Laporan Tahunan Telkomsel 2011
Laporan Tahunan Telkomsel 2011
Table of Contents
Preface
1 2 3 4 5 6
Telkomsel at a Glance 14 Brief Profile 15 Vision and Mission 16 Milestone 16 Share Ownership 17 Organization Structure 18 Products and Services Report to the Shareholders 24 Message from the President Commissioner 26 The CEOs Report 30 The Managements Profile 32 The Board of Commissioners 34 The Board of Directors Management Discussion and Analysis 38 Operational Review 58 Financial Review 63 Business Prospect in 2012 Good Corporate Governance 67 Responsibility 69 Accountability 71 Transparency 71 Independence 72 Fairness 73 Legal and Compliance Corporate Social Responsibility 76 Corporate Social Responsibility 76 Education 76 Entrepreneurship 77 Emergency Response 77 Social Responsibility for 2011 Annual Report
Preface
PT Telekomunikasi Selular 2011 Annual Report 1
PT Telekomunikasi Selular (Telkomsel) continued to present unparalleled success in the year 2011, as indicated by a new record high in our subscriber base. This reflects our commitment to stay in the lead by driving greater potential and responding rapidly to the growing demand for data communications, which Telkomsel delivers with its large-scale of investment and mutual synergy in broadband infrastructure. Telkomsel is now more than ready to deliver end-to-end services to create a quality digital lifestyle experience for the subscribers. Through this effort, we expect to contribute to the development of the national telecommunication industry, and ultimately, to the nation's education, the business community and stronger economic growth. Telkomsel is determined to be in the drivers seat in taking you to experience the next step in digital lifestyles communication.
107 million
Financial Highlights
Description (in billion Rp) CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Current Assets Fixed Assets - Net Other Non - Current Assets Total Assets Current Liabilities Non - Current Liabilities Equity Total Liabilities & Equity CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Revenues Expenses (Incl. Depreciation) EBITDA Profit CONSOLIDATED STATEMENTS OF CASH FLOWS Cash Flows from Operating Activities** Cash Flows from Investing Activities Cash Flows from Financing Activities Cash Dividend Net Increase/ (Decrease) in Cash and Cash Equivalents FINANCIAL RATIOS EBITDA Margin1 Profit Margin2 Return on Assets3 Return on Equity4
2011
2010*
2009*
2008*
2007*
Notes: * The 2007-2010 figures were reclassified to conform with 2011 presentation. ** Includes effect of exchange rates changes on cash & cash equivalent.
1 2 3 4
EBITDA divided by Revenues Profit divided by Revenues Profit divided by Average Total Assets Profit divided by Average Equity
Operational Highlights
Description CUSTOMERS - in thousand Customer Base Postpaid Prepaid Total Net Additions Postpaid Prepaid Total MoU - in billion minutes Minutes of Usage (Chargeable) SMS - in billion units SMS (Chargeable) ARPU1 - in thousand Rp Postpaid Prepaid Blended Effective ARPU2 NETWORK DATA Base Station Unit EMPLOYEE DATA Total Employees (excl. Board of Directors) Efficiency Ratio (subscriber / employee)
2011
2010
2009
2008
2007
62 12,945 13,007
92 12,275 12,367
94 16,249 16,344
27 17,383 17,410
159.3
128.6
130.3
90.2
25.2
108.2
94.3
100.4
78.0
49.5
197 35 39 40
211 38 42 43
214 43 48 50
216 53 59 59
264 72 80 78
42,623
36,557
30,992
26,872
20,858
4,417 24,228
4,421 21,264
4,205 19,416
4,124 15,834
4,075 11,752
Notes:
1
ARPU refers to average monthly ARPU (average revenue per user) of the year, which is calculated by taking the sum of the ARPU for each month of the year, and divided by 12. ARPU is computed by dividing total cellular revenues for either postpaid or prepaid subscribers (excluding connection fees, interconnection revenues, international roaming from visitors, dealer discounts and tax) for each month by the respective average number of months. Effective ARPU is calculated from booked revenues divided by the average number of subscribers (number of subscribers at the beginning of the year added to number of subscribers at the end of year divided by 2) and then divided by 12.
Events Highlights
JANUARY
FEBRUARY
MARCH
The cooperation between Telkomsel and Google led to the launch of Business Connect. Available as a Hosted PushMail service, Business Connect assists customers to easily manage all of their corporate activities with features including e-mail, instant messaging, sharing documents, meeting calendar and secure access controls.
Telkomsel won four awards at the Top Brand Awards 2011, including awards for both kartuHALO and simPATI. The other two awards were for Internet Services Provider for its TELKOMSELFlash product and for BlackBerry Service provider. The awards were given based on a survey by the Frontier Consulting Group and Marketing Magazine.
Telkomsel launched GraPARI 24 jam at Wisma Alia 1-2nd floor Jl. M. Ridwan Rais kav. 10-18 Central Jakarta. Customers can easily and comfortably access a range of Telkomsels products and services 24 hours and 7 days a week at this ISO 9001:2008 standardized GraPARI outlet. Telkomsel celebrated the 1st anniversary of Langit Musik, launched in 2010, the special occasion was celebrated by holding an exclusive music concert at Epicentrum Walk Jakarta, presenting musical performances by 20 musicians, among which were Bottlesmoker, The Trees and The Wild, Endah N Rhesa, The Banery, etc. Until now, Langit Musik has been enjoyed by 12 million subscribers.
Telkomsel was a winner at the Global Mobile Awards 2011 for Best Mobile Learning Innovation. This international award presented at the GSMA Mobile World Congress in Barcelona Spain was dedicated to Telkomsels Urban English program. Telkomsel signed a partnership agreement with TelkomVision, one of our synergy programs with our parent company, to offer kartuHALO, simPATI, and Kartu As subscribers a discounted price for YesTV subscriptions. Through this program, Telkomsel's subscribers enjoy a 50% discount on subscriptions to YesTV Gold Package.
APRIL
MAY
JUNE
Telkomsel achieve 100 million subscribers, positioning it as the seventh largest telecommunications operator in the world, managing more than 100 million subscribers. For this achievement, Telkomsel granted a special kartuHALO for our 100th million subscribers to B.J. Habibie, the pioneer of GSM technology in Indonesia.
Together with its parent company, Telkomsel launched SpeedyFlash, which combines fixed internet service and Telkomsels mobile internet TELKOMSELFlash. The new product enables customers to enjoy stable and quick internet access in and outside home. Telkomsel was entrusted by the Asia Pacific Network Information Center (APNIC) to manage an additional 4 million IPs (Internet Protocols). With the addition of this public internet access block, Telkomsel now manages 5.7 million IP addresses, making it the biggest IPv4based internet provider in Indonesia. Telkomsel also announced its service collaboration with its parent company for loyal customers at 25 New Plasa Telkoms. The synergy brings the Companys total customer service points to more than 1.3 million. The Company serves its 107 million customers through three channels: Walk-in CTP (Customer Touch Points), such as GraPARI, GraPARIkios, and Plasa Telkom; Self Care; and Call Centers in five locations: Medan, Jakarta, Bandung, Surabaya and Makassar.
Telkomsel won the Word of Mouth Marketing (WOMM) Award 2011 as The Most Recommended BlackBerry Internet Service (BIS). This is an annual award held by SWA magazine in cooperation with onbee Marketing Research to appreciate the products and services of companies which were categorized as the most recommended brands by customers in 2011.
Telkomsel, for the eighth year in a row, earned Best Operator of the Year 2011 award at the Selular Awards 2011. At the prestigious event for GSM and CDMA operators, Telkomsel also won the awards of The Best GSM Operator and The Best Customer Care Operator.
JULY
AUgUST
SEPTEMBER
The ICT Guru program was held for three days in 2011 in 22 cities across Indonesia, targeting math, physics and chemistry teachers. It followed the success of a similar program held in 2010 in 18 cities.
Welcoming the holy month of Ramadhan, Telkomsel introduced a new program called Online Masjid Raya (OMR). The innovative program included as part of our corporate social responsibility (CSR) program communicates information and activities at 99 major mosques in Indonesia in a digital format.
Telkomsels Kartu As came with an innovation called Kartu As BonbAstis. Customers can enjoy free credit after making calls or sending SMS to other Telkomsel users.
Telkomsel launched TAP IzY, a contactless payment service which can turn a customers own phone into an electronic wallet. It is a new innovation in Indonesia and Telkomsel is the only operator providing this service.
Four students were competitively selected to receive Telkomsel School Community (TSC) scholarships under a joint cooperation between Telkomsel and the Bina Antarbudaya Foundation, which serves as the partner of the American Field Service for Intercultural Programs. The students joined in a student exchange program with the following destinations: Switzerland, Belgium, Italy and Japan.
Welcoming the 2011 hajj season, Telkomsel partnered with a Saudi Arabian operator, zain, to facilitate Hajj communications in the Holy Land of Mecca and Medina. The program was offered at a discounted tariff of up to 80% and accessible without changing SIM Card. To obtain hajj information, such as manual setting, tariffs valid in Mecca, Medina, and others, customers could also access *123#.
Telkomsel, in partnership with Telkom, launched HotSpot FLASH zone. This WiFibased area is an innovation for customers to access the internet in public areas.
OCTOBER
DECEMBER
Telkomsel announced its partnership with Skype, to deliver a new digital lifestyle experience for Telkomsels customers in accessing Skypes services through their smartphones anytime, anywhere.
NOVEMBER
Telkomsel won The Best Operator Award at Indonesia Customer Satisfaction Award (ICSA) 2011 held by SWA Magazine and an independent research agency Frontier on October 7, 2011, particularly for simPATI, kartuHALO and TELKOMSELFlash. Not only winning the Best Operator for 12th year in a row, Telkomsel also earned Best of The Best 2011.
Telkomsel launched Langit Musik HITS!, a full-track music download service for customers of kartuHALO, simPATI and Kartu As. This Service allowed our cellular customer to download thousands of songs for only Rp1,000 per week.
Telkomsel signed a partnership agreement with the other seven companies under the Telkom Group at the Sensasi di Ujung Tahun event, which was a knowledge sharing activity for the Telkom Group. Telkomsels participation was part of its commitment to implementing knowledge management in Telkom Group. The other seven companies were Metra, TII, Graha Sarana Duta, TelkomVision, Pins, Infomedia, and Mitratel. Telkomsel inaugurated the Research & Development Center (RDC), which represents our serious commitment to develop the cellular evolution and technology. Located in a 375-sqm area in Bandung, the R&D has a comprehensive facilities including an equipment room, data center, testing room, monitoring room, IP Surveillance and Demo (Outdoor).
Core Services
1. Top Brand Award for Telkomsel BlackBerry Internet Service (BIS) as The Best BlackBerry Service Provider from Marketing & Frontier
4. Indonesia Cellular Award 2011 as The Best Value Added Service from Sinyal Tabloid
2. Indonesia Brand Champion Award 2011 for simPATI as Brand Equity Champion of Cellular Operators from Marketeers & Markplus
5. WOMM Award 2011 as The Most Recommended 7. Selular Award as Operator of The Year from Selular Magazine BlackBerry Internet Service (BIS) from SWA & onbee Marketing Research
3. Indonesia Brand Champion Award 2011 for TELKOMSELFlash as Brand Equity Champion of Mobile Internet Providers from Marketeers & Markplus
6. Frost & Sullivan Indonesia Excellence Awards 2011 for Telkomsels TCASH as Most Innovative Application of the Year
8. Golden Ring Award 2011 for Telkomsels Langit Musik as Best Value Added Service from Indonesian Telecommunication Journalists
11
Broadband Services
CSR
9. Top Brand Award for TELKOMSELFlash, Mobile Internet Service Provider from Marketing & Frontier
11. Call Center Award 2011 for its excellent service performance through Telkomsel Caroline from Marketing & CCSL
14. ICT PURA & USO Award 2011 for Telkomsels services
12. Service Quality Award for GraPARI from Marketing & CCSL
10. Yahoo Big Idea Chair Regional Award 2011 for TELKOMSELSiaga Campaign as The Best ROI Combine of Display and Search
15. Indonesia CSR Award 2011 in appreciation of the Teknisi Handphone Bagi Anak Jalanan, Penyandang Cacat dan Peserta Rehabilitasi Narkotika program from the Corporate Forum for Community Development
Telkomsel at a Glance
12
broadband
cities as part of the Companys transformation program to go beyond telecommunication services, Telkomsel has deployed large-scale of
investment in network, people and technology.
13
Telkomsel at a Glance
14 15 16 16 17 18 Brief Profile Vision and Mission Milestone Share Ownership Organization Structure Products and Services
Telkomsel at a Glance
14
Brief Profile
elkomsels experience for more than 15 years since its establishment in 1995 has earned it a reputation as a leading telecommunications provider in Indonesia. With strong backup from its parent companies, Telkomsel is well positioned as the most innovative company offering extensive service coverage across the country and catering to the growing needs of a digital lifestyle with quality products and services for all market segments. To realize the mission of establishing 40 broadband cities as part of the Companys transformation program to go beyond telecommunication services, Telkomsel has made significant investments in its network, people and technology. Major groundwork projects in 2011 included restructuring the core network architecture to speed up mobile broadband take-up, for which
we have laid fiber optic infrastructure in several cities to significantly boost data speeds from and onto the internet. The fiberation in 48 broadband cities is an example of the true synergy between Telkomsels own investment and Telkoms Metro Ethernet infrastructure. This effort was combined with capacity expansion and optimization of transport assets to accelerate enhancement to the IP-based network, and the establishment of capacity management process. Telkomsel is now strongly positioned as the biggest mobile data and BlackBerry service provider in Indonesia, following exclusive improvements in connectivity to RIM and the provision of 5 Gbit/s capacity for BlackBerry services and 20 Gbit/s for Internet access. With more extensive broadband-based network and more competent human
resources, Telkomsel will be able to extend connectivity services and mobile solutions to remote areas, particularly villages in the eastern part of Indonesia. These extensive efforts have paved the way for Telkomsel to maintain its leading position in terms of subscriber base, connecting more than 107 million customers with 40 million data users at the end of 2011. This is a tremendous success, which will deliver value to the investments shared between our parent companies, Telkom (65%), the largest full service telecommunication operators in Indonesia, and SingTel Mobile (35%), a wholly owned subsidiary of Singapore Telecommunications Limited. Telkomsel guarantees a lasting commitment to lead this nation towards the experience of new styles of mobile telecommunication.
15
Vision To be the best and leading mobile lifestyle and solutions provider in the region.
Mission To deliver mobile lifestyle services and solutions in an excellent way that exceeds customers expectations, and creates value for all stakeholders and the economic development of the nation.
Telkomsel at a Glance
16
Milestone
2g
Telkomsel was established by Telkom and PT Indosat. Telkomsel launched the kartuHALO postpaid service. Brought mobile telecommunication services to all 27 provinces. Launched simPATI Nusantara, the first prepaid service in Asia. Rolled out mobile data services, including WAP over GPRS (General Packet Radio Services), MMS (Multimedia Messaging Services), and content services. Commercially launched the first international roaming services in Indonesia for prepaid customers. Introduced a secure mobile-to-mobile prepaid top up system. Joined a regional mobile alliance (Bridge Alliance) for enhanced customer benefits. Launched Kartu As prepaid service. Call Center acquired ISO 9001:2000 certification. Mobile Banking ATM services were launched. First in Indonesia to launch 3G network and services. First in Indonesia to provide push-email services. HSDPA (High Speed Downlink Packet Access) service was rolled out. Telkomsel made financial transactions possible using mobile phones (TCASH) in Indonesia. Pioneered renewable energy power for BTSs in Asia. First in Indonesia to provide mobile voice and data services to PELNI ships on the open ocean. Launched HSUPA (High Speed Uplink Packet Access) broadband network-based services. Kicked off Desa Berdering Program to provide telecommunications access for over 25,000 villages. First to perform Long Term Evolution (LTE) network broadband technology trials in Indonesia. Introduced the first Mobile Newspaper services in the country. Achieved 100 million subscribers, positioning Telkomsel as the worlds seventh largest telecommunication operator in terms of topping a 100 million customer base. Inaugurated the first Research & Development Facility for cellular technology in Indonesia. Introduced TAP IzY, the first mobile contactless payment system in Indonesia, by which customers can use their own phone as an electronic wallet.
3g
4g
2010
2011
Share Ownership
2g 1995 Telkomsel was established by Telkom and PT Indosat. KPN Netherlands (KPN) and PT Setdco Megacell Asia (Setdco) acquired stakes in Telkomsel of 17.3% and 5%, respectively. Telkom increased its ownership to 77.7%, in an acquisition deal over Indosats shares. KPN and Setdco sold their shares to Singapore-based SingTel Mobile. SingTel increased its ownership by 12.7%, bringing its total ownership in Telkomsel to 35% and leaving Telkoms ownership at 65%.
1996
2001
2002
17
Organization Structure
President Director
Finance Directorate
Operation Directorate
Commerce Directorate
HR Management Group
Corporate Strategic Planning Group Corporate Business Planning Sub Directorate Technology Master Planning Sub Directorate
Marketing Group
Digital Music Content Management Sub Directorate Mobile Advertising Management Sub Directorate TCASh Management Sub Directorate
Outer Jawa Bali Radio Access Engineering and Implementation Sub Directorate Jawa Bali Radio Access Engineering and Implementation Sub Directorate Core Network and Transport Engineering Sub Directorate
Power System Team Outer Jawa Bali Network Operations Sub Directorate Network Operations Jabotabek Sub Directorate Jawa Bali Network Operations Sub Directorate Network and Service Quality Management Sub Directorate Operations Support and Interconnect Sub Directorate
Legal and Compliance Sub Directorate Enterprise Risk Management Sub Directorate Tower Management Sub Directorate
Procurement Support and Logistics Sub Directorate International Roaming, Synergy and Partnership Management Sub Directorate Interconnect and Regulatory Affairs Sub Directorate
Sumatera Area
Pamasuka Area
Telkomsel at a Glance
18
simPATI
Kartu As
International Services
Bubble Talk & Bubbly Chatting and Social Networking City Life Emoticon SMS Facebook Idbell gapura Shop
google Apps
19
A breakthrough translation service with Google technology that operates on mobile phones via SMS. Special data package that enables Nexian mobile phone users to get unlimited data to chat with other Nexian phone users. Special data package that enables Opera mini users to access unlimited data and to formulate daily, weekly and monthly subscription plans. Telkomsel is the official partner of Opera Mini in Indonesia. Customized SMS service suited to Indonesian teenagers style.
Nexian Messenger
This application allows users to view current locations and public places nearby.
Transfer Pulsa
Secured mobile-to-mobile prepaid top up system for credit transfer services. Twitter access using SMS. Send tweets and receive notification alerts on mobiles via SMS at a very cheap tariff. Location-based social networking powered by Yahoo! (Yahoo! Koprol). Telkomsel offers a special data plan that enables users to get unlimited data on a daily, weekly, or monthly subscription plan to access the Yahoo! Koprol mobile site. English Mobile Learning Application service. This service allows users to subscribe to a course via SMS and get daily updates to learn English. Telkomsel Data plan to access Unlimited Skype for Skype Call & Chat using a special Skype application. WAP-based ODP as a channel for customers to purchase Telkomsel services and packages. New Card with a special Price Plan designed for youth plus special benefits on lifetime free Facebook access from m.facebook.com and official Facebook applications. Billing System Integration to purchase content from the OVI Store with Telkomsel balance. Voice-based service to look for RBT, voice content, and friends. One-stop application allowing customers to listen to music, play music, view videos, etc. Dating and chatting application allowing customers to find friends to chat with, see other profiles, send gifts, etc.
Twitter SMS
Yahoo! Koprol
Kartu Facebook
Voice Portal
EntbluexTV
Fundate
Telkomsel at a Glance
20
Broadband BlackBerry & iPhone A range of packages and services for individuals and corporate customers that provide browsing, instant messaging, email and social media access. Broadband access which can be enjoyed through USB dongles, portable Wi-Fi Routers, Smartphones and Tablet Packages, that includes: Flash Unlimited Starter pack - a special SIM card that is provided as a stand-alone card or companion for Tablets, Modems and Routers/Wi-Fi that is distributed to IT/ Device Channels (non traditional channels). Flash Flash Unlimited for iPad Starter pack - a special micro SIM Card for iPad as an extension of Telkomsels partnership with Apple. Flash Unlimited Package - an internet package targeted at Smartphones, Tablets, Modems and Routers, starting from Rp5,000 a day. Small Deno Package - an internet packages based on volume, targeted at mobile phones, starting from Rp1,000 a day. A Low Cost Modem with 1-Year Contract - the cheapest HSDPA in the country up to (7.2 Mbps), tied to a 1-year Unlimited Data Plan subscription. Love Indonesia Application A BlackBerry Application for the Asia Pacific region that is exclusive to Telkomsel. Broadband-based service that allows customers to make video calls using 3G-based phones. Enables back up, restore, lock, and wipe data functions for the convenience and security of mobile phone users.
Video Call
WaveSecure
Digital Music and Content Langit Musik A platform that provides full-track music downloads to mobile phones.
Mobile Content
A platform that provides a range of content including ring tones, themes, games, applications, etc.
NSP1212
21
Mobile Banking Service Mobile Banking A platform that makes it possible to perform banking service transactions via mobile phone. A platform for electronic purchase transactions that are performed between mobile phones. TAP IzY, a contactless payment service which can turn a customers own phone into an electronic wallet.
TCASH
TAP IZY
Mobile Advertising Bulk Services Personalized advertising and information broadcasts to brand communities via SMS, MMS and RBT.
Interactive Services
New form of advertising that targets consumers based on location-specific mobile devices.
M-Kupon
A form of service that replaces the conventional coupons with more interactive media.
Mobile Newspaper
A new form of newspaper in digital format, consisting of various newspapers and tabloids that can be read online. An interactive broadcast system, in the form of a pop-up message that appears on the users mobile screen.
Popscreen
WAP Banner
23
Rinaldi Firmansyah
President Commissioner
Hence, since the last few years, while still focusing on the voice and sms, we have been embarking on the development of beyond telecommunication businesses.
25
elkomsel has carved another milestone in the year of 2011, as indicated by the big jump in its subscriber base, which positions it as the worlds seventh largest telecommunication operator with more than 100 million subscribers. Of that number, we are pleased to see a significant number of Telkomsels mobile data users, which reached 40 million subscribers at the end of the year. This unparalleled achievement, which we are really proud of, has given us confidence that there is still a room for the cellular business to grow, and for us to lead the competition in Indonesias cellular industry. Nevertheless, with high SIM card penetration in the domestic cellular market, the challenge to further business expansion is always there. However, as we realize, the focus of the competition has shifted, from voice to non-voice or substitute products. Hence, for the last few years, while still focusing on voice and sms, we have been embarking on the development of beyondtelecommunications businesses, by-for example-focusing on the development of data and value added services (VAS) such as internet data access and application stores. Telkomsels management believes that the Company will be able to benefit from the rising consumer trends for data and VAS usage, and continue to focus on increasing the number of subscribers from these business segments. The opportunity to expand our business beyond telecommunications refers to the fact that we see a significant growth in the VAS business and the growing use of
smartphones in the market. In the future, we are seeking to advance these services to produce a combined voice and non-voice service that will deliver a full digital lifestyle experience for our subscribers. Adding to the data and VAS businesses and in line with the Telkom Groups strategy, Telkomsel also has a chance to expand its remittance, mobile finance and machineto-machine communication (m-to-m) businesses. We are optimistic that Telkomsel is ready to compete in these service sectors with our established IT infrastructure, improved billing system and synergy with our parent companies. Although we have a well-developed administration, we, in Telkomsel, actually apply a lenient bureaucracy, in which the Directors have considerable opportunities to run the Company and accomplish the business agenda as mandated by the shareholders and stakeholders. To assist us in monitoring the day-to-day management by the Directors and to ensure its compliance with the rules and regulations, we have three committees in the organization: the Audit Committee, Capex Committee and Remuneration Committee. The Board of Commissioners has been working closely with the Board of Directors to give recommendations on how to respond to the business dynamics in the future. Some of the recommendations covered the area of infrastructure development, particularly on how to develop the backbone network and infrastructure transportation in an efficient way. The Commissioners also suggested that Telkomsel to be more open to possible product bundling with the leading players in cellular technologies and applications so as
to boost competitiveness of the Company, particularly competitive pricing. We also seek synergy opportunities for the joint development of human resources, particularly to prepare the staff for the future expansion of the business. We expect such synergies to be able to offer broad opportunities for each individual employee to work not only at Telkomsel but also in any position in the parent companies and create value for the company he or she works for. In terms of Corporate Social Responsibility, Telkomsel has proved itself as a caring company. Through Telkomsels CSR programs, among which are providing basic ICT education for teachers and students and promoting incubation in the ICT field, we are aiming at shortening digital gap in the communities. To conclude, we, the Commissioners, appreciate all of the efforts and energy shared by the management and staffs of the Company that has enabled us to reap this success in 2011. We are proud of the business achievements, both financial and non-financial, that have positioned Telkomsel as a leading and inspiring telecommunications company for the development of the digital lifestyle in Indonesia. With stronger fundamentals, we expect Telkomsel to be able to continue to deliver sustainable growth in the years to come. Sincerely Yours,
Rinaldi Firmansyah
President Commissioner
Sarwoto Atmosutarno
CEO
he year 2011 was another milestone for Telkomsel, as indicated from the rise of customer base to a total of 107 million at the end of the year. Such achievement reflects the trust and support from our customers as Telkomsel could present an outstanding performance in 2011. Our financial performance was also healthier as revenues and net profit recorded stronger growth compared to the previous year, growing 7% and 4% year-on-year, respectively. This strong performance has given us the confidence to move forward with the strategies that we have developed to continue leading the industry in the years to come. As we entered the year 2011, the saturation signal became stronger: SIM card penetration in Indonesia had already reached close to 100%, which left little room for operators to grow their customer base from basic voice
and SMS services. However, there has been increasing growth in data demand, which has given operators the opportunity to increase customer base growth. With the declining growth rate in voice and SMS revenues in the last few years, data services have become increasingly important to operators to enhance operating revenue growth. Therefore we focused our activities in 2011 on capturing the growth in the data business, growing the contribution of content-related business, and also putting in a stronger foundation for our sustainable growth.
27
In 2011, Telkomsel served a total of 40 million data users, more than 80% up from 2010, and leading to a 60% rise in Telkomsels data revenue compared to the previous year.
as well as demand for fast information distribution that is accessible from mobile devices. It also gives Telkomsel another opportunity to grow its business beyond telecommunications by including broadband development in our business agenda. With a favourable macroeconomic environment in which inflation is at a low level, there is strong economic growth and people have relatively good purchasing power. Therefore we think this is the right time to expand the broadband-based businesses by making our non-voice services, such as mobile money/ payment, mobile music and video, mobile news, or mobile advertising, our spearheads in pursuit of sustainable growth. Although the contribution to total operating revenues was still relatively low (approximately 10%), mobile data revenues recorded more than 60% growth in 2011. Meanwhile, data users increased more than 80% close to
40 million users and data payload/ traffic increased more than 130% to more than 28 thousand terabytes. Telkomsel has placed a strong emphasis on providing and driving the increase in bandwidth per capita for the nation.
more than 1,700 3G NodeBs. In addition to new sites, we also modernized our network infrastructure to promote Internet Protocol (IP)-based voice and non-voice services. By the end of 2011, our HSDPA/HSPA network covered 48 broadband cities throughout Indonesia, or exceeded our target of coverage set at 40 broadband cities. Our synergy with our parent companies has also helped us in obtaining technology and infrastructure support, including for fibre optic and satellite bandwidth development for Telkomsels transmission needs and tower development for our radio network. Other infrastructure development included the implementation of a new billing system, moving from packagebased to an Online Charging System (OCS) for kartuHALO, simPATI, and Kartu As users. This new system enables our customers to opt for a more personalized billing service suitable
to their needs. It also enables us to implement a cluster pricing strategy. We believe that the new billing system will be a strong support to improve our competitiveness in the future. To support our product and service delivery, Telkomsel also embarked on extensive sales and marketing strategies. In 2011, these strategies also focused on below-the-line campaigns, including introducing a price differentiation policy to help micro segments to benefit more from our services. Adding to these, Telkomsel also launched innovative branding strategies to strengthen brand awareness among potential young subscribers through various school and community expansion programs. To improve retail sales performance, Telkomsel also reengineered the channel and distribution system through the implementation of a hard clustering system for every dealer and set up a key performance indicator for dealers to avoid unfair competition among them.
29
As the business grows, we understand there will be lots of potential issues within the organization. We therefore have a whistleblower mechanism so that we can manage the risks to the business. We, through Enterprise Risk Management (ERM) unit and Internal Audit Unit, also work closely with other committees in the organization, to define the risk to the business. This included establishing a new Business Sustainability task as part of our risk management effort to mitigate issues such as disasters, regulation and internal processes.
Continue to Share
Meanwhile, our commitment as a responsible business entity is also realized through the implementation of our Corporate Social Responsibility (CSR) programs. This is more than a charity program; we use CSR as momentum to share knowledge and help generate better-educated people. Thus, in 2011 our programs included device repair training for dealers and enhancement of school teachers knowledge about ICT. In addition, there were CSR programs that reflected our commitment to social and cultural development. Telkomsel is well known for its strong environmental concern and this commitment is represented, among others, by our establishment of a disaster handling squad called the Telkomsel Emergency Response and Recovery Activity (TERRA), which has attained recognition from the National Agency for Disaster Management. To ensure their effectiveness and measurability, Telkomsel has produced a sustainability report for these CSR programs.
estimated to grow at least at the same level of 2011's growth, we believe our broadband infrastructure is adequate to support the realization of our 2012 business agenda. We are aware of potential challenges that we will face in 2012, particularly on competition and regulations such as local government regulations, regulations relating to the 3G frequency spectrum, the impact of the premium SMS ban and the implementation of an interconnection fee for SMS. However, we are determined to meet the growth target set for next year as the Company is committed to developing new business beyond telecommunications services in more effective ways, to lead the digital lifestyle business. Learning from our 2011 business performance, we will promote more programs that will unlock value and enable us to be a more competitive company in many ways. Focus is the key, and we ask for the participation of all parties, management and employees, to consolidate all our efforts in managing the new businesses. Most of all, these efforts will focus on making Telkomsel the best experience provider in the year to come. To conclude, the Board of Directors would like to thank all the management and employees for all their dedication and hard work in achieving the success of 2011. Board of Directors would also like to extend the highest gratitude for the trust and support from the shareholders, stakeholders, and particularly from the valued customers and partners, which led to the success for realizing the whole business agenda of the Company. We therefore value each of your contributions to the coming achievements that will keep us in the lead. Sincerely yours,
Ready to Compete
With all of these operational and nonoperational efforts, Telkomsel is poised to win the business competition and carve another milestone in 2012. As the industry is
31
Rinaldi Firmansyah President Commissioner Mr. Rinaldi Firmansyah has been President Commissioner of Telkomsel since March 2007. The President of CFA Indonesia as well as a graduate in Electrical Engineering from the Bandung Institute of Technology (ITB) and the holder of a Masters degree in Business Administration from Indonesian Institute of Management Development (IPMI) Jakarta is currently the President Director of PT Telekomunikasi Indonesia Tbk (Telkom), a position he has held since March 2007. Prior to the top post, he was Telkoms CFO. Previously, he served as Director of Investment Banking, President Director and Vice President Commissioner at PT Bahana Securities (19972003), then Head of the Audit Committee and a Commissioner of PT Semen Padang in 2003. Between 2004 and 2010, he was recognized with a number of awards, including 'Best CFO' and 'Best CEO', by both local and international institutions. In September 2011, he also won Satellite Executive of the Year in the AsiaPacific Awards 2011, held by the Asia-Pacific Satellite Communications Council (APSCC) and was nominated as one of the Men of the Year 2012 by rakyatmerdekaonline.com in 2012. He was also named one of the leaders in Entrepreneurship Development by Minister of Cooperatives of Republic of Indonesia. He was awarded a Satya Lencana Pembangunan medal by the President of the Republic of Indonesia in 2007.
Arief Yahya Commissioner Mr. Arief Yahya has been a Commissioner of Telkomsel since June 2007. The graduate in Electrical Engineering from the Bandung Institute of Technology (ITB) and a Masters degree holder in Telecommunications Engineering from the University of Surrey, UK, has also served as Telkoms Director of Enterprises & Wholesale since June 2005. Building his career at Telkom since 1986, Mr. Arief Yahya has been entrusted with several prominent positions, among which were Head of Regional Division V - East Java (2004-2005) and Head of Regional Division VI - Kalimantan (2003-2004), when he was named The Best Head of a Regional Division. In 2006, Mr. Arief Yahya was honoured to receive a Satya Lencana Pembangunan medal from the President of the Republic of Indonesia and was cited as a future business leader by SWA Magazine.
Loso Judijanto Commissioner Mr. Loso Judijanto has served as a Commissioner of Telkomsel since June 2007. The holder of a Masters degree in Statistics from the University of New South Wales, Sydney, Australia, in 1998 and of a Masters degree in Management Accountancy from the University of Indonesia in 1995, he is also a member of the Strategic Review Unit for the Government of Indonesia. During the period 2007 to 2009, he served as a Special Advisor to the Minister of State-Owned Enterprises of the Republic of Indonesia and as a Special Advisor to the Minister of Information and Communication Technology of the Republic of Indonesia (2005-2007). Other positions he has held include Corporate Governance Consultant (2000-2005), staff member at the Ministry of State-Owned Enterprises (1998-2000) and Public Policy Researcher at the Center for Policy and Implementation Studies (1995-1996). Mr. Loso Judijanto also holds a number of professional qualifications: CMA from ICMA; PRM from PRMIA; CISA, CGEIT, and CRISC from ISACA; CFE from ACFE; CAMS from ACAMS; CIA, CGAP, CFSA (Banking); and CCSA from IIA; ERP and ICBRR from GARP; CPMA from IAMI; SAS from IAI; and CSCP from APICS.
33
Ermady Dahlan Commissioner Mr. Ermady Dahlan has been serving as a Commissioner of Telkomsel since March 2010. He has also been Telkoms Director of Network and Solution and Chief Operations Officer since 2009. Since joining Telkom in 1973, the graduate in Telecommunications from the National Telecommunications Academy (a joint program between Perumtel and ATN Bandung) has held a number of strategic positions, among which were Director of Commerce (2007-2009), Head of Regional Division II - Jakarta (2005-2007), Head of Enterprise Service Center Division (2003-2005) and Head of Regional Division I - Sumatra (2001-2003). Mr. Ermady Dahlan is honoured to have received three awards from President of the Republic of Indonesia: the Bintang Jasa Pratama (2008), Satya Lencana Wira Karya (2000) and Abdi Satya Bhakti (1997).
Yuen Kuan Moon Commissioner Mr. Yuen Kuan Moon has been serving as a Commissioner of Telkomsel since September 2009, and has been recently appointed SingTel CEO (Consumer Singapore). He concurrently holds the position of CEO of SingTel Mobile. Mr. Yuen Kuan Moon is responsible for leading and managing the Singapore consumer business to deliver a complete and integrated suite of services, including mobile, broadband and fixed-line solutions to the consumers. He previously held the position of Executive Vice President of Digital Consumer in SingTel from July 2009 to 31 March 2012. A graduate in Engineering with a First Class Honors degree from the University of Western Australia and the holder of a Master of Science degree in Management from Stanford University in California, USA (Sloan Program), Mr. Yuen Kuan Moon has a long-established career in the telecommunications industry. Starting his career in SingTel in 1993, he performed successfully in a variety of functions, including a long-term assignment at Telkomsel as the Commerce Director from 2003 to 2007.
Paul OSullivan Commissioner Mr. Paul OSullivan has been serving as a Commissioner of Telkomsel since January 2010, and has been recently appointed as SingTel Global CEO Consumer in addition to his duties as Chief Country Officer for the Australian arm of the Business (Optus). Mr. Paul O'Sullivan held the role of Chief Executive of Optus from 2004 to 31 March 2012 with responsibility for all aspects of performance and operations of Optus. The holder of B.A. (Mod) in Economics from Trinity College, University of Dublin, Ireland and a graduate of the Harvard Business Schools Advanced Management Program, he currently serves as a member of the SingTel Group Management Committee and was a member of the Board of Bharti Airtel, a SingTel Groups India-based joint venture company (2003-2009). Prior to joining Optus, Mr. Paul OSullivan worked with the Colonial Group in Australia and held a number of international management roles with the Royal Dutch Shell Group in Canada, the Middle East, Australia and the United Kingdom.
Sarwoto Atmosutarno President Director Prior to his appointment as President Director and Chief Executive Officer of PT Telekomunikasi Selular (Telkomsel), Mr. Sarwoto Atmosutarno previously held various key strategic positions in the Telkom Group. The holder of a diploma in technical engineering from Telkom in 1979, a degree in Economics from Airlangga University in 1985 and a Masters in Business Engineering in Telecommunications from the Ecole National Superieure Des Telecommunications de Bretagne, France, in 1995, was once Telkoms Head of the Infratel Division (2007), Head of the Long Distance Division (2004), Assistant EVP Network Business for Interconnection Policy (2003) and Vice President of Tariff and Interconnection (2001). He is the Chairman of ATSI, a cellular provider association in Indonesia, and Vice Chairman of the Telecommunications and Infrastructure Committee in Kadin (Indonesian Chamber of Commerce). He was awarded the Bintang Jasa Nararya (2009) and Satya Lencana Wirakarya (2000) medals by the President of the Republic of Indonesia.
Triwahyusari Director of Finance Ms. Triwahyusari has been serving as Director of Finance of Telkomsel since 2007. The Accounting graduate from Airlangga University in 1982 is responsible for the overall accounting, financial and business control functions of Telkomsel. She was once a member of Telkomsels Board of Commissioners (2003-2007) and has also served as Telkoms Vice President of Accounting (2001) and Assistant Vice President Internal Audit (1998). She was awarded the Satya Lencana Pembangunan medal by President of Republic of Indonesia in September 2011 for her active participation in CSR implementation.
35
Herfini Haryono Director of Planning and Development Ms. Herfini Haryono served in various key positions before she was appointed Director of Planning and Development at Telkomsel. The Electrical Engineering graduate with a Diplome-Ingenieuer degree from the Technical University of Braunshweig, Germany, was once Telkomsels Vice President of Business Control (2007-2009) and Vice President of Radio Access Engineering and Implementation (2004-2006). She has also been on the Board of Commissioners of PT Multimedia Nusantara (Metra) since 2008. Before joining Telkomsel, she was Senior Manager of Radio Network Planning and Engineering at StarHub Singapore (1999-2004), and System Engineering Manager at PT Motorola Indonesia (1994-1997). She was awarded the Satya Lencana Pembangunan medal by President of Republic of Indonesia in September 2011 for her active contribution in building Indonesia cellular industry.
Ng Kwon Kee Director of Operations The graduate from Brighton Polytechnic, UK, with Bachelors degree in Electrical & Electronics Engineering (Honors) was a Commissioner of Telkomsel from 2008 to 2009 and Director of Operations from 2004 to 2006. Before joining Telkomsel, he was Senior Director (Network Integration & Interconnect) of Network Services at SingTel Mobile, where he was involved in the network integration with Optus and reviewed and streamlined the business process in the Network Group.
Edward Ying Siew Heng Director of Commerce Prior to Joining Telkomsel in November 2011, Mr. Edward Ying Siew Heng previously served as Chief Multimedia Group (2008 to 2011) at SingTel, where he was instrumental in elevating SingTels standing in the local content, media landscape and Pay TV Business. Mr. Edward Ying Siew Heng brings with him a wealth of leadership experience in the telephony, entertainment and content business across many countries. Mr. Edward Ying Siew Heng was COO of Maxis Communications, Malaysias largest mobile operator (2003 to 2008), where he was involved in the multimedia content business, taking their mobile business to greater heights. Mr. Edward Ying Siew Heng also spent seven years in Globe Telecom in the Philippines as Chief Operating Advisor and as a member of the Board (1996 to 2003). Prior to that Mr. Edward Ying Siew Heng was also the Managing Director at the Cambridge Cable Group Pay TV Business in the UK (1995-1996). Mr. Edward Ying Siew Heng graduated in Marketing from the Institute of Marketing, United Kingdom, in 1987, earned a DIP Sales and Marketing at the Marketing Institute of Singapore in 1985, and took part in the National University of Singapores General Management Program in 1984 as well as attending the International Executive Program at INSEAD, Fontainebleau, France, in 1996.
the largest national cellular provider in Indonesia with a market share of 43% of the
full-mobility cellular market.
37
Operational Review
Strategic Objectives
The telecommunications industry nowadays is becoming more dynamic, with the shift of business focus from voice services to the development of non-voice, such as data services, mobile finance, mobile advertising, mobile music, etc. The industry is challenged to meet a variety of demands with end-to-end services and to match its internal capacity with the developing external ecosystem. Thus, Telkomsel has designed corporate strategies for 2011 to 2015 emphasis on strengthening the core business (Voice & SMS), winning wireless broadband business (mobile data), driving and leading the digital lifestyle, and leveraging business solutions. These strategies will establish a firm foundation which to maintain its leading position in the domestic market. In the years ahead, we expect to see growth in the low-end segment while defending high value subscribers and winning youth communities, as well as driving mass market adoption of the mobile internet
lifestyle with Telkomsels robust portfolios of additional New Wave businesses. The smart strategies and promotional activities we put in place during 2011 enabled the Company to accomplish its target of increasing the customer base. At the end of the year, Telkomsels total subscribers reached 107 million, consisting of 2 million postpaid kartuHALO subscribers, and 105 million prepaid subscribers under the simPATI and Kartu As brands.
cellular market with close to a 50% share, reaching more than 2.1 million subscribers at the end of 2011.To better serve kartuHALO users and reduce the churn rate, Telkomsel has been focusing on various retention programs: Micro campaigns for retention & loyalty programs Telkomsel executed various loyalty programs through micro campaigns, such as giving away gifts on customers birthdays, bonuses after a certain number of minutes of consumption, and special programs for certain kartuHALO subscriber segments. HALOtalk Telkomsel offered daily bulk packages for Voice On-Net. The program successfully increased package users by 34% in JuneJuly 2011. Commemorating 100 million subscribers Telkomsels customer base in 2011 finally reached 107 million subscribers. To celebrate this achievement, Telkomsel gave a combined bonus of 100 minutes of calls, 100 SMSs and 100 Mb of data for all kartuHALO subscribers.
39
Telkomsel has designed corporate strategies for 2011 to 2015, which place an emphasis on strengthening the core business (Voice & SMS), winning wireless broadband business (mobile data), driving and leading the digital lifestyle communication, and leveraging business solutions.
Free BlackBerry Data Roaming Service Our postpaid subscribers enjoyed the re-launch of Free BlackBerry Data Roaming without any package activation in China- (China Unicom), Singapore- (SingTel), Malaysia- (Maxis), Hongkong(CSL), Taiwan- (Taiwan Mobile), Thailand- (AIS), Japan- (Softbank) and Australia- (Optus). The promotion was valid from December 12, 2011 to February 29, 2012. To lure new kartuHALO users, in 2011 Telkomsel offered bundling device packages though several promotional programs, such as the 100 million customers program and Ramadhan promotion. We also riding the momentum of high mobile data/ GPRS demand to launch an attractive internet service package that offered an unlimited data package at only Rp75,000 for high fair usage. The promotional programs were also combined with the kartuHALO Caring program, in which Telkomsel provided education for new subscribers about e-Billing and payment services, international direct calls and international roaming features, TCASH, BlackBerry Internet Service, and so on. In 2011 simPATI was positioned as a premium prepaid card with lifestyle theme cards. More youthful and dynamic packages were offered, targeting the middle segment, including university students and young executives. Telkomsel launched a number of campaigns for collaborative mobile broadband services to boost demand for simPATI among digital lifestyle users. These campaigns included: Talkmania Campaign This program was aimed at keeping voice revenue stable. Ramadhan - SMS Program This program was launched during Ramadhan and Lebaran to boost SMS revenue during the holiday season. Mobile Internet Campaign This program included Internetmania, Musikmania and simPATI Puas 2. The program was aimed at boosting preference for simPATI among data users. Bundling simPATI Bundling handsets with well-known brands, such as Nokia, Samsung, LG, BlackBerry, iPhone, HTC, and so on to strengthen simPATI as premium prepaid card. Telkomsel also targeted a number of campaigns at retention and high value customer loyalty programs, including: Friday Movie Mania This was aimed at enhancing loyalty among subscribers by redeeming Telkomsel points for movie tickets on Fridays. Bonus Gila-gilaan Through this loyalty program, subscribers were eligible for surprise bonuses. PSTN Packet and Combo Mania Packet & Recharge Surprise Bonus This program was aimed at enhancing loyalty among subscribers.
Below-the-line Micro campaign recharge bonus Recharge bonuses for selected target segments, with the purpose of stimulating recharge, as well as retention programs for New Activation. At the end of 2011, the award-winning brand reached a total of 51.3 million subscribers, leading the market for the eleventh year in a row.
Kartu As continued to penetrate the mid-low segment, winning market share with more competitive pricing and new packages, such as: Kartu As Rp0 Launched early in the year, this was an aggressive Kartu As campaign offering a Rp0 experience from the first 30 seconds. This promotion package also offered free 5,000 SMS. Kartu As Extra Ampuh This package was an acquisition promotion offering free voice and SMS based on usage and valid for 24 hours on the same day. Sahur Package Fasting Month This was unlimited package of Voice & SMS, valid during Sahur time. Kartu As BonbAstis Launched in September 2011, Kartu As BonbAstis offered customers a certain amount of free credit after making a call or sending an SMS to another Telkomsel user. Kartu As Gratis Nelpon 30 Jam The Gratis Nelpon 30 Jam promotion was launched in December 2011 with various offerings, such as voice bonus based usage until 6 a.m. the next day (30 hours).
Other package campaigns were Jagoan Serbu Nelpon & SMS, and SMS on certain price plans. To support market penetration in some regions, Telkomsel also launched Local Cards in Madura, Lombok, Sumbawa, and Pantura (Central Java) and Cianjur in West Java. To strengthen its position as a cheap lowend card, Telkomsel also offered cheap SMS, voice, or data. The new promotion boosted Kartu As sales to 99% in 2011 while the introduction of local cards increased Kartu As sales by up to 300% in areas where it was applied. At the end of 2011, Telkomsel managed more than 53.5 million Kartu As subscribers with a net add of more than 18 million subscribers and year-on-year revenue growth of more than 50%. NEW WAVE SERVICES Value Added Services (VAS) The growing usage of smart phones and the trend for social networking has paved the way for Telkomsel to boost its Value Added Services (VAS). Thus, to drive innovation in the Value Added Services segment, Telkomsel has developed partnerships with the worlds leading VAS players such as Yahoo!, Google, Opera, Apple, Facebook, Research in Motion (RIM), Skype, MacAfee and others.
41
Partners Telkomsel-Yahoo!
Remarks The partnership in 2011 covered programs of providing data & SMS packages for the users of Yahoo! Koprol, Yahoo! Messenger SMS, Yahoo! News module on Telkomsels mobile portal, and the launch of new service package to retrieve update from Yahoo! OMG portal via SMS. The partnership was extended to the launch of a new innovative product, Google Apps (Business Connect). The service is tapping opportunities in Cloud-based services for SME segment. Both were partners in providing unlimited daily, weekly and monthly data base access through Opera Mini. The Latest innovation with Opera was the launch of inspiring woman photo contest as co-marketing program to commemorate Kartinis Day. Both worked on a number of packages such as BlackBerry Unlimited plan, BlackBerry Business plan and BlackBerry Lifestyle plan. A new BlackBerry service was launched in July 2011 called BlackBerry Extreme offering customers the services like streaming and tethering on their BlackBerry handset or tablet. Its partnership with RIM led to achievement of Best Innovative BlackBerry Services and achieved biggest market share in Indonesia. The partnership included billing system integration to facilitate content transaction on Nokia OVI Store. Both set up an exclusive partnership, which was the first in the world, in launching Facebook Card, allowing users to enjoy free access to Facebook mobile site and all of its applications then get bonus for Facebook Credit. The initiative targeted youth segment and particularly new-to-net users. The partnership has been running since October 2011 to make Skype monthly package (valid for 30 days) for Unlimited Skype to- Skype Calls and Chat available on a range of BlackBerry, Android and Symbian based devices. This is the first partnership Skype has in Indonesia.
Mobile Internet & Broadband As we realized the huge potential and high growth in the mobile data or internet market, Telkomsel continued its effort to lead in this market through several initiatives on network deployment, marketing communications strategy, product offering and micro segmentation, device bundling and sales channel development as well as partnership and synergy. With these various initiatives, which were deployed until December 2011, Telkomsel reached approximately close to 40 million mobile data subscribers, or more than 80% from 2010 including Flash and Blackberry users. Revenue jumped by 62% (year-on-year) compared to our performance in 2010. A number of strategies were taken in 2011 to tap the market potential, among which were the following: 1. Network Deployment Telkomsel developed its broadband network under the broadband city initiative. In 2011, we successfully covered 48 broadband cities, exceeding the initial target of 40 cities, using 3G/ HSDPA/ HSPA/ HSPA+ technologies combined with 2nd carrier of 3G and Metro Ethernet for the best digital experience.
Telkomsel-Google
Telkomsel-Opera
Telkomsel-RIM
Telkomsel-Nokia
Telkomsel-Facebook
Telkomsel-Skype
2. Marketing Communication To boost broadband sales, Telkomsel launched a new tagline for TELKOMSELFlash, namely TELKOMSELFlash, Koneksi Internetku replacing the previous TELKOMSELFlash, High Speed Wireless Broadband. This was to build a new brand image as a complete data service provider for any device. In addition, to strengthen Telkomsels digital presence, we have been aggressively penetrating digital and new emerging channels, such as online, mobile, search and social. Initiatives included strengthening the awareness of Telkomsel.com and Telkomsels social media properties. 3. Sales Channel Development With the use of a special prepaid data card, namely the Flash unlimited starter pack as the vehicle, Telkomsel was able to recruit 10 major distributors from non-traditional dealers (IT Channels) nationwide. 4. Product Offering The above-mentioned strategies were combined with attractive product offerings, as follows: Giving a bonus for each new prepaid starter pack. Micro-campaign initiatives, offering customized internet packages that are built according to the subscribers usage pattern, buying power and device that subscriber is using. Special prepaid packages for broadband users: Perdana Flash Unlimited sold as a stand-alone internet prepaid card or as part of the bundling package, especially for modems and tablets. Combination of 2 in 1 between the Fix and Mobile networks through Speedy Flash. Subscribers only need to pay and maintain one bill to have two kinds of products: Speedy for home usage and Flash for mobile usage. Flash Zone, a WiFi-based internet service which is an alternate to 3G / HSDPA / HSPA services. The launch of the midnight package with competitive price and a large quota allowance (high value package). The Flash Midnight Data Sale was launched to promote faster and more competitive data connections during off-peak times. The launch of a special broadband package and Telkomsel Business Connect (Google Apps) for the Small and Medium Enterprises (SME) market distributed through the kartuHALO card. This will continue to enhance the product portfolio by being offered as a corporate business solution to serve corporate subscribers according to their line of business. 5. Device Bundling In driving data adoption and data usage, devices play an important role. Telkomsel has therefore continued to launch aggressive bundling programs with both handset manufacturers and handset distributors of major brands such as Apple, RIM, Nokia, Samsung, LG, HTC and Sony Ericsson, as well as of mass market brands like Nexian and TiPhone. The programs enabled us to provide competitive but fullfeatured packages, such as: Nokia-exclusive bundling partner for the new flagship Nokia Asha 303 and Nokia Asha 200, Nokia Browser and WhatsApp data plan. Samsung-exclusive bundling partner for advanced Android handsets, such as the Samsung Galaxy SII and Samsung Galaxy Mini. On tablets, Telkomsel has bundling packages for the Samsung Galaxy Tab. 10.1. and Samsung Galaxy Note. LG-exclusive bundling partner for the Android-based LG Optimus Me handset, LG Optimus Black, LG Optimus 2x, and LG Optimus 3D. Nexian-exclusive bundling partner for the NexianSlank handset and Nexian 3G. HTC-exclusive bundling partner for the HTC Wildfire S, HTC Chacha, HTC Explorer, and HTC Rhyme as well as the special HTC 7 inch tablet, namely the HTC Flyer. Sony Ericsson-exclusive bundling partner for the Sony Ericsson ARC and Sony Ericsson Spiro special edition with Harry Potter.
43
BlackBerry-bundling partner for new BlackBerry handsets powered by next generation BlackBerry OS-OS7: BlackBerry Bold 9900, BlackBerry Bold 9790, BlackBerry Torch 9810, BlackBerry Torch 9860, BlackBerry Curve 9360, and BlackBerry Curve 9380 as well as the BlackBerry Playbook. With this partnership, Telkomsel introduced a special BlackBerry Extreme package for streaming. Modems and tablets have been another focus, served through our partnerships with Huawei, Speed Up, Advan for modems and Samsung for tablets. 6. Partnership and Synergy Telkomsel decided to extend the partnership with Over The Top (OTT) players (Facebook, Google, Skype, Opera and RIM) to provide customers with easy internet access (zero Facebook, Facebook on Java and Nokia Store carrier billing), special data packages (Opera Mini & BlackBerry) or new products (Google Apps through Telkomsel Business Connect and Telkomsel Skype) to help drive adoption of data usage. Through synergies with our parent company, Telkom, which owns the biggest fixed internet network, Telkomsel has combined fixed and mobile internet in one package through Speedy Flash and Flash zone, a WiFi-based internet service which is an alternate to 3G/ HSDPA/ HSPA services. For the Speedy Flash package, subscribers only need to pay and maintain one bill to access two kinds of products; Speedy for home usage and Flash for mobile usage. Mobile Banking Services Telkomsel has been cooperating with several national banks to provide mobile banking services that allow customers to perform banking transactions using their cellular phones. In 2011, we made advances in mobile transaction solutions for partner banks, namely Bank Mandiri, Bank BNI, Bank BCA, Bank BII, Bank CIMB Niaga, and Bank Jabar and Banten (BJB). Our Mobile EDC Solution for the finance and banking sector generated significant revenues and expanded our customer base, securing more than 18,000 customers from BCA, 3,000 customers from BRI, and 1,000 customers from Bank Mandiri.
Mobile Advertising (MobAds) Management MobAds has been recognized as a promising new business model the Company can explore further in the future. Since June 2010, Telkomsel has accelerated the development of the platform, which is expected to be an integrated solution for all partners such as media sellers, brands, agencies, government and communities using channels like SMS, MMS, voice, portal, cell broadcasts, USSD, applications and video. We have 73 partners and have launched a campaign for 5,652 brand advertisements as well as cooperating on digital music and content application management. One of the more popular products of MobAds in 2011 was Location Based Advertising (LBA), adding to the potential of Mobile Newspaper and Mobile Internet. To successfully market these products, Telkomsel will combine the efforts of strengthening our business foundations and enhancing basic telco channels to promote service and product leadership. In 2011, MobsAds saw significant revenue growth, particularly in the 3rd quarter. The Bulk Package was still the biggest revenue contributor to the total MobAds revenue, followed by Bulk Excess, Pop Screen, IPX Profiling, Mobile Newspaper, Interactive Service, Biz Ring, and Wap Banner. Telkomsel relaunched Mobile Newspaper (MNS) and enhanced public awareness about mobile advertising. To enhance awareness, we participated in seminars and exhibitions, launched new products and supported the bike community. We also added locations for the LBA service while completing the development of mobile newspaper and the Indolife platform. New features added to the MobAds service included Malena, which enabled multiple data profiling selection, SMS notification and a brand monitoring dashboard. In terms of system, MobAds now is supported by new platforms such as USSD Menu Browser (UMB) Push, WAP static banner and MMS Ads User Accept Tance (UAT).
Digital Music & Content We celebrated the first anniversary of the launch of the innovative Langit Musik service, from which customers can enjoy music videos, Mini Songs and Device Play. In 2011, we modernized the RBT platform, moving from Comverse to Eluon, to give a better entertainment experience for customers. We also launched NSP1212 for the corporate segment. To deliver content services, we have been working closely with partners who also participate in our MobAds service. We have also pursued synergies with our parent company to improve content services, such as by providing Music License Bank (MLB) and Ring Back Tone (RBT) for mobile customers, providing SMS Konten and SMS Broadcast with Telkom Flexi, Games and educating Game Blue Print, mobile finance, and a WiFi trial project.
TCASH and TAP IZY Telkomsel has brought in more mature strategies for developing its TCASH product management to make it a more effective and efficient business model with great potential. In 2011, the product development strategies included aggressive promotional programs and the addition of new features to generate a higher number of customers. TCASH promotion included a cash in program plus free voice service, registration program plus free 100 SMS, Rp50,000 top-up transaction with free 1,000 SMS, 20% discount program for the purchase of prepaid PLN tokens, Megalife insurance program, Telkomsel mobile community program in Medan, additional discount programs at www.dealkeren.com, the launch of the BlackBerry Dakota 9900 series, and the TCASH corner. At the end of 2011, the number of TCASH users reached nearly 8 million, by successful partnerships with 509 merchants and the addition of TCASH terminals to bring the total number to more than 32,000 terminals. In late 2011, Telkomsel introduced TAP IzY, a new means of mobile payment transaction which turns customers own phones into electronic wallets. In early 2012, Telkomsel, in cooperation with PT Kereta Api Indonesia (PT KAI), will present TAP IzY for purchasing tickets for the Prambanan Ekspress (Prameks) serving the Yogyakarta-Solo route. The payment method is as easy as bringing a cell phone, which already has a TAP IzY card installed, close to the EDC machines at the Tugu, Lempuyangan, Purwosari and Solo Balapan stations, in addition to those in the Greater Jakarta area. At the initial stage, Telkomsel and KAI are offering a special discount rate of Rp1,000 for any Prameks ticket purchase (AC, Non AC). The facility is made possible by radio frequency technology.
45
CORPORATE BUSINESS SOLUTIONS Telkomsel is committed to serving its corporate segment with end-to-end products and services at high level of quality. To better serve our corporate customers, Telkomsel will appoint Account Managers as consultants with extensive knowledge and skills to extend solutions and assistance to the customers, particularly the SME and Corporate segment, in a more personal way and at an affordable cost. Today, Telkomsel is serving more than 8,000 companies across the country. In 2011, Telkomsel introduced a range of Corporate Business Solutions. These included Hosting Solution packages and SME packages. The Hosting Solution packages are corporate solutions offered in two packages: Business Connect and Sales Force Automation. The Business Connect package includes Google Apps Business Connect, which has been offered through a collaboration between Telkomsel and Google since January 2011. Business Connect offers various bundling packages consisting of Easy Package, Smart Package, and Speed Package besides bundling programs with HALO fit, BlackBerry, and TELKOMSELFlash. Through the launch of these packages, Telkomsel aims to be the first GSM operator with total hosting solutions in Indonesia. To complement Business Connect, Telkomsel also offers Sales Force Automation, a hosting solution for the corporate segment designed to strengthen the implementation of Business Mobility Sales, Marketing or Delivery Services that allow sales force management applications to be accessible through mobile devices in real time. Meanwhile, two SME packages were introduced: a. HALOBisnis is a new communication service package for the SME segment launched in mid-2011. b. PAKAR (PAketKomunikasiAndalanwiRausaha) consist of the PAKAR Telkomsel package (Rp335,000/month), PAKAR Smartphone (Rp342,000/month) and PAKAR Internet (Rp150,000/month). The efforts to expand our corporate customer base included taking part in competitive biddings and acquiring back customers from a variety of business sectors: trading, manufacturing & industry, finance & banking, government and SME. Telkomsels Corporate Business Solutions have focused on the following categories: a. Business Mobility This is a solution for business operations based on technology (GPRS/EDGE/3G/HSDPA/HSPA+) as well as SMS. Examples of the solutions include Push Email, Sales Force Automation, and Intranet Application Access.
b. Wireless Connectivity Among the wireless connectivity solutions are Mobile ATM, Mobile EDC, Mobile Tracking & Fleet Management, Telemetry Application and Small & Remote Office Connectivity, for smooth and effective online and wireless operational work procedures. c. Business Leveraging Telkomsel offers Business Leveraging solutions such as SMS Service, NSP1212 for Corporate, Mobile VPN, Fixed Wireless Connectivity, TCASH, TELKOMSELFlash, and Telkomsel Enterprise Hosting Services (Business Connect). During the year, Telkomsel made a deal on providing Mobile VPN solutions for 15,000 subscribers from the armed forces, and gained a significant number of customers and revenue from providing Mobile EDC Solutions for the finance and banking sector. At the end of 2011, Telkomsel enjoyed a 13% increase in its corporate customer base. To boost its presence in the SME and corporate markets, Telkomsel actively participated in a number of events and seminars. The Company participated in the Indonesia International Communication Expo & Conference 2011 (ICC) from June 8th to 12th, 2011 at the Jakarta Convention Center to build greater awareness of Telkomsels corporate business solutions. It was also present at the Indonesian Petroleum Association (IPA) at the Jakarta Convention Center, where several leading oil companies were also the participants. Telkomsel also set up building-to-building temporary outlets at several office landmarks such as the House of Arkadia, Pertamina, BNI, BRI, GKBI House and the House of Representatives / Peoples Consultative Assembly compound. The Company held the Telkomsel BlackBerry @2011 golf tournament series in several cities as part of a loyalty program for middle to high level management, and took part in a roadshow held by Femina magazine (Wanita Wirausaha) and Seputar Indonesia (SINDO) daily to strengthen its presence in the corporate market segment.
INTERNATIONAL SERVICES Telkomsel continues to develop its international services through partnerships with well-known global telecommunications operators. Today, Telkomsel has expanded the coverage of its GPRS roaming packages, unlimited data roaming packages, and unlimited BlackBerry roaming packages to more than 40 countries across the globe. International Roaming We continue to maintain our leading position in roaming services to serve digital lifestyles with aggressive roaming footprint expansions and attractive yet simple roaming solutions in 2011, particularly for data services (BlackBerry and Data Roaming). In order to drive roaming traffic growth and secure roaming traffic and revenue from international partners, we expanded roaming agreements (on voice, GPRS, 3G, CAMEL) with new roaming partners and established special IOTs (Inter Operator Tariffs) with major global operators. Telkomsel brought the number of its GPRS roaming partners to 285 in 134 countries, following the addition of 52 GPRS roaming agreements. Telkomsel also added roaming agreements, making a total of 449 agreements in 195 countries by the end of 2011. To boost inbound traffic, save roaming costs and enhance the roaming retail proposition, preferential roaming partnerships were established with more than 65 operators globally. With regard to traffic performance in 2011, inbound traffic grew by 8% to 31 million minutes while outbound traffic grew by 12% to 21 million minutes. Data traffic grew significantly, both inbound and outbound, i.e. 171% for inbound, and 142% for outbound compared to 2010. Other ways of maximizing revenues and growing traffic were pursued by developing innovative and simple retail programs with attractive pricing and full network support. During the 2011 Hajj season, when over 234,000 Indonesian pilgrims went to Saudi Arabia, Telkomsel launched its Close to Saudi Local Card Tariff, the lowest and most attractive tariff and services at Rp6,000/ minute for calls to Indonesia and Rp900/SMS. Especially for this Hajj promotion , Telkomsel established a free Hajj Call Centre, hosted in Jakarta, as well as Posko Haji, Customer Service Points for Hajj pilgrims in Mecca and Medina, which offered services such as voucher top up, roaming feature activation, and SIM Card replacement. These programs provided a strong service image for Telkomsel and proved to be most valuable to Hajj roamers. The Hajj program was very successful in driving significant traffic growth of up to 590% for voice, 632% for SMS and 184% for
GPRS compared to the 2010 Hajj season. Telkomsel gained a SIM Card penetration of 71% of all Hajj pilgrims, or more than 165,000 subscribers. We entered into a strategic cooperation with zain Saudi Arabia in deploying this successful Hajj program. To help realize the digital lifestyle experience, Telkomsel has launched programs such as BlackBerry roaming and data roaming, supported by wide service coverage and a variety of attractive offers. The data roaming packages, including unlimited data roaming, unlimited BlackBerry roaming and volume-based data roaming, were supported by footprints in 53 destination countries across the Asia Pacific region, USA and Europe as well as Middle East countries. A Free BlackBerry Data Roaming service was re-launched to postpaid subscribers from December 12, 2011 to February 29, 2012 in the top eight destination countries: Singapore, Malaysia, Hong Kong, Australia, Taiwan, China, Japan and Thailand. Voice and SMS promotions were introduced on December 12, 2011, in more than 15 European countries as well as in Australia, New zealand, and South Africa, and will last until August 31, 2012. We also ensure the quality of our international services by conducting numerous tests in major cities and entry points on a periodic basis. Telkomsel has also strengthened its tools for network monitoring and traffic management as well as effective network management (troubleshooting & handling).
47
Bridge Alliance Telkomsel joined the Bridge Alliance, an alliance of the Asia Pacific regions leading telecommunication providers, in 2004. The alliance was established to tackle any emerging issues in the dynamic telecommunications industry in the region, particularly with regard to mobile markets and technologies. In the next phase, the Bridge Alliance will perform as a commercial vehicle for its members to join forces in establishing mobile infrastructure and a common service platform in the region. The cooperation will enable the delivery of seamless mobile services across the Asia Pacific region, and enhance the roaming service experience for mobile users during their travels within the region. The alliance of eleven leading operators, namely Bharti Airtel (India), Globe Telecom (Philippines), Maxis (Malaysia), Optus (Australia), SingTel Mobile (Singapore), Taiwan Cellular Corporation (Taiwan), Telkomsel (Indonesia), Hong Kong CSL (Hong Kong), CTM (Macau), SK Telecom (South Korea), and Advanced Info Service (Thailand), and supported by two major technology players: Huawei and Starhome, Bridge Alliance is offering a range of competitive benefits, particularly in international roaming services. Indeed Telkomsels membership in the Bridge Alliance extends the benefits to Telkomsels customers abroad. Bridge Alliance membership enables the Company to deliver access to various mobile content services including football and other sport features from STAR Sports and ESPN, utilize Bridge Data Roaming Unlimited (BDRU) with various packages for 1-3 -5 days, and the Bridge Privilege Service. The Bridge Alliance has enhanced Telkomsels competitiveness and our customers digital experience as well as giving an array of significant benefits and improving the economic scale of its products and services. CUSTOMER SERVICE We value our customers by delivering end-to-end services and greater benefits to give them the full digital lifestyle experience. This is part of our below-the-line campaign to selected customer segments, such as prepaid low-cost segments and postpaid kartuHALO, our premium brand, for which we provide full-features products and services, high value promotions and dedicated service. Our customers can access the range of products, services and solutions by contacting Telkomsels Customer Touch Points (CTPs), i.e. walk-in (GraPARIkios, GraPARI and Plasa Telkom), selfcare and call-in through the Call Center. Our walk-in customer touch points are established in 435 locations, and consist of GraPARIkios (327 locations), GraPARI (83 locations) and Plasa Telkom (25 locations). The number rose by 4% from the end of 2010. Through these walk-in CTPs, Telkomsel has served more than 10 million transactions. Telkomsel officially implemented GraPARIkios as of October 1, 2011 across Telkomsels service areas, particularly at walkin Telkomsel CTPs managed by business partners. It also supported the migration of the charging system for prepaid customers by taking anticipatory actions to mitigate against the implications of the system enhancement. Telkomsels Call Center and GraPARI already have ISO 9001:2008 certification from the international certification institution, RW TV. For Self-Care services, customers could access *111# for kartuHALO users and *116# for simPATI and Kartu As, as well as by sending an SMS to 111 for kartuHALO subscribers and 116 for simPATI & Kartu As. They can also be accessed through social media via Facebook and Twitter, Web TCare, and e-mail. Telkomsels enhanced web TCare is accessible through the website: https://my.telkomsel.com and we have also opened a new service channel using social media networks: Facebook (account: Telkomsel) and Twitter (account: @Telkomsel). To support the Go Green campaign, Telkomsel launched electronic billing, which will reduce costs and the usage of billing paper. Our Call Center is accessible in five locations: Medan, Jakarta, Bandung, Surabaya and Makassar. In 2011, Telkomsel focused on the improvement of our Call Center quality. By the end of this year, we manage to improved the capacity of our Call Center Agents through optimization of existing resources and simplification of service processes. We also optimized the handling of valuable calls by our Call Center Agents by shifting the static data information service to a non-human system. The handling of Broadband and Data Services by Call Center Agents was also enhanced. The program has given our customers easier access to Call Center Agents and thus to solutions for their problems.
We launched the SMS Center 1111 for international roaming users, particularly in line with the development of our Data Roaming Services. Between November 2010 and December 2011, the SMS Center for International Roaming had served nearly 15,000 subscribers. During the 2011 Hajj season, Telkomsel launched a special international service, Call Center Haji, in cooperation with Saudi Arabian-based operator, zain, which was accessible by dialling 1111 (free). Since its kick-off on October 5, 2011, we received more than 14,000 calls through Call Center Haji 1111.
In order to maintain the standards of our customer service and ensure procedures are applied correctly, we conduct mystery shopping on a periodic basis. This program is carried out by an independent institution appointed by Telkomsel. To reduce the churn rate in kartuHALO service, Telkomsel introduced a series of retention programs, including kartuHALO Bill Shock Prevention, kartuHALO Priority Complaint Handling, and Prepaid Priority Complaint Handling, which were initially focused in Greater Jakarta. It also held the Win Back kartuHALO program to reduce the churn rate in kartuHALO segment subscribers while maintaining new kartuHALO subscribers by making outbound calls to verify billing and e-mail addresses for E-bill activation, and sending e-mails full of information on Telkomsels products and services. The Win Back kartuHALO program, which was conducted from November 25, 2011, until December 20, 2011, succeeded in maintaining nearly 4,000 subscribers, representing an 80% success rate. Telkomsel was also able to solve 96% of the problems under the kartuHALO Priority Complaint Handling program. In overall, we were able to maintain the service level of our Call Centers in 2011 at 96%, exceeding the regulators target of 75%, with the total capacity of agent handling rising 4% to 115 million transactions. Customer Experience Survey (CES) Customer satisfaction is our first priority. Thus, since the beginning of 2010, Telkomsel has conducted CES by sending SMSs to all subscribers who visit GraPARI. The survey achieves a 17% response rate from all subscribers, with confirmation of satisfactory service level of up to 95%. In 2011, Telkomsels Customer Satisfaction Index (CSI) for Call Center services rose to 83.1 from 77.7 in 2010. Meanwhile, the CSI for walk-in services averaged 86.2 in 2011, from a previous level of 85.5. The average CSI for self-care rose to 81.8 from 77.9. The total number of transactions served through the Call Center in December 2011 reached more than 115 million, up 4 % from around 110 million transactions in December 2010. Walk-in transactions in 2011 reached more than 900,000, and there were close to 22 million self-care transactions. CUSTOMER RETENTION AND OPTIMIZATION (CRO) Telkomsel categorizes its subscribers into segments according to their tenure and usage patterns. In meeting the specific needs of the customers in each market segment, thousands of
49
unique campaigns were designed and delivered by Telkomsel in 2011 to increase the usage and tenure of its subscribers. In line with Telkomsels focus on increasing the take-up of mobile broadband services among its subscribers, numerous mobile broadband micro-campaigns were launched in 2011, including data bonuses, automatic device configurations and customer education messages.With an effective customer campaign design and delivery process, Telkomsel was able to reach more than 70% of its subscribers through these campaigns in 2011. In order to retain subscribers, Telkomsel also runs loyalty programs, offering Telkomsel points as a tool to engage subscribers. One million subscribers participated in Telkomsel points programs and one billion points were redeemed. The main loyalty programs conducted in 2011 were as follows: Lucky Draws Merchant discounts Lifestyle activity (movies, music, travelling and religy) All subscribers were eligible to join in those programs easily by redeeming their Telkomsel points through a very simple mechanism. The most redemption points were through lucky draws, of which three were conducted during 2011. Telkomsel offered a variety of lucky draw prizes, such as handsets and savings for monthly prizes, deposits on TCASH accounts and holiday trips for quarterly prizes and luxurious cars as a grand prize. In 2011, Telkomsel cooperated with local and national merchants to support loyalty program such as Garuda Indonesia, Blitz Megaplex, XXI, Telkom Vision, Metro Dept Store, KFC, Urban Kitchen, Kidzania, Ancol, Ace Hardware, etc. We also gave privileges to subscribers by offering them the chance to redeem points for tickets for concerts such as by David Foster, Westlife, Jason Mraz, Akon, Java Rockin Land, Ina Blues, Kylie Minogue, and Kahitna.
In 2011 Telkomsel embarked on several activities in sales using existing distribution channels. We optimized the inbound and outbound Call Center for cross sales and upsales of various products such as RBT, BlackBerry Internet Service (BIS), and TELKOMSELFlash. In the meantime, Telkomsel continued the Mobile KIOS (MKios) project, including sustaining the performance of transfer and recharge in the MKios system and developing new feature applications for MKios. We also added other features into the Universal Recharge Platform (URP) system in order to adapt to the business dynamics in the telecommunications industry, while developing a new alternative channel for international services and improving sales capacity management by fulfilling network capacity and billing elements through the application of mass deletion tools. We also ensured the availability of credit vouchers and starter packs in the market, which we supported with the development of the Paradise (Supply Chain Management) system for smooth distribution. Other programs included the acquisition of retail and banking partners, the implementation of a new concept of kartuHALO, and training and workshops for Kios Halo owners. In addition, Telkomsel also enhanced sales, revenue and brand awareness by conducting a self-consumption program as an alternative effort to grow revenue, sales and boost public awareness of Telkomsels brands. Sales programs with partner banks were aimed at increasing transactions through non-ATM channels (SMS banking, Mobile Banking, e-Banking, etc). In 2011, we saw a 15% increase in transactions through non-ATM channels. We also implemented auto collection to support efficiency and effectiveness in the distribution system, developed sales tools automation, provided handsets for Online Masjid Raya (OMR) and Canvassers and developed an outlet management program. Outlet management has been developed in line with the effort to expand our service coverage and market share. In 2011, Telkomsel took various initiatives, such as developing the outlet community by launching Merah Mandiri outlets, standardizing outlet classification, and training, educating and disseminating knowledge to the Sales Forces. We also set up and supported outlet programs as well as developing sales kits and communication media for outlets, such as issuing bulletins and providing transaction record books for outlets, as well as empowering the Sales Forces. This was supported by reliable information systems, consisting of the Outlet Management System (OMS) and Sales Force Integrated Information System (SEFIIA).
Telkomsel also strengthened its digital presence (beyond telecommunications) through a series of programs. The programs included the re-branding of the TELKOMSELFlash tagline as TELKOMSELFlash, Koneksi Internetku (previously TELKOMSELFlash, High Speed Wireless Broadband). To kick off the new branding campaign, Telkomsel launched the Flash Midnight Data Sale to enable fast and cheap data connections for midnight use and Flash QoS for kartuHALO subscribers, enhancing the speed of TELKOMSELFlash. We also sponsored the Formula 1 broadcast on Global TV to boost the positioning of TELKOMSELFlash as a fast data service. In August 2011, Telkomsel introduced Flashzone as a hotspot service area. Sales programs for Products and Services in 2011 were: a. Promotion of simPATI Double Talk Mania, simPATI Gratis Nelpon Berjam-jam and simPATI Gratis Internet Berjam-jam. b. Promotion of Kartu As Rp0 + free 5,000 SMS. c. Telkomsel Poin draw with a Mercedes Benz C200 as the grand prize. d. Introduction of Telkomsels new tagline, Terbukti Paling Terpercaya, Paling Indonesia. e. Promotion of simPATI Internet Mania. f. The launch of TelkomselSIAGA, a yearly program for loyal customers and loyal outlets. g. Launch of Unlimited Internet M@nia and Unlimited Musik M@nia, Telkomsel Ibadah, which offered a special tariff for Hajj pilgrims calling to Indonesia. h. Promotion of simPATI Bonus Surprise. i. Promotion of Kartu As BonbAstis. j. Promotion of simPATI Puas 2. To boost the number of simPATI subscribers, we conducted a major hand phone bundling campaign and various sponsorship events, such as the Friday Movie Mania with simPATI, a religious program, discount programs with top brands, etc. There are also co-branding programs involving top merchants, such as Garuda Indonesia, Sea World, Urban Kitchen and Hypermart, aimed at retaining existing subscribers. On the marketing side, to pursue effectiveness and efficiency, Telkomsel developed numerous bundling programs. Among these were: Revenue device bundling This program was designed to meet demand over data with benefits and offers through events. Some of the incentive was: - Running upfront-fee packages (prepaid bundling packages). - Giving bundling bonuses after recharge. - Educating partners and customers about Telkomsels bundling programs. - Introducing a new experience for the users through customized data service packages based on partner brands or device types: HTC, Nexian, and iPhone. Customer based and VAS selling program This program included: - Introducing regional bundling programs based on market development and new business sales. - Providing competitive bundling packages and launching incentive schemes based on partners commitment and distribution. - Creating applications that could be injected into bundling devices and facilitating the introduction of VAS programs. - Participating in national events. Bundling product capability This program was conducted through product and service launch events, penetration events and education programs as well as promotional media for bundling programs. CLUSTERIZATION To promote effective sales and distribution, Telkomsel is consistently strengthening its distribution channels by applying the cluster management system, which consists of soft and
51
hard clusters. Cluster management is important to ensure the availability of Telkomsels products and services in the market and to manage credit top-up (recharge distribution) in certain areas, which ultimately ensures the achievement of sales targets. Under this system, customers can top up their credits through MKios located in the same area or the same cluster (district) of the end user. To improve distribution performance, we are constantly reviewing and monitoring the performance of both soft and hard clusters at all branches. The sales team also applied the CDMP (coverage, distribution, merchandising and promotion) method across all clusters at all branches. In 2011, we kicked off re-clusterization in certain areas, namely in Greater Jakarta, West Java, Lampung, and Central Java. One of the challenges we faced in clustering was focusing Telkomsel sales partners more on Telkomsels growth in their respective clusters. To improve the management of distributors, we reviewed the cluster management by reviewing questionnaires about the operation of hard clusters, setting Key Performance Indicator (KPI) parameters for clusters, reviewing the implementation of the CDMP method and Sefiia, and setting rewards and consequences. BRAND PERFORMANCE These sales and marketing programs are also concentrated on meeting the parameters we use to measure brand performance, loyalty performance, and community performance. To measure brand performance, we use the brand equity index (BEI). The brand indexes for each of our Core Services in 2011 were 0.3 for kartuHALO, 3.2 for simPATI, and 2.3 for Kartu As. The brand index for Kartu As in 2011 increased over each quarter. For loyalty program performance, the parameters are the quantity of participants and transaction growth. Telkomsel achieved 41% from a target of 35% for quantity of participants, and more than 187 million transactions. This achievement was also part of our effort to boost media effectiveness, as a result of which we have gained a higher Ad liking for Kartu As TV commercials (TVC) and a higher consideration to use Kartu As in the future due to its positioning as a value brand and its cheaper image, rather than simPATI, which is considered a premium brand (with a strong signal, more complete features and broad coverage). This was an outstanding achievement for Kartu As as no other TVC managed to reach an empathy score of 3.8 and impact score of 5.1 as of 2009. Kartu As also gained the highest Electronic Privacy Information Center (EPIC) score compared to its peers.
AREA PERFORMANCE Sumatra Area In 2011, Telkomsel focused more on programs that were granular in accordance with the segment and focused on the aim of achieving the targets, including promotion campaigns. In order to boost the performance of new wave businesses, Telkomsel added network capacity and new coverage for 3G, and implemented broadband corners, bundling strategies and promotions. A heavy Below The Line (BTL) and Above The Line (ATL) campaign was conducted for mobile internet users, giving priority to existing customers. greater Jakarta and West Java Area To support the spirit of going beyond telecommunications, Telkomsel took some initiatives for customers in the Greater Jakarta and West Java Area, by: 1. Launching the UMB program (Tausiah Islami by Ust Nur Maulana, Yusuf Mansur, etc.), the SULE application, and a content program (Blast promo through 4444). 2. Conducting Broadband Flash competitions (the Ketupat program, Etalase Broadband), TELKOMSELFlash hard selling programs (On the Street, bundling program of Flash Co with Gramedia) and the Broadband Corner. 3. Developing the Hai Sobat.com community site, a digital activation corner through Twitter, activating the TCASH service for all staff, and offering sales outlet rewards through TCASH. Java - Bali Area In 2011, Telkomsel focused on building greater awareness of its products and services to boost the number of customers in Java-Bali areas by using social media as marketing channels, such as Facebook and Twitter. In that case, there were also programs, like Profile Picture Competition (PPC) and Video Talent Competition (VTC) in June August 2011 using Facebook Page of Telkomsel Java-Bali. In the meantime, Telkomsel also successfully migrated all of its prepaid and postpaid customers in Java and Bali to the new OCS / SCP system. These efforts helped Telkomsel to achieve good performances in each marketing area, particularly in the data services business. In 2011, the Java-Bali Area managed 11 broadband cities. Pamasuka Area Business development in Papua, Maluku, Sulawesi, Kalimantan area (Pamasuka) has been very aggressive, with a focus on
optimizing revenue from the core business and from new wave businesses through cross selling in main and secondary cities. These efforts were also expanded to youth communities, such as school and campus communities. We launched thematic marketing programs to generate revenues from the new businesses, such as Nada Sambung Pribadi (NSP), TELKOMSELFlash, BlackBerry Internet Service (BIS) and content, holding an exhibition to introduce the new wave businesses and youth activities. Our sales programs to increase the customer base in the area included the Banjir Hadiah program for new simPATI/ Kartu As subscribers, Semarak 16 tahun Telkomsel, which was a musical event to celebrate Telkomsels 16th anniversary, and an inner city and second city bundling program.
some improvements were made in terms of connectivity to RIM and the provision of 5 Gbit/s capacity for BlackBerry services and 20 Gbit/s for Internet access. Telkomsel is now recognized as the biggest mobile data and BlackBerry service provider in Indonesia. The following are the network development programs undertaken in 2011: Network & technology master plan Creating Telkomsels network migration strategy for longterm plan in securing long-term investment. Network planning guideline a. Formulating an accelerated technology strategy as part of the Network Infrastructure Strategy and Guidelines, in line with Telkomsels business objectives for Mobile Broadband and growing new wave businesses. b. Solutions to minimize capex investment for 2G technology. Technology & investment control a. Creating a Telkomsel technology center environment to facilitate innovation, development and the testing new business revenue stream. b. Developing technical standardization and policy for both existing and new products. c. Assessing, analyzing and investigating business development & future telecommunication technology. d. Controlling network implementation & investment plans by evaluating capex.
Network
CORE NETWORK & TRANSMISSION In 2011, Telkomsel had put in place network master plan which serves to drive the long and medium-term network development direction in our transformation toward the Next Generation Mobile Network and enhance our ability to sustain the longer term mobile data growth. The long-term focus will be on technological evolution of the network and key R&D initiatives while the midterm focus will be on network control and planning. During the year, Telkomsel invested ahead of growth to speed up mobile broadband deployment, expand capacity and optimize core network services, modernizing existing core network assets to reduce operational expenditure (Opex) and optimizing the transport of assets to speed up migration to the IP-based network, as well as establishing capacity management process. These programs helped Telkomsel to establish full IP-ready Packet Switch (PS) and Circuit Swicth (CS) core networks in Greater Jakarta and West Java, implement new internet gateways and Gi core architecture, introduce business-friendly capacity management in core networks and a pay as you grow licensing scheme, as well as complete customer experience management (CEM) tools, complete re-engineering at transport level and inner city transport fiberization in 48 mobile broadband cities, among others. The fiberization in 48 broadband cities was implemented in a synergy between Telkomsels own investment and Telkom Metro Ethernets infrastructure. Adding to this network enhancement,
53
New technology solution /feature assessment a. Assessing new technology solutions, products and features to support new wave businesses before they are implemented on Telkomsel network. b. Investigating and analyzing changes in telecommunications regulations. Technology acquisition & research development Conducting research and development to test new technology and product capability. Adding to the implementation of the above-mentioned programs, Telkomsel launched the Telkomsel network migration strategy 2012-2016, covering global technology trends and a roadmap, a regulation roadmap, alignment with the strategic plan, and network planning guidelines for 2012, which consists of Radio Access Network (RAN), core & transport strategy and policy. Other efforts included the RAN Cluster & Modernization to define new cluster areas nationwide to achieve a single RAN, running Radio Frequency (RF) Spectrum Strategy and Analysis, Cloud Single RAN, IPv6 implementation and participation in the IPv6 World Day in Telkom, and transporting network modernization towards the IP network, IP Radio Microwave (MW) and IP Clock synchronization. Telkomsel joined project tenders for IP Radio microwave, Serving GPRS Support Node (SGSN) solutions & CS core as well as as Internet Service Provider (ISP) nationwide, as well as
conducting an LTE Trial & Assessment, to test LTE frequencies 1.8GHz & 2.1GHz with NSN, Ericsson, zTE and Huawei. To support the expansion in customer base and revenue, Telkomsel took a number of actions including business process improvement, alignment with capacity requirement and maintain a quality network. These actions led to the following successes: Adding to our capacity and number of BTSs with the addition of 4,328 2G BTSs and 1,738 Node B BTSs. Blocking reduction in various key areas such as; Sumbagut, Sumbagteng, Sumbagsel, Kalimantan and Sumalirja to accommodate high traffic demand. The average blocking rate is maintained in the healthy rate. Establishing 48 broadband cities, exceeding the target of 40 broadband cities. Network modernization in radio and core system in various regions to support business growth and build efficiency. To strengthen our leading position and protect our share of the voice and SMS markets, we conducted various service quality management programs, which included sustaining the quality of existing network elements consisting of regular Drive Test Benchmarking in 40 cities and Drive Tests in Outer Cities. Service Quality Management To improve quality, Telkomsel launched a range of programs including capacity enhancement optimization, coverage & quality optimization, RAN feature optimization, end-to-end broadband optimization, VAS & recharge optimization and transport & datacomm optimization. A unified platform was created for performance management by rolling out NetCool from IBM and acquiring more user experience management tools to support the transformation of our culture and business foundations. To support the realization of our vision of a digital lifestyle, Telkomsel took several initiatives, such as providing wireless broadband service assurance in 25 cities that have been broadband-ready since 2010, while improving the quality of our broadband service in 15 additional cities as well as enhancing the quality of our Value Added Services (VAS) and Service Provisioning by assuring a high success rate in USSD. Through all these activities, in 2011 we were able to maintain our lead in quality benchmarking in 70% of cities in terms of voice service and in 80% of cities for data services, and reach beyond our corporate strategy objective of establishing 40 broadband cities by adding eight more cities.
Power System As a telecommunications service company, Telkomsel has to ensure the availability and reliability of power systems at all sites. In 2011, we made improvements to the the Telkomsel Telecommunications Centers (TCC ) by re-engineering the power system, through a COS (Change over switch) usage program aimed at power supply redundancy for TTC buildings, bus duct redundancy and the addition of mobile generators, and by designing a cooling system room for vulnerable equipment. Other improvements focused on power availability at all sites, by rehabilitating power systems such as battery recharge and rectifiers, ATS and power equipment, and by adding power equipment capacity, installing solar cells and micro hydro power as green energy sources, reengineering the power system and installing DC power rental. In 2011, Telkomsel operated green BTSs in 226 sites. Tower Management The management of Telkomsels towers, sites and other utilities is currently done in synergy with PT Mitratel, a Telkoms subsidiary, under the Telkom-Telkomsel tower colocation program. This synergy also includes network lease and maintenance of sites, towers and other utilities. This co-location program aims at achieving a lower cost of capital ownership and enhancing revenue for Telkomsel. Telkomsel took the initiative to launch the Telkom Groups Tower Management Security Task Force, which is assigned to review risks in the tower business. We also conducted a tower valuation in line with efforts to address the compliance gaps. In cooperation with a CellPlan consultant, Telkomsel is able to get an accurate insight of the compliance values and the geographical status of each of our tower environments. USO Project One of Telkomsels programs for its Universal Service Obligation (USO) project in 2011 was Kapal (on the ship) broadband services, i.e. internet and WiFi services with speeds of up to 4Mbps (upgradeable) installed on Angkutan Sungai Dan Penyeberangan (ASDP) ships that operate between Bali and Lombok. The service is enabled with the implementation of a Broadband Automatic Tracking System (BATS) and Orthogonal Frequency Division Multiplexing (OFDM) for backhaul transmission. During the Telkomsel Siaga Event 2011, Telkomsel also succeeded in delivering broadband services on PELNI ships serving the Makassar-Surabaya route
using a VSAT-IP system. These achievements enabled ship passengers across the nation to enjoy broadband services onboard. This is the first broadband solution introduced for ships and maritime areas. To support the program, Telkomsel also offered customized tariffs for each service group: the Telkomsel Ships Package, and Rural Corporate & Village and Hotspot USO applicable to all Telkomsel customers. Telkomsel also launched the Talkmania Kapal package to accommodate customers with higher voice consumption during their trips. Other USO programs included a rural internet service under the Desakupinter portal program, which is a social and business portal for residents in rural areas. We also developed infrastructure and rural internet services using Broadband Wireless Access (BWA)/ OFDM solutions, through which Telkomsel installs two computer terminals connected to Telkomsels internet network, plus one Wireless Access Point for the internet as an embryo for paid wifi services. Telkomsel also developed Telemetry Services for shipping lines, WiFi access for the rural corporate segment, and broadband services for banking and micro finance transactions in remote areas. Telkomsel has also designed and is ready to deploy hundreds of BTS in border area sites around the country to ensure that our cellular network serves areas bordering other countries. Research and Development On December 5, 2011, Telkomsel launched a research and development center in Bandung. The research and development facilities include LTE, FEMTOCELL, Solar Cell, M2M, Power, and so on. The establishment of this technology research and development center is a necessary step to facilitate innovation, development and testing for new business revenue streams to boost the Companys competitiveness.
55
as long and short-term plans that will be aligned with the Corporate Business and Strategic Plans. At the same time, all our system transformations are designed to reduce the longterm cost of capital investment and operational costs. Our IT system transformation was one of our key activities in 2011. The transformation consisted of an Online Charging System (OCS) project, a Customer Relationship Management & Contact Center (CRM & CC) project and an Enterprise Service Bus (ESB) project. The OCS project successfully migrated all prepaid and postpaid subscribers in 2011 while the ESB project and CRM & CC project entered the design phase with shared resources, goals and business capability improvements. a. OCS (Online Charging System) Project The project aimed at replacing current billing and IN systems with a convergent prepaid and postpaid OCS system to support prepaid and postpaid customers at the same time. The project stages included scoping, designing, building, integration testing, acceptance test, performance test, migration, training, operational readiness test and deployment. Telkomsel completed the migration process of more than 68 million prepaid and 2 million postpaid customers. b. CRM & CC (Customer Relationship Management & Customer Care) Project Telkomsel plan to implement an integrated customer relationship management and contact center solution to support future growth. This program is aim to enhance Telkomsels existing customer relationship management process and reducing the time to market of product and service offerings. c. ESB (Enterprise Service Bus) Project This project was aimed at replacing the existing Enterprise Service Bus (ESB) with an industrial scale Enterprise Service Bus and Service Oriented Architecture (SOA) solution to integrate key business support systems (BSS), operations support systems (OSS) and other enterprise applications. Modularity and re-usability are the key features of this project. Other IT transformation programs included the modernization of the MKios recharging system, as well as implementing the International Roaming Traffic Director (IRTD). All were designed to support business and operation needs, provide reliable systems and still maintain cost effectiveness. In the meantime, Telkomsel launched strategies to support IT enterprise architecture and beyond telecommunications
procurement processes, among other means by completing Capex and Opex procurement price management, and implementing modernization and reclusterization as well as adopting new technology. Also in support of IT enterprise architecture and beyond telecommunications procurement processes, Telkomsel also plans to implement an Operational and Strategic Decision Support System (OSDSS), Customer Relationship Management and Contact Center (CRM CC), Operational Support System (OSS), Enterprise Service Bus (ESB), Serving GPRS Support Node (SGSN), Gateway GPRS Support Node (GGSN) & Policy Charging and Rules Function (PCRF), Circuit Switch Core (CS Core), and Network Analysis Module (NAM) tender processes. The Capex & Opex procurement price management strategy included a new pricing scheme that with a stronger revenue generation perspective, the implementation of Pay As You Use pricing and pooling, and the modernization of beyondtelecommunications ready networks. With regard to modernization and reclusterization, Telkomsel completed the modernization of 2G BSS equipment by introducing new equipment that is 3G and LTE ready in Greater Jakarta, West Java, Lampung, and Central Java, and conducted an IP Microwave and Packet Transport Network (PTN) tender to ensure the readiness of the transmission backbone for broadband. In 2011, Telkomsel started implementing e-procurement to replace the PR User system used for making purchase requests. The new system is equipped with features such as e-justification, manage buyer workload, PR PO monitoring, and i-supplier and vendor management evaluation.
Human Resources
Given the contribution of human resources to the success of the companys business, Telkomsel has well-planned programs for its human resources development. Hence, empowering them with certain competencies and skills that are required in response to the business dynamics is very important. We help shape them into professional individuals with specializations according to each of their functions, who also respect the corporate culture and work ethic. In Telkomsel, our HR Services conduct the recruitment, performance assessment and manage the development programs of our human resources. As of December 2011, Telkomsel managed 4,417 employees.
BUILDINg A PROFESSIONAL WORKFORCE AND A STRONgER ORgANIZATION In order to develop our staff into highly motivated, professional human resources with strong teamwork, Telkomsel set strategic objectives to strengthen our Talent Pool program (Organization Development, Employee Performance and Talent Management): To enhance Telkomsels organization by making it a HighPerformance Culture Organization that is ready to face the next S curve; To build valuable human capital.
Training Programs To add to the development initiatives, Telkomsel also held a number of trainings designed to enhance the capabilities and baseline expertise of the employees and leaders, as well as to prepare them to take on key supporting roles in the new business transformation. The training programs were: Broadband Competency Program & Leadership Training This included training on enhancing awareness of the Mobile Broadband Business for staffs and supervisors. Mobile Broadband Business training was also provided for managers and general managers. Broadband training involved 83% of our staffs, or 3,686 employees. We also provided technical skills training and soft skills training to 2,250 employees and 247 employees, respectively, as well as e-learning training to 405 employees. Marketing Program This was an analytical training program for sales and marketing staff and leaders to improve their performance in response to the business transformation. Employee Exchange Program The company also intensified the Telkomsel-SingTel employee exchange program, which is a leadership training program held jointly between Telkomsel and our parent company, SingTel, to create a highly qualified workforce. Another exchange program was conducted with the Telkom Group, which involved PT Telekomunikasi Indonesia Tbk (Telkom), PT Dayamitra Telekomunikasi, PT Sigma Caraka, PT Infomedia, PT Gratika and PT Indonusa Telemedia. Telkomsel also facilitated staff placement at Koperasi Telkomsel (KISEL).
The Development Initiatives These strategic objectives were then articulated into various development programs designed in line with the corporate strategies, one of which is to prepare all of our human resources for broadband readiness. Among the development initiatives in 2011 we were developing sourcing policy, launching the organization transformation for 2011, accountability mapping for the 2011 and 2012 organizations, position evaluations for level 2-5, a workforce plan for 2012 and individual target setting. During the year, Telkomsel also conducted a Telkomsel Best Leader & Staff 2011 program, aimed at getting the best leaders and staff to be role models for all employees. In addition, we continued to develop the Talent Management System in order to identify the best performing, highly competent employees. Talent management candidates are approved by the Board of Directors.
57
At the same time, Telkomsel also defined core competencies for leaders and staffs to identify competence gaps among employees. This involved a competence assessment, job evaluations, the introduction of a New Competency Profile using the spider web model for 3,025 positions, and applying competencies for learning, talent and others. With improved competencies, we expect our employees to be agents of change in the future. Employee Rewards Telkomsel rewards its employees with competitive remuneration packages, consisting of a salary and various benefits which are on par with the industrys fair value. We apply a merit system to assess the appropriate rewards based on performance of the employees. Under the Employee Performance Management Team, Telkomsel launched Individual Performance Appraisals in the second half of 2010 through the Cross Border Process. The program was extended by launching Individual Performance Appraisals in the first semester of 2011 through an improved, smoother Cross Border Process. In cooperation with Corporate Planning and Business Control Units, the team promoted Integrated Performance Management System. Other reward programs, which are categorized as continuation programs, include pilgrimages to Mecca for Moslem employees and similar programs for employees of different faiths.
HR COMPLIANCE Since 2007, Telkomsel has applied a Code of Conduct to support the implementation of Good Corporate Governance. All employees are required to sign the code of conduct statement and apply it in their daily activities so that the Company can develop into a healthier, more transparent and more responsible organization. Industrial Relation In the effort to maintain good relations and cooperation between Telkomsel and the Labor Union, labor institutions, Immigration and related institutions concerning labor issues, Telkomsel is committed to upholding the Bipartite Cooperation Institute (LKS Bipartite). LKS Bipartite will serve as a medium of communication and discussion between management and the employees, bridging the interests of both parties so as to create more harmonious and conducive environment. The management and employees are also committed to the implementation of the articles in the working agreement. Disciplinary measures will be taken to resolve conflicts in industrial relations with reference to Law No. 2 year 2004 regarding the Resolution of Industrial Relations Conflicts. Awards For its success in transforming Knowledge Management into daily activities, Telkomsel received a Most Admired Knowledge Enterprise (MAKE) award from Dunamis Consulting.
Financial Review
Introduction
The cellular telecommunications industry has experienced a declining growth rate in the revenues of basic voice and SMS services. At the same time we have seen strong growth in data services. Telkomsel has developed a five-year strategy to maintain its leading position and implemented a number of programs to sustain revenue growth in 2011. With a more stable competitive environment during the last three quarters of 2011, we implemented price optimization programs to improve our revenue per minute and revenue per SMS in order to improve revenue growth for voice and SMS. We also put more focus on our customer retention program to maintain healthy customers and increase our active customer base. With the increase in demand for data services, we accelerated our capacity and coverage expansion to support the growth of our broadband data service. We actively enhanced our efforts to further increase data penetration, such as through partnership and bundling programs, solving user and device barriers, and enhancing distribution and promotion. All of these efforts successfully sustained our growth. Our customer base, operating revenues and profit even grew more strongly in 2011 than in 2010. We were also able to maintain Telkomsels position as the largest national licensed cellular provider in Indonesia, with a 43% share of the full-mobility cellular market. In 2011, Telkomsel net added 13 million new customers, bringing the total customer base to 107.02 million, a 14% increase on a year-on-year basis at end of 2011. One of the growth drivers was the growth in data users, as reflected by the number of Flash users, which grew 46% to 5.5 million customers, and Blackberry customers, which grew 226% to 3.1 million customers. The total data users grew more than 80% to approximately 40 million customers. Traffic production also increased in 2011, for both voice and SMS (chargeable). Minutes of Use (MoU) rose 24% to 159.3 billion minutes and SMSs increased 15% to 108.2 billion units, while data traffic grew 134% to 28.3 petabytes. This led to a 7% growth in revenues to Rp48.73 trillion, while expenses (including depreciation) grew 10% to Rp31.06 trillion. Meanwhile, EBITDA and profit growth achieved 4% each to Rp27.55 trillion and Rp12.82 trillion, respectively.
Operational Results
Customer Base In 2011, Telkomsel successfully net added 13 million customers, a 5% improvement on the 2010 performance. This growth was fully attributable to prepaid products, with Kartu As as the main contributor with its Rp0 promotional program, which experienced the highest growth in 2011. The total customer base as at end of 2011 increased 14% from the prior year to 107.02 million, consisting of 2.19 million postpaid and 104.83 million prepaid customers. At the end of 2011 Telkomsel dominated the full mobility market with a 43% share. ARPU The ARPU of cellular operators has been declining over recent years as a result of competition on pricing and penetration to the lower market segment, as well as the impact of the multiple SIM card holders phenomenon. Telkomsels blended ARPU decreased 7% to Rp39,000 in 2011. Minutes of Use (MoU) and Revenue Per Minute (RPM) MoU production (chargeable) increased 24% in 2011 to 159.3 billion minutes on the back of customer base growth and an increase in MoU per customer. Total MoU production (chargeable and non-chargeable) increased 23% to 166.3 billion minutes in 2011. Revenue per minute declined 21% year-on-year to Rp171, due to the impact of competition in 4Q10, which was still affecting the RPM in 1Q11. Although RPM declined year-on-year, we saw an improving trend in RPM during the last three quarters as a result of our tariff optimization program to monetize the traffic growth. SMS and Revenue per SMS (RPS) Chargeable SMS traffic in 2011 rose 15% to 108.2 billion SMS units, mainly driven by the growth in the customer base. Total SMS production (chargeable and non-chargeable) registered considerable growth (approximately 13%) as a result of certain promotional SMS packages offered during the year. We recorded 226.4 billion units of SMS in 2011. Revenue per SMS (chargeable) showed an improvement in 2011, growing 3% to Rp116.
59
Financial Results
REVENUES (in billion Rp) Postpaid Prepaid International Roaming Interconnection Other (USO compensation & network lease) Total Revenues 2011 4,347 39,991 686 3,148 561 48,733 2010 4,430 36,724 713 3,173 527 45,567 Growth -2% 9% -4% -1% 6% 7%
Telkomsels revenues increased 7% year-on-year to Rp48.73 trillion, which doubled the last years growth rate, thanks to the strong growth of our data services. There was also an impact of changes on dealer sales scheme in 2011. Revenue growth was still driven mainly by our prepaid products, which contributed 82% to total revenues.
1.1% 1.4% 6.5% 8.9% 82.1% 1.6% 1.2% 6.9% 9.7% 80.6%
Contribution (%) of each revenue item Postpaid Prepaid International Roaming Interconnection Others
2011
2010
Postpaid revenues slipped 2% to Rp4.34 trillion due to the decrease in voice and SMS revenue resulted from traffic decline. Prepaid revenues grew 9% to Rp39.99 trillion driven by the growth of Kartu As customers. International roaming revenues declined 4% to Rp686 billion, due to the impact of special inter operator tariff with some roaming partners. Interconnection revenues declined slightly (1%) to Rp3.15 trillion due to the decline in domestic interconnection combined with an increase in revenue from foreign roamers. Other revenues increased 6% to Rp561 billion, resulted from network lease and USO compensation fee. Telkomsels non-voice (SMS, Data & VAS) revenues grew 29% to approximately Rp17 trillion. This contributed 36% to total revenues, increasing from 29% in 2010. The major contribution to the growth of non-voice revenues was from our SMS and data revenue growth. We saw strong revenue growth in data services in 2011 (62% growth to Rp5.2 trillion) in line with the growth in data users. This contributed approximately 10% to our total revenues in 2011.
ExPENSES Expenses (including depreciation) increased 10% to Rp31.06 trillion, which was mainly due to increase of revenue related expenses.
(in billion Rp)
Personnel Operation and Maintenance General and Administrative Marketing Interconnection Charges Cost of Services Depreciation Others - net Total Expenses
2011 1,901 10,312 938 2,201 2,701 3,131 10,016 (135) 31,065
2010 1,634 9,875 854 1,428 2,797 2,381 9,417 (176) 28,210
Contribution (%) of each expense item Personnel Operation and Maintenance General and Administrative Marketing Interconnection Charges Cost of Services Depreciation
6%
6%
32%
2011
33%
33%
2010
35%
10% 9% 7%
3%
8%
3% 10% 5%
Personnel expenses increased 16% to Rp1.90 trillion, following the organizational restructuring program and an increase in allowances for the employees. Operation & maintenance expenses grew 4% to Rp10.31 trillion, resulting from an increase in network related expenses such as transmission, power supply and network space rental in line with the growth of our network infrastructure, combined with a decline in frequency expenses due to the implementation of the new bandwidth-based frequency fee.
(in billion Rp)
Transmission Frequency Repair & Maintenance Power Supply Others Total Operation and Maintenance
General & administrative expenses rose 10% to Rp938 billion, mainly due to increasing consulting fees and miscellaneous other general expenses. Marketing expenses grew 54% to Rp2.20 trillion in line with the increase in marketing and sales activities to leverage our product competitiveness and to promote our data services, and was also due to changes in our dealer sales scheme.
61
Interconnection charges (domestic and international) decreased 3% to Rp2.70 trillion, mainly because of a decline in domestic interconnection charges due to a decline in interconnection tariffs. Cost of Services grew 31% to Rp3.13 trillion. The YoY growth of Cost of Services was mainly due to increase in data access fees in line with the growth of the data business, particularly for BlackBerry service. Depreciation expenses increased 6% YoY to Rp10.02 trillion as an impact of network infrastructure growth and accelerated depreciation of certain fixed assets. Others-net decreased 23% to a net gain of Rp135 billion due to forex loss resulted from depreciation of the rupiah in 2011. EBITDA AND PROFIT Our EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) increased by 4% to Rp27.55 trillion, which improve from last year decline of 3% in 2010. The EBITDA margin declined slightly from 58% in 2010 to 57% in 2011. Meanwhile, profit climbed 4% to Rp12.82 trillion, which reversed the decline of 6% recorded in 2010. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Total assets decreased by 2% to Rp58.72 trillion. Total liabilities decreased by 12% to Rp20.35 trillion, while total equity increased 12% to Rp38.37 trillion. Current assets increased 70% to Rp9.86 trillion, mainly due to the increase in cash and cash equivalents. Fixed assets declined 6% to Rp46.21 trillion due to the network infrastructure growth, offset by the increase in depreciation expenses as a result of the accelerated depreciation of fixed assets in relation to the modernization of our network infrastructure and supporting equipment. Current liabilities increased 4% to Rp13.98 trillion, mainly due to increasing accrued liabilities combined with a decline in the current maturities of mediumterm loans in 2011. Non-current liabilities declined 34% to Rp6.37 trillion, mainly due to a decrease in medium-term loans.
Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Dividend Net Increase in Cash & Cash Equivalent Effect of Foreign Exchange Rate Changes Cash & Cash Equivalent at Beginning of the Year Cash & Cash Equivalent at End of the Year Addition to Fixed Assets
2010 19,515 (9,870) (2,029) (9,992) (2,376) (43) 3,641 1,222 8,198
Loan
In 2011, Telkomsel tapped USD104.81 million of its loan facilities. As of the end of December 2011, Telkomsels total outstanding loan was Rp5.76 trillion after transaction costs. Telkomsel did not propose any new loan facilities in 2011, instead utilizing only the loan facilities that were already available. The following table shows the details of the Companys loans: 2011 Loan per Currency (in Trillion Rupiah or Rupiah Equivalent) per 31 Dec, 2011 - IDR - Valas 4.69 1.07 8.42 1.14 2010
Telkomsel is required to observe certain agreed financial covenants relating to its loans/ debts. As of December 31, 2011 these covenants were as follows: Covenants t/b maintained
Bank loans
Telkomsels latest credit ratings, as issued by a number of recognized institutions, are as follows:
Local currency Foreign currency Outlook
Baa1 BBBBBB-
BBB-
63
Our market assessments indicate that Telkomsel has great opportunities to grow the business beyond telecommunications. With the trend of flattening growth in voice revenues, both globally and domestically, data services are expected to be a promising revenue contributor in the next year and beyond. Indonesian broadband users are growing significantly, along with the growth of smartphone users, particularly of BlackBerry handsets, and device operating systems have been playing a role as catalysts of the change. We have thus seen a tendency among telecommunications operators to drive mobile data services as the key driver of growth while still holding on to voice
and SMS as the core of the business. This situation opens the way for: a. Product diversification, given that with numerous language and ethnic groups and a vast territory, the Indonesian market is one of the most diverse. Telkomsel therefore has opportunities to launch micro segment campaigns, and create regional products and services with local pricing schemes. b. Driving innovation in mobile internet services, such as e-payment, Mobile Newspaper, and MobAds. Mobile internet is an interesting product for advertisers and will be a promising revenue stream for the Company in the next year.
c.
d.
Developing more synergies with the worlds leading VAS players to support content development and with device manufacturers for product bundling. Developing revenue-share businesses through strategic partnerships with other key players in the industry.
Telkomsel is well-equipped with newly modernized systems, including the new billing system, to support strategy realization in the future, as well as to drive digital lifestyles among mobile data users and enable them to enjoy life beyond telecommunications.
Telkomsel pursues higher competitiveness by creating a more flexible, innovative as well as efficient and lenient organization to protect the interests of the stakeholders. Thus, the
65
Telkomsels GCG is implemented on the basis of five pillars: responsibility, accountability, transparency, independence, and fairness.
The implementation of every aspect of Good Corporate Governance (GCG) according to best practices and universal principles is essential, as we believe that GCG can be a reliable instrument for managing each business line in the Company in a more transparent and responsible way. In the meantime, the implementation of GCG also ensures the Companys compliance with Company Law No. 40/2007 and certain aspects of the United States Sarbanes-Oxley Act (SOA) as required in our capacity as a subsidiary of PT Telekomunikasi Indonesia Tbk (Telkom), whose shares are listed on both the Indonesia Stock Exchange (IDX) and the New York Stock Exchange (NYSE). Telkomsels GCG is implemented on the basis of five pillars: responsibility, accountability, transparency, independence, and fairness. These five pillars can be explained as follows:
67
Responsibility
Responsibility is represented in the description of the duties and responsibilities of each management officer and employee. Responsibility is implemented in the Company based on GCG principles by setting up clear functions and responsibilities for each element in the organization.
Board of Commissioners
The duties and responsibilities of Telkomsels Board of Commissioners are as follows: To supervise the Board of Directors in managing the Company; To ensure the fulfilment of the Companys long-term business strategy and its commitment to a transparent and high quality governance system; To monitor the business performance; To provide the necessary directions, recommendations, and guidance for the Board of Directors in managing the Companys business. The Articles state that the Board of Commissioners shall comprise six members, elected at the GMS by the shareholders. It is led by the President Commissioner. The Board of Commissioners is assisted by three committees: the Audit Committee, the Remuneration Committee and the Capital Expenditure Committee. MEETINgS OF BOARD OF COMMISSIONERS Telkomsels Board of Commissioners meets at least once every three months, and whenever requested by any of the Commissioners. The Board also has periodic joint meetings with the Board of Directors as part of its supervisory duties. In 2011, the Board held 11 meetings.
The Committees
The Committees under Board of Commissioners are: AUDIT COMMITTEE The Audit Committee was established pursuant to the Audit Committee Charter. The Committees main responsibilities are to review Telkomsels audited consolidated financial statements and communicate with the internal and external auditors during the audit process.
Telkomsels Audit Committee is chaired by Arief Yahya and the members were Paul O Sullivan, Daru Mulyawan and Agus Suryono. The Audit Committee holds regular meetings with the Head of the Internal Audit to discuss any findings or issues during the implementation of the internal audit. REMUNERATION COMMITTEE This Committee is responsible for assisting the Board of Commissioners in determining the appropriate remuneration packages for the Board members to ensure the accomplishment of the business objectives. The remuneration proposal for both Commissioners and Directors is presented at the General Meeting of Shareholders for approval. The Remuneration Committee is chaired by Loso Judijanto, and the members are Yuen Kuan Moon and Arief Yahya.
The Articles state that Telkomsels Board of Directors comprises five members, elected at the GMS by the shareholders. It is led by the President Director. Telkom, as the majority shareholder, is entitled to nominate three Directors, while SingTel Mobile is entitled to nominate two Directors. MEETINgS OF BOARD OF DIRECTORS The Board of Directors meets at least once every two months or whenever requested by any of the Directors. The Board also has joint meetings with the Board of Commissioners to present monthly or quarterly reports on business performance and to seek approval for certain corporate actions. The quorum for the meetings is four members and at least one shall be a member nominated by SingTel Mobile. In 2011, the Board held 49 meetings.
CAPITAL ExPENDITURE COMMITTEE The Committees main responsibility is to conduct a review of Telkomsels capital expenditure, financing and management processes. The Committee is chaired by Rinaldi Firmansyah, with Yuen Kuan Moon and Herfini Haryono as members.
Board of Directors
The scope of duties and responsibilities of Telkomsels Board of Directors is: To collectively and individually bear responsibility for the success of the business management; To manage the day-to-day business; To formulate Telkomsels Business Plan; To prepare the annual budget; To prepare the Annual Report; To ensure the effective governance of the business to give value to the shareholders and stakeholders; To represent Telkomsel in any legal cases.
69
Accountability
Accountability is reflected in Telkomsels compliance with the applicable rules, such as the establishment of an Internal Audit Unit as required by Section 404 of the Sarbannes Oxley Act (SOA).
Internal Audit
Telkomsels Internal Audit Unit was established pursuant to the Internal Audit Charter that was issued pursuant to a Directors Decree in 2007. The Charter contains the vision, objectives and scope of work as well as the accountability, independence, responsibility, authority and reporting requirements of the Internal Audit. Referring to the Charter, the Internal Audit has dual accountability to the Audit Committee on functionality and to the President Director on administration. The Internal Audit Unit functions: a. To carry out independent, objective assurance and consulting activities aiming at adding value and improving the organizations performance; b. To help the Company accomplish its business objectives by introducing a systematic and disciplined approach to evaluating and improving the effectiveness of the Companys risk management, control and governance processes; c. To assist the management and Board of Commissioners, through the Audit Committee, with analysis, recommendations, advice and information on activities being reviewed. In 2011, the Internal Audit of the Company performed 34 audit/ assurance projects and 2 consultative projects, summarized on a category basis as follows: a. Operational & revenue assurance audits Operational audits are conducted to evaluate the effectiveness and efficiency of Telkomsels operations in all management and operational processes. Revenue assurance audits are performed to ensure the effectiveness of Telkomsels revenue generating process. b. Information technology audits Information technology audits cover all aspects of information technology used in operational activities by evaluating the sufficiency of Information Technology general controls, physical security controls, etc.
c. Financial & compliance audits Financial audits are aimed at ensuring the reliability of the financial reports by evaluating the quality of the financial information presented under generally accepted accounting principles (PSAK and IFRS). As a subsidiary of Telkom, Telkomsel is required to ensure its compliance with SOA rules in implementing internal controls over financial reporting (ICoFR). d. Fraud investigation audits The Fraud Investigation Audit handles all complaints received through the whistleblower protocol. Telkomsel has established a whistleblower policy that allows employees or other parties to give feedback to the Audit Committee. A special/ investigative audit will be launched to respond to any complaints or inputs with regard to protocol. e. Consultation service Consultation services are extended to various operating units to improve business processes and reduce risks. Two projects were completed under this category, namely the implementation of International Financial Reporting Standards (IFRS) as stated in Telkoms policy, and ISO 27000 on Customer Care and Billing Systems (CCBS). Telkomsel has implemented IFRS for its consolidation package submitted to Telkom. The Company used the consulting services of the public accounting firm Siddharta & Widjaja/ KPMG for this purpose.
In addition, we annually identify and mitigate the Corporate Wide Risks with reference to the basic policy of identifying and responding to the risk, particularly in accordance with our Risk Management Processes. In 2011, Telkomsel had evaluated 184 Corporate Wide Risks, and priority risks relating to Spectrum frequency scarcity, capacity and services availability, local government regulation, Business Continuity Management (BCM), and business process alignment. The details on the priority risks are as follows: Spectrum frequency scarcity In order to pursue long-term success, Telkomsel conducted risk assessments, particularly with regard to the frequency reframing. This risk assessment was important as we had to deal with pressure from various parties to perform 3G frequency shifts that could have an impact on service quality and the cost of the frequency shift. Capacity and Service Availability To respond to business dynamics, Telkomsel maintained a quality and secure infrastructure through an effective and efficient roll out process. Business process alignment Business resilience is determined by a companys business agility. Telkomsel launched a number of risk assessments covering aspects of corporate policy, business processes, systems and human resources. In 2012, we are determined to complete risk list of major business processes to carry out risk assessments at each directorate. The main business processes are HR System process, Commerce, Financial, Revenue assurance, Compliance, Network, and IT.
Local Government Regulation Local governments have sought to increase their revenues from tower retribution, as provided for in Law No.28/2009. Accordingly, we have to intensively communicate with the local governments to mitigate risks on such retribution. Business Continuity Management To address natural disasters and other significant risks that may disrupt business continuity, Telkomsel issued a Decree on Business Continuity Management in 2011. We have established a Business Continuity Planning Project Team to design a Business Continuity Plan. In the meantime, we are also preparing a Decree on the Crisis Management Team, which will be responsible for crisis handling. Also, In order to comply with the provisions of the SOA, following our parent companys listing on the New York Stock Exchange (NYSE), Telkomsel has conducted a Top-Down Risk Assessment for financial reporting, which was the basis for updating the ICoFR risk control matrix.
71
Transparency
Independence
Transparency is represented in our commitment to provide corporate data and information, including quarterly and annual financial and operational reports, through channels like Telkomsels official website www.telkomsel.com or our parent companys website http://www.telkom.co.id/hubunganinvestor/laporan-laporan/info memo. This aspect is also carried out through the function of our Investor Relations.
Telkomsels management ensures independence by acting independently in the best interests of Telkomsel and ensuring that there is no conflict of interest in the management of Telkomsel.
Conflict of Interest
Telkomsel prohibits the members of Board of Directors to have other positions outside Telkomsel that could directly or indirectly give rise to any conflicts of interest with Telkomsel and/or that could violate the existing laws and regulations. As provided for in the Articles of Association, if there is a conflict of interest that involves one of Telkomsels Directors, he or she shall be represented by another Board member. However, should all the members of the Board of Directors be involved in a conflict of interest, they will be represented by the Board of Commissioners.
Investor Relations
In order to better serve our shareholders and stakeholders, and to assure transparency, Telkomsel has established an Investor Relations team. The team functions to provide easy access to corporate information for both shareholders and stakeholders. Investor Relations prepares and provides reliable and accurate materials for interested shareholders and stakeholders in the form of Info Memos that are released on a quarterly basis.
Family Relation
Telkomsel ensures that none of the current members of the Board of Commissioners and Board of Directors have a familial relationship with one another.
Remuneration
Telkomsel authorizes the General Meeting of Shareholders to determine the remuneration for members of the Board of Commissioners and Board of Directors. None of the Board members receives any fees for attending Board meetings. For the Year ended December 31, 2011, the aggregate compensation paid by Telkomsel to all Commissioners and Directors was approximately Rp27.5 billion, as determined by the General Meetings of Shareholders
Fairness
To promote fairness in Telkomsels environment, Telkomsel consistently pursues balance in the treatment of all shareholders and stakeholders, including our customers, employees, and suppliers, in term of services, career advancement, and fair access to information.
c.
The third P is Permintaan or request, representing Telkomsels response to customers requests for service activation or a change of SIM card, etc. The fourth P is Pengaduan or complaint handling, representing Telkomsels obligation to handle complaints and offer solutions to customers problems. The fifth P stands for Pembayaran or payment, meaning easy payment access for customers. The final P is Pemeliharaan or retention, representing attention and retention activities that promote convenience for customers and persuade them to stay on as Telkomsels customers.
d.
Customer Protection
As a telecommunications service company, Telkomsels Customer Service Points have ensured the development and enhancement of service quality to customers and realized our commitment to customer protection by launching the 6P service concept. This concept can be further explained as follows: a. The first P stands for Penerangan or information, representing Telkomsels commitment to provide accurate and adequate information to the customers while also educating them about Telkomsels products and services. The second P stands for Penjualan or sales, which is undertaken in a responsible manner to provide reliable and comprehensive information to the customers to increase their interest in Telkomsels additional features or devices. A Sales Corner is also available to support customer service, in line with the pull-sales strategy at GraPARI. e.
f.
b.
73
In 2011, Telkomsel successfully achieved its targets on the following issues: a. Bandwidth-based 2G Frequency Fee (BHP) for the 2nd year of implementation, which replaced BHP based on ISR/TRX. b. Securing 3G network from Quality of Service (QoS) degradation risk, due to the Governments 3G frequency migration plan, and regulatory efforts to obtain an additional 3G frequency allocation on the 2.1 Ghz band to support Telkomsels broadband business in the future. c. Implementation of new cost-based interconnection in 2011. d. Implementation of a new offnet SMS scheme with SMS termination charges among operators instead of the SKA scheme (Sender Keeps All), which may increase SMS revenue and minimize SMS spam from other operators. e. Anticipation and response on the premium content service issue ensure maximum legal compliance. f. Synergy for the joint development of regulations with the Telkom Group to anticipate future compliance on Telkomsels license report obligations. g. Compliance on Telkomsels license report obligations. h. Anticipation of new regulations and drafting to accommodate the Next Generation telco era. i. Supporting incidental regulatory issues and Government activities in various international events held in Indonesia. In the case of tower management, Telkomsel complies with regional regulations to obtain regional permits in order to establish and operate towers. Telkomsel continues to meet the obligations of Law No. 28/2009 on Local Taxes and Levies in relation to the tower owners obligation to pay number of levies to regional governments and minimize the risk of disputes with regard to local regulations.
In 2011, Telkomsel's Corporate Social Responsibility (CSR) focused on development of the existing three pillars, namely education, entrepreneurship, and emergency response, which are closely related to Information & Communication Technology (ICT).
75
We seek to grow every business line in a responsible manner by involving stakeholders interests so that we can grow together. We are committed to making a positive contribution to the nation through our community development programs. Telkomsel is aware of the significant impact of advancement in information and communication technology on the economic, social and cultural life of the community. Not only we are consistent in improving the coverage and quality of our services, but also seeking to enhance our presence in Indonesia in order to minimize the digital divide and indirectly contribute to the acceleration of macro economic growth. In 2011, Telkomsels Corporate Social Responsibility (CSR) program focused on the existing three pillars, namely education, entrepreneurship, and emergency response, which are closely related to Information & Communication Technology (ICT).
Padang, Bukit Tinggi, Banten, Tangerang, Jakarta, Surabaya, Malang, Samarinda, Balikpapan, Ambon, Kupang, and Jayapura, with thousands teachers taking part. The program was conducted over three days, consisting of a pre-test, an overview of the modules and ICT education through www. telkomselsahabatguru.com, ICT for learning and creating digital materials. The ICT Guru Telkomsel 2011 program also promoted the Online Retention Web Platform activity as a discussion session on ICT, covering activities such as data files, a center for learning materials, online dissemination and a forum. Through this program, Telkomsel launched V Books, which are virtual learning materials published on www.telkomselsahabatguru.com.
Telkomsels corporate social responsibility for developing a sustainable supply chain, both internally and externally. The activities included support to Merah Mandiri outlets, which was part of an entrepreneurship development program for credit top-up outlets based on the working assets concept. The program targeted 1,000 outlets across the nation, which Telkomsel gave working assets in the forms of cell phones, a manual, reseller numbers and a makeover for each outlet to meet a standard design. The program also included coaching and counselling. The target of the program is small and medium enterprises, which are one of the pillars of the Indonesian economy. We realized that outlets are growing at a significant pace but have proportionally less working capital support. The entrepreneurship program will therefore have a significant impact on enhancing the reputation of the existing outlets.
Education
ICT education programs from Telkomsel in 2011 were targeted at teachers and aimed at enhancing their capabilities in using technology as a tool to prepare attractive and interactive learning processes. Access as well as skill in processing and sharing information are important assets in the global economy of the future. Our ICT education activities included the application of technology as a teaching tool in various fields of study, such as Math, Physics and Chemistry. ICT training for teachers was provided in 22 cities in Indonesia, including Medan, Palembang,
Entrepreneurship
One of Telkomsels contributions to the local economy is through the capacity development of the stakeholders who make up our supply chain. This reflects
77
gender equality and entrepreneurship; improving mothers health and the quality of childrens nutrition; and environmental preservation. In 2011, Belawan II Sub District, Medan Belawan District, in the city of Medan in North Sumatra, was the main target for the implementation of this program, with the revitalization of POSYANDU as main activity. This was aimed at improving the quality of health of mothers and children. The integrated MDG program also established a secretariat at each location, which is equipped with ICT facilities. This functions as a center for public information and communication services. This program is the result of an MoU signed by the Indonesian Female Entrepreneurs Association and Telkomsel to support the implementation of the MDGs program in Indonesia, particularly entrepreneurship. The program is aimed at helping Indonesian female entrepreneurs to develop regional economic potential to create high value outputs and strengthen household economies. Our efforts to conduct these CSR programs have been recognized by a number of institutions. Telkomsel received an Indonesia Green Award from the Ministry of Forestry of the Republic of Indonesia, as well as a 2011 Indonesia CSR Award for our cellular phone Technical Learning Program for street kids, handicapped people and narcotics rehabilitation participants, our ICT teachers program and our ICT Students and Schools program from the Corporate Forum for Community Development.
Emergency Response
Telkomsel's established Telkomsel Emergency Response and Recovery Activity (TERRA) is an emergency response initiative focusing on supporting Network Operation teams to accelerate the recovery of Telkomsels telecommunication services and networks in disaster-hit areas. In 2011 Telkomsel introduced an integrated media center concept, ranging from disaster mapping systems and communication information applications to a new mobile BTS concept, RANGER 10, which will be launched in disaster-hit areas. RANGER 10 has greater capacity, particularly in terms of reaching disaster areas that are difficult to access with large vehicles. RANGER 10 serves as a repeater for mobile users within a radius of 1 km and can be used by up to 100 people on a sharing basis for data needs. To enhance TERRAs capacity, Telkomsel is committed to consistent innovation
in emergency response technology and telecommunication. The communication acceleration is crucial since the proximity and velocity of data during disaster drills is vital to support coordination in transferring aid to disaster-hit areas. Telkomsel also conducted emergency management trainings for employees in Indonesia, so as to be able to secure Telkomsels infrastructure and extend first aid in any disaster hit areas, as well as public counselling, logistics mobilization and technical services.
Social
Telkomsel participated in government programs to accelerate the achievement of the MDGs (Millennium Development Goals) in Indonesia by 2015. An integrated ICT-based program for the MDGs was implemented in four districts in Telkomsels operational areas in Indonesia, covering four pillars of the MDGs: improving access to clean water and sanitation;
This Annual Report including the accompanying consolidated financial statements and related financial information for the year ended December 31, 2011 was authoritatively signed by members of the Board of Commissioners and the Board of Directors of PT Telekomunikasi Selular. Jakarta, March 23, 2012
BOARD OF COMMISSIONERS
Rinaldi Firmansyah
President Commissioner
Ermady Dahlan
Commissioner
Arief Yahya
Commissioner
Loso Judijanto
Commissioner
Paul OSullivan
Commissioner
BOARD OF DIRECTORS
Sarwoto Atmosutarno
President Director
Triwahyusari
Director of Finance
Herfini Haryono
Director of Planning and Development
Ng Kwon Kee
Director of Operations
PT TELEKOMUNIKASI SELULAR Wisma Mulia Jl. Jend. Gatot Subroto No. 42 Jakarta 12710, Indonesia Phone +62-21-5240 811 Fax +62-21-5290 6122 [email protected] www.telkomsel.com