protected]. this document Andafrom ourjuga online dapat site mengunduh http://www.telkom.co.id. dokumen ini secara Pihak Berelasi Budaya Perusahaan F +62 21 522 0500 Property, Plant & 131 Code of Ethics and 186 keuangansubsidiaries. konsolidasian Perusahaan dan entitas anak. online melalui situs kami pada http://www.telkom.co.id. Talenta Global Sistem Pelaporan 189 We use the word “Indonesia” in this Annual Report to refer to the Republic of email : [email protected] EquipmentAset Tetap 131 Corporate Culture Pelanggaran LaporanThis Annual Tahunan Report yang contains bersifat “forward-looking pandangan ke depanstatements”, (forward-looking including statements statement ), SebutanIndonesia “Indonesia” while the word dalam “Government” Laporan Tahunan refers 2013 to the ini Governmentmerujuk kepada of Indonesia Republik InsuranceAsuransi 132 Whistleblowing(Whistleblowing System 189 termasukregarding tentangour expectations ekspektasi and dan projections proyeksi atas for ourkinerja future operasional operating dan performance prospek Indonesiaand “United sedangkan States of “Pemerintah”America” or “US” adalah is the Pemerintah United States. Indonesia The currencydan “Amerika “Rupiah” IDX : TLKM System) bisnisand business di masa prospects. mendatang. The Pernyataan words “believe”, seperti “expect”, ini umumnya “anticipate”, mengunakan “estimate”, Serikat”or “Rp” refersatau “AS” to the adalah Indonesian Amerika Rupiah Serikat. while Penyebutan “US Dollar” satuan or “US$” mata refers uang to “Rupiah” the NYSE : TLK Material Information 132 GCG Implementation 192 kata“project” seperti and “percaya”, other similar “mengharapkan”, words identify “mengantisipasi”, forward-looking “memperkirakan”,statements. In addition, atauUS currency. “Rp” merujuk Certain pada figures mata (including uang resmi percentages) Indonesia sedangkan have been “Dolar rounded AS” up. atau Save Konsistensi 192 Informasiand Facts dan 132 Consistency “memproyeksikan”all statements other atau than kata-kata statements serupa of historical lainnya. Selainfacts included itu, seluruh in this pernyataan Annual yang “US$”as otherwise merujuk noted, pada all mata financial uang resmiinformation Amerika is Serikat.presented Beberapa in Indonesian angka tertentuRupiah LSE : TKID Fakta Material Penerapan GCG bukanReport merupakan are forward-looking fakta historis, statements. dalam Laporan Although Tahunan we believe ini dapat that thedikategorikan expectations (termasukaccording topersentase) Indonesian telah Financial mengalami Accounting pembulatan. Standard Kecuali (“IFAS”). jika disebutkan lain, Authorization for 133 GCG Evaluation 197 sebagaireflected forward-looking in the forward-looking statement statements. Walaupun herein kami arepercaya reasonable, bahwa ekspektasiwe can give no semua informasi keuangan disajikan dalam mata uang Rupiah sesuai dengan Kewenanganthe Issuance Penerbitan of 133 Evaluasi GCG 197 tersebut akan terbukti benar. Pernyataan yang mengandung pandangan ke depan Standar Akuntansi Keuangan (“SAK”) Indonesia. www.telkom.co.id FinancialLaporan Statements Keuangan
CONTENTS
Highlights Business Overview Management’s Discussion Corporate Governance SocialTanggung And Environmental Jawab Sosial CompanyProfil Perusahaan Profile AdditionalInformasi Information Tambahan and Analysis danResponsibility Lingkungan (For Adr(Bagi Shareholders) Pemegang Preface Riwayat Singkat Telkom 224 Saham ADR) Telecommunication 42 Management’s 100 Concept and Foundation 136 CSRStrategi Strategy CSR 201201 A Brief History of Telkom 224 Summary of Significant 254 Legal Basis and 262 Kegiatan Usaha 225 Financial Highlights 14 Industry in Indonesia Discussion and Analysis RangkumanDifferences Perbedaan between 254 DasarRegulation Hukum 262 Telkom’s GCG 137 PelestarianEnvironment Lingkungan 202 202 Line of Business 225 of the Company’s Struktur Organisasi 225 SignifikanIndonesian antaraCorporate Praktik dan Peraturan Operational Highlights 16 Corporate Strategy 43 Framework and Preservation Competition 268 Performance Organizational Structure 225 GovernanceTata Kelola Perusahaan Practices Performance Ketenagakerjaan, 206 Perusahaan Persaingan 268 Common Stock and 18 Business Outlook 45 Employment,Kesehatan Health dan 206 Indonesiaand dan the Standar NYSE’S Tata Licensing 272 Operational Review 102 Subsidiaries and 230 Bond Highlights Corporate Governance 141 and Work SafetyKeselamatan (“K3”) Entitas Anak 230 Corporate Kelola Perusahaan Governance NYSE Perizinan 272 Business Portfolio 46 by Segment Associated Companiesdan Asosiasi Standards Trademarks, Copyrights, 276 Structure Kerja (“K3”) Anggaran Dasar 256 Events Highlights 22 Financial Overview 107 Social and Community 212 IndustrialMerek, Hak Designs Cipta, 276 Distribution and 54 Board of Commissioners 145 PengembanganDevelopment Sosial 212 Telkom’sStruktur Subsidiaries Kelompok 236 236 Articles of Association 256 Desainand Patens Industri Awards 24 Marketing Strategy Usaha ChartTelkom Hubungan dengan 256 Comprehensive Income 109 dan Kemasyarakatan RelationshipPemerintah with the dan 256 dan Paten Comparison Board of Directors 149 Responsibility 220 Certifications 26 Telecommunication 56 Tanggungto Consumer Jawab 220 ProfilProfile Dewan of The Komisaris Board 238 238 LembagaGovernment Pemerintah and Services Tariffs Net Cash Flows 118 Committees Under 158 Kepada Konsumen of Commissioners Government Agencies Appendices the Board of Profil Direksi 240 Mekanisme 258 Lampiran Customer Services 58 Profile of The Board 240 Management Report Obligation and Commitment 119 Commissioners Capital MarketPerdagangan Trading 258 DaftarDefinitions Istilah 278 278 Informasiof Directors Efek 242 Consumer Protection 61 MechanismPasar Modal and dan Report from the 28 Liquidity 120 Committees Under 172 CrossReferensi Reference Silang 284 284 Stock OverviewAlamat 242 249 TelkomADS Telkom ADS President Commissioner Board of Director to Bapepam-LKPeraturan Billing, Payment 62 Receivable Collectibility 121 PerpajakanTaxation 260 260 Bapepam-LKRegulation No.X.K.6 No.X.K.6 Report from the 34 and Collection Corporate Secretary/ 175 Addresses 249 Capital Structure 122 President Director Risk Factors 64 Investor Relations (“IR”) ResearchRiset and dan 262 262 Capital Expenditures 122 PengembanganDevelopment Network Infrastructure 82 Internal Audit Unit 178 Material Commitment 123 Internal Control System 180 Network Development 86 For Capital Investment Independent Auditor 181 Human Capital 88 Changes In Accounting 124 Policies Risk Management 182 ABOUTSEKILAS OUR MENGENAI ANNUAL REPORT LAPORAN TAHUNAN 2013 assurancememuat thatrisiko such dan expectations ketidakpastian, will termasuk prove to akibatbe correct. perubahan-perubahan These forward-looking dalam statementslingkungan are ekonomi, subject politikto a number dan sosial of risks di Indonesia. and uncertainties, Pada bagian including “Faktor-faktor changes Exchange Controls 124 Legal Proceeding 183 PTPT Telekomunikasi Telekomunikasi Indonesia, Indonesia, Tbk, Tbk, or atau“Telkom”, disebut “The “Telkom”, Company”, “Perusahaan”, and “we”, isdan proud “Kami”, in Risiko”the economic, dan bagian-bagian social and political lain di Laporan environments Tahunan in Indonesia. ini diungkapkan This Annual faktor-faktor Report and Lawsuits Involving to menyajikanpresent Annual Laporan Report Tahunan for the untuk year periodeended December tahun yang 31, berakhir 2013. Our pada Annual 31 Desember Report discloses,penting underyang dapat“Risk Factors”menyebabkan and elsewhere, hasil-hasil important aktual yang factors berbeda that secara could causematerial Quantitative And 125 the Company is furnished2013, yang according disusun sesuai to the dengan decree Keputusanof the Indonesian Otoritas Financial Jasa Keuangan Services (“OJK”), Authority, actualdengan results ekspektasi to differ kami. materially from our expectations. Qualitative Disclosures thepengganti successor dari of Bapepam-LKBapepam-LK (“OJK”)No.X.K.6. No.X.K.6. Beberapa Certain bagian information tertentu dalam in this Laporan Annual About Market Risks Administrative Sanctions 185 ReportTahunan is also ini jugacontained berisi ininformasi the Form yang 20-F, dimuat with thedalam United Form States 20-F Securitiessesuai peraturan and ToApabila obtain furtherAnda ingin information mengetahui on Telkom, informasi please mengenai contact Telkom Investor lebih Relations, lanjut, AndaGrha dapat ExchangeSecurities Commission. and Exchange However, Commission no part (“SEC”) of this documentAmerika Serikat. has been Namun, incorporated tidak Merahmenghubungi Putih, 5th floor, Investor Jl. Jend.Relations, Gatot Grha Subroto Merah Kav. Putih, 52 JakartaLantai 5,12710, Jl. Jend. Indonesia. Gatot Subroto Related Party 130 Public Access 185 byada reference bagian into dari the dokumen Form 20-F. ini yang The digabungkan information and untuk data merujuk presented pada in Form this Annual 20-F. Tel.:Kav. (62-21) 52, Jakarta 521 5109, 12710, Fax: Indonesia. (62-21) 522 Tel: 0500 (62-21) or 521e-mail: 5109, [email protected]. Fax: (62-21) 522 0500 You atau Transactions to Information ReportInformasi draws dan upon data the yang consolidated disajikan pada financial Laporan data Tahunan of the Companyini bersumber and ourpada data canemail: download [email protected]. this document from Anda our juga online dapat site mengunduh http://www.telkom.co.id. dokumen ini secara Property, Plant & 131 Code of Ethics and 186 subsidiaries.keuangan konsolidasian Perusahaan dan entitas anak. online melalui situs kami pada http://www.telkom.co.id. Equipment Corporate Culture We use the word “Indonesia” in this Annual Report to refer to the Republic of ThisLaporan Annual Tahunan Report containsyang bersifat “forward-looking pandangan ke statements”, depan (forward-looking including statements statement ), IndonesiaSebutan while “Indonesia” the word dalam “Government” Laporan Tahunan refers to 2013 the iniGovernment merujuk kepada of Indonesia Republik Insurance 132 Whistleblowing System 189 regardingtermasuk our tentang expectations ekspektasi and danprojections proyeksi for atas our kinerja future operasional operating performance dan prospek andIndonesia “United sedangkanStates of America” “Pemerintah” or “US” adalah is the Pemerintah United States. Indonesia The currency dan “Amerika “Rupiah” andbisnis business di masa prospects. mendatang. The wordsPernyataan “believe”, seperti “expect”, ini umumnya “anticipate”, mengunakan “estimate”, or Serikat”“Rp” refers atau to “AS” the Indonesianadalah Amerika Rupiah Serikat. while Penyebutan “US Dollar” orsatuan “US$” mata refers uang to the“Rupiah” Material Information 132 GCG Implementation 192 “project”kata seperti and other “percaya”, similar “mengharapkan”, words identify forward-looking “mengantisipasi”, statements. “memperkirakan”, In addition, USatau currency. “Rp” merujuk Certain figurespada mata (including uang resmi percentages) Indonesia havesedangkan been rounded “Dolar AS” up. atauSave and Facts Consistency all“memproyeksikan” statements other than atau statements kata-kata serupa of historical lainnya. facts Selain included itu, seluruh in this pernyataan Annual yang as“US$” otherwise merujuk noted, pada all financialmata uang information resmi Amerika is presented Serikat. Beberapain Indonesian angka Rupiah tertentu Reportbukan are merupakan forward-looking fakta historis, statements. dalam Although Laporan weTahunan believe ini that dapat the dikategorikan expectations according(termasuk to persentase)Indonesian Financial telah mengalami Accounting pembulatan. Standard Kecuali (“IFAS”). jika disebutkan lain, Authorization for 133 GCG Evaluation 197 reflectedsebagai inforward-looking the forward-looking statement statements. Walaupun herein kami are percaya reasonable, bahwa we ekspektasican give no semua informasi keuangan disajikan dalam mata uang Rupiah sesuai dengan the Issuance of tersebut akan terbukti benar. Pernyataan yang mengandung pandangan ke depan Standar Akuntansi Keuangan (“SAK”) Indonesia. Financial Statements Creating Global Talents and Opportunities
International expansion has become a necessity for Telkom in order to sustain a high rate of business growth. This complements our growth strategy, consistently applied over the last couple of years, by which we strive to maintain our market leadership in the cellular business while building our broadband capabilities as the mainstay of the telecommunication business in the future.
In 2013, these initiatives have resulted in double-digit growth for us, paving the way for us to become the dominant TIMES service provider in Indonesia and a leading presence in the region. 2013 Annual Report Management Business Management’s 2 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Strength Born of a Long History of Telkom
1974 1991 1856-1882 PN Telekomunikasi was split into two Perumtel became PT Telekomunikasi On October 23, 1856, the Dutch divisions, PT Industri Telekomunikasi Indonesia or Telkom, and operations colonial government deployed the Indonesia (“PT INTI”), which were organized into twelve regional first electromagnetic telegraph manufactured telecommunications units (“Witel”). These were later in Indonesia, connecting Batavia equipment, and Perusahaan Umum reorganized into seven regional (Jakarta) with Buitenzorg (Bogor). Telekomunikasi (“Perumtel”), which divisions: Division I Sumatra, Division supplied domestic and international II Jakarta and Surrounding Area, telecommunication services. Division III West Java, Division IV 1906-1965 Central Java and DI Yogyakarta, The Dutch colonial government Division V East Java, Division VI established a government Kalimantan and Division VII Eastern agency to operate post and 1980 Indonesia telecommunications services in The international telecommunication Indonesia. In 1965, the post and business was taken over by Indosat telecommunications services were 1995 separated and brought under the We held our Initial Public Offering control of two state companies, on November 14, 1995 on the Jakarta PN Pos and Giro and Stock Exchange and the Surabaya PN Telekomunikasi. Stock Exchange. On May 26, 1995, we established Telkomsel, our cellular business subsidiary.
1999 The Telecommunications Law (Law No. 36/1999), which went into effect in September 2000, facilitated the entry of new players, intensifying the competition in the telecommunications industry. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 3
2001 2009 2012 We acquired Indosat’s 35% We underwent a transformation from We sought to achieve widespread shareholdings in Telkomsel, making an infocom to a TIME company. The broadband penetration us the majority shareholder with a new Telkom was introduced to the throughout Indonesia through the stake of 77.7%. Indosat then took over public with the new corporate logo implementation of the Indonesia our 22.5% shareholding in Satelindo and tagline, “the world in your hand”. Wi-Fi program towards the and 37.7% share in PT Aplikanusa development of Indonesia Digital Lintasarta. At the same time, we Network. lost our exclusive right to be the We sought to improve business sole fixed line telephone operator in 2010 value creation by reconfiguring The JaKaLaDeMa submarine and Indonesia. our business portfolios from TIME fiber optic cable project linking Java, to TIMES (Telecommunications, Kalimantan, Sulawesi, Denpasar and Information, Media, Edutainment & Mataram was successfully completed Services). 2002 in April 2010. We divested 12.7% of our shares in Establishment of Telkom Corporate Telkomsel to Singapore Telecom University to develop a globally Mobile Pte Ltd. (“SingTel Mobile”). competitive human capital (from 2011 competence to commerce). We commenced the reform of our 2004 telecommunications infrastructure through the Telkom Nusantara Super We launched our international direct Highway project, which unites the dial fixed line service. Indonesian archipelago from Sumatra to Papua, and the True Broadband Access project, which will enable 2013 2005 customers all over Indonesia to have The Telkom-2 Satellite was launched broadband access to the internet. We began to replace all satellite transmission operating in seven services previously provided by the Palapa B-4 satellite. This brought our countries, namely total number of satellites launched Hong Kong-Macau, to eight, including the Palapa A-1 Timor Leste, satellite. Australia, Myanmar, Malaysia, Taiwan and United States of America. 2013 Annual Report Management Business Management’s 4 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Telkomsel Double Digit
Telkomsel is one of the major revenue contributors at Telkom Group. We believe that Telkomsel will continue to grow faster than industry average, maintaining its leading position in the legacy business while posting strong growth in digital services. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 5
Telkomsel Double Digit
Financial – Revenues Rp60.0 trilllion performance – EBITDA Rp33.9 trillion 10.1% – Net Income Rp17.3 trillion
Cellular – Cellular subscriber base subscriber base 131.5 million 5.1% – Mobile broadband (“Flash”) subscribers 17.3 million – Blackberry subscribers 7.6 million
BTS - 69,864 units 28.7% – 27,034 units BTS 3G 2013 Annual Report Management Business Management’s 6 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Indonesia Digital Network (IDN) 2015
Strengthen Broadband Based Infrastructure
Indonesia Digital Society
10 Ha Data Center Internet Cloud
30 nodes Tera Router IP & Optical Transport 75,000 km FO
20,000,000 Homepass Fixed 1,000,000 Broadband AP Wi-Fi Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 7
IDN implementation targets across all of our network infrastructures by the year 2015.
Business Information, Media, Edutainment & Services
Convergence Digital Telkom Cloud Innovation
IP & Optical Transport Nationwide Broadband Backbone
Mobile Broadband True Broadband Access 2013 Annual Report Management Business Management’s 8 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Sustaining Growth through International Expansion
Macau Hong Kong
Myanmar Telkom Macau Telekomunikasi Limited Indonesia PT Telekomunikasi (Subsidiary Telin International Indonesia Hong Kong) (Hongkong) Limited International Mobile Virtual Network Mobile Virtual Network International Network Operator Operator August 16, 2013 May 13, 2013 Desember 8, 2010
Malaysia Timor Leste Telekomunikasi Indonesia Telekomunikasi Indonesia International Australia (Malaysia) Sdn. Bhd. International (TL) S.A. Telekomunikasi Mobile Virtual Network Operator Mobile Network Operator Indonesia July 2, 2013 September 17, 2012 International Australia Pty. Ltd.
IT-Business Process Outsourcing & Solution January 14, 2013 Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 9
Initiatives in international expansion are essential if we are to maintain our growth momentum, providing us with new room for growth as domestic opportunities become more constricted. International expansion is also a strategy to diversify our business risks, in view of the rapid developments and convergence of the TIMES industry that is also becoming increasingly borderless.
United States of America
Telekomunikasi Indonesia International (USA) Inc.
International Network December 11, 2013
Taiwan
Telkom Taiwan Limited (Subsidiary Telin Hong Kong)
Mobile Virtual Network Operator (“MVNO”) June 3, 2013
Singapore
Telekomunikasi Indonesia International Pte. Ltd. Singapore
Content Delivery Network (“CDN”) & Data Center December 6, 2007 2013 Annual Report Management Business Management’s 10 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Global Talent Program (GTP)
It“ is the people that makes the difference between one country and another, between one company and another, and between one family and another. And the difference between people of different companies lies in their character and their competence.
~Arief Yahya~ ” Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 11
Global Talent Program (“GTP”) is an initiative intended to provide our employees/talents with practical experiences in international businesses through job assignments at host companies overseas. GTP graduates have greater prospect of future placement at critical positions in centers of business growth. Talent assignment through GTP is also intended to support our program of international expansion to 10 countries in 2013. participating in GTP GTP talent assignments at 1,010 talents 25 countries
Europe N. America 3 Countries Asia 1 Country 41 Employees 19 Countries 16 Employees 668 Employees
Africa
S. America Australia 2 Countries Jakarta 105 Employees 72 Various Countries 180 Employees 2013 Annual Report Management Business Management’s 12 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
With Our Vision, Mission and Values
To become a leading Telecommunication, Information, Media, Vision Edutainment and Services (“TIMES”) player in the Region.
• To provide “more for less” TIMES services. Mission • To be the role model as the best managed corporation in Indonesia.
Corporate Culture The New Telkom Way
Philosophy to be Always The Best the best
Principle to be the Solid, Speed, Smart star
Practice to be the Imagine, Focus, Action winner
The vision and mission are set forth in the long-term corporate plans as approved by the Board of Commissioners on May 30, 2013 by Decision Letter of the Board of Commissioners No.06/KEP/DK/2013/RHS. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 13
..and Strategic Initiatives... 1 Center of excellence.
2 Focus on high growth or high value portfolio. 3 Accelerate international expansion.
4 Cost transformation. 5 IDN (id-Access, id-Ring, id-Con) development.
Indonesia Digital Solution (“IDS”) – convergent services 6 in digital ecosystem solution.
Indonesia Digital Platform (“IDP”) – platform enabler for 7 ecosystem development. 8 Execution of the best subsidiary management system.
9 Managing portfolio through BoE and CRO.
10 Increasing synergy within Telkom Group.
We affirmed our strategic initiatives on the basis of the decision of the Board of Commissioners of PT Telekomunikasi Indonesia, Tbk as set forth in the Decision Letter of the Board of Commissioners No.06/KEP/DK/2013/RHS dated May 30, 2013. 2013 Annual Report Management Business Management’s 14 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Financial Highlights (Based on IFAS)
Consolidated Statements of Comprehensive Income Total Revenues (in billions of Rupiah) (in billions of Rupiah, except for net income per share and per ADS) 82,967 Years ended December 31, 7.5% 2013 2012 2011 2010 2009* Total Revenues 82,967 77,143 71,253 68,629 68,220 Total Expenses Total Expenses 57,700 54,005 49,960 46,240 44,139 (in billions of Rupiah) 57,700 6.8% Adjusted EBITDA 43,626 40,154 36,821 37,549 38,056 Operating profit 27,846 25,698 21,958 22,937 24,081 Profit for the year 20,290 18,362 15,470 15,870 16,043 Profit for the year (in billions of Rupiah) Profit for the year attributable to: 14,205 10.5% Owners of the parent company 14,205 12,850 10,965 11,537 11,399 Non-controlling interest 6,085 5,512 4,505 4,333 4,644
Total Assets (in billions of Rupiah) Total comprehensive income for the year 20,402 18,388 15,481 15,904 16,048 127,951 14.9% Total comprehensive income attributable to: Owners of the parent company 14,317 12,876 10,976 11,571 11,404 Adjusted EBITDA Non-controlling interest 6,085 5,512 4,505 4,333 4,644 (in billions of Rupiah) 43,626 8.6% Net income per share 147.4 133.8 111.9 117.3 115.9 Net income per ADS (1 ADS : 40 common stock) 29,483.6 26,767.6 22,386.8 23,461.6 23,180.8
Consolidated Statements of Financial Position (in billions of Rupiah) Total Revenues Total Assets 127,951 111,369 103,054 100,501 97,931 (in billions of Rupiah) 82,967 Total Liabilities 50,527 44,391 42,073 44,086 48,436 77,143 Total equity attributable to owners of the parent 60,542 51,541 47,510 44,419 38,562 71,253 company 68,220 68,629 Net working capital 4,638 3,866 (931) (1,745) (10,797) Investment in other entities 304 275 235 254 151
Capital Expenditures (in billions of Rupiah) Telkom 5,313 4,040 4,202 3,623 5,652 Telkomsel 15,662 10,656 8,472 8,197 12,673 Others Subsidiaries 3,923 2,576 1,929 831 836 2009 2010 2011 2012 2013 Total 24,898 17,272 14,603 12,651 19,161
Total Assets Consolidated Financial and Operational Ratios (in billions of Rupiah) 1 127,951 Return on Asset (ROA) (%) 11.1 11.5 10.6 11.5 11.6
2 111,369 Return on Equity (ROE) (%) 23.5 24.9 23.1 26.0 29.6 103,054 100,501 3 97,931 Operating Profit Margin (%) 33.6 33.3 30.8 33.4 35.3 Current Ratio (%)4 116.3 116.0 95.8 91.5 59.9 Total Liabilities to Equity (%)5 83.5 86.1 88.6 99.3 125.6 Total Liabilities to Total Assets (%)6 39.5 39.9 40.8 43.9 49.5
* As restated. See Note 2p to our Consolidated Financial Statements. (1) ROA is calculated as profit for the year attributable to owners of the parent company divided by total assets at year end December 31. (2) ROE is calculated as profit for the year attributable to owners of the parent company divided by total equity attributable to owners of the parent company at year end December 31. (3) Operating profit margin is calculated as operating profit divided by revenues. 2009 2010 2011 2012 2013 (4) Current ratio is calculated as current liabilities divided by current liabilities at year end December 31. (5) Total liabilities to equity is calculated as total liabilities divided by total equity attributable to owners of the parent company at year end December 31. (6) Total liabilities to total assets is calculated as total liabilities divided by total assets at year end December 31. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 15
Revenues Expenses Operating profit (in billions of Rupiah) (in billions of Rupiah) (in billions of Rupiah) 7.5% 6.8% 8.4% 57,700 54,005 27,846 25,698 82,967 49,960 24,081 77,143 46,240 22,937 44,139 21,958 71,253 68,220 68,629
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
Adjusted EBITDA Profit for the year Net income per share (in billions of Rupiah) (in billions of Rupiah) (Rupiah) 8.6% 10.5% 10.2% 147.4 14,205 133.8 43,626 12,850 40,154 117.3 38,056 37,549 11,399 11,537 115.9 36,822 10,966 111.9
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
Assets Liabilities Total equity attributable to owners of (in billions of Rupiah) (in billions of Rupiah) the parent company (in billions of Rupiah) 14.9% 13.8% 17.5%
127,951 50,527 48,436 111,369 44,086 44,391 60,542 42,073 100,501 103,054 97,931 51,541 47,510 44,419 38,562
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 2013 Annual Report Management Business Management’s 16 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Operational Highlights
Years ended December 31, Unit 2013 2012 Changes (%) Broadband Subscribers Fixed broadband (Speedy) (000) subscribers 3,013 2,341 28.7 Mobile broadband (Flash) (000) subscribers 17,271 11,039 56.5 Blackberry (000) subscribers 7,556 5,764 31.1 Total Broadband Subscribers (000) subscribers 27,840 19,144 45.4 Cellular Subscribers Postpaid (kartuHalo) (000) subscribers 2,489 2,149 15.8 Prepaid (simPATI, Kartu As) (000) subscribers 129,023 122,997 4.9 Total Cellular Subscribers (000) subscribers 131,513 125,146 5.1 Fixed Line Subscribers Fixed wireline (000) subscribers 9,351 8,946 4.5 Fixed wireless (000) subscribers 6,766 17,870 (62.1) Total Fixed Line Subscribers (000) subscribers 16,117 26,816 (39.9) Other Subscribers Datacomm (000) Mbps 381,440 281,063 35.7 Satellite transponder (000) MHz 3,007 2,650 13.5 Network BTS unit 75,579 60,011 25.9 Customer Services PlasaTelkom location 572 572 - Grapari location 86 85 1.2 Mobile Grapari unit 268 - - TV) dan Usee TV (teknologi OTT T
Broadband Subscribers Cellular Subscribers (in thousands) (in thousands) 45.4% 5.1%
Speedy Flash Blackberry kartuHalo simPATI, kartu AS
17,271 129,024 122,997
11,039
7,556
5,764
3,013 2,341 2,149 2,489
2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 17
Other Subscribers BTS (in thousands) (in thousands) 35.7% 13.5% 25.9%
Datacom Satelit transponder
381,440
75,579 281,063
60,011
2,650 3,007
2012 2013 2012 2013 2012 2013 2013 Annual Report Management Business Management’s 18 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Common Stock and Bond Highlights
Telkom Share Price and Trading Volume on the Indonesia Stock Exchange 2012-2013
Volume Price (in million shares) Volume Price (Rp) 500 2,500
400 2,000
300 1,500
200 1,000
100 500
0 0 First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter 2012 2012 2012 2012 2013 2013 2013 2013
Telkom ADS Price and Trading Volume on the New York Stock Exchange 2012-2013
Volume Price (in million shares) Volume Price (US$) 2.4 50 2.1
1.8 40
1.5 30 1.2
0.9 20
0.6 10 0.3
0.0 0 First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter 2012 2012 2012 2012 2013 2013 2013 2013 Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 19
Trade Price and Volume
The table below shows the high, low, closing quoted prices, trading volume, outstanding shares and market capitalization for our common stock on the IDX during the periods indicated.
Table Trade Price and Volume
Price per Share of Common Stock Market Volume Calendar Year High Low Closing Outstanding Shares Capitalization (in Rupiah) (shares) (Rp billion) 2009 2,070 1,150 1,890 20,872,067,500 98,347,123,900 190,512 2010 1,960 1,390 1,590 28,539,250,000 98,347,123,900 160,272 2011 1,610 1,320 1,410 22,207,895,000 96,931,696,600 142,128 2012 1,990 1,330 1,810 23,002,802,500 95,745,344,100 182,448 First Quarter 1,430 1,330 1,400 5,197,855,000 96,096,969,100 141,120 Second Quarter 1,740 1,400 1,630 6,934,820,000 95,921,374,100 164,304 Third Quarter 1,970 1,590 1,890 5,100,152,500 95,767,844,100 190,512 Fourth Quarter 1,990 1,730 1,810 5,769,975,000 95,745,344,100 182,448 2013 2,580 1,760 2,150 27,839,305,000 97,100,853,600 216,720 First Quarter 2,230 1,760 2,200 5,993,025,000 95,745,344,100 221,760 Second Quarter 2,580 1,900 2,250 8,265,647,500 96,044,401,100 226,800 Third Quarter 2,450 1,950 2,100 7,206,438,500 97,100,853,600 211,680 Fourth Quarter 2,375 1,980 2,150 6,374,194,000 97,100,853,600 216,720 September 2,450 1,950 2,100 2,644,068,500 97,100,853,600 211,680 October 2,375 2,100 2,350 2,019,709,500 97,100,853,600 236,880 November 2,350 2,025 2,175 2,055,114,500 97,100,853,600 219,240 December 2,200 1,980 2,150 2,299,370,000 97,100,853,600 216,720 2014 January 2,275 2,060 2,275 1,758,433,800 97,100,853,600 229,320 February 2,420 2,170 2,325 2,015,617,700 97,100,853,600 234,360
(1) We conducted a two for one split of our common stock from a nominal value of Rp500 per share to Rp250 per share as resolved by the AGMS on July 30, 2004, effective October 1, 2004. (2) We conducted a five for one split of our common stock from a nominal value of Rp250 per share to Rp50 per share as resolved by the AGMS on April 19, 2013, effective September 2, 2013. (3) The price per share of the common stock reflects this two splits above for all periods shown. (4) Market capitalization is multiplying between the share price and issued and fully paid shares which is 100,799,996,400 shares.
Telkom Share Price and Market Capitalization on the Indonesia Stock Exchange 2012-2013
Price Market Capitalization (Rp) Market Capitalization Price (in billions of Rupiah)
2,500 250
2,000 200
1,500 150
1,000 100
500 50
0 0 First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter 2012 2012 2012 2012 2013 2013 2013 2013 2013 Annual Report Management Business Management’s 20 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
On December 30, 2013, the last day of trading on the IDX in 2013, the closing price for our common stock was Rp2.150,0 per share.
The high, low, closing prices and trading volume for our ADSs on the NYSE and the LSE for the periods indicated are shown in the table below. Trading in ADSs is effected “off exchange” on the LSE. Under LSE rules, off exchange trading means that transactions are carried out on other exchanges and once the transaction has taken place, it is reported to the LSE.
Table of Telkom's Stock Price and Trading Volume on the NYSE and LSE
Price per ADS (NYSE) Price per ADS (LSE) Calendar Year High Low Closing Volume High Low Closing Volume (in US Dollars) (in ADS) (in US Dollars) (in ADS) 2009 41.55 20.19 39.95 67,767,999 40.76 25.67 41.02 3,757 2010 43.80 30.33 35.65 69,803,576 42.00 30.76 34.91 19,673 2011 36.96 30.29 30.74 69,279,100 35.89 21.02 30.50 1,406,292 2012 41.14 29.26 36.95 88,190,589 40.12 30.24 36.50 746,278 First Quarter 31.69 29.26 30.36 19,265,880 31.04 30.24 30.95 236,546 Second Quarter 37.00 30.38 34.83 32,660,280 36.64 30.40 33.70 293,809 Third Quarter 41.14 34.28 38.93 19,696,121 39.78 34.30 39.10 88,412 Fourth Quarter 41.00 36.00 36.95 16,568,308 40.12 36.50 36.50 127,511 2013 50.61 33.75 35.85 67,061,105 50.59 33.44 35.33 6,579,103 First Quarter 45.32 36.17 45.08 13,876,752 45.83 37.06 45.28 12,819 Second Quarter 50.61 38.75 42.74 15,688,290 50.59 39.31 45.34 6,465,258 Third Quarter 47.20 34.54 36.31 18,713,653 47.44 35.62 36.27 79,240 Fourth Quarter 41.69 33.75 35.85 18,782,410 41.69 33.44 35.33 21,786 September 42.39 34.54 36.31 6,791,001 42.10 35.62 36.27 44,011 October 41.69 36.95 40.76 5,975,745 41.69 37.29 41.69 20,830 November 40.90 34.70 36.54 5,866,608 40.95 34.43 36.36 - December 40.86 33.75 35.85 12,697,081 37.38 33.44 35.33 956 2014 January 37.49 33.91 36.27 5,498,292 37.26 33.83 37.36 - February 40.53 35.19 39.23 5,149,305 38.06 35.98 38.06 -
On December 31, 2013, the last day of trading on the NYSE and LSE in 2013, the closing price for one Telkom ADS was US$35.85 and US$35.33 respectively. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 21
Table Telkom's Bond
Out Issuance Maturity Term Interest Bond standing Underwriter Trustee Rating Date Date (Year) Rate (Rp million) 1,005,000 June 25, 2010 July 6, 2015 5 9.6% PT Bahana Securities PT CIMB idAAA Obligasi II Telkom PT Danareksa Sekuritas Niaga Tbk 2010 Seri A PT Mandiri Sekuritas 1,995,000 June 25, 2010 July 6, 2020 10 10.2% PT Bahana Securities PT CIMB idAAA Obligasi II Telkom PT Danareksa Sekuritas Niaga Tbk 2010 Seri B PT Mandiri Sekuritas 2013 Annual Report Management Business Management’s 22 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
01 03 05
02 04 06 Event Highlights
01 January 05 May 07 July Opening the GSM/3G cellular a. Launched “Digitally We won an international services in Dili, Timor Leste, with Connecting Indonesia”, a tender for the management of Telkomcel as brandname. cooperation program with Myanmar’s international network Intel Corporation, US, through via Mumbai, India, as part of 02 February the provision of low cost the modernization program Launched Community Service access to technology and of Myanmar’s Information & Contact Center 110 (toll-free internet. Communication Technology calls) as a synergy with the b. Ground breaking installation (“ICT”) infrastructure. National Police, for the reporting of Maluku Cable System of accidents and criminal acts. (“MCS”) marine cable. MCS 08 August is a part in the program a. Opening of the overseas for constructing Sistem branch of Telin in Malaysia, 03 March Komunikasi Kabel Laut Cooperation agreement with which provide the mobile (“SKKL”) Sulawesi Maluku virtual network operator the Provincial Government Papua Cable System of Yogyakarta to support the (“MVNO”) by selling the Kartu (“SMPCS”). SMPCS is the As 2in1 from Telkomsel. “Yogyakarta Digital Government continuation of the Palapa Services” program and the b. Telkom Indonesia logo Ring toward Indonesia Digital refresh using red, white, “Yogya Cyber City” program in Network (“IDN”). which installed Indonesia Wi-Fi black and grey colors in the in Yogyakarta. logo, representing a spirit 06 June of optimism and courage Strengthen a cooperative in the face of challenges, 04 April agreement with Garuda Indonesia delivering the best for the The Annual General Meeting in providing services network nation, determination and also of Shareholders was held on and supporting infrastructure technology. April 19, 2013, which among for the development of Garuda other agendas approved the Indonesia contact center services appointment of Gatot Trihargo through our subsidiary PT as Commissioner. Infomedia Nusantara. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 23
07 09 11
08 10 12
09 September b. ICT infrastructure support in 12 December a. Launched the One Million the APEC 2013 event was held a. Supports the national Speedy Instan Card Indonesia in Bali, on 1-8 October 2013, education project through our Digital School (Spin-Card and became the Host Sponsor participation in the National IndiSchool) program in APEC CEO’s Summit 2013. State University Entrance support of education in c. Business cooperation with Examination (“SNMPTN”) Indonesia through the Garuda Indonesia to provide and the Joint State University provision of low cost internet access service Entrance Examination broadband internet access to through Wi-Fi technology in (“SBMPTN”) in 2014 as part school community. Garuda Boeing 777-300ER of our Mega commitment b. A cellular service trial for and Airbus 330-200 and 300. “Telkom Indonesia for 4G Long Term Evolution Indonesian Education”. (“LTE”) technology in order b. Trusted to support the to support the Asia Pacific 11 November telecommunication facilities in Economic Cooperation a. Introduced the Assessment the meeting of the Ministerial (“APEC”) which will be held in Center Indonesia services by Conference of the World October in Bali. State Minister of State-Owned Trade Organization (“WTO Enterprises Dahlan Iskan as KTM”) IX in Bali. 10 October our contribution for better HR a. The Board of Company management in Indonesia. conducted the closing bell b. Ground Breaking for fiber ceremony on the trading optic venture in Papua named floor of the New York the Papua Cable System Stock Exchange (NYSE) on (“PCS”). PCS also embodies Thursday, October 31, 2013, our firm commitment to also marks as 18 years Telkom facilitate connectivity in areas listing in NYSE. of Eastern Indonesia. 2013 Annual Report Management Business Management’s 24 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
01 03 05
02 04 06 Awards 01 January 03 March 06 June a. Arief Yahya, President Director, is a. The award for “Excellent Service a. “Best of Asia” award in the nominated as “The Amazing Star: Performance” for our Contact category Asia’s icon on Men’s Obsession 9 Tough CEOs” Center in the Contact Center corporate governance in the by Men’s Obsession Magazine. Service Excellence Award 2013 Corporate Governance Asia b. We received three awards in Bali organized by Care Center for Annual Recognition Award Service Excellence Award 2013 Customer Satisfaction and 2013 organized by Corporate organized by MarkPlus Insight for Loyalty. Governance Asia Magazine. Speedy (internet provider fixed b. Speedy and Flexi received “Gold b. “The Best Product Innovation broadband category), Telkomsel Brand Champion” awards in of Infrastructure Sector” (GSM operator category) the Indonesia Brand Champion for IndiFinance, “The Best and Flash (internet wireless Award 2013 organized from Technology” for Indigo and broadband category). MarkPlus Insight. “The Best Corporate Innovation Culture & Management” awards, in the BUMN Innovation Award 02 February 04 April 2013 organized by the Ministry of a. Speedy service is nominated as Arief Yahya, President Director, SOE. “Best Internet Service Provider nominated as “Innovative CEO for c. Award as “Best Corporate (ISP) in Indonesia 2012” from Nation” by Gatra Magazine. Image” in telecommunication Chip Magazine in Chip Award category and as “Corporate 2013. Image Excellent” internet b. Arief Yahya, President Director, is provider category in Indonesia’s 05 May Most Admired Companies one of the 19 CEOs of Indonesia’s “Diamond” award in the Cellular large companies named as (“IMAC”) 2013 organized by telecommunication CDMA category Bloomberg Businessweek “Indonesia Most Admired CEO for Plasa Telkom in the Service 2013” from Warta Ekonomi Indonesia Magazine and Frontier Quality Award 2013 organized by Consulting Group. Magazine. Service Excellence Magazine. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 25
07 09 11
08 10 12
07 July 10 October b. Award as “The Best” in the SOE a. Awards in several categories, a. Award as “The World’s Biggest Award 2013 organized by SOEs including “The Best Managed Public Companies” in Forbes Track Magazine, SOE Ministry and Company”, “The Best CEO” and Global 2000 organized by PPM Management for category of “The Best CFO” in the Finance Forbes Magazine. best competitive infrastructure, best Asia Best Companies Award b. “Second Place Rank” in the SOE implementation of competitive open 2013 organized by Finance Asia Non Financial Listed category SOEs good corporate governance Magazine. in the Annual Report Award and best competitive CEO SOE b. Award as “Winner” in the (“ARA”) 2012 competition. 2013. Indonesian MAKE (Most Admired c. Award as ” Telecom Service Knowledge Enterprise) Award Provider of the Year” and “Data 2013 from Dunamis Organization Communication Service Provider Services. 11 November of the Year” in the 2013 Frost & c. Award as “Best of the Best a. Award as “ Best Company in Sullivan Indonesia Excellence award Service Provider of the Year” and Telecomunication Undustry” in organized by Frost & Sullivan. “Best Wireless service Provider of the Economic Challenges Award d. Awards as “Indonesia Marketing the Year”, in the Asia Pacific ICT 2013 from Metro TV. Champion 2013” and “Marketer of Award 2013 from Frost & Sullivan. b. Award as “Best Contact Center the Year 2013” for CEO, Arief Yahya, of the Year 2013” in the APCCAL from MarkPlus Inc. Expo 2013 organized by the e. Award as “Indonesia Most Trusted Asia Pacific Contact Center Companies” from The Indonesian 08 August Association Leaders (“APCCAL”) Institute for Corporate Governance “The Best BUMN on Marketing 2013” held in Seoul, South. (IICG) and also the “Indonesia and “The Best CMO” awards in the Trusted Company” award from SWA BUMN Marketing Day 2013 from the Magazine. Ministry for SOE. 12 December f. Award as” Best Sustainability a. Awards in Indonesia Human Reporting Award 2012” in the Capital Study 2013 organized Industry category in the annual 09 September by Dunamis Human Capital and Sustainability Reporting Award “Best CEO of the Year” award for Business Review, with the highest (SRA) competition organized by the Arief Yahya, President Director, in accolades as “aThe Best for CEO National Center for Sustainability the Anugerah Business Review 2013 Commitment” and “The Best for Reporting (“NCSR”). from Business Review magazine. All Criteria”. 2013 Annual Report Management Business Management’s 26 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
01 02 03
04 05 06 Certification 01 02 03 ISO 9001:2008 Certification Customer Center of AS/NZS ISO 9001:2008 Issued to PT Finnet, our indirect Expertise Certification Certification subsidiary by DQS GmbH in 2012. Issued by SAP, in 2012. Valid until Issued to PT Administrasi Medika Valid until 2015. 2013 (“AdMedika”), our indirect subsidiary, by Verification New Zealand Limited, in 2012. Valid until 2015.
04 05 06 ISO 9001:2008 ISO/IEC 27001:2005 ISO 9001:2008 Certification Certification Certification Issued to PT Dayamitra Issued to PT Finnet, our indirect Issued to West Consumer Service Telekomunikasi (“Mitratel”), our subsidiary by DQS Gmbh, in 2012. Division, by TUV Rheinland Cert subsidiary by United Register Valid until 2015. GmbH in 2011. Valid until 2013. for System (“URS”) in 2013. Valid until 2016. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 27
07 08 09
10 11 12
07 08 09 ISO 9001:2008 ISO 9001:2008 ISO 9001:2008 Certification Certification Certification Issued to Business Service Issued to Tbk. Telkom Flexi Issued to PT Telkom Akses, our Division by TUV Rheinland Cert Division, by TUV Rheindland Cert subsidiary, by TUV Rheinland GmbH in 2013. Valid until 2016. GmbH in 2011. Valid until 2014. Cert GmbH in 2013. Valid until 2016
10 11 12 ISO/IEC 27001:2005 ISO 9001:2008 The Second Phase of IPv6 Certification Certification Certificate: Connectivity to Issued to Infratel Division M Floor Issued to Enterprise Service Corporate Customers From th and Access Division 7 Floor Division by TUV Rheindland Cert Any Segment of Its Services Graha Citra Caraka Building, GmbH in 2011. Valid until 2014. Awarded by Ministry of by TUV Rheinland Japan Ltd. Communication and Information in in 2012. Valid until 2015 2013, to Infratel Division . Issued by SAP, in 2012. Valid until 2013. 2013 Annual Report Management Business Management’s 28 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 29
Important point of Board of Commissioner supervisory in 2013
- Supervisory function through the Board committees comprising of Audit Committee, Nomination and Remuneration Committee, and Risk and Planning Evaluation and Monitoring Committee.
- One of the achievement that applauds was the consistency of the Directors in focusing on the consolidation of different subsidiaries and business units at Telkom, to move ahead in matching steps under a shared vision.
- The quality of the practice of Good Corporate Governance (“GCG”) at Telkom.
Report From The President Commissioner
Jusman Syafii Djamal President Commissioner 2013 Annual Report Management Business Management’s 30 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Esteemed Shareholders, to undertake in creating new strength and form since its growth opportunities, Telkom initiation in 2009. Back then, Telkom records another year is on the right track to deliver Telkom started to diversify of excellent results in 2013, sustained and increased value into the telecommunications, sustaining fine achievements to shareholders in the years to information, media and in business growth and come. edutainment, and services, or financial performance that what we call the TIMES business were accomplished the year In the last two to three years, portfolio. The fundamental before. Along with strategic the strategic transformation transformation reflects initiatives that we continue of Telkom has gained in ongoing developments in the
Left to Right:
Johnny Swandi Sjam Independent Commissioner
Parikesit Suprapto Commissioner
Hadiyanto Commissioner
Jusman Syafii Djamal President Commissioner
Gatot Trihargo Commissioner
Virano Gazi Nasution Independent Commissioner Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 31
telecommunications sector or technological capability. All various elements in Telkom's driven by rapid changes and Within the Telkom Group, transformational agenda progress in information and the transformation promotes have been built by stages in communication technology. inorganic growth through a consistent and sustained development of new businesses, manner. The results are The transformation serves to including through the synergy evident on Telkom’s excellent unlock Telkom's potentials by or alliance with industry players, achievements in 2013. eliminating existing constraints in addition to organic growth in terms of organization through increased internal structure, corporate culture, productivity and efficiency. 2013 Annual Report Management Business Management’s 32 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
All various elements significantly to the increase in function through the Board our revenues and bottom line committees comprising of in Telkom's for the year. Audit Committee, Nomination transformational and Remuneration Committee, The Board of Directors has and Risk and Planning agenda have been also shown promptness and Evaluation and Monitoring built by stages in a diligence in the realignment of Committee. Overall, these business portfolio, promoting Board committees have consistent and higher growth in subsidiaries exercised their functions sustained manner. through adoption of business satisfactorily in accordance models well-suited to the with their respective areas of overall direction of Telkom's responsibilities. Board Assessment on the long-term growth strategy. The Performance of Directors development of broadband Excellent communications The Board of Commissioners infrastructure through the and interactions between applauds the consistency Indonesia Digital Network the Directors and the Board of the Directors in focusing ("IDN") project also progresses of Commissioners is shown on the principle of "first on track. Meanwhile, the size during joint meetings between thing first". In this case, the and distribution of Telkom's the two boards, which were consolidation of different capital expenditure continue regularly held at least once subsidiaries and business units to reflect our commitment in a month throughout 2013. at Telkom, to move ahead in investment on communication Through these interactions, matching steps under a shared infrastructure as the basis of the Board of Commissioners vision. The so-called Board of business growth. especially notes that Executive of Telkom Group has business plans at Telkom been influential in promoting The Board of Commissioners have been developed after synergy in the Group in terms supports the strategic conducting careful scrutiny of alignment of strategies initiative of the Directors of all relevant aspects. and business development with regard to international Decision-making processes, planning. The result is higher expansion, which should be and the implementation efficiency and productivity in pursued along with proven of these decisions, have the utilization of the Group's opportunities in the domestic been undertaken in a assets and resources, leading market. prudent manner, and in to higher business growth and strict adherence to clearly improved EBITDA. Supervision by the Board established mechanism and of Commissioners procedures. This reflects well, This is manifested, for example, The Board of Commissioners inter alia, on the quality of the in the successful execution of was closely involved with practice of Good Corporate one of the main programs of developments at Telkom Governance ("GCG") at the Directors, namely support throughout 2013, in its Telkom. We believe that this of our cellular business. In capacity as supervisory will be to our advantage as 2013, Telkomsel, the cellular body for the management of Telkom continues to grow and business arm of Telkom, has the Company. In addition to effectively compete with the once more shown a double- internal meetings of the Board, best players in the industry, digit growth, contributing we discharge our supervisory both at regional and global levels. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 33
Thus far, Telkom applauds the initiatives of members, is deemed necessary the Directors concerning to maintain and strengthen has successfully human capital development the Board's performance in transformed itself at Telkom, especially efforts anticipation of increased work on developing science and loads in line with expected into a dynamic player technology-competent human growth of Telkom and Telkom in one of the most capital that are capable of Group going forward. competing at a global level. competitive industries. Appreciation to This is a critical issue for Stakeholders The Outlook on Our Telkom, and thus the theme On behalf of the Board of Business of our Annual Report 2013, Commissioners, I would like Thus far, Telkom has "Creating Global Talents and to congratulate the Directors successfully transformed Opportunities" is deemed and staff at Telkom for their itself into a dynamic player in appropriate. The time will excellent achievements in 2013, one of the most competitive come when our global talents along with my appreciation industries. Moving into 2014, will prove to be a source for their dedicated hard work the Board of Commissioners of business innovations, over the years. The Board of has reviewed the work spearheading the creation Commissioners also extends programs prepared by the of new opportunities on the highest appreciation to the Directors. In our opinion, the global level to ensure shareholders, loyal customers the work programs and the sustainable growth in the and all our other stakeholders, targets set for 2014 represent future. for their vote of confidence a realistic indication of Telkom and steady support to Telkom. potentials to grow and develop Changes in the Board Your continuing vote of in the long run, along the I would like to take this confidence and support do lines set out in its Corporate opportunity to welcome motivate all of us at Telkom Strategic Scenario. Gatot Trihargo, the Deputy and the Telkom Group to of Business Services at the strive even harder for higher The Board of Commissioners Ministry of SOE, who was achievements. would like to remind the appointed to the Board of Directors to be cognizant Commissioners of Telkom at of regulatory aspect of the the Annual General Meeting domestic telecommunications of Shareholders of Telkom on industry in the formulation of April 19, 2013. The appointment the company’s business plans of an additional Board Jusman Syafii Djamal and strategies. Aside from that, member, making a total of six President Commissioner the Board of Commissioners 2013 Annual Report Management Business Management’s 34 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 35
We succeeded in maintaining our growth performance in 2013 above industry average.
- Financial performance above the targets set out in the Company’s Budget Plan.
- Named as “the Most Trusted Company” for the fifth time in a row in the Corporate Governance Perception Index survey.
- Quite optimistic about the business prospects in 2014 as we have established major programs same as in 2013.
Report From The President Director
Arief Yahya President Director 2013 Annual Report Management Business Management’s 36 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Estemeed Shareholders, During the year, we continue to initiatives in expanding broadband allocate our resources, including penetration. IDN contains the In line with the expectations of the largest portion of our capital following elements: id-Access (direct shareholders, we recorded another expenditures, to strengthen the to the home broadband access); year of encouraging achievements performance of our cellular business id-Ring (fiber optics backbone in 2013 following our satisfactory under Telkomsel, our subsidiary. infrastructure); and id-Con (ICT-based performance of the year before. Historically, Telkomsel is the largest convergence services as new sources Consistent and successful execution contributor to our consolidated of revenue going forward). of our strategic work programs during revenues. With improved synergy the last couple of years has resulted in within the Telkom Group, Telkomsel We also focused on international strengthened business fundamentals was able to maintain excellent expansion initiatives in 2013, targeting for Telkom to maintain and sustain performance in 2013, posting triple footholds in 10 countries by 2015. growth over the long term. double-digit growth in terms of Initiatives in international expansion revenues, EBITDA and profitability. are essential if we are to maintain The strengthened fundamentals are our growth momentum. As room reflected on our performance at the The Indonesia Digital Network for growth in the domestic market Indonesia Stock Exchange ("IDX") ("IDN") 2015 program represents our becomes smaller, the search for new during 2013, where prices of Telkom's shares showed a steady and upward trend exceeding the performance of the industry index. Our market capitalization grew by 18.8% to Rp216.7 trillion, the fourth largest at IDX by the end of the year.
Strategic Directions in 2013 We have consistently pursued our growth strategy on the principle of 'first thing first'. We do this by focusing the resources of Telkom Group on business segments that showed either a strong performance or an excellent future growth potential. In 2013, our main work programs are (i) strengthening the performance of cellular business, (ii) extending broadband penetration in Indonesia, and (iii) engaging in international expansion.
Left to Right:
Honesti Basyir Arief Yahya Director of Finance President Director
Indra Utoyo Rizkan Chandra Director of Innovation & Director of Network IT & Strategic Portfolio Solution
Sukardi Silalahi Priyantono Rudito Director of Consumer Director of Human Capital Service Management
Muhammad Awaluddin Ririek Adriansyah Director of Enterprise & Director of Wholesale & Business Service International Service Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 37
outlets of growth overseas become has developed the Global Talent allocated approximately 20% of necessary. In addition, international Program ("GTP") in order to equip our human capital budget towards expansion represents a strategy to our employees with the necessary creating this 'center of excellence'. diversify our business risks, in view capabilities in managing business in a Our strategic vehicle to fulfill this of the rapid developments and global environment. objective is Telkom Corporate continuing convergence of the TIMES University, whereby we strive to industry that has increasingly become The GTP initiative, in turn, is part of improve our advantages in leadership, borderless. our consistent endeavor within the competences, and global standard last couple of years in developing certifications. More importantly, international our human capital as a center of expansion is also a very effective excellence. This is our first and Company Performance in 2013 method by which to improve the foremost strategic initiative that will By fine-tuning our focus on business competences of our human capital. be key to winning the competition segments that demonstrated strong This is especially true in regard the and ensuring our sustained growth, we succeeded in maintaining inevitable competition with global existence into the future. True to our our growth performance in 2013 players in the industry. Thus, Telkom commitment, we have consistently above industry average. 2013 Annual Report Management Business Management’s 38 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
In terms of financial results, we to 24,993 employees of the The excellent performance and recorded an increase of 7.5% in Telkom Group in the Employee achievements of the Telkom Group consolidated revenues to Rp83 Stock Option Program have been recognized by domestic trillion in 2013. Revenues from cellular ("ESOP"). and international institutions alike. voice and from data, internet & IT b. On July 30, 2013, a total of Among the various awards that we services contributed 38.7% and 38.2%, 211.0 million shares in the received were: respectively, to total consolidated treasury stock acquired in 1. Asia’s Icon on Corporate revenues. EBITDA, meanwhile, grew the share buy-back program Governance in Corporate by 8.6% over last year's figure and Phase I year 2007 were sold Governance Asia Annual amounted to Rp43.6 trillion, with to market through a private Recognition Award 2013 in Manila, a relatively stable EBITDA margin placement. Philipina. of 52.5%. Net income improved by 2. We undertook a 1:5 stock split 2. The Best CEO, The Best CFO and 10.5% from Rp12.9 trillion in 2012 to corporate action on September 3rd Asia Best Managed Company Rp14.2 trillion in 2013. Our bottom line 2, 2013, to improve the trading from Finance Asia in Hong Kong. represents a return on assets ("ROA") liquidity of our shares at the 3. Best of The Best Service Provider of 11.1% and a return on equity ("ROE") Indonesia Stock Exchange. of the Year fro Telkom and Best of 23.5% in 2013, compared with 3. Telkom Corporate University Wireless Service Provider of the 11.5% and 24.9%, respectively, in the recorded a total of 1,010 Year for Telkomsel in Asia Pacific previous year. employees participating in the ICT Award 2013. GTP and 1,471 employees receiving 4. Certification of premium ethernet We also continue to maintain international standard professional MEF-CE 2.0 from Metro Ethernet adequate levels of capital certifications. Forum (MEF). Telkom is the first expenditures to support future 4. In the interest of business portfolio provider of ethernet services in growth. Total capital expenditures realignment, we reduced our Indonesia, the fourth in Asia, and in 2013 amounted to Rp24.9 trillion, majority shareholding at Indonua the thirteenth in the world. constituting 30% of total consolidated Telemedia, a subsidiary in the 5. The Best Provider and The Best revenues in that year, and an increase media business, and acquired Data Communication of The Year of 44.2% over our spent in the majority share ownership at from Frost & Sullivan. Telkomsel previous year. The largest portion, at Patrakom, a subsidiary in VSAT for also recognized as The Best 35.2% of total capital expenditures, marine broadband business. We Mobile Provider of The Year and was allocated for the expansion of also established PT Metra Digital The Best Mobile Broadband radio access network in our cellular Media as a sub-holding company Service of The Year. business. The remaining budget was to develop new business models mainly spent for the expansion of for our subsidiaries in the digital Meanwhile, among domestic broadband access and infrastructure media business. recognitions were: as well as for business development 5. A re-mapping of the structure of 1. The Amazing Star, Men’s of subsidiaries in Telkom Group in the Area Telecommunication Office Obsession 9 Tough CEO from tower business, IT and media business, (Kandatel) giving full authority Men’s Obsession magazine. and for international expansion. on operational activities in the The award are given to CEOs respective areas, with expected with achievement, capacity, Other noteworthy developments and benefits in faster execution of integrity, dedication, and achievements in 2013 include: work programs as well as in cost loyality in developing business 1. In accordance with the resolution leadership. and contributing to national of the GMS in 2013 concerning 6. Of the 10 countries initially development efforts. changes in the planned utilization targeted in our international 2. The Best Product Innovation of treasury stocks acquired in the expansion program, we have of Infrastructure Sector for share buy-back program phase successfully secured footholds INDIFINANCE, The Best I - IV, we have completed the in 7 countries or areas, namely Technology Innovation of following approved programs, Singapore, Hong Kong - Macau, Infrastructure Sector for Indigo namely: Timor Leste, Australia, Myanmar, and the highest recognition for a. On May 31, 2013, a total of 59.8 Malaysia, and the United States. innovation, The Best Corporate million shares in the treasury Innovation Culture & Management, stock acquired in the share We are indeed grateful that we have in BUMN Innovation Award. buy-back program Phase III been able to rise above challenges year 2009 were transferred and achieve excellent results. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 39
3. Best of The Best for the corporate consecutively that we received in the Business Prospects in 2014 and Best Chief Marketing Officer Corporate Governance Perception Looking back on our performance for Telkom EBIS Director in BUMN Index survey by the Indonesian during the last couple of years, we are Marketing Award. Institute for Corporate Governance justifiably optimistic of our prospects 4. Best Corporate of The Year and (IICG), and also recognized as 'Best for 2014. Our priority programs for CEO Of The Year in Anugerah of Asia' in Asia's Icon on Corporate 2014 are the same as in 2013. We Business Review. Governance polling conducted by will continue to allocate capital 5. Best For All Human Capital Corporate Governance Asia magazine. expenditures and other resources Criteria and Best CEO in support of our cellular business, Commitment from Indonesia In 2013, as part of the implementation targeting double-digit growth for Human Capital Study (IHCS). of GCG practices, we have fully Telkomsel, our cellular subsidiary. We 6. The Best CEO of Most adopted the International Financial will push ahead with the expansion Competitive SOE 2013, Most Reporting Standard ("IFRS") for our of broadband infrastructure in the Competitive SOE in Infrastructure financial reports. We have also begun Indonesia Digital Network 2015 and GCG Implementation Most with the implementation of IFRS in project. This will include construction Competitive Listed SOE in a number of our subsidiaries in the of the remaining network segments Anugerah BUMN 2013. Telkom Group. Further, we have also in the Sulawesi-Maluku-Papua Cable 7. Marketeer of The Year 2013 for conformed to the ASEAN Corporate System, accelerated deployment CEO of Telkom Indonesia. Governance Scorecard criteria, a of FITH broadband access, and the recognized quality benchmark of construction of additional Data Center Business and Operational GCG implementation by publicly facilities. At the same time, we will Constraints listed companies in the six ASEAN continue to promote and grow our In working towards our business and countries. business initiatives in the 10 countries operational targets in 2013, we faced a or areas that we have previously number of constraints related mainly Corporate Social Responsibility designated in our international to external developments during the In addition to our focus on business, expansion program. We will also year. Unfavorable macro economy we also continue to improve on strengthen our digital media business conditions, and especially the our Corporate Social Responsibility portfolio in 2014. significant depreciation of the Rupiah ("CSR") commitments to society against the US Dollar, have impacted and the environment. Through Words of Appreciation on our bottom line due to losses on the Partnership and Community On behalf of the Board of Directors, foreign exchange translation. It also Development Program ("PKBL"), allow me to express the highest of forced the suspension of a number we disbursed funds totaling Rp174 appreciation for the dedication and of telecommunication infrastructure billion in 2013. These funds were hard work of all employees that have projects, resulting in a less than spent entirely for various community led to such excellent achievements optimum spend of our capital welfare initiatives within the scope in 2013. I would also like to convey expenditures budget. The targeted of activities of the Community our sincere thanks for the trust and deployment of Fixed-to-the-Home Development Program. support that we continue to receive ("FTTH") broadband access was also from the Board of Commissioners, less than satisfactory, due to external We also allocated funds to our own shareholders, business partners, loyal factors related to location permits CSR programs, focusing on initiatives customers. or local regulations as well as the that promote higher proficiency preparedness of supporting industries. and utilization of Information and Long live Indonesia Communication Technology ("ICT") Long live Telkom Indonesia Corporate Governance among people and communities in The numerous recognitions that we Indonesia. Under the Indonesia Digital received over the years from a variety Community ("Indigo") program, we of external parties should serve as currently have a number of initiatives, a valid indication of the quality of one of the most progressive being Arief Yahya our corporate governance practice the IndSchool program. We were also President Director/CEO ("GCG"). active helping natural disaster victims In 2013, just to mention a few, we were through the Telkom Peduli program, awarded the citation of "Most Trusted as well as through our participation Company", the fifth such award in the BUMN Peduli humanitarian aid program administered by the Ministry of SOE. 2013 Annual Report Management Business Management’s 40 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis Business Overview
42 56 82 Telecommunication Industry in Telecommunication Services Network Infrastructure Indonesia Tariffs 86 43 58 Network Development Corporate Strategy Customer Services 88 45 61 Human Capital Business Outlook Consumer Protection
46 62 Business Portfolio Billing, Payment and Collection
54 64 Distribution and Marketing Strategy Risk Factors Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 41 2013 Annual Report Management Business Management’s 42 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Telecommunications Industry in Indonesia
Indra Utoyo Director of Innovation & Strategic Portfolio We continued Corporate strategy governance to adapt to the Our strategic initiatives support the comprehensive transformation of our dynamics of the organization, business portfolio, infrastructure, systems, and corporate culture. industry by updating our strategic initiatives With directional strategy, we plan to seek opportunities for inorganic growth through acquisitions & alliances (“A&A”) and with a focus on corporate restructuring. implementing the TIMES business
The increasingly open and tight competition framework among telco operators, which is expected to result in improved service quality, higher and strengthening industry efficiency. internal consolidation
Indonesia's telecommunication industry has shown rapid growth ever since the transformation of the telecommunication sector from monopoly to competitive, enacted by the Government through Law No.36 Year 1999 on Telecommunication. This growth is moreover further accelerated by advances in communication technology using radio frequencies, as alternative telecommunication means to communication through cable networks and satellite.
Compared to the growth of fixed wireline telephony for many decades that eventually stagnated at only around 9,4 million lines, the telecommunication teledensity in Indonesia has since experienced a very significant jump in less than 20 years to more than 310 million lines, driven primarily by the growth of cellular telephone, as well as fixed wireless telephone. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 43
The cellular telephony business also result in improved service quality, new corporate culture we have continues to grow through a variety higher industry efficiency, and established the “Telkom Corporate of innovations as well as constant constant innovations in products University”, which aims to educate adaptation to changes in market or services, and will eventually our employees in order to meet demands and consumer preferences. drive more growth in Indonesia's international standards in the While the growth in voice and Short telecommunication industry. TIMES industry. Messaging Service (“SMS”) has showed signs of declining in recent CORPORATE STRATEGY 2. Focus on high growth or high years, there was at the same time a Our strategic target to achieve our value portfolio marked strengthening in the growth objectives in 2013 was improving Deploy resources to the parts of data communication and mobile market capitalization. Our strategies of our portfolio with the highest internet access services. consisted broadly of: growth and value potential will - Directional strategy: sustainable ultimately generate the optimum There are a number of factors competitive growth. value for Telkom Group. This or conditions that point to good - Portfolio strategy: converged includes supporting Telkomsel growth prospects for Indonesia's TIMES portfolio. in order to sustain its growth telecommunication industry, including: - Parenting strategy: strategic and market position as well as 1. Indonesia's demographics, with guidance. developing broadband through the fourth largest population in our Indonesia Digital Network the world and a fast growing In 2013, we continued to adapt to the program. middle class segment, as well as dynamics of the industry by updating Indonesia's economy that has our strategic initiatives with a focus 3. Accelerate international shown stable and respectable on implementing the TIMES business expansion growth in recent years, are framework and strengthening internal International expansion through expected to drive further consolidation. We believed that partnerships, alliances and demands for telecommunication these strategic initiatives support acquisitions, giving priority to the and data services. the comprehensive transformation Asia Pacific region, the Middle 2. While internet penetration in of our organization, business East and North Africa. Our the country is still relatively low portfolio, infrastructure, systems, and subsidiary Telin will be our main compared to peer countries in corporate culture that we believed vehicle for international expansion. the region, people in Indonesia is was necessary to realize our vision of becoming increasingly exposed, becoming a leading TIMES company 4. Cost transformation and are increasingly adopting in the region. Besides providing a Improve cost efficiency and global trends in digital lifestyle, as new growth stream, we believed that infrastructure capability, by shown especially in the marked our TIMES business also helped to utilizing technology (multiplay/ increase of smartphone usage promote the sustainable growth of multiservice/multiscreen), leverage with more affordable prices as our traditional telecommunications existing asset (empowerment of well as higher levels of social business. the less productive assets) and networking media activities. create a creative business model We expect that the growth of To achieve the objective of these (through partnerships to share mobile internet services will three corporate broad strategies, costs). continue to be fueled on the we have developed the following 10 back of the increasing popularity strategic initiatives: 5. IDN (id-Access, id-Ring, id-Con) of smartphones, tablets and 1. Center of Excellence Development other internet-enabled mobile In order to improve our business We plan to support our MP3EI devices in Indonesia, faster data performance and implement a (Government’s Master Plan for transmission of wireless networks, and increasingly affordable smart We believe that the shifting of consumer devices and mobile internet services. preference towards digital lifestyle will serve as 3. The increasingly open and the key to unlock our potential business growth tight competition among telco in the future, that will lead to the increase in operators, which is expected to demand for broadband services to compensate the decline of our legacy business. 2013 Annual Report Management Business Management’s 44 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
the Acceleration and Expansion experience and customer DKI Jakarta, West Java & Banten, of Indonesia's Economic engagement through exploration Central Java, East Java, Kalimantan Development) target of attaining of best technology, development and East Indonesia area. broadband access to 30% of appropriate business model and households in Indonesia by the partnership scheme. 10. Increasing synergy within Telkom year 2015. IDN (Indonesia Digital Group Network) is also intended to 8. Execution of the best subsidiary Optimalization synergy at the bridge the digital divide. management system strategic and operational levels, as Provide strategic guidance to well as single main function and 6. Indonesia Digital Solution (“IDS”) our subsidiaries is important for cross functions. – Convergent services in digital the success of Telkom Group. ecosystem solution In general, guidance provided In order to implement our directional Developed the IDS strategic to our subsidiaries will focus strategy of sustainable competitive initiative to support the Indonesia on the aspects of planning and growth, we plan to seek opportunities Digital Network program such optimalization of synergy within for inorganic growth through as the digital media ecosystem the Telkom Group. acquisitions & alliances (“A&A”) and (cooperation with best partners corporate restructuring, as described and differentiation through 9. Managing portfolio through below: innovative business models) and Board of Executives (“BoE”) and 1. A&A program business solution ecosystem Chief Regional Officer (“CRO”) A&A implementationis part of (accelerate development of Manage our subsidiaries our growth strategy objective to innovative business ecosystem & subsidiaries through a Board of mitigate risks, develop capital, convergence services for excellent Executives, comprising the heads increase competency as well as customer experience) space. of four businesses, namely, mobile accelerate access to synergy and (represented by Telkomsel), value contribution. In 2013, we: 7. Indonesia Digital Platform (“IDP”) multimedia (represented by – acquired all shares of PT Patra – Platform enabler for ecosystem Metra), infrastructure (represented Telekomunikasi Indonesia development by Mitratel) and international (“Patrakom”) and enabling Developed IDP strategic initiative (represented by Telin), and seven us to integrate Parakom’s to seek enhance overall customer CROs representing Sumatera, line of business, namely Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 45
satellite-based closed fixed in service of development which was launched in 2011. One of telecommunications network and modernization network the three pillars of the master plan is provider, as well as providing customers to the broadband development of national connectivity, communication network and fiber optic network. including development of the and solution, with a permit information and communication as Operator of Micro Earth BUSINESS OUTLOOK (TREND technology sector. This is in line with Stations Communications INFORMATION) our IDN program and our strategic System ("SKSBM"). The significant trends, or initiative on the development of - entered into strategic developments that have had in our Nusantara Superhighway partnership with PT Trans recent years, and may have in the project (i.e. the Palapa ring project Corpora and PT Trans Media future, a material impact on our known as id-Ring), an optical-based Corpora by selling shares of results of operations, financial network of six interconnected Indonusa (“Telkom Vision”) condition and capital expenditures, rings which links Indonesia’s to strengthen Telkom Vision include (i) an increase in cellular main island groups, namely the position in Pay TV industry. telephone revenues with increases Sumatra ring, the Java ring, the - acquisition of PT Pojok Celebes in subscribers, minutes of use, Kalimantan ring, the Sulawesi ring, Mandiri who engaged in ARPU and regulatory aspects (ii) the Bali and Nusa Tenggara ring business-ticket booking & an increase in revenues from data, and the Maluku and Papua ring. We online applications through internet and information technology expect that the development of POINTER which has been services revenues, and (iii) a this extensive telecommunication connected with the national decrease in fixed lines telephone network connecting all the six major airline and a large number of revenues. economic corridors will allow us to hotels in Indonesia. offer more value-added services, We believe favorable external and to reach more customers in a 2. Corporate restructuring factors, among others, will support much larger scale, as well as provide Corporate restructuring our ability to continue to drive opportunities for our products and implemented through unit revenue growth from data, internet services in the IMES areas. business spin-off program, and information technology services possible initial public offering as well as from mobile phone We believe the shift in consumer of subsidiaries, established new services. Indonesia's economy preferences towards a digital lifestyle subsidiaries and capital injection. In recorded a relatively robust growth will be a key factor that we expect 2013, the corporate restructuring in recent years despite a sluggish will drive our business in the future. program that we already global economy. With good We believe this will lead to continuing implemented such as: economic fundamentals, Indonesia’s increase in broadband demand - business splitting: Metra national economy is expected to (including mobile broadband), Digital Media splitting from our continue to grow steadily, with a compensating for the decline of indirect subsidiaries, Infomedia; corresponding increase in consumer our legacy business (both fixed - established new subsidiaries purchasing power, which in turn is wireline and cellular telephone through overseas expansion expected to result in higher demand revenue and SMS revenue). We such as in Malaysia (MVNO), for telecommunications services, expect the increase in demand for Australia ( IT business process for both basic telecommunications data communications and corporate outsourcing & solution), services as well as the more internet to continue next year as we Timor Leste (mobile network sophisticated value-added services increase our capacity to cover more operator), Hong Kong - Macau that are part of the increasingly small and medium enterprises. (MVNO), Taiwan (MVNO), prevalent digital lifestyle in modern Myanmar (international societies. For further explanation of these network), and United States significant developments, see of America (international In the longer term, Indonesia’s “Management's Discussion network); and economy is also expected to enjoy and Analysis of the Company’s - capitalization strengthening, support from Government initiatives Performance”. increase competence such as the Master Plan for the and certification to our Acceleration and Expansion of subsidiary Telkom Akses Indonesia’s Economic Development, 2013 Annual Report Management Business Management’s 46 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Business Portfolio
Telkom Group’s We are a State-Owned Enterprise and currently the largest telecommunication service and network provider in Indonesia. business portfolio We serve millions of customers throughout Indonesia with a includes fixed wireline complete range of telecommunications services that include fixed wireline and fixed wireless telephone connections, cellular services, services, fixed wireless network and interconnection services, as well as internet and data services, mobile communication services. We also provide services in information, media and edutainment, including cloud-based and server-based services, internet and managed services, e-Payment and IT enabler services, Pay-TV, as well data communication as e-Commerce and other portal services. We posted revenues of services, network Rp77,143 billion and Rp82,967 billion, respectively, for the years ended December 31, 2012 and 2013. services, interconnection Fixed line telephone services include local, direct long-distance (“DLD”), and international call services, as well as other services, and telecommunications and supporting services. Fixed wireless services additional services. include local and direct long-distance CDMA-based telephone Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 47
connections, and other products, services and solutions (“IMS”) services which telecommunication services. ranging from our legacy business combines wireless and Cellular services comprise to the new economy business fixed line technologies cellulars telecommunication (“NEB”). Our business portfolio is for voice and data service. Our telecommunications- grouped into the following lines communications. related business may experience of business: certain seasonal effects. We succeeded Cellular and fixed wireless A. Telecommunications in improving the communications tend to increase Business performance of our around the Ramadhan lunar Our telecommunications fixed wireline business month and the culmination business portfolio includes line through the of the Eid festivity, as well as (i) fixed wireline services, implementation of a during the December holiday (ii) fixed wireless services, “More for Less” program season, while fixed line (iii) cellular services, in 2013, where subscribers communications from homes (iv) internet and data are able to get deeper and offices may decrease when communication services, discounts with greater there are fewer working days in (v) network services, telephone usage such as the period or a greater number (vi) interconnection services, unlimited talk time using of subscribers are on vacation. and (vii) ancillary services. the house phone, unlimited In 2013, except for OLOs who broadband access with use our interconnection services 1. Fixed Wireline Services various bandwidth options and Telkomsel’s employee Our fixed wireline services and television channels cooperative (“Kisel”), none of our include plain old telephone with attractive program customers accounted for more services (“POTS”), value- packages. than 1% of our total revenues. added services (“VAS”), Intelligent Network (“IN”) 2. Fixed Wireless Services A substantial majority of our services and session Our fixed wireless revenue has and continues to initiation protocol (“SIP”) business, which uses come from telecommunications- services. IN services are related services, including data IP-based network services kartuHalo is still and internet services. As a that are connected to company that provides TIMES, our exchange systems recorded as the most we continue to encourage and telecommunications widely used postpaid innovations in sectors other than network. Session Initiation telecommunications, and capture Protocol services are IP cellular services since synergies among all of our multimedia subsystem introduced in 1995 2013 Annual Report Management Business Management’s 48 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
limited mobility CDMA simPATI starter pack, technology, is managed by - kartuHalo. In 2013, the simPATI Loop, our Wireless Broadband kartuHalo launched targeting the high- Division under the a new package, the value youth segment trademarks "Telkom Flexi" HaloFit, targeting the with an enhanced data or "Flexi". In 2013, we young professional package with additional optimized existing BTSs segment with three lifestyle content for for our fixed wireless main value added movies, music and network, but did otherwise services bundled magazines. ”walk with further develop our fixed with the core services simPATI” program wireless network or of voice and SMS. also launched, which conduct any new product The value added invited the youth to launches or promotional services comprised participate in a video campaigns activities for data services and clip project and drew this service. international roaming positive attention from services. kartuHalo also customers in digital 3. Cellular Services launched kartuHalo media. We provide cellular Family. This new communications services product, which is – Kartu As is a prepaid using GSM technology targeted at families, service that bills through our subsidiary, is offered to new and customers based on Telkomsel. Cellular services existing subscribers, seconds of talk time. (excluding mobile data and provides a number One of the programs services) remained the of benefits such as Kartu As products largest contributor to our additional minutes launched in 2013 was consolidated revenues in of calling to other the Kartu As PlayMania 2013. We have two primary members within the starter pack, which types of cellular products HaloFamily group, targets the early youth and services, postpaid convenient payment consumer segment. services represented by through single billing, The product features “kartuHalo” and prepaid and exclusive content edutainment content services represented by bonuses. Members aimed at young users in simPATI and Kartu As. within the HaloFamily the segment. Another group are able to top- feature of this service In 2013, with the increasing up through the primary is the emergency call demand for data services member. service, which enables from customers, Telkomsel users of Kartu As added various attractive - simPATI is a prepaid and competitive data service that can be services to its range of purchased at any "Indonesian Wi-Fi" was products and services to cellular shop in the launched in 2012 to complement its legacy in form of starter packs voice and SMS. In order to and top up vouchers. meet the needs of the accelerate the adoption In 2013, among other community in accessing of 3G mobile devices, efforts, we refreshed Telkomsel also intensified our simPATI starter Wi-Fi based internet at collaboration with device pack with more the airports, shopping principals and distributors benefits to target data of local and global brands users and higher value malls, hospitals, of mobile devices by customer acquisition. introducing affordable 3G We also launched a universities/schools and mobile device bundled new edition of our cafes packages. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 49
PlayMania to make technology, is offered blackberry package free call and SMS to under the commercial and non package data two favourite numbers. name “Speedy”. We services. We also launched also provide a prepaid - SMS services are "Recharge Bonus on-demand, “pay as provided to mobile and Gokil" program , which you use” broadband fixed wireless telephone drew an enthusiastic internet service using subscribers. response from Kartu Speedy or Wi-Fi access - “TelkomNet instan” As subscribers. The under the commercial is our dial-up internet Recharge Bonus Gokil name of “Speedy access services. program is designed Instan”. We also offer - Wi-Fi/hotspot is a to provide bonus value a triple play package wireless access solution each time the user combining broadband for intranet and mobile engages in a top-up internet (Speedy), internet data services transaction. telephone services in a particular area by and content (UseeTV, utilizing our and other 4. Broadband and Internet home monitoring and ISP’s payment facilities, Services music-Melon) under or in bulk using We provide a range of the commercial name Customer Premises products and services “Indihome”. Equipment-based in data communication - Cellular data Wi-Fi technology. In and internet services as communication, 2012, we launched described below: Telkomsel provides “Indonesia Wi-Fi or @ - Broadband internet, internet and mobile wifi.id” to meet the our primary non- data communications need for Wi-Fi based cellular based services through its internet service at broadband internet mobile cellular network, public places such service, using ADSL with the commercial as airports, shopping and fiber optic name “Flash”, malls, hospitals, 2013 Annual Report Management Business Management’s 50 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
universities/schools, These services can be Save” for regular cafes, and other public easily accessed from international calls. places. Our “Indonesia any device that has Both services can be Wi-Fi” service has a Wi-Fi capability by the accessed by dialing minimum speed of 10 FlexiNet Unlimited or a special prefix for Mbps to accommodate, Flexi Mobile Broadband international calls. To offloading, retail and username and the provide these services, other uses. password in each we cooperate with 79 - “FlexiNet” is our hotspot. international wholesale internet access service - Virtual Private Network carriers that can that uses the Telkom (“VPN”) is a virtual support our IDD call Flexi fixed wireless private network service services worldwide, to network. Our “Flexi that uses the internet deliver VoIP traffics. Hotspot” service for secure connection - ISDN PRA is a provides customers to remote sites. digital network to who wish to enjoy - “Astinet” provides facilitate multimedia high speed internet high quality internet telecommunications access through a access using a default services, using wider wireless internet internet gateway and bandwidth as well connection that is public IP address for as inter-terminal supported by our a dedicated, fixed digital systems to hotspot infrastructure. communication line accommodate high- 24 hours a day. speed, high-quality - VoIP. We provide and high-capacity affordable international voice, data and video call services through communications our premium VoIP through a single service package channel. We also “Telkom Global-01017” provide ISDN-based as well as “Telkom internet access. - DINAccess is a wireless communications service with dedicated access to provide LAN interconnection services and multimedia services at a speed adjustable to customer needs. - Global Datacom is a data communications service that lets corporate customers connect their headquarters with branch offices or clients across the globe. We work with global partners through Telin, our subsidiary, Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 51
in providing these for subsequent sale to to five year periods. services. their customers. - Metro Link is a - Value-added service 6. Interconnection Services Metro-network-based Datacom provides We also earn revenue from connectivity services additional facilities that other telecommunications that accommodates offer added value to operators that utilize point-to-point, data communications our extensive network point-to-multipoint customers. infrastructure in Indonesia, and multipoint- both for calls that end at to-multipoint 5. Network Services or transit via our network. communications. We directly manage Similarly, we also pay - Metro I-net is a high the provision of interconnection fees to capacity data network network services to other telecommunications solution based on IP customers comprising operators when we use (Internet Protocol) or of our business partners, their networks to connect ethernet that provides commercial businesses a call from our customers. flexibility, ease of use and OLOs. Our network Interconnection services and effectiveness services include satellite that we provide to other as well as quality transponder leasing, telecommunications assurance for corporate satellite broadcasting, operators comprise and SME customers. VSAT, audio distribution, domestic and international - Port Wholesale as well as satellite-based interconnection services. provides wholesale and terrestrial-based In 2013, we have increased rental of port remote leased lines. Our network our efforts to optimize access servers to services customers may the capability of Telkom internet service enter into short-term deals Group through exploiting providers, content for several minutes of synergies among Telkom, service providers and broadcasting to longer- Telkomsel and Telin with corporate customers term agreements for one respect to interconnection 2013 Annual Report Management Business Management’s 52 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
services. business through our payments to service or subsidiary, Mitratel. goods providers such 7. Ancillary Services as PLN, Telkom, PDAM, We have exclusive B. New Economy Business KAI, and others through agreements with some (“NEB”) and Strategic collecting agents investors under revenue Business Opportunities that include banks, sharing arrangements to Portfolio cooperatives, BPR, expand fixed line phone NEB and Strategic Business convenience stores, and services, public card Opportunities are a part others. phones (including their of our IME portfolio. We - Remittance is money maintenance), data and have designated our transfer service where internet networks, and subsidiary, Telkom metra, as neither the money ancillary facilities related a sub-holding company that sender nor the recipient to telecommunications. focusses on our IME business need a bank account development. to complete a transfer, For more details about as transfers can be the scheme of additional Our information business accomplished using services, please see portfolio includes: only a mobile device. Note 39 in the 1. IT Outsourcing or - e-money provides Consolidated Financial Managed Application services to customers Statements. which provides cloud- who wish to manage based and server-based money electronically We also operate other management services and through certain media supporting and ancillary IT consulting services. (mobile, prepaid card, businesses, which or a virtual account include the lease and/ 2. e-Payment/Payment that can be accessed or supply of BTS to services, including the via the Internet) for other cellular operators following: use in electronic and the provision - Billing payment, a transactions. of various support service that allows - e-Vouchers or Telkom facilities. We manage our customers to make Voucher is a single telecommunications tower Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 53
voucher issued by us Our Media and Edutainment accessed from Telkom's that can be used to business portfolio includes the internet network, purchase or recharge following : offering free content any of our services, 1. Television broadcast such as video-on- such as for Kartu As, services comprising the demand programming, simPATI, Flexi Trendy, following live TV, internet radio, and Speedy Hotspot. - Pay TV by satellite, a pay and some pay video TV service broadcasted programming. Similar 3. IT enabler services over satellite links to UseeTV Cable, the include business offering premium-grade OTT TV is also capable process outsourcing contents in news, sports, of allowing play back of and knowledge process entertainment, and program content from outsourcing, which consist others. the last three days. of: - IPTV, an Internet - Network centric Protocol-based television 2. Advertising is a value added services, ("IPTV") under the commercial service for the comprising IT-based commercial name promotion of products value-added services ”UseeTV Cable”. The or services of any third for data and phone, service is delivered using party that are presented security services, the Speedy broadband in digital or print media, and server and access network, and such as radio, television, storage services for offers ”pause and internet, newspapers, connectivity customers. rewind” features for brochures/leaflets and - Integration services, contents such as billboards. comprising integration video-on-demand services for network programming, FTA TV, 3. Portal Services facilitates and hardware premium TV, internet content aggregation associated with radio and TVoD, allowing and distribution. In Customer Premises playback of program addition to sales and Equipment (“CPE”), content from the last payments related to our integration services seven days. products and services for applications - OTT TV (Over the conducted through our and software, and Top TV), an internet e-Commerce portal, our integration services for TV service under the portal e-store and on- computer hardware. commercial name device portal services also ”UseeTV” that can be accommodate the sale and distribution of content OTT TV (Over the Top TV), an internet TV or applications such as games, applications, news, service under the commercial name ”UseeTV” sports news, educational that can be accessed from our internet network, content, music, ring back tones, SMS content and offering free content such as video-on-demand others, which can be programming, live TV, internet radio, and some downloaded directly by customer mobile device pay video programming. As with UseeTV Cable, or internet users. Content or applications can be OTT TV can re-broadcast up to the previous obtained either at a certain three days price or free of charge. 2013 Annual Report Management Business Management’s 54 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
3. Partnership Stores are extensions of our distribution channels, in cooperation with a variety of third-party marketing outlets such as computer or electronic stores, banks, and others.
4. Feet on The Street are sales agents that conduct direct marketing of our products, Muhammad Awaluddin particularly for our Speedy Director of Enterprise & products, through door- Business Service to-door sales, open table discussions, exhibitions, Marketing management product demonstrations, and other similar activities. Plasa Telkom and GraPARI outlets are our direct distribution channels. 5. Authorized dealers and retail outlets are sales and distribution outlets for a variety of telecommunication products such as Speedy Instan cards, Flexi We implement a comprehensive marketing strategy to strengthen the brand and subscription cards, starter increase sales, including through marketing packs, prepaid SIM cards communication activity and development of and top-up vouchers. These product and service distribution network dealers are non-exclusive, and they receive a discount on all of the products they receive. We set our telecommunications tariffs in accordance with government regulations. Retail outlets also include outlets jointly operated by us, Telkomsel and PT Pos Indonesia, as well as other outlets such as banks.
6. Account Management Teams DISTRIBUTION AND lower scale outlet of cellular who manage relationships MARKETING STRATEGY services, GeraiHalo, managed with our individual, business, The following are the primary by third party. and corporate customers. distribution marketing channels for our products and services: 2. Contact centers handle 7. Telkom Solution Houses are enquiries regarding our places where an enterprise 1. Plasa Telkom and GraPARI products, services and customer can obtain are outlet function as walk- customer transactions. Our information on a variety of in customer service points, contact/call centers currently TIMES solutions, products where customers have do not handle payments. and services, and the latest access to the full range of Our contact centers also technology. At these Telkom our products and services. operate our customer Solution Houses, we provide GraPARI is specialize for care (telecaring) and free live demonstrations (such cellular services managed by telemarketing programs. as Speedy, Hotspot, PDN, Telkomsel. In other hand, a Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 55
Effective marketing communication activity plays an important role in ensuring that product offerings reach the intended segment or potential customer
IP-Phone), live ensuring that product offerings demonstrations for reach the intended segment In the distribution of Telkom commercial products or potential customer . In Flexi and Speedy Instan card (such as video conference), addition to marketing using (SPIN Card) and mobile cellular enterprise consultation and traditional (offline) media such products, we engage the ecosystem business solutions as advertisement placement partnership of best-performing for customized TIMES for in television, print media, dealers, giving each of these corporations, and simulated newspaper, and radio as well partners a designated and demonstrations (such as as during local events, we have exclusive sales area ("cluster") e-Payment & VPN over GSM also begun to intensify product to manage. As of December 31, and Flexi). marketing through the digital 2013, we have partnerships with (online) media within various 53 official dealers that manage 8. SME Centers function as digital communities as well as more than 83 thousand of retail a communication center building popularity in social outlets in 96 clusters. In addition, supported with advanced networks. We also have partnership office facilities, a community arrangements with seven center where our customers Plasa Telkom and GraPARI national retail partners and 17 can interact, and a commerce outlets are our direct distribution national banking partners center especially for channels. In addition to its e-Commerce solutions. function as a direct channel for For kartuHalo, Telkomsel focuses our product distribution, these on corporate and professional 9. Our website which provides outlets also handles after-sales customers with high usage customers information on the service for our customers, and volumes. Marketing for this entire range of our products disseminates information on segment is undertaken by and services, multimedia as programs, promotions and special corporate account teams, well as telephony, through the products to customers and which are also responsible for official company websites at end users. This distribution maintaining long-term relations www.telkom.co.id and channel enables us to monitor with our customers through www.telkomsel.com and improve service quality, efforts to provide solutions complaint handling performance, suitable to the needs of the Marketing Strategy and customer satisfaction level in corporate customers. Effective marketing general. As of December 31, 2013, communications activity we operated 572 Plasa Telkom The simPATI and Kartu As plays an important role in and 86 GraPARI outlets through products are designed to appeal Indonesia. 2013 Annual Report Management Business Management’s 56 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
towards a much wider target events, the BLC facilities can services which is connected segment and particularly to also be used by communities through fixed line network younger customers. Telkomsel for events related to education consists of the following: uses above and below the line and information technology - activation fee marketing channels to promote development. As of December - monthly subscription its brands, including campaigns 31, 2013, we operate a total of charges aimed at schools and special 218 BLCs in various locations - usage charges interest groups, placing print throughout Indonesia. - additional facilities fee. advertisements, billing insertions, point-of-sale presentations, Market Share B. Mobile cellular telephone and events promotion and The biggest contribution tariffs sponsorship. to our revenues comes On April 7, 2008, the MoCI from cellular revenues. For issued Decree No.09/PER/M. In keeping with changes in information regarding our KOMINFO/04/2008 (“MoCI consumer behavior and lifestyle cellular market share, see Decree 09/2008”) regarding trends, we consistently develop “Additional Information (for ADR “Mechanism to Determine sales partnerships on a national Shareholders) - Competition – Tariff of Telecommunication scale with number of partners. Cellular”. Services which Connected These comprise of sales of through Mobile Cellular bundled products through sales TELECOMMUNICATIONS Network” which provides outlets owned by the respective SERVICES TARIFFS guidelines to determine partner, such as Samsung and We set our telecommunications cellular tariffs with a formula Intel, among others. tariffs in accordance with consisting of network element government regulations. cost and retail services As part of our strategy to Under Law No.36/1999 and activity cost. promote internet technology Government Regulation to the broader public and to No.52/2000, tariffs for operating Under the Decree, the improve customer knowledge telecommunications network cellular tariffs of operating about broadband internet and/or services are determined telecommunication services products and application, we by providers based on the tariff which connected through have engaged in an initiative to type, structure and with respect mobile cellular network develop Broadband Learning to the price cap formula set by consist of basic telephony Centers ("BLCs"). At our BLCs, the Government. services tariff, roaming tariff we provide facilities including and/or multimedia service air conditioned rooms, personal A. Fixed line telephone tariffs tariff, with the following computers with internet The Government issued a structure: connections, blackboards, new tariff adjustment formula - activation fee educational materials, and in 2008, which is stipulated - monthly subscription teachers and other speakers in the MoCI Decree No.15/ charges from our internal as well as PER/M.KOMINFO/4/2008 - usage charges in cooperation with other dated April 30, 2008 - additional facilities fee. institutions. The BLC program concerning “Procedure for primarily targets non-internet Tariff Determination for Basic C. Interconnection tariffs users, as well as communities Telephony Service which ITRA, in its letter No.227/ that are interested in deepening Connected through Fixed BRTI/XII/2010 dated their knowledge on internet Line Network”. December 31, 2010, and information technology decided to implement topics, such as students and Under the Decree, the tariff new interconnection tariffs collegues. In addition to facilitate structure for basic telephony effective from January 1, 2011 Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 57
services of network lease. Pursuant to the MoCI Decree, the Government released Director General of Post and Telecommunication Decision Letter No.115 of 2008 dated March 24, 2008 which stated “The Agreement on Network Lease Service Type Document, Network Lease Service Tariff, Available Capacity of Network Lease Service, Quality of Network Lease Service, and Provision Procedure of Network Lease Service in 2008 Owned by Dominant Network Lease Service Provider”, in conformity with our proposal.
E. Tariff for other services The tariffs for satellite lease, telephony services and other multimedia services are determined by the service provider by taking into account the expenditures and market price. The Government only determines the tariff formula for basic telephony services. There is for mobile cellular networks, for SMS interconnection no stipulation for the tariff of satellite mobile networks tariffs from Sender Keep other services. and fixed local networks and All (“SKA”) basis to a cost- effective from July 1, 2011 for based interconnection fee F. IMES tariffs fixed wireless local network calculation (“Non-SKA”) In providing IME services, with a limited mobility. effective from June 1, 2012, our New Economy Business, for all telecommunication we work with a number of Based on Director General provider operators. partners. These collaborations of Post and Informatics are based on considerations Decree No.201/KEP/DJPPI/ D. Network lease tariffs of capability, time to market KOMINFO/7/2011 dated July Through the MoCI Decree No. and idea creation. Tariffs 29, 2011, ITRA approved our 03/PER/M.KOMINFO/1/2007 for our IME services are revision of RIO regarding the dated January 26, 2007 determined in agreement interconnection tariff. ITRA, concerning “Network Lease”, with these partners based on in its letter No.262/BRTI/ the Government regulated the scheme of cooperation XII/2011 dated December the form, type, tariff structure, between us and each 12, 2011, changed the basis and tariff formula for respective partner. 2013 Annual Report Management Business Management’s 58 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Hong Kong. Telkomsel’s customer service point had 408 outlet consisted of 86 GraPARI and 322 GeraiHalo. We also have 268 unit mobile customer service point namely Mobile GraPARI.
2. Contact Center Our contact centers are Sukardi Silalahi call centers that allow Director of Consumer customers to make Service enquiries regarding our products and services, Customers management billing, promotional offers and submit complaints We manage customers with classify into two by dialing "147" from any groups, personal customers and corporate phone line. We operate customers. contact center facilities in Medan, Jakarta and Surabaya.
For cellular subscribers, We offer service level guarantees, which guarantee a specified minimum level of Telkomsel operates call service to customers in terms of product centers under the brand quality and customer handling. “Caroline” which is the abbreviation of “Customer Care Online” Caroline is accessible through the We routinely engage independent market analysts to conduct surveys and market research on our customers' levels of 88.5% satisfaction and loyalty. In 2013, we achieved CSI average As part of the following levels of the Customer implementing the Satisfaction Index (“CSI”) and Customer Loyalty Index (“CLI”). principles of good corporate governance ("GCG") towards customers and CUSTOMER SERVICE 1. Plasa Telkom & GraPARI We provide our customers a Plasa Telkom is a walk-in community, and number of value-added services customer service point in line with our mission which allow them to conveniently at which customers to provide the best access a wide range of our can access information and convenient products and services. on a range of products services, as well as and services, including A. Personal Customer Segment billing, payment, quality products and In order to facilitate our account suspension, competitive prices, individual customers' access promotional deals and we continue to our products and services, submit complaints. As of to maintain we operate a network of Plasa December 31, 2013, we communication Telkom and GraPARI outlets, maintained 572 outlet and contact centers and also Plasa Telkom in Indonesia with customers provide services through and we opened an our websites and on-line overseas Plasa Telkom in applications. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 59
following numbers: customers can download through community - “133” by kartuHalo the application for use on management, value added users; Android and BlackBerry resellers, marketing and - “155” (24 hours, free) Appworld. sales using web-based and “188” (24 hours, technology, and tele- chargeable) by simPATI B. Corporate Customers account management. and Kartu As users; and We categorize our corporate - “021-21899811” in customers into business, Our Enterprise Service Jakarta, “022-2553811” enterprise, wholesale and Division serves large in Bandung, “031- international groups based on enterprise customers 8403811” in Surabaya, a numbers of criteria such as including State-Owned “061-4578811” in contribution to our revenues, Enterprises, national Medan, "0411-438150" our customers' geographic corporations and in Makassar or scope of operations and the multinational corporations. “08071811811” in other type and range of products Our Enterprise Service areas of Indonesia, and services procured from Division account managers when accessed us. As part of our strategy and respresentatives through cell phones to provide streamlined managers manage not operated by us customer service, we operate relationships by or through fixed account management teams conducting visits to telephone lines. to manage our relationships our clients' offices. We with our corporate clients categorize enterprise 3. Web-in who are supported by the customers into thirteen Web-in is our facilities Telkom Solution House, SME groups based on our to our customers, which Centers and Contact Centers, customers’ line of customers can access as described below. business, namely bank products and services management services, independently through our 1. Account Management education management website on “MyTelkom” Our Business Service services, energy & menu. Available services Division caters to business resources services, include e-billing customers, which include financial management registrations, collective micro customers, SMEs, services, government bill registrations, and local governments, management services, complaints. cooperatives and hospitality & business rural credit banks. Our services, healthcare Our cellular customers can Business Service Division & welfare services, access on-line services accounts managers and logistic & transport through Telkomsel website representatives managers services, manufacturing on “MyTelkomsel” menu manage customers & agribusiness services, that launched in 2013. directly by conducting site media & communication Through “MyTelkomsel”, visits and telephonically. services, military & police our customer may We categorize business services, property & purchase service customers into three construction services, packages for Flash groups based on our and trading & distribution internet, telephone, SMS, customer’s line of business services. MMS, and international public and general roaming conduct phone services, construction and Our Wholesale Service credit transfers, purchase manufacturing services, Division caters to flash gifts and monitor and trading and business wholesale customers internet quota usage. The services. In addition, we which are categorized also manage customers into the following carrier 2013 Annual Report Management Business Management’s 60 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
service groups: scope of ISP, VoIP, – Group carrier closed user group, call 2. Telkom Solution Houses service 1: handling center and satellite and SME Centers OLO Telkomsel, provider. We offer special services PT. Hutchison CP to our corporate Telecommunication Our subsidiary, Telin, caters customers through our (“Hutchison”), AXIS, to international carriers Telkom Solution Houses PT Sampoerna who provide TIMES located in Jakarta, Telekomunikasi portfolio overseas. The Denpasar and Surabaya. Indonesia and priority of provision of the We also operate SME PT Pasifik Satelit services is determined in Centers in Jakarta, Nusantara. line with the opportunity Surabaya, Bandung, – Group carrier service in every countries where Palembang, Balikpapan 2: handling OLO Telin operates. We operate and Makassar. Our SME Indosat, XL-Axiata, account management Centers function are as a Bakrie Telecom, Smart teams in Singapore and community and business Telecom, Batam Bintan Jakarta as headquarter. center. Telecom and PT Beginning in 2013, Telin Indonesia Comnets Plus commenced operating 3. Contact Center (“ICON+”). telecommunication We provide contact – Group carrier service services in Hong Kong- number “500250” for 3: handling operators Macau, Timor Leste, business customers within the business Australia, Myanmar, and a toll-free number Malaysia, Taiwan and “08001Telkom” United States of America. (“08001835566”) for enterprise customers. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 61
to provide fair compensation Service Level Guarantee Customer Satisfaction and by applying a service level Program Loyalty guarantee ("SLG"). This We offer service level guarantees, We routinely engage commitment is adjusted with which guarantee a specified independent market analysts customers' and society's minimum level of service to to conduct surveys and market demands as articulated in our customers in terms of product research on our customers' policy. quality and customer handling. levels of satisfaction and loyalty. In 2013, we achieved the Throughout 2013, we continued For individual customers, the following levels of the Customer our efforts and improvement program is available for fixed Satisfaction Index (“CSI”) and in managing product safety, line, Flexi as well as data and Customer Loyalty Index (“CLI”) complaints and after-sales internet subscribers. The service using the “top two boxes” and guarantees to ensure customers' level guarantee is applicable “top three boxes with seven convenience and protection to customers applying for scales” methods as follow: guarantee through the following new connections, a change in – personal customer segment: measures, among others: type of service, resolution of 80.16% in CSI and 67.64% in - To ensure that the service disruption, resumption CLI. development of a particular of disconnected service and – business customer segment: new product will lead to the complaints over customer billing. 91,23% in CSI and 87,27 % in right product commercially Under this program, we will CLI. acceptable in the market, provide non-cash compensation – enterprise customer segment: we implements standard such as free subscriptions for a 94.28% in CSI and 97.26% in guidelines for the incubation limited period, if we fail to meet CLI. process of innovation the minimum standard. products. An incubation process is needed to support For the corporate customer CONSUMER PROTECTION the innovation and creation segment, the service level As our responsibility to apply of a new product through guarantee is provided under a good corporate governance successive phases of idea contract agreed between us and (“GCG”) to our customers and submission, customer and the relevant customers. We offer the public, and in line with our idea validation, product service level guarantees to OLOs mission to provide excellent validation, business model and certain wholesale customers service, convenience, quality validation, and market who use our SL Digital, IP Transit products and competitive validation. and Metro-E products. Our pricing, we ensure a continuous - Upholding the principle guarantee covers the availability communication with our of producing high quality of our services and the time customers. We believe that products and services that taken to install and repair the efficient and proactive can deliver maximum benefits equipment we provide. We communications play an and contribute to economic divide service levels guarantees important role for the Company's growth. for such customers into five going concern and to ensure that - Consistently maintaining classes of service (Bronze, Silver, quality remains above standard. ethical standards in Gold, Platinum and Diamond) product sales (direct sales), which represent different levels With respect to upholding advertisement and promotion. of price, products and services service and after-sales service - Applying ethical advertising offered and technical parameters standards, we are committed practices, taking into guarantee. consideration the rules on advertising ethics in 2013 Annual Report Management Business Management’s 62 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Indonesia. methods the convenient of of residence with service usage - Ensuring that the public has telecommunication services calculation that are based on easy access to products and customers, in cooperation with (i) the number of minutes of use after-sales service. Collecting Agents (“CA”) such for celluler sevice, (ii) charges - Supporting healthy as national commercial banks, for value-added services used competition principles and regional development banks, during a certain period, and practices. PT Pos Indonesia, various (iii) subscription fees for basic - Maintaining a customer employee cooperatives, services and other services. On satisfaction orientation. minimarkets and others. July 2013, Telkomsel provided - Strive continuously to satisfy Payments can be made in cash additional convenience for the required benchmarks or non-cash. Cash payment postpaid customers through as stipulated in a several can be made at various our e-billing, whereby billing Ministerial Decrees governing payment counters at Plasa statements are sent via e-mail. service quality standards, Telkom, employee cooperatives, namely Ministerial Decrees banks, post offices, minimarkets Telkomsel bill payments can on Establishment of Service and other sub CA outlets, be made by cash payment at Quality Standards for while non cash payments can Plasa GraPARI outlets or banks' Domestic Fixed Network, be made through auto debit, teller, and also through ATM, Domestic Long Distance credit card, bank transfer to a phone banking, internet banking, Fixed Network, International Telkom account (for corporate mobile banking, credit card, and Direct Dial Fixed Network, customers/OLO), Automated auto debit. Telkomsel has also FWA Domestic Fixed Teller Machines (“ATM”), mobile cooperated with certain CAs, Network and Internet banking, internet banking or comprising of private national Telephony Services for Public source of funds (Flexicash, banks, regional development Needs ("ITKP"). Mcash, or Tcash). banks, and PT Pos Indonesia, which are authorized to receive Service Centers and For users of mobile services, payments from kartuHalo Consumer Complaints Telkomsel as one of our customers. In addition, customers Mechanism subsidiaries has applied a can also make payments via the We have customer service billing system based on Online web TCare (https://my.telkomsel. centers at all our regional and Charging System (“OCS”) for its com). branch offices where customers prepaid and postpaid products. can visit in person, and we also The new system is expected Customer Receivable offer an online complaints center to improve service quality as Management through our website customers will be offered options The Finance, Billing and (www.telkom.co.id) as well as of payment method, while Collection Center Unit (“FBCC”) a contact center that can be allowing Telkomsel to adopt manage billing and payment reached by dialing "147" for retail regional cluster based pricing of receivables of customers customers and "500250" for strategy. who are grouped according to business customers. customer and product segments Previously, Telkomsel applied service management concept, BILLING, PAYMENT AND a centralized, accurate and by applying Telkom Revenue COLLECTION standardized periodic billing Management System (“TREMS”). We have a periodic billing system in all regions. Subscribers The application of TREMS has system that suits the products of postpaid kartuHalo services features that it: and segment customers. We would receive monthly billing - Allows customers to pay bills provides various payment statements sent to their address throughout the service area. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 63
- Receives both cash and non- In a case a customer has not collection. If a customer has cash payment. made payment until the due not made payment until his/ - Receives Security Deposit date, the customer will be her bill’s due date, Telkomsel (“SD”) from a customer who penalized according to the type will suspend the customer plans to unsubscribe which is of products and services he/ outgoing calls. If such customer estimated based on average, she uses. Sanctions imposed fails to make payments until warm or pro-rata usages, the may include the imposition of the second month after the due SD will be recalculated in the late fees, call limitation and line date, Telkomsel will disconnect next bill. disconnection as set out in the the customer’s line. In the mean - Receives an advance as down Subscription Contract. We have time, Telkomsel will keep seeking payment which will be stated applied Integrated Dunning payment from such customer, in the next month’s billing Management System (“IDMS”) including in collaboration with statement. designed to provide initial billing debt-collecting agents. - Facilitates partial payments information and reminding from corporate customers. calls for current, 1-month and A customer whose line has - Facilitates payment by 2-month overdue bills. IDMS is been disconnected, but intends installments. also used for electronic billing to continue subscribing to - Features Telkom Single statement (“eBS”) which is sent Telkomsel’s services must first Invoice (“TSI”) which to subscribers’ e-mail accounts. settle his/her overdue bill and combines multiple invoices Invoices for corporate and OLO fill out an application for new from multiple services into customers are printed and sent services. Telkomsel does not a single billing statement, by special couriers. charge fees or impose interest on in addition to other various late payments. comfortable payment Telkomsel has its own transactions. mechanism for receivalbe 2013 Annual Report Management Business Management’s 64 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
Risk Factors
As a business entity, A. Risks Related to Indonesia
Telkom existence is 1. Political and Social Risks Current political and social events in Indonesia may adversely affect affected by various our business risk factors that could Indonesia is facing a couple of critical political events in 2014, adversely affect our namely the Legislative Election scheduled for Indonesia is facing a couple of critical political events in 2014, namely the Legislative business, financial Election scheduled for April 9, 2014, and then the Presidential Election for President and Vice President scheduled for July 9, 2014. condition, operations Political tensions are predicted to increase during the successive stages of both the Legislative and the Presidential elections. or business prospects. Additional Social & Information Corporate Environmental Company (For ADR 2013 Annual Report Governance Responsibility Profile Shareholders) Appendices PT Telekomunikasi Indonesia, Tbk 65
As political tensions rose, experienced political enacted a new labor law social and civil disturbances instability, as well as general that gave employees and conflicts are also social and civil unrest. greater protections. predicted to increase. Social For example, since 2000, Occasional efforts to reduce conflicts, in particular, are thousands of Indonesians these protections have predicted to escalate and have participated in prompted an upsurge in become more of a problem demonstrations in Jakarta public protests as workers in the lead-up period to the and other Indonesian cities responded to policies that 2014 Presidential Election. both for and against former they deemed unfavorable. The dynamics of political President Abdurahman maneuvering to win the Wahid, former President There can be no assurance sympathy of different Megawati, and current that social and civil groups of the public will President Susilo Bambang disturbances will not instead triggers frictions at Yudhoyono as well as in occur in the future and the grass-root level. response to specific issues, on a wider scale, or that including fuel subsidy any such disturbances will Political tensions will reductions, privatization not, directly or indirectly, almost certainly increase of state assets, anti- materially and adversely accompanied with a variety corruption measures, affect our business, financial of political in-fighting as decentralization and condition, results of well as social disturbances. provincial autonomy and operations and prospects. Nevertheless, given the track the American-led military record of past elections in campaigns in Afghanistan Terrorist activities in 1999, 2004 and 2009 which and Iraq. Although these Indonesia could destabilize were relatively peaceful, demonstrations were Indonesia, which would safe and under control, the generally peaceful, some adversely affect our vigilance of Indonesia's turned violent. business, financial condition security forces, and also and results of operations, the now politically more Separatist movements and and the market price of our mature Indonesian electors, clashes between religious securities it is believed that security and ethnic groups have also conditions in 2014 will not resulted in social and civil There have been a number be compromised. unrest in parts of Indonesia, of terrorist incidents in such as Aceh in the past and Indonesia, including the Since 1998, Indonesia has in Papua currently, where May 2005 bombing in experienced a process there have been clashes Central Sulawesi, the Bali of democratic change, between supporters of bombings in October resulting in political those separatist movements 2002 and 2005 and the and social events that and the Indonesian military, bombings at the JW Marriot have highlighted the including continued activity and Rizt Carlton hotels unpredictable nature in Papua, by separatist in Jakarta in July 2009. of Indonesia’s changing rebels that has led to violent Although the Government political landscape. In incidents. There have also has successfully countered 1999, Indonesia conducted been inter-ethnic conflict, some terrorist activities in its first free elections for for example in Kalimantan, recent years and arrested parliament and president. as well as inter-religious several of those suspected Indonesia also has many conflict such as in Maluku of being involved in these political parties, without and Poso. incidents, terrorist incidents any one party holding may continue and, if serious a clear majority. Due to Labor issues have also come or widespread, might have these factors, Indonesia to the fore in Indonesia. a material adverse effect on has, from time to time, In 2003, the Government investment and confidence 2013 Annual Report Management Business Management’s 66 PT Telekomunikasi Indonesia, Tbk Preface Highlights Report Overview Discussion & Analysis
in, and the performance of, downgrade of US sovereign affected Indonesia was the the Indonesian economy debt in 2012 and concerns depreciation and volatility in and may also have a over the debt crisis in the the value of the Indonesian material adverse effect Eurozone. Uncertainty Rupiah as measured against on our business, financial over the outcome of the other currencies, such as condition, results of Eurozone governments’ the US Dollar. The Rupiah operations and prospects financial support programs continues to experience and the market price of and worries about sovereign significant volatility. our securities. There can be finances generally are From 2009 to 2013, the no assurance that terrorist ongoing. If the crisis Indonesian Rupiah per US activities will not occur becomes protracted, Dollar exchange rate ranged again in future, or that if or extends to Asia and from a high of Rp8,508 such events do occur, they Indonesia, we can provide per US Dollar to a low of will not have an impact on no assurance that it will not Rp12,270 per US Dollar. business or our securities have a material and adverse As a result, we recorded market price in Indonesia effect on Indonesia’s foreign exchange losses of capital market. economic growth and Rp210 billion in 2011, Rp189 consequently on our billion in 2012 and Rp249 2. Macro Economic Risks business. billion in 2013. The Rupiah Negative changes in global, depreciated significantly in regional or Indonesian Adverse economic 2013. As of December 31, economic activity could conditions could result in 2013, the Indonesian Rupiah adversely affect our less business activity, less per US Dollar exchange rate business disposable income available stood at Rp12,170 per US for consumers to spend Dollar compared to Rp9,670 Changes in the Indonesian, and reduced consumer per US Dollar as of regional and global purchasing power, which December 31, 2012. economies can affect may reduce demand for our performance. Two communication services, To the extent that the significant events in the past including our services, Indonesian Rupiah that impacted Indonesia’s which in turn would have depreciates further from economy were the Asian an adverse effect on our the exchange rate as economic crisis of 1997 business, financial condition, of December 2013, our and the global economic results of operations and US Dollar-denominated crisis which started in prospects. There is no obligations under our 2008. The 1997 crisis was assurance that there will not accounts payable and characterized in Indonesia be a recurrence of economic procurements payable, as by, among others, currency instability in future, or well as payments for foreign depreciation, a significant that, should it occur, it will currency-denominated decline in real gross not have an impact on loans payable and bonds domestic product, high the performance of our payable, would increase in interest rates, social unrest business. Indonesian Rupiah terms. A and extraordinary political depreciation of the Rupiah developments, while the Fluctuations in the value of would also increase the global economic crisis t