P.T. Telekomunikasi Tbk (TLK), the largest telecom carrier in Indonesia, is likely to launch the country’s first 4G WiMAX network in first quarter of 2010. As of now, the company provides both 2G and 3G wireless infrastructure that includes GSM and WCDMA/HSPA technologies and is quickly expanding its wireless infrastructure. TLK’s wireless division, popularly known as Telkomsel has decided to raise capital expenditure plan to $1.4 billion in fiscal 2009, an increase of 25% from previous fiscal. Telkomsel commands 45% share of the total Indonesian wireless market, well ahead of its competitors, P.T. Indosat Tbk (24%), and P.T. Excelcomindo Pratama (17%).
Through WiMAX, TLK will offer an alternative to cable and digital subscriber lines technology. WiMAX enjoys commendable growth potential especially within the emerging markets. The technology provides a low-cost, open network system with an all IP mobile Internet solution that enables efficient and scalable networks for voice, data, and video transmission. TLK announced that the company is ready to comply with the required minimum of 40 percent local content in the products to be used for setting up the necessary infrastructure.
Indonesia is an emerging economy in the Asia-Pacific region with a mobile penetration rate still below 60%. Favorable industry trends are expected to sustain robust growth in the wireless business of TLK for the next several years. Mobile services are becoming increasingly popular as a result of declining handset prices, attractive service plans and better network coverage. Telkomsel has decided to spread out its radio access network infrastructure throughout Indonesia. The company has expressed continued interest in acquiring ownership stakes in telecommunications operators based in neighboring countries possibly Bangladesh, India and/or Sri Lanka.
Read the full analyst report on “TLK”
Zacks Investment Research
