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Telkom (Indonesia)
Encyclopedia
PT Telekomunikasi Indonesia, Tbk , commonly abbreviated as Telkom Indonesia or just Telkom, is the largest telecommunications services company in Indonesia
. Telkom is a semi-privatized
, majority state owned
multi-listed company.
Telkom Indonesia is the telecommunication business unit mainly in fixed line telephony
, internet and data communications. It is also the parent company of the Telkom Group
, which is engaged in a broad range of businesses that consist of telecommunication, multimedia, property and finance services. Since 2008, Telkom Indonesia began transforming its business focus, infrastructure, systems, organization and human resources, as well as the corporate culture, as their effort faced rising competition.
Telkom Indonesia currently employs about 21,000 people and has a combined total of approximately 125 million customers at end of April 2011 increased by 14.6 percent from 2010, making the company the nation's largest telecommunication service provider by subscribers.
connecting Batavia (Jakarta
) and Buitenzorg (Bogor
). In 1884, the Dutch Colonial Government founded a private company to provide postal and domestic telegraph services and, later on, international telegraph services.
services had been introduced to Indonesia in 1882 by privately-owned companies
under a 25-year government license. In 1906, all postal
and telegraph services in Indonesia were taken over by the government as single, unified government agency named Posts Telegraafend Telefoon Diensts (PTT). In September 1945, roughly a month after Indonesian proclamation of independence, the agency headquarters in Bandung
were taken over by Indonesian nasionalist. In December 1949, after years of national revolution war
, the PTT was nationalized by Indonesian Government as part of Indonesian effort to ousted the remaining Dutch and nationalized Dutch corporate assets.
and PN Telekomunikasi as telecommunications services. The mail services PN Pos Giro developed over year, to become the Pos Indonesia
in 1995, which is still state-owned today and the official postal carrier for Indonesia's 230 million people.
In 1974, PN Telekomunikasi was further divided into two state-owned companies. Perusahaan Umum Telekomunikasi (Perumtel) provided
domestic and international telecommunications services, while PT Industri Telekomunikasi Indonesia (PT INTI) manufactured telecommunications equipment. A further division in 1980 saw the international telecommunications business taken over by the newly established PT Indonesian Satellite Corporation
(Indosat).
In 1991, Perumtel became a state-owened limited liability corporation
and renamed to what is now Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia or Telkom. Until 1995, Telkom's operations were organized along twelve regional operating units known as Wilayah Telekomunikasi or Witel. Each Witel had full responsibility for all aspects of business and operations in their respective regions, such as telephone services, property management and security. In 1995, Telkom reorganized the twelve Witels into seven regional divisions and one network division. Under a series of Cooperation (KSO) Agreements, Telkom transferred the right to operate five of its seven regional divisions (I, III, IV, VI and VII) to private sector consortia. Under these agreements, the KSO partners manage and operate the regional division concerned for a fixed term, build a specified number of fixed lines and, at the end of the term, transfer the telecommunications facilities to Telkom for an agreed amount in compensation. Revenues from the KSO operations were shared between Telkom and the KSO partners.
On November 14, 1995, Telkom shares went on sale through an initial public offering on the Jakarta Stock Exchange and the Surabaya Stock
Exchange (which merged in December 2007 to become the Indonesia Stock Exchange). Telkom's shares are also listed on the NYSE and the LSE
in the form of American Depositary Shares
(ADSs), and were publicly offered without listing on the Tokyo Stock Exchange
. Telkom is now the largest company by market capitalization in Indonesia, with a market capitalization of approximately IDR
190,512 trillion as of December 31, 2009. The Government retains an aggregate interest of 52.47% of the issued and outstanding shares of Telkom. The Government also holds one Dwiwarna share, which has special voting and veto rights over certain matters.
In mid 1997, Indonesia was badly affected by the Asian economic crisis. Among those impacted were certain KSO partners, who experienced difficulties in fulfilling their obligations to Telkom. Telkom eventually acquired control of its KSO partners in Regions I, III and VI, and amended the terms of the KSO agreements with its KSO partners in Regions IV and VII to obtain legal rights to control the financial and operating decisions of those regions.
telecommunication law that set in motion a sweeping array of reforms and enlivened competition policy
, private investment
, and long term industry direction. Among the proposed reforms was the progressive elimination of the joint ownership, by Telkom and Indosat
, of most of the telecommunications companies in Indonesia. This was intended to promote a more competitive market. As a result, in 2001, Telkom acquired Indosat's 35.0% stake in Telkomsel
, resulting in Telkom owning 77.7% of the shares of Telkomsel, while Indosat acquired Telkom's 22.5% interest in Satelindo and its 37.7% stake in Lintasarta
. In 2002, Telkom sold 12.7% of Telkomsel to Singapore Telecom Mobile Pte Ltd (SingTel Mobile),
reducing Telkom's ownership of Telkomsel to 65.0%.
On August 1, 2001, the Government terminated Telkom's exclusive right to provide fixed line
services in Indonesia and Indosat's right to provide international direct dial services. Subsequently, Telkom's exclusive rights to provide domestic and long-distance services were terminated in August 2002 and August 2003, respectively.
On June 7, 2004, Telkom began to provide their own international direct dial fixed line services. On November 16, 2005, Telkom launched Telkom-2
Satellite to replace all satellite
transmission services that have been served by previous satellite, Palapa B-4
.
services, media
and edutainment
. Telkom's decision to transform its business was prompted by the shift in customer lifestyles, and supported by advances in technology and regulatory changes that enabled service providers to deliver enhanced service to customers. With this new business transformation, Telkom also plans to conduct the acquisition of several companies that are in line with Telkom’s transformation of the new business.
services due to owning most of Indonesia's copper network. Telkom also runs telephone exchanges, trunk network
and local loop
connections for its fixed-line telephones. Currently Telkom is responsible for approximately 8.3 million telephone lines in Indonesia. And like most of the other state-ownership telecommunication company in the world, Telkom is obliged to provide public services such as public call boxes
.
Telkom Indonesia businesses are operated under government regulation by the Indonesian Ministry of Communication and Information. Telkom, as government-owned company, is required to comply with additional obligations such as provide telecommunication services and not to discriminate. As well as providing service in those regulated areas, Telkom has expanded into more profitable products and services where there is less government-owned-related regulation.
Telkom Indonesia is the parent company of the Telkom Group
, which is engaged in a wide range of businesses that consist of telecommunication, information, multimedia, property and finance services. Telkom mainly operates in fixed line telephony
, internet and data communications business, while other businesses are run by subsidiaries.
Other investments:
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
. Telkom is a semi-privatized
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
, majority state owned
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
multi-listed company.
Telkom Indonesia is the telecommunication business unit mainly in fixed line telephony
Landline
A landline was originally an overland telegraph wire, as opposed to an undersea cable. Currently, landline refers to a telephone line which travels through a solid medium, either metal wire or optical fibre, as distinguished from a mobile cellular line, where transmission is via radio waves...
, internet and data communications. It is also the parent company of the Telkom Group
Corporate group
A corporate group is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control. The concept of a group is frequently used in tax law, accounting and company law to attribute the rights and duties of one member of the group to...
, which is engaged in a broad range of businesses that consist of telecommunication, multimedia, property and finance services. Since 2008, Telkom Indonesia began transforming its business focus, infrastructure, systems, organization and human resources, as well as the corporate culture, as their effort faced rising competition.
Telkom Indonesia currently employs about 21,000 people and has a combined total of approximately 125 million customers at end of April 2011 increased by 14.6 percent from 2010, making the company the nation's largest telecommunication service provider by subscribers.
History
Telkom is one of the world's oldest telecommunication company. The company traditionally traces its roots to an establishment of the first first electromagnetic telegraph service in Indonesia on October 23, 1856 by the Dutch Colonial GovernmentDutch East Indies
The Dutch East Indies was a Dutch colony that became modern Indonesia following World War II. It was formed from the nationalised colonies of the Dutch East India Company, which came under the administration of the Netherlands government in 1800....
connecting Batavia (Jakarta
Jakarta
Jakarta is the capital and largest city of Indonesia. Officially known as the Special Capital Territory of Jakarta, it is located on the northwest coast of Java, has an area of , and a population of 9,580,000. Jakarta is the country's economic, cultural and political centre...
) and Buitenzorg (Bogor
Bogor
Bogor is a city on the island of Java in the West Java province of Indonesia. The city is located in the center of the Bogor Regency , 60 kilometers south of the Indonesian capital Jakarta...
). In 1884, the Dutch Colonial Government founded a private company to provide postal and domestic telegraph services and, later on, international telegraph services.
Colonial Era
TelephonyTelephony
In telecommunications, telephony encompasses the general use of equipment to provide communication over distances, specifically by connecting telephones to each other....
services had been introduced to Indonesia in 1882 by privately-owned companies
Privately held company
A privately held company or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders or company members which does not offer or trade its company stock to the general public on the stock market exchanges, but rather the...
under a 25-year government license. In 1906, all postal
Mail
Mail, or post, is a system for transporting letters and other tangible objects: written documents, typically enclosed in envelopes, and also small packages are delivered to destinations around the world. Anything sent through the postal system is called mail or post.In principle, a postal service...
and telegraph services in Indonesia were taken over by the government as single, unified government agency named Posts Telegraafend Telefoon Diensts (PTT). In September 1945, roughly a month after Indonesian proclamation of independence, the agency headquarters in Bandung
Bandung
Bandung is the capital of West Java province in Indonesia, and the country's third largest city, and 2nd largest metropolitan area in Indonesia, with a population of 7.4 million in 2007. Located 768 metres above sea level, approximately 140 km southeast of Jakarta, Bandung has cooler...
were taken over by Indonesian nasionalist. In December 1949, after years of national revolution war
Indonesian National Revolution
The Indonesian National Revolution or Indonesian War of Independence was an armed conflict and diplomatic struggle between Indonesia and the Dutch Empire, and an internal social revolution...
, the PTT was nationalized by Indonesian Government as part of Indonesian effort to ousted the remaining Dutch and nationalized Dutch corporate assets.
State-Owned Company
In 1961, PTT was converted from an official government agency into a newly-established state-owned company, the Postal and Telecommunications Services company. Four year later, in 1965, Indonesian Government separated this company into two state-owned companies, PN Pos Giro responsible for providing mail servicesMail
Mail, or post, is a system for transporting letters and other tangible objects: written documents, typically enclosed in envelopes, and also small packages are delivered to destinations around the world. Anything sent through the postal system is called mail or post.In principle, a postal service...
and PN Telekomunikasi as telecommunications services. The mail services PN Pos Giro developed over year, to become the Pos Indonesia
Pos Indonesia
Pos Indonesia is the state-owned company responsible for providing postal service in Indonesia. It was established with the current structure in 1995 and now operates 11 regional divisions.-History:...
in 1995, which is still state-owned today and the official postal carrier for Indonesia's 230 million people.
In 1974, PN Telekomunikasi was further divided into two state-owned companies. Perusahaan Umum Telekomunikasi (Perumtel) provided
domestic and international telecommunications services, while PT Industri Telekomunikasi Indonesia (PT INTI) manufactured telecommunications equipment. A further division in 1980 saw the international telecommunications business taken over by the newly established PT Indonesian Satellite Corporation
Indosat
PT Indosat Tbk., formerly known as PT Indonesian Satellite Corporation Tbk. is a provider of telecommunication services in Indonesia. It is the third largest telecommunication company for mobile services in Indonesia after defeat by XL Axiata...
(Indosat).
In 1991, Perumtel became a state-owened limited liability corporation
Limited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
and renamed to what is now Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia or Telkom. Until 1995, Telkom's operations were organized along twelve regional operating units known as Wilayah Telekomunikasi or Witel. Each Witel had full responsibility for all aspects of business and operations in their respective regions, such as telephone services, property management and security. In 1995, Telkom reorganized the twelve Witels into seven regional divisions and one network division. Under a series of Cooperation (KSO) Agreements, Telkom transferred the right to operate five of its seven regional divisions (I, III, IV, VI and VII) to private sector consortia. Under these agreements, the KSO partners manage and operate the regional division concerned for a fixed term, build a specified number of fixed lines and, at the end of the term, transfer the telecommunications facilities to Telkom for an agreed amount in compensation. Revenues from the KSO operations were shared between Telkom and the KSO partners.
On November 14, 1995, Telkom shares went on sale through an initial public offering on the Jakarta Stock Exchange and the Surabaya Stock
Exchange (which merged in December 2007 to become the Indonesia Stock Exchange). Telkom's shares are also listed on the NYSE and the LSE
LSE
LSE may refer to:* London School of Economics and Political Science, a specialist school of the University of London* London Stock Exchange or its owner group London Stock Exchange Group...
in the form of American Depositary Shares
American Depositary Shares
An American depositary share is a vehicle for foreign corporations to list their ordinary equity on an American stock exchange, such as the New York Stock Exchange or the NASDAQ....
(ADSs), and were publicly offered without listing on the Tokyo Stock Exchange
Tokyo Stock Exchange
The , called or TSE for short, is located in Tokyo, Japan and is the third largest stock exchange in the world by aggregate market capitalization of its listed companies...
. Telkom is now the largest company by market capitalization in Indonesia, with a market capitalization of approximately IDR
IDR
IDR can refer to:*Indian Depository Receipt*Devi Ahilyabai Holkar International Airport, Indore, India for its IATA code*Indonesian rupiah, a unit of currency*Infiltrate•Destroy•Rebuild, an album by CKY...
190,512 trillion as of December 31, 2009. The Government retains an aggregate interest of 52.47% of the issued and outstanding shares of Telkom. The Government also holds one Dwiwarna share, which has special voting and veto rights over certain matters.
In mid 1997, Indonesia was badly affected by the Asian economic crisis. Among those impacted were certain KSO partners, who experienced difficulties in fulfilling their obligations to Telkom. Telkom eventually acquired control of its KSO partners in Regions I, III and VI, and amended the terms of the KSO agreements with its KSO partners in Regions IV and VII to obtain legal rights to control the financial and operating decisions of those regions.
Telecommunication Deregulation
In 1999, Indonesia passed a deregulatingDeregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...
telecommunication law that set in motion a sweeping array of reforms and enlivened competition policy
Competition law
Competition law, known in the United States as antitrust law, is law that promotes or maintains market competition by regulating anti-competitive conduct by companies....
, private investment
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
, and long term industry direction. Among the proposed reforms was the progressive elimination of the joint ownership, by Telkom and Indosat
Indosat
PT Indosat Tbk., formerly known as PT Indonesian Satellite Corporation Tbk. is a provider of telecommunication services in Indonesia. It is the third largest telecommunication company for mobile services in Indonesia after defeat by XL Axiata...
, of most of the telecommunications companies in Indonesia. This was intended to promote a more competitive market. As a result, in 2001, Telkom acquired Indosat's 35.0% stake in Telkomsel
Telkomsel
Telkomsel is a brand name of a GSM and UMTS Mobile phone network operator which is operating in Indonesia. It was found in 1995, and is a subsidiary of Telkom Indonesia....
, resulting in Telkom owning 77.7% of the shares of Telkomsel, while Indosat acquired Telkom's 22.5% interest in Satelindo and its 37.7% stake in Lintasarta
Lintasarta
PT Aplikanusa Lintasarta is data communication, internet service and value-added service provider in Indonesia.At the beginning, Lintasarta focus on its mission to develop information technology for national banking sector...
. In 2002, Telkom sold 12.7% of Telkomsel to Singapore Telecom Mobile Pte Ltd (SingTel Mobile),
reducing Telkom's ownership of Telkomsel to 65.0%.
On August 1, 2001, the Government terminated Telkom's exclusive right to provide fixed line
Landline
A landline was originally an overland telegraph wire, as opposed to an undersea cable. Currently, landline refers to a telephone line which travels through a solid medium, either metal wire or optical fibre, as distinguished from a mobile cellular line, where transmission is via radio waves...
services in Indonesia and Indosat's right to provide international direct dial services. Subsequently, Telkom's exclusive rights to provide domestic and long-distance services were terminated in August 2002 and August 2003, respectively.
On June 7, 2004, Telkom began to provide their own international direct dial fixed line services. On November 16, 2005, Telkom launched Telkom-2
TELKOM-2
TELKOM-2 is a C-band geosynchronous communications satellite built by Orbital for Indonesia's state-owned telecommunications company, PT Telekomunikasi Indonesia Tbk...
Satellite to replace all satellite
Satellite
In the context of spaceflight, a satellite is an object which has been placed into orbit by human endeavour. Such objects are sometimes called artificial satellites to distinguish them from natural satellites such as the Moon....
transmission services that have been served by previous satellite, Palapa B-4
Palapa
Palapa is a series of communication satellites owned by Indosat, an Indonesian telecommunication company.The name Palapa also alludes to "Sumpah Palapa" the oath taken by Gajah Mada, a 14th century Prime Minister of the Javanese Majapahit Empire described in the Pararaton...
.
Transformations
In 2009, Telkom started doing the business transformation of the only company in the field of telecommunications to broader range of business, the company expanded to the telecommunications, information technologyInformation technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
services, media
Mass media
Mass media refers collectively to all media technologies which are intended to reach a large audience via mass communication. Broadcast media transmit their information electronically and comprise of television, film and radio, movies, CDs, DVDs and some other gadgets like cameras or video consoles...
and edutainment
Edutainment
Edutainment is a form of entertainment designed to educate as well as to amuse.-Overview:...
. Telkom's decision to transform its business was prompted by the shift in customer lifestyles, and supported by advances in technology and regulatory changes that enabled service providers to deliver enhanced service to customers. With this new business transformation, Telkom also plans to conduct the acquisition of several companies that are in line with Telkom’s transformation of the new business.
Operations
Telkom Indonesia is a dominant and largest provider of fixed lineLandline
A landline was originally an overland telegraph wire, as opposed to an undersea cable. Currently, landline refers to a telephone line which travels through a solid medium, either metal wire or optical fibre, as distinguished from a mobile cellular line, where transmission is via radio waves...
services due to owning most of Indonesia's copper network. Telkom also runs telephone exchanges, trunk network
Trunking
In modern communications, trunking is a concept by which a communications system can provide network access to many clients by sharing a set of lines or frequencies instead of providing them individually. This is analogous to the structure of a tree with one trunk and many branches. Examples of...
and local loop
Local loop
In telephony, the local loop is the physical link or circuit that connects from the demarcation point of the customer premises to the edge of the carrier or telecommunications service provider's network...
connections for its fixed-line telephones. Currently Telkom is responsible for approximately 8.3 million telephone lines in Indonesia. And like most of the other state-ownership telecommunication company in the world, Telkom is obliged to provide public services such as public call boxes
Telephone booth
A telephone booth, telephone kiosk, telephone call box or telephone box is a small structure furnished with a payphone and designed for a telephone user's convenience. In the USA, Canada and Australia, "telephone booth" is used, while in the UK and the rest of the Commonwealth it is a "telephone...
.
Telkom Indonesia businesses are operated under government regulation by the Indonesian Ministry of Communication and Information. Telkom, as government-owned company, is required to comply with additional obligations such as provide telecommunication services and not to discriminate. As well as providing service in those regulated areas, Telkom has expanded into more profitable products and services where there is less government-owned-related regulation.
Telkom Indonesia is the parent company of the Telkom Group
Corporate group
A corporate group is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control. The concept of a group is frequently used in tax law, accounting and company law to attribute the rights and duties of one member of the group to...
, which is engaged in a wide range of businesses that consist of telecommunication, information, multimedia, property and finance services. Telkom mainly operates in fixed line telephony
Landline
A landline was originally an overland telegraph wire, as opposed to an undersea cable. Currently, landline refers to a telephone line which travels through a solid medium, either metal wire or optical fibre, as distinguished from a mobile cellular line, where transmission is via radio waves...
, internet and data communications business, while other businesses are run by subsidiaries.
Business Divisions
Telkom Indonesia is organised into following business divisions:- Consumer Division: Retail telecoms services to consumers
- Carrier and Interconnection Services Division: Telecoms services partnership
- Enterprise Division: Telecoms services to enterprises
- Business Services Division: Telecoms services to small-medium businesses
- Telkom Flexi Division: Mobile phone services based on CDMA protocol
Subsidiaries and Investments (Telkom Group)
- TelinTelinPT Telekomunikasi Indonesia International or Telkom International, and commonly abbreviated as Telin, is an Indonesian carrier services and investment company and is a wholly owned subsidiary of Telkom Indonesia...
(Telekomunikasi Indonesia International): International telecommunications services and investment company - TelkomselTelkomselTelkomsel is a brand name of a GSM and UMTS Mobile phone network operator which is operating in Indonesia. It was found in 1995, and is a subsidiary of Telkom Indonesia....
: Mobile phone services based on GSM and UMTS protocol - Infomedia NusantaraInfomedia NusantaraPT Infomedia Nusantara is a company that publishes telephone directories in Indonesia.It was founded in the 1980s, and released the PT Elnusa Yellowpages in 1984...
: Information & communication services solution - TelkomVisionTelkomVisionTelkomVision is a subscription-based direct broadcast satellite and cable television provider service for Indonesia. It is a part of the Telkom Group...
: Subscription-based direct broadcast satellite, cable and IPTV television services - Multimedia NusantaraMultimedia NusantaraPT Multimedia Nusantara, or Metra, is an Indonesian strategic investment and holding company and a wholly owned subsidiary of Telkom Indonesia. It owns and oversees various Telkom Indonesia acquisitions, primarily in telco adjacent industry. Among its subsidiaries, as 2010, are Telkomsigma, Finnet,...
: Strategic investment and holding company- TelkomsigmaTelkomsigmaPT Sigma Cipta Caraka or telkomsigma , or just Sigma, is an Indonesian-based information and communications technology business solution provider. Telkomsigma is a wholly owned subsidiary of Telkom Indonesia through its investment subsidiary Multimedia Nusantara, and parts of the Telkom Group...
: IT solutions, consulting services and data center - Finnet: Financial services
- Mojopia: Internet commerce business
- Melon Indonesia: Music and entertainment business
- Admedika: Healthcare network provider
- Telkomsigma
- Graha Sarana Duta: Property development and management company
- Pramindo: Joint operation scheme
- Scicom: Global CRM consulting, technology services, education and outsourcing company
- Mitratel: Telecommunication coverage provider
- Napsindo: Marketing business solution
Other investments:
- Patrakom: Strategic IT and telecommunications solutions
- Bangtelindo: Telecommunication planning, construction, installation and maintenance company
- Pasifik Satelit Nusantara: Satellite telecommunications company
- Citra Sari Makmur: Satellite and terrestrial network company
Awards
In July 2011, Telkom wons five awards from Finance Asia magazine for:- Asia's Best managed Company
- Best Corporate governance
- Best Investor Relations
- Best Corporate Social Responsibility
- Most Committed to a Strong Dividend Policy