PT Telkom Indonesia (Persero) Tbk (Telkom) is an Indonesian telecommunications company headquartered in Jakarta. This company operates in the telecommunications services sector, including fixed telephone, cellular, internet and data services. Telkom Indonesia is the largest telecommunications company in Indonesia, and is also one of the largest telecommunications companies in Southeast Asia.
Telkom is a state-owned information and communications technology enterprise and telecommunications network in Indonesia. The Government of Indonesia is the majority shareholder with 52.09 percent shares while the remaining 47.91 percent shares belong to public shareholders. Telkom’s shares are traded on the Indonesian Stock Exchange (IDX) where it is listed as “TLKM” and on the New York Stock Exchange (NYSE), which lists it as “TLK”.
Telkom categorizes its portfolio into 3 Digital Business Domains:
- Digital Connectivity: Fiber to the x (FTTx), 5G, Software Defined Networking (SDN)/ Network Function Virtualization (NFV)/ Satellite
- Digital Platform: Data Center, Cloud, Internet of Things (IoT), Big Data/ Artificial Intelligence (AI), Cybersecurity
- Digital Services: Enterprise, Consumer
There are two revenue stream which contribute more than 90% of Telkom revenue: IndiHome (fixed broadband) dan Telkomsel (wireless broadband).
IndiHome is a home internet service provided by Telkom Indonesia. This service offers high-speed internet access up to 300 Mbps, interactive television services (UseeTV), and landline telephone. IndiHome was launched in 2012 as a triple play service, namely a service that combines three services in one package. This service has become one of the most popular home internet services in Indonesia, with the number of subscribers reaching 15.26 million as of December 31, 2022.
IndiHome continues to be the country’s market leader for fixed broadband by securing 75.2% of the market. The number of IndiHome subscribers at the end of 2022 reached 9.2 million customers, an increase of 611.000 new customers compared to the previous year. As a result, the Consumer segment’s revenue increased significantly by 5.7% to Rp26.354 trillion, a substantial contribution to the increase of the consolidated revenue. The Consumer segment’s revenue performance reached 96.9% of the set target
Competition for fixed wireless broadband in Indonesia is also getting tighter. This is due to the rapid growth of the fixed broadband industry in Indonesia. In 2023, the number of fixed broadband subscribers in Indonesia will reach 15 million, with annual growth of 10%.
- Mobile revenue growth is under considerable pressure.
- The price of data/GB continues to decline.
- Payload has grown significantly, but data/GB prices have decreased.
- Fixed broadband growth is starting to slow down,
- The number of potential customers who can afford IndiHome services is decreasing.
- More and more devices are connected to WIFI @Home
- Integrated fixed-mobile telcos have better growth prospects than “mobile or fixed-only” operators.
Characterization of The Situation and Theories
Telkom has launched FMC (Fixed Mobile Convergence) on July 21, 2023. FMC is a product that combines fixed broadband (IndiHome) and mobile (Telkomsel) services in one package.
- Build up positioning of MAXstream in the video streaming industry with around 6 million monthly active users and footprint in mobile gaming industry under Dunia Games brand with more than 17 million monthly active users.
- Augmented the functionalities of by.U, a fully digital prepaid product offering integrated services based on fully customizable digital applications with positive growth of customer to reach 4.8 million customers.
- Developing Telkomsel Orbit, a home wireless internet service as an effort to leverage strong network capacity.
- Rehaul MyTelkomsel app & Telkomsel.com to improve their value proposition & to better support other corporate wide programs with around 33 million monthly active users of MyTelkomsel app.
Based on the company and analyzing the situation facing Telkom Indonesia, here are the some recommendations for a future course of action that is connected back to Disruptive Strategy theories.
- In term of sustaining innovation, Telkom should strive to continuously improve its FMC services, this could involve conducting customer surveys, testing new features, or making changes to existing services based on feedback. And also to mprove or maintain profit margins by exploiting the existing processes and cost structure and by making better use of current competitive advantages.
- In term of the job to be done, Telkom should deliver the best quality of services with excellent customer experience, service quality and customer experience management are the main keys to gaining customer loyalty. Telkom should strive to comprehensively understand customer needs and behaviour. Furthermore, Telkom also should manage customer data in a systematic and sustainable manner by maximizing the implementation of data analytics at every stage of the customer journey.
- In term of managing the strategy development process, Telkom should accelerate digitization and lean organization development for impactful operation, Telkom should continue to accelerate improvements to their operating and business models to become leaner by utilizing digital technology and artificial intelligence. Telkom also should ensure the readiness of various supporting talents, especially digital talent so that the company’s growth milestones can take place at the right momentum.