This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Konsolidasi Usaha Pelat Merah: Internet BUMN siap merger
01 September 2021
By: Leo Dwi Jatmiko and Hendra Wibawa
Bisnis, Jakarta – PT Telkom Indonesia Tbk and PT Perusahaan Listrik Negara are merging the internet business of the two SOEs (State-owned Enterprises), following the policy of SOE Minister Erick Thohir to consolidate state-owned companies.
The SOE Ministry is currently targeting several SOEs, including PT Indonesia Comnets Plus (Icon +) as a subsidiary of PT PLN (Persero), to be merged with PT Telkom Indonesia Tbk.
Telkom Corporate Communication VP, Pujo Pramono, said that he was welcoming the policy of the SOE Ministry as Telkom and PLN have functions that would strengthen synergy, create sustainable growth, and develop businesses.
“We are welcoming and are open to every decision of the SOE Ministry to support digitalisation acceleration and equal connectivity all over Indonesia,” he said to Bisnis on Tuesday (31/8).
He is optimistic about the plan bringing more benefits for SOEs and citizens in Indonesia as merging SOE internet businesses will provide ease of access to more citizens.
Pujo said that, currently, fixed broadband service penetration in Indonesia reached 15% from a total of 69 million households.
The ongoing pandemic is also accelerating the adoption rate of citizens, so demand for access and connectivity will increase.
As of the second quarter of 2021, Telkom had installed 169,833 kilometres of optical fibre cables that reached 496 cities or regencies all over Indonesia. During the period, Telkom’s internet users increased by 5.7% yearly to 169.19 million. Telkom’s fixed broadband users in the second quarter of 2021 reached 8.3 million, which increased by 11.4% from last year.
On the contrary, PLN, through Icon + in 2019, had installed 152,069 kilometres of optical fibre cables. The length is surely longer now.
If the internet business of the two SOEs is merged, Pujo predicts that the optical fibre cables of the two SOEs will span more than 320,000 kilometres.
He said that Telkom, through Indihome, will continue to provide internet services with the best digital experience to fulfil the demand of citizens, especially during the pandemic.
Meanwhile, PLN Public Relations Vice President, Arsyadany G. Akmalaputri, agrees that the merger strategy will bring many benefits for citizens and consumers.
She explained that the internet product of her subsidiary, Icon +, had been developed since 2019. It was previously named Stroomnet, but now it is known as Iconnet.
The internet service is a form of PLN’s innovation to fulfil the increasing demand of citizens for internet and as a form of business development to increase the company’s revenue.
She said that Iconnet would provide an additional option for citizens who were looking for reliable and economic internet solution.
According to Arsyadany, internet users in Indonesia at the start of 2021 reached 202.6 million, while the total population is currently 274.9 million. This means that there are around 30% of citizens who have yet to acquire internet access.
During the 2021 work meeting, Icon+ stated that they wanted to serve 20 million customers in 2024 or to acquire 5 million new customers every year. Icon + will take advantage of their strategic assets and prime services to achieve the target.
During the work meeting with House of Representatives (DPR) Commission V on Monday (30/8), SOE Minister Erick Thohir gave signal to merge Icon + with Telkom.
The merger will be implemented to prevent competition among SOEs in the same sector. Besides that, the merger will also make the performance of both companies more effective and synchronised.
“There are one or two SOEs that we are targeting. In our internal meeting, we have talked about Icon + and Telkom, which we will merge,” Erick said.
Meanwhile, Indonesian Telecommunications Society (Mastel) Chairperson, Sigit Puspito Wigati Jarot, reckoned that merging Icon + with Telkom’s ecosystem would positively impact the telecommunications industry.
ICT Institute Executive Director, Heru Sutadi, assessed that merging Icon + with the ecosystem of PT Telkom Indonesia Tbk would make SOEs stronger in competing with non-SOEs in the telecommunications sector.
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