Telkomsel`s Plan with Additional 30 Mhz Frequency at 2,3 GHz

Ririek Adriansyah (ist)

JAKARTA (IndoTelko) - Telkomsel was finally designated as the winner of 30 Mhz at 2.3 GHz frequency by the Ministry of Communications and Informatics (Kominfo).

"We are grateful to have been set to become the winner of the frequency auction. Offers worth Rp1.007.483.000.000 based on a mature investment strategy with strong financial support. The additional spectrum will be utilized to strengthen LTE 4G services and maximize the quality of broadband services for customers in various regions of Indonesia. We hope this will support the digital ecosystem in Indonesia, including e-commerce, and encourage the development of small and medium enterprises, "said Telkomsel President Director, Ririek Adriansyah in Jakarta, Monday (23/10).

Ririek also added that as Telkomsel's consistency and commitment to build telecommunication networks across Indonesia, including rural and border areas, additional spectrum will support the company's efforts to open wider access for rural.

"As the speed of mobile broadband access is higher, we are able to present the best digital lifestyle experience for all Indonesian people," said Ririek.

Telkomsel's Director of Planning and Transformation, Edward Ying, added that the company has obtained a spectrum with a fair price that is much lower than other operators in other developing countries, such as one of the telecommunications operators in India. They pay about four times greater, i.e. USD0,34 per MHz per population, compared to Telkomsel which paid 0.08 dollars per MHz per population.

Compared to developed countries, such as South Korea, Singapore, Australia and Hongkong, the prices paid by operators in these countries are 1.5 to 5 times higher than the amount paid by Telkomsel.

"Currently the availability of spectrum in Indonesia is still very limited and very rare, while the comparison between the number of subscribers and the allocation of frequency spectrum owned by Telkomsel is not proportional. With these considerations and to accommodate the growing subscriber population with a very large population in Indonesia, the additional value of this spectrum becomes very high and important for Telkomsel, "added Ririek.

Ririek said that for the initial phase, the company plans to build more than 500 base stations (BTS) using the 2.3 GHz spectrum in the next three months, especially in the areas with the highest need for data services after going through the process needed, including operational feasibility tests.

"We will develop 500 BTS first, as soon as possible. Our target is next month and finishes until the end of the year. After that will follow other big cities. This so that our customers can enjoy the maximum access speed of mobile broadband up to 400 Mbps, which will make Telkomsel becomes an operator with the fastest speed access in Indonesia, "explained Ririek.

Financial performance
A subsidiary of Telkom becomes the winner of the frequency auction by bidding Rp 1,007,483,000,000. This means, in order to utilize additional 30 MHz at 2.3 GHz, Telkomsel has to pay twice the upfront fee plus Frequency Usage Rights Fee (BHP), totaling around Rp3,021 trillion.

How is the financial performance of Telkomsel until the end of the year with the amount of redeeming value?

"First, we talk about the funding source, it uses internal funds," Ririek said.

Ririek explained Telkomsel's management has long days preparations to follow the additional tender frequency.

"We have been anticipating this tender since a year ago. All calculated. Starting from frequency, technical and other valuations. Every quarter we propose if the tender is right. So if the calculations appear in the fourth quarter of 2017, it will not affect Telkomsel's performance as a whole this year, because all the impacts have been included in the count, "he said.

For your info, with the announcement of Telkomsel as the winner of 2.3 GHz frequency spectrum auction, the composition of frequency allocation owned by Telkomsel is as follows: 2.3 GHz frequency with 30 MHz bandwidth, 2.1 GHz frequency with 15 MHz bandwidth, 1.8 GHz with 22.5 MHz bandwidth, 900 MHz frequency with 7.5 MHz bandwidth, and 800 MHz frequency with 7.5 MHz bandwidth.

In terms of network construction, until the first half of 2017, Telkomsel has built more than 146,000 BTS, of which approximately 65% of them are broadband base stations (3G and 4G). Currently, Telkomsel continues to build the 4G LTE service to a wider area, which currently serves more than 30 million subscribers in approximately 480 district capitals.

Telkomsel's total subscribers are currently 178 million.(es)