The third quarter witnessed the comeback of the telecommunications industry on a trajectory for growth after months of tumult from rising costs and tough competition, financial reports show.
Indonesia's biggest market player, PT Telekomunikasi Indonesia (Telkom), announced Friday its net profit in the third quarter rose by 24 percent to Rp 3.26 trillion (US$342 million) from Rp 2.62 trillion in the same period last year.
Bloomberg said the quarterly gain was Telkom's best three-month gain since December. The first two quarters of this year saw the company post net profit declines.
The positive performance in the third quarter ends the first nine months with a net profit increase of 4.27 percent to Rp 9.3 trillion, up from Rp 8.9 trillion year-on-year.
Revenues by the end of September reached Rp 47 trillion, up by 5.52 percent compared to Rp 44.6 trillion in the first nine months last year. Telkom's cellular business, managed by subsidiary PT Telekomunikasi Seluler (Telkomsel), contributed Rp 21 trillion, a 15 percent increase from Rp 18.2 trillion last year.
The most significant trend visible in the third quarter was a currency gain of Rp 774.78 billion from the same period last year that saw the company making Rp 63.8 billion is currency losses, which later extended into the following quarters, as the rupiah was under attack.
Telkom's positive third-quarter performance validates analysts' predictions that the industry is getting back on its feet with the stabilization of the rupiah and the tariff war that follows the government's decision to cut interconnection rates last year.
Albeit stabilizing, competition in the cellular market, which contributed nearly half of Telkom's revenues, remains tricky, analysts say.
PT Indosat, the country's second-largest phone operator, saw its nine-month profit down by 1.4 percent to Rp 1.45 trillion as revenue slid 1.8 percent to Rp 13.41 trillion. The revenue drop was largely caused by fleeing customers. Indosat had 29.3 million total subscribers at the end of September compared to 36.4 million a year earlier.
Moody's Investors Service said Friday in a statement that Indosat's performance in the third quarter, albeit showing signs of stabilization, was below expectations. However, the quarterly performance has no immediate impact on the company's Ba1 rating and stable outlook.
Moody's analyst Ivan Palacios acknowledged Indosat was moving toward a long-term change in business strategy, a shift toward providing value-added services to higher-yield subscribers, and away from role as a low-cost and high-volume provider.
"However, this change in strategy is impacting the company's near-term performance," Palacios said.
PT Excelcomindo Pratama, the third-biggest market player, ended the nine-month period with a net profit of Rp 1.2 trillion, an increase of 34.85 percent from Rp 891 billion last year, as revenue grew by 17 percent to Rp 8.26 trillion.
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