FINANCIAL PERFORMANCE ASSESSMENT OF PT. INDOSAT TBK AGAINST OTHER NATIONAL MOBILE OPERATORS IN INDONESIA

• Main Author: Aulia, Annisa
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/72295
• Institution: Institut Teknologi Bandung

The telecom business has assumed an essential part in the advancement of Indonesia's economy over the last few years. One of the telecom divisions in Indonesia is mobile network, and it has become one of the tools for Indonesia to be comparable to developed country and also to reach rural, less populated areas in the country. It has also additionally aided in building other sectors of the economy, e.g. finance, banking software, hospitality, and trade. Starting in 2013, Indonesia was the world's third-biggest telecom market (behind China and India) as far in the mobile telecommunication industry, with 322.9 million cellular subscriptions at the end of 2015, 99% of them are prepaid users. This means a 127.7% penetration of Indonesia’s total population. This study will assess the financial performance of PT Indosat Tbk (20.3% market share) as the runner up in Indonesia telecommunication industry. It will be compared to its top two biggest competitors, PT Telekomunikasi Selular (45.1% market share) and PT XL Axiata Tbk (19.2% market share). The assessment will be done with Financial Ratio Analysis and DuPont System of Analysis. Time Series will be used to analyze PT Indosat Tbk’s own financial performance trend and Cross Section will be used to compare PT Indosat Tbk’s performance to its competitors. Data from 2011-2015 will be used in this study. Finally, combined analysis will also be used to analyze and compare the financial performance of PT Indosat Tbk compared to the industru average. The study will focus on two phenomenons, the first one is the advantageous effect of the new government’s regulation regarding infrastructure sharing for the small players, which are PT Indosat Tbk and PT XL Axiata Tbk, as the regulation allows them to save capital expenditure, but it can also be a threat as infrastructure sharing can decrease the quality of service of a provider. The second phenomenon focused on the Interconnection Regime (that was applied in 2012). The regime give a big advantage to the biggest player, PT Telekomunikasi Selular, as the tariff for short message services used the “cost-based scheme” for off-network SMS, while at the same time become a disadvantage for companies with smaller market share, including PT Indosat Tbk. This research will focus on the financial performance of PT Indosat Tbk compared to its competitors’ performances. The study’s objective is to assess the financial performance of PT Indosat Tbk in regard of those phenomenons and to propose some recommendations that can improve PT Indosat Tbk’s performance. The analysis shows that PT Indosat Tbk’s performance is declining in almost every aspect throughout these 5 years, the biggest indicator being the net loss suffered from 2013-2015. The recommendation given is for PT Indosat Tbk to utilize the infrastructure sharing regulation to be more efficient in using their capital expenditure while maintaining their quality of service and to charge more for off-network SMS in order to cover interconnection rate and to discourage people to send off-network SMS.