revenues employee proile by educational background

PT Telkom Indonesia, Tbk. 2011 Annual Report Moving Forward Beyond Telecommunications • The cost of IT services decreased by Rp56 billion, or 28.1, from Rp200 billion in 2010 to Rp144 billion in 2011. This decrease resulted from a decrease in the number of software licenses maintained, because of the substitution of Sigma’s services for some software in 2011, and a decrease in software maintenance expenses; and • Radio frequency usage expenses decreased by Rp46 billion, or 1.6, from Rp2,892 billion in 2010 to Rp2,846 billion in 2011, due to a new regulation issued on december 13, 2010 under which right- of-use fees paid to the Government for BTSs are no longer calculated in relation to the number of BTSs deployed and are computed based on bandwidth used. 2. depreciation and Amortization Expense depreciation and amortization expense increased by Rp251 billion, or 1.7, from Rp14,612 billion in 2010 to Rp14,863 billion in 2011, primarily due to the increase in depreciation expense by Rp616 billion, or 4.7, from Rp13,085 billion in 2010 to Rp13,701 billion in 2011, resulting from the depreciation of facilities supporting BTSs and switching equipment, ofset by decreases in the depreciation of cable networks, data processing equipment and capital leases. This increase was ofset by the decrease in amortization expense of Rp928 billion, or 60.7 that was primarily due to KSO related intangible assets being fully amortized as of december 31, 2010 following expiration of the KSO by that date. In 2011, the related intangible assets were written-of. After considering increased competition in the ixed wireless markets that resulted in lower average tarifs, declining active customers and declining ARPU, we conducted an impairment test for the ixed wireless cash generating unit. See “Risk Factors– Risks Related to Our Business–Competition Risks Related to Our Fixed Telecommunication Business.” The impaired ixed wireless related assets were written down to their recoverable value, which was determined to be based on estimated value-in-use VIU calculations. In determining value in use, the Company and its subsidiaries apply management judgment in establishing forecast of future operating performance, as well as the selection of growth rates and discount rates. These judgments are applied based on our understanding of historical information and expectations of future performance. The cash low projections relect management’s expectations of revenue, EBITdA growth, and operating cash lows on the basis that the ixed wireless CGU generates positive net cash lows from 2013 and returns to proitability in 2016. Management’s cash low projection also incorporates expectations for developments in macro economic conditions and market expectations for the Indonesian telecommunications industry. The projection assumes that management will receive appropriate licenses and efectively implement a full mobility initiative that will remove limitations in the existing service which can only be used by customers within a particular area code. Management applied a pre-tax discount rate of 11.4, derived from the Company’s post-tax weighted average cost of capital and benchmarked to externally available data. The perpetuity growth rate used of 0 assumes that while subscriber numbers may continue to increase after ive years, average revenue per user may decline such that only negligible long term growth will be achieved in a competitive market. The Company determined that assets for the ixed wireless CGU were impaired at december 31, 2011 resulting in an impairment charge of Rp563 billion 2010: Rp nil recognized in the Consolidated Statement of Comprehensive Income under ‘depreciation and Amortization’. Changing the key assumptions, including the discount rates or the growth rate assumption in the cash low projections, could materially afect the value in use calculations. A 1 increase in the discount rate used would result in an increase in impairment loss of approximately Rp907 billion. However the recoverable amount of the ixed wireless CGU is most sensitive to whether management will be able to implement its plans, including the full mobility initiative, such that it generates positive cash lows and returns to proitability as projected. If the performance of the ixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next inancial year, analysis will be required to assess whether there will be further impairment next year. PT Telkom Indonesia, Tbk. 2011 Annual Report Moving Forward Beyond Telecommunications 3. Personnel Expenses Personnel expenses increased by Rp1,223 billion, or 16.7, from Rp7,332 billion in 2010 to Rp8,555 billion in 2011. The increase in personnel expenses was due in part to an increase in the salaries and related beneits of Rp250 billion, or 9.1, from Rp2,751 billion in 2010 to Rp3,001 billion in 2011. This increase was due to an annual increase in basic salaries of 8.0 to adjust for domestic inflation. In addition, early retirement program expenses were Rp517 billion in 2011, compared to nil in 2010 when no early retirement programs were ofered. Vacation pay, incentives and other beneit expense also contributed to the increase by Rp240 billion, or 9.3, from Rp2,574 billion in 2010 to Rp2,814 billion in 2011, primarily due to an increase in incentives. Employees’ income tax expenses also increased by Rp248 billion, or 31.1, from Rp796 billion in 2010 to Rp1,043 billion in 2011. This increase followed from the increase in salaries and related beneits. 4. Interconnection Expenses Interconnection expenses increased by Rp469 billion, or 15.2, from Rp3,086 billion in 2010 to Rp3,555 billion in 2011. Interconnection expenses increased due to an increase in domestic cellular interconnection and transit interconnection expenses for calls between Telkomsel subscribers routed through the cellular network of another company interconnection expenses by Rp434 billion, or 21.9, which was in line with the increase in Telkomsel’s number of subscribers in 2011 by 13.8. Our total interconnection expenses accounted for 7.1 of our consolidated expenses for the year ended december 31, 2011, compared to 6.7 for the year ended december 31, 2010. 5. Marketing Expenses Marketing expenses increased by Rp753 billion, or 29.8, from Rp2,525 billion in 2010 to Rp3,278 billion in 2011 primarily due to an increase in advertising and promotion expenses by Rp749 billion, or 37.6. The increase in advertising and promotion expenses was due to changes in Telkomsel’s dealer incentive scheme. 6. General and Administrative Expenses General and administrative expenses increased by Rp398 billion, or 15.7, from Rp2,537 billion in 2010 to Rp2,935 billion in 2011 due in part to an increase in the provision for impairment of receivables and inventory obsolescence by Rp358 billion, or 68.2, from Rp525 billion in 2010 to Rp883 billion in 2011. This increase mainly resulted from current year individual and collective assessment for impairment of receivables. In addition, social contribution expenses increased by Rp119 billion, or 69.2, from Rp171 billion in 2010 to Rp290 billion in 2011. This increase resulted from the decision by our shareholders to increase the amount spent on corporate social responsibility from 1.0 of our total comprehensive income in 2010 to 2.0 of our total comprehensive income in 2011, allocated equally between community development and partnership programs. Professional fees increased by Rp72 billion, or 44.5, from Rp163 billion in 2010 to Rp235 billion in 2011. The increase in professional fees, social contribution expenses and provision for impairment of receivables and inventory obsolescence were partially ofset by a substantial decrease in security and screening expense of Rp118 billion, or 54.8, from Rp215 billion in 2010 to Rp97 billion in 2011. This decrease was due to a major optimization exercise pursuant to which the number of security guards used was substantially reduced and guards were sourced from a Telkom subsidiary instead of a third party. In addition, collection expenses decreased by Rp74 billion, or 18.5, from Rp401 billion in 2010 to Rp327 billion in 2011. 7. Loss gain on Foreign Exchange - net Loss gain on foreign exchange - net decreased by Rp253 billion or 588.4 from a gain of Rp43 billion in 2010 to a loss of Rp210 billion in 2011. The decrease is primarily due to the appreciation of the Yen by 5.6 in 2011 which resulted in the increase in cost of debt denominated in Yen, coupled with a smaller loss due to the appreciation of the US dollar by 0.7 in 2011.