IndiHome's Finances: What Happens After the Planned Merger with Telkomsel?

Indonesia's leading internet provider, IndiHome, is set to be separated from its parent company, PT Telkom Indonesia Tbk (TLKM). This follows the signing of a Conditional Spin-Off Agreement with Telkomsel on April 6, 2023.

This agreement will see IndiHome spun off from Telkom and merged with Telkomsel.

As reported by *Katadata*, TLKM's VP of Investor Relations, Edwin Sebayang, announced that the value of the IndiHome business segment to be separated is Rp58.24 trillion.

This corporate action previously received approval from TLKM and Telkomsel shareholders. The reason for the planned separation is to maintain the companies' competitiveness and advantage in the telecommunications sector.

"The company plans to combine fixed broadband and mobile broadband services into a single business entity through a planned separation to a subsidiary, namely Telkomsel," said Edwin Sebayang on Thursday, April 6.

So, what is IndiHome's financial condition?

According to TLKM's annual report, IndiHome falls under the consumer segment. The company claims to remain the leader in the Indonesian fixed broadband market, controlling over 75.2% market share.

At the end of 2022, IndiHome had 9.2 million subscribers, an increase of 611,000 from the previous year.

Consequently, revenue in this consumer segment increased by 5.7% to Rp26.35 trillion in 2022. This achievement significantly contributed to increased consolidated revenue.

"Consumer segment revenue performance reached 96.9% of the target," Telkom wrote in its official report.

Revenue in 2021 was recorded at Rp25.11 trillion, with expenses of Rp19.22 trillion, resulting in a profit of Rp5.89 trillion.

The 2021 performance also showed an increase from 2020, which recorded revenue of Rp22.10 trillion, expenses of Rp17.54 trillion, and a profit of Rp4.56 trillion.

Generally, IndiHome's revenue and profit, along with other businesses in the consumer segment, have increased from 2018 to 2022. Note that the revenue figures include total revenue (not just external revenue). The details are as follows:

* 2018
* Revenue: Rp 16.18 trillion
* Profit: Rp 2.15 trillion

* 2019
* Revenue: Rp 18.49 trillion
* Profit: Rp 2.58 trillion

* 2020
* Revenue: Rp 22.10 trillion
* Profit: Rp 4.56 trillion

* 2021
* Revenue: Rp 25.11 trillion
* Profit: Rp 5.89 trillion

* 2022
* Revenue: Rp 26.54 trillion
* Profit: Rp 7.57 trillion

(See also: Telkom's Net Profit Declines Despite Revenue Increase in 2022)