Results: Profits fall at Telkom Indonesia, LG Telecom

Dylan Bushell-Embling
03 Aug 2009
Daily News

Heavy price competition continues to take its toll on Asian operators, as results from Indonesia’s Telkom and Korean operator LG Telecom have revealed.

Telkom, Indonesia’s biggest mobile operator, said net income for the first half dipped 4% to 6.044 trillion rupiah ($610.4 million) while revenue grew just 1.5% to 30.221 trillion rupiah. Operating income was down 7.1% and ebitda was 0.2% higher.

Director of finance Sudiro Asno said a stronger local currency had boosted the bottom line by 550 billion rupiah.

In a market that has been driven by intense price-cutting for the past year, Telkom now has 76 million mobile customers, up 45% from a year ago. This quarter Telkom's mobile ARPU fell 25% to 47,000 rupiah, although minutes of use more than doubled to 68.1 billion minutes.

President director Rinaldi Firmansyah said the company had grown operating revenue by “being able to constantly enhance network capacity and quality.”

LG Telecom said its quarterly net income fell 43.3% year-on-year to 38.3 billion won ($31.3 million), its biggest profit decline in six quarters.

Revenue grew 5.7% to 1.32 trillion won. LG blamed the disparity on soaring marketing costs and discount offers due to an “overheated marketing situation” in Korea. Operating expenses grew 20% during the quarter to 966.5 billion won. ARPU also declined 1.9% year-on-year.

The company recorded 187,000 net subscriber additions. Inbound minutes dropped 6.5% year-on-year and outbound minutes increased 6.5%.

Taiwan Mobile said it had exceeded its forecast for the quarter, recording a net income of TW$3.60 billion ($109.7 million). Revenue declined 3% to TW$17.35 billion.

The company expects net income to fall 14% in Q3, but said revenue would remain stable.

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