cOrpOrate strategy
To allow us to adapt to the dynamics of the industry and our business, in 2011 we updated our corporate strategic
initiatives, focusing on implementing the TIME business framework and strengthening internal consolidation.
This supports the comprehensive transformation of our organization, business portfolio, infrastructure, systems,
and corporate culture that we have undertaken to realize our vision of becoming a leading TIME company in the
region. With the tremendous growth opportunities that exist in the IME sector, we expect the revenue
contribution of our IME business to increase by 2015 following our signiicant investment in developing our
Internet Protocol-based Next Generation Network “NGN” infrastructure.
As well as being a new growth stream, the IME business is also an enabler, supporting sustainability and growth
in our telecommunications sector business. Moreover, we have continually sought to promote synergies between
our telecommunications services in addition to exploring inorganic growth opportunities by expanding overseas,
particularly in Asia and the Middle East. Our strategic initiatives for 2011 are elaborated below:
1. Optimizing our Plain Ordinary Telephone Systems “POTS” and strengthening our broadband business
This strategic initiative focused on improving cost eiciency and slowing the revenue decline from
POTS, one of our legacy services. To strengthen the broadband business, our priority growth strategy was
to accomplish ‘broadband anywhere’ and work towards realizing ‘meaningful broadband’.
2. Consolidating and growing our fixed wireless access “FWA” business and managing our wireless portfolio
The principal goal of this strategic initiative was to grow the value of the Telkom Group’s wireless
portfolio overall. Aimed at increasing the value of the FWA business so that it can be consolidated with
the rest of our wireless portfolio, it also supported the eforts of our subsidiary, Telkomsel, to be the
market leader in the cellular business in Indonesia by encouraging Telkomsel to adopt a ‘value-based
market approach’ and implement a ‘segment-based approach’ to defend its leading position in the
cellular market.
3. Integrating the Telkom Group’s Ecosystem Solutions
Through this strategic initiative, we sought to design solutions to meet the needs of Telkom Group customers
as an ecosystem, with the objective of optimizing our resources and creating a lock-in system. Ecosystem
solutions are business solutions that are designed to foster reciprocal or mutually beneicial relationships
between us, as the service provider, and our customers from the individual consumer, SME and enterprise
segments by engaging in business activities with their communities. We are targeting customers from
the retail, SME, Enterprise and Wholesale segments, both domestic and international, for the growth of this
business customer portfolio.
4. Investing in Information Technology “IT” services
Entering the IT industry is a means of enhancing our capabilities as an IT solution provider in order to
broaden our customer base in the retail, enterprise and SME segments. Also under this initiative, Telkom
aimed to enter the Premises Integration business, which focuses on strengthening relations with key customers
in the enterprise and SME segments. At the same time, developments in our e-payment services, including
APMK, Billing Payment, Payment Gateway, e-Money, e-Voucher and Remittance, were aimed at creating a
single operating platform under our DELIMA brand.
5. Investing in media and edutainment businesses
This strategic initiative anticipated the convergence between telecommunications, information, media
and edutainment. Telkom’s role in the media and edutainment industries is as a content aggregator and
delivery point.
6. Investing in the wholesale business and strategic international business opportunities
This was aimed at driving growth in our wholesale business through the supply leading concept as well as
balancing the wholesale and retail businesses. We also sought strategic international investment opportunities,
both in the telecommunications sector through our subsidiary Telin and in the IME sector through Metra.
7. Investing in strategic domestic opportunities by capitalizing on our assets
This initiative focused on domestic investment opportunities outside the TIME business that would
optimize the Telkom Group’s assets in order to generate higher revenue growth.
8. Integrating Next Generation Networks “NGN” and Operational support system, Business support system,
Customer support system and Enterprise relations management “OBCE”
This strategic initiative represents the transformation of our infrastructure into a converged network that
will support multiplay services. It also relects the transformation of IT into an enabler, as we moved
towards implementing Consolidated Data, Consolidated Billing and Integrated CRM for the Telkom Group.
PT Telkom Indonesia, Tbk. 2011 Annual Report Moving Forward Beyond Telecommunications
9. Aligning the business structure and portfolio management
Under this initiative, we investigated new approaches to managing the TIME business from various available
options, including segment-based, geography-based, business-based and functional-based. We need to
study the efectiveness of the holding management model in more depth in order to optimize the growth of
our TIME portfolio. Metra has already been positioned as a holding company for our IME business portfolio.
10. Transforming the corporate culture
This strategic initiative was aimed at accelerating the transformation of our corporate culture from Telkom
135 to Telkom’s 5C, which is linked to the “5C Values“ that will be adopted throughout the Telkom Group, with
each subsidiary making any adjustments required.
suBsIdIarIes’ strategIes
As part of our measures to strengthen and grow the Telkom Group’s core business, and in line with our strategic
initiatives, we have pursued a strategy of inorganic growth. The reasons underlying this strategy are as follows:
a. It is a growth strategy in view of the stagnant or declining legacy business;
b. It is a risk mitigation measure capital, competencies as well as for deriving synergies and rapid value creation;
c. Transformation of the business of subsidiaries that depended on joint operation “KSO” revenues which
ended in 2010 and therefore have value from an investor perspective;
d. Acquisition and alliance of IME businesses in
anticipation of the trend towards commodities in the telecommunications sector Devices-Network-
Application convergence; and e. International acquisitions to increase scale and beneits
and to monetize our domestic and international assets. During the period 2006-2011, among our key initiatives
were transforming our former KSO businesses, building the value chain and our fundamental IME business, and
launching our BIG DEAL initiative. In line with these, we also established a number of fundamental pillars for
the implementation of our inorganic growth strategy, as follows:
1. New Development: development of our business portfolio through expansion or by establishing new
businesses. 2. Transformation: measures to transform the portfolios of
our subsidiary or former KSO businesses. 3. Strengthening: measures to strengthen the capital
structure of our subsidiaries to enable them to grow and become self-reliant.
4. Spin of and Transfer: eforts to align focus and underpin the expansion of our business, including the divestment
of similar businesses. 5. Mergers and Acquisitions: the consolidation or purchase
of a business unit aimed at strengthening our business value chain and highlighting the potential of the Telkom
Group while positioning ourselves to maintain the momentum of growth or change in the business.
In 2011, we realized these initiatives through a number of corporate actions, including the following:
1. Transfer of VSAT IP. 2. Datacenter Initiative.
3. Transformation of Indonusa ongoing. 4. Development of Mitratel.
5. Development of Pramindo.
eXecutIOn Of strategy
Our business is divided into four segments: ixed wireline, ixed wireless, cellular and others.
The ixed wireline segment provides local, DLD and international telephone services, and other
telecommunications services including leased lines, telex, transponder, satellite and Very Small Aperture
Terminal, or VSAT as well as ancillary services. Our ixed wireless segment provides local and domestic
long-distance CDMA-based services as well as other telecommunications services. Our cellular segment
provides mobile cellular telecommunications services. Any operating segment that does not represent more than
10 of our revenues is presented as “others” and such segments include telephone directory production and
our building management businesses. In 2011, other than interconnection customers and Government departments
and agencies, no single customer accounted for more than 1 of our total operating revenues. Our business does not
experience signiicant seasonality. The execution of our strategic initiatives, which is based on
the relationship between our business strategies, business portfolio, delivery channels and international investment, is
described below:
PT Telkom Indonesia, Tbk. 2011 Annual Report Moving Forward Beyond Telecommunications
1. telecommunications Business portfolio
The Telkom Group’s telecommunications business portfolio comprises Plain Ordinary Telephone System “POTS”
which covers both local and long distance calls, ixed wireless connections consisting of voice, SMS and data
network package “DNP”, cellular voice and SMS services, international direct dialing “IDD”, broadband services
mobile and ixed, and network and tower services.
a. Fixed Wireline Services
Our ixed wireline services include POTS, VAS ixed wireline, intelligent network “IN” services and
session initiation protocol “SIP” services. After experiencing a decline, in 2011, we successfully
improved the performance of this business by launching a number of new programs, such as
“Telkom Poin Rejeki Tumpah” reward points and the ixed business improvement program “FBIP”.
We serve 8.6 million customers, representing a market share of 99.0 of the total ixed wireline
market penetration in Indonesia of 4.0 as of December 31, 2011.
b. Broadband and Internet Services
These services are ofered through a range of product lines, including TelkomNet instan, FlexiNet, wholesale
port, Metro I-net, Astinet, broadband internet under the Speedy and Flash brand names, WiFi hotspots
and IP transit. TelkomNet Instan is a premium postpaid internet access service that is accessible
in all cities in Indonesia. In 2011 there were 40.2 thousand TelkomNet Instant customers, a decrease
of 60.9 from the previous year as these were largely new internet customers who are expected to migrate
to our Telkom Speedy broadband service. Our broadband internet access is provided through
our existing copper cables using ADSL technology. Telkom’s substantial presence in the broadband
market in Indonesia is indicated by our 12.9 million customers. Data, internet and IT services contributed
33.6 to our total revenue as of December 31, 2011. In 2011 we launched our Flexi Hotspot service that
delivers high speed internet access through a wireless internet connection, supported by our Telkom
Hotspot infrastructure. Subscribers can access this service, which is available in Hotspot areas, using
any device equipped with a WiFi connection simply by entering their FlexiNet Unlimited or Flexi Mobile
Broadband username and password. We ofer low-cost international calls through our
premium VoIP service, “Telkom Global-01017”, while standard international calls are available through
“Telkom Save”. Both services are accessed by dialing a special access preix. We cooperate with
eight global carriers, all of which are wholesalers that allow us access to their international networks.
Of these eight carriers, four are for outgoing calls, one is for incoming calls and three are for both
outgoing and incoming calls. In 2011, a total of 358.6 million minutes of outgoing
calls using TelkomSave and Telkom Global-01017 and incoming VoIP calls from our global partners
were used. This represents an increase of 47.4 million minutes, or 15.2 in VoIP calls compared to 2010.
The table below shows information about our VoIP services:
Item TelkomGlobal-01017
TelkomSave
Dial One Stage
Two Stages Quality
Technology Premium VoIP
Standard VoIP
c. Cellular Services
In 2011, Telkomsel introduced a number of marketing programs that focused on new
features in our cellular services. These programs strengthened our position in Indonesia’s cellular
telecommunications industry, with Telkomsel’s customer base growing from 94.0 million
subscribers at the end of 2010 to 107.0 million subscribers at the end of 2011, an increase of
13.8 or 13.0 million subscribers. Telkomsel’s new features in 2011 were as follows:
PT Telkom Indonesia, Tbk. 2011 Annual Report Moving Forward Beyond Telecommunications
