PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2011 AND FOR THE YEAR THEN ENDED AND AS OF JANUARY 1, 2011
Figures in tables are presented in billions of Rupiah, unless otherwise stated
48
10. PROPERTY AND EQUIPMENT continued
b. KSO assets ownership arrangements continued ii In accordance with the amended and restated KSO IV agreement with PT Mitra Global
Telekomunikasi Indonesia “MGTI”, the ownership rights to the acquired property and equipment in KSO IV were legally retained by MGTI until the end of the KSO period which
was on December 31, 2010. As of December 31, 2010, the net book value of such property and equipment was Rp161 billion. As of January 1, 2011, the legal rights over these
property and equipment were transferred to the Company, and such assets have been included in the balances above.
c. Assets impairment i
As of December 31, 2012 and 2011, the Cash Generating Unit CGUs that independently generate cash inflows were fixed wireline, fixed wireless, cellular and others. As of
December 31, 2012 and 2011, there were indications of impairment in the fixed wireless CGU presented as part of personal segment, which was mainly due to increased
competition in the fixed wireless market and that has resulted in lower average tariffs, declining active customers and declining Average Revenue Per User “ARPU”. The
Company assessed the recoverable value of the assets in the CGU and determined that assets for the fixed wireless CGU were impaired amounting to Rp247 billion and
Rp563 billion at December 31, 2012 and 2011, respectively, and being recognized in the consolidated statement of comprehensive income under “Depreciation and amortization”.
The recoverable amount has been determined based on value-in-use VIU calculations. These calculations used pre-tax cash flow projections approved by management covering a
five-year period and with cash flows beyond the five-year period extrapolated using a perpetuity growth rate. The cash flow projections reflect management’s expectations of
revenue, Earning before Interest, Tax, Depreciation and Amortization “EBITDA” growth and operating cash flows on the basis that the fixed wireless CGU generates positive net cash
flows from 2013. Management’s cash flow projection also incorporates management’s reasonable expectations for developments in macro economic conditions and market
expectations for the Indonesian telecommunications industry. As of December 31, 2012 and 2011, management applied a pre-tax discount rate of 12.3 and 11.4, respectively,
derived from the Company’s post-tax weighted average cost of capital and benchmarked to externally available data. As of December 31, 2012 and 2011, the perpetuity growth rate
used of 0.5 and 0, respectively, assumes that subscriber numbers may continue to increase after five years, while average revenue per user may decline such that the long-
term growth will not be significant.
If the performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required
to assess whether there will be further impairment next year. ii Management believes that there is no indication of impairment in the value of other CGUs as
of December 31, 2012 and 2011.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2011 AND FOR THE YEAR THEN ENDED AND AS OF JANUARY 1, 2011
Figures in tables are presented in billions of Rupiah, unless otherwise stated
49
10. PROPERTY AND EQUIPMENT continued
