telkom non deal roadshow presentation deutsche bank, aug 10-12,2009

Corporate PresentationPT Telekomunikasi Indonesia, TbkFirst Half 2009 Results

presented by Rinaldi Firmansyah (CEO)

NDR by Deutsche BankUnited Kingdom & Frankfrut ‐ GermanAugust 10‐12, 2009

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Disclaimer

This document contains financial conditions and result of operation, and may also contain certain projections, plans, strategies, and objectives of the Company, which would be treated as forward looking statements within the meaning of applicable law.

Forward looking statements, by their nature, involve risk and uncertainty that could cause actual results and development to differ materially from those expressed or implied in these statements.

TELKOM does not guarantee that any action, which should have been taken in reliance on this document will bring specific results as expected.

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Content

TELKOM in Brief

Telco Industry in Indonesia

Business Results (Operational & Financial) – H1/09

Business Development

TELKOM Transformation and Strategic Initiatives

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TELKOM Ownership ...

TELKOM is the largest full service and network provider in Indonesia, owned by the Government of Indonesia and Public. (Total shares = 20,159,999,280, including 1 Dwiwarna share series A)

as of June 30, 2009

Government

Public

52.47%10,320,470,711 shares

Treasury Stock

490,574,500 shares

47.53%9,348,954,069 shares

The biggest public listed company in Indonesia( Market cap : Rp.151 Tn, or 9.5% of total market cap. at IDX)

TELKOM listed at the Indonesia Stock Exchange (IDX), the New York Stock Exchange (NYSE) as well as theLondon Stock Exchange (LSE) on November

14, 1995,and also Publicly Offering Without Listing (POWL) at Tokyo Stock Exchange (TSE)

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TELKOM Core Business

Market leader with more than 90%market share

Operated by Division : Reg. Div 1-7; FWN Div; Infratel Div;

CISC Div; Enterprise Div; and Subsidiaries :

UN

CO

NSO

LC

ON

SOLI

DA

TED

New Wave Business with significant growth

Operated by:

No.1 cellular operator with more than 49% market share

Operated by:

AWI Finance B.VBalebat

Property, telco infrastructure, trade and finance services, call center and directory, andprinting

As of June 30, 2009

Others

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TELKOM’s Map of Operations

Regional ISumatera Island

Regional IIGreat Jakarta

Regional IIIWest Java

Regional IVCentral Java& DIY Regional V

East Java

Regional VIKalimantan

Regional VIIEastern IndonesiaBali, Nusa Tenggara,Sulawesi, Maluku & Papua

Covers all over Indonesia : 33 provinces and 440 districts

7 Regional Division913 Customer Service Point / PlasaTELKOM(11 shared with GraPARI)More than 317 K Warung Telkom

Subscribers in Java (70%)

4 Areas11 Regional Sales71 GraPARI (51 shared with PlasaTELKOM)271 Gerai HALO

Subscribers in Java (70%)

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Board of Directors

Rinaldi Firmansyah

President Director

Sudiro Asno

Director of Finance

Faisal Syam

Director ofHuman Capital &

General Affair

I Nyoman G Wiryanata

Director ofConsumers

Indra Utoyo

Director ofInformationTechnology

& Supply

Ermady Dahlan

Director ofNetwork &

Solution

Arief Yahya

Director ofEnterprise &Wholesale

Prasetio

Director ofCompliance &

RiskManagement

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Content

TELKOM in Brief





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Telco Industry - Environment Overview

Highlights on Telco Industry in Indonesia :

Environment is very dynamic

There are 11 Telco Operators

Regulation Changes

National Telephone Penetration already around 70%

Traffic Pattern Changes

Significantly increase in Data & Internet

Price war on Cellular Business

Tariff decreased significantly

Global Crisis

TELKOM’s Strategies :Strengthen the core to deliver the fundamentalExpand into adjacent to build momentum for new portfolioEmpower business units to drive growthTransform the legacy & culture

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Telco Industry - Environment Overview

9%

27%8%

56%

0-1415-1920-5960+

Population by Age

Indonesia population

Population: approx. 227 million +

Young dynamic population

There are 11 operators for more than 227 Mn population with 56 % young dynamic population…

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Penetration in Telco Industry

Amid intensifying competition, TELKOM remains market leader in all product line businesses…

TotalIndustry

± 8.7 mn ± 23 mn ± 152 mn ± 1.1 mn

CellularFixed Wireline

Fixed Wireless

Broadband Data Comm

Penetration13%

Penetration±63%

Penetration<1%

Rev. Share± 52%

TELKOM 90%BBT

Telkomsel 51%IndosatExcel Hutchinson (3)AxisSampoernaMobile‐8

TELKOM 59%IndosatBakrie Smart

TELKOM 52%ISAT Group IndosatIM2 Lintas ArtaExcel

Speedy 816 KWireless (HSDPA) ~ 150K (Telkomsel)Others : Cable etc.

Fixed Line

as of June 30 2009

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Content

TELKOM in Brief





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TELKOM’s transformation is on going process…

Began terminating KSO Agreement

(2001)

2001Cross ownership termination with IndosatTELKOM acquired 35% interest in Telkomselfrom Indosat

2002Implementation of duopoly

1999Telecommunication industry reforms based on UU No 36Terminated the exclusive rights of TELKOM to provide fixed-line services

1st Phase Transformation 2nd Phase Transformation

Govt transformed PERUMTEL into

PT. TELKOM (1991)

Fundamental Change :

Basic Culture Transformation

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Go Public & listed on JSX, SSX, NYSE,LSX & TSE (POWL)

1. Restructuring 12 WITEL into 7 Regional Div.

2. KSO Agreement in 5 Regional Div.

Improving the transparency and

moving toward world class best practice

2

Transformation from Asset-based Company to Customer-Centric

Company and evolving from a Telco Company

to an InfoCommCompany

Main Drivers:End of

monopoly/exclusivity right to provide fixed-

wireless services (“Local” and “Long

Distance”).

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Moving from F.M.M to T.I.M.E

business portfolio by strengthening the core

and growing new wave business

4

1988 -1992

1992 -1997

GO PUBLIC! 20082002 - 2005

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Strengthen Core Business

Grow New Wave

Delivering exceptional value our customers

Competitive Sustainable Growth

Superior Value Creation

Strategy Implementation Starting 2008 : Transforming Our Business..

TELKOM has to transform its business to TIME (Telecommunication, Information, Media, and Edutainment based services) to maintain its competitive sustainable growth…

5 Integrated NGN

2 Align Cellular‐FWA & separate FWA as buss. unit

Optimize FWL Legacy1

8 Streamline subsidiary portfolio

3 Invest in Broadband

4 Integrated Enterprise Solutions

6 Expand into IT Services

7 Expand into Portal Business

9 Align Business Structure and Portfolio Management

10 Transforming Culture

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Content

TELKOM in Brief





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Operational Highlights Q2/09

..in almost all business segments, TELKOM has a significant customer base growth story..

Q2/08 Q2/09

Customer Base (LIS)

MoU (Bn minutes)

BTS (Unit)

Fixed Wireless 2,677 4,943 85%

Fixed Wireless 6.1 8.6 42%

Cellular 32.1 68.1 112%

Cellular 23,056 28,481 24%

22.2

Cellular (mn) 52.4 76.0 45%

Broadband Internet (‘000) 0.4 0.8 107%

Fixed Line (mn)

Growth (%)

16.1 38%

17Line in Service (LIS)

(mn)

8.78.6

Q2/08 Q2/09

1%

Fixed Line Business (1/2)

as of June 30, 2008 & 2009

141

114

Q2/08 Q2/09ARPU(Rp)

19%

Fixed Wireline

The fixed wireline business in Indonesia still provides some room for growthdespite pressure on margins…

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7.4

13.5

Q2/08 Q2/09

2,677

4,943

Q2/08 Q2/09

6.1

8.6

Q2/08 Q2/09

41

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Q2/08 Q2/09Subscribers

(mn)

83%

Fixed Line Business (2/2)

BTS(unit)

85%

as of June 30, 2008 & 2009

Minutes of Use(bn minutes)

42%

ARPU‐Blended(Rp)

43%

Fixed Wireless

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52.4

76.0

Q2/08 Q2/09

32.1

68.1

Q2/08 Q2/09

23.1

28.5

Q2/08 Q2/09

63

47

Q2/08 Q2/09

BTS(000)

24%

ARPU ‐ Voice (Blended) (Rp 000/month)

25%

Minutes of Use(bn minutes)

112%

Cellular Business

Subscribers(mn)

45%

Telkomsel is still the clear market leader in cellular GSM with around 51% of market share…

as of June 30, 2008 & 2009

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Broadband Business (Speedy)

393

816

Q2/08 Q2/09Subscribers

(‘000)

107%

0.57

1.18

Q2/08 Q2/09Revenues(Rp. Tn)

108%

has a strong opportunity to continue growing in the new wave business…

….Speedy revenue grew significantly by 108%

as of June 30, 2008 & 2009

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Financial Highlights Q2/09

(in Rp. Tn) Q2/08 Q2/09

Total Assets 85.9 94.2 9.6%

Total Equity 30.4 34.1 12.3%

EBITDA Margin (%) 60.3 59.5 0.8%

Net Income 6.3 6.0 4.0%

Net Income/Share (Rp.) 317.83 306.04 3.7%

Total Liabilities 47.6 51.6 8.2%

30.7

Operating Expenses 17.7 19.1 7.6%

EBITDA 18.2 18.3 0.2%

Operating Revenues

Growth (%)

30.2 1.5%

In tight competition, total revenues has delivered positive result in Q2/09 …

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QoQ Comparison - Q1/09 vs Q2/09

Q1/09 Q2/09

Operating Revenues (Rp. Tn) 16.0

Operating Expenses (Rp. Tn) 9.4 9.7 2.8%

Operating Income (Rp. Tn) 5.3 6.3 18.9%

Net Income (Rp. Tn) 2.5 3.6 45.9%

EBITDA Margin (%) 58.3 60.6 1.6%

9.7EBITDA (Rp. Tn)

Growth (%)

14.7 8.6%

8.6 13.0%

…during Q2/09, financial performance showed positive results

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Our New Wave business has grownsignificantly (52.5%)….

…and the contribution to total revenues reached 9% (2009) from 6% (2008)

Legacy and New Wave Revenues Q2/09

28,389 27,894

1,822 2,779

Q2/08 Q2/09

Total (Rp. Bn)

30,211 30,673

New Wave Business

52.5%(Rp.957 bn)

Legacy Business

1.7%(Rp. 495 bn)

The decline of Legacy revenues was partially offset by an increase of New Wave revenues…

as of June 30, 2008 & 2009

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Revenue Drivers Q2/09

5.3

4.3

Q2/08

Q2/09Fixed Lines • On‐net and off‐net usage• TIC usage

19%

7.4

7.9

Q2/08

Q2/09Data, Internet &IT Services

• Internet connectivity • Speedy subscribers 107%

7%

0.5

0.5

Q2/08

Q2/09Network • Leased lines services as a result from integrated marketing and sales development

14%

12.2

13.5

Q2/08

Q2/09Cellular • Minute of Use 112%• Subscribers 45%

11%

4.4

3.9

Q2/08

Q2/09Interconnection • Change in life style• Customers preference to make on‐net call

12%

14%

44%

13%

26%

2%

as of June 30, 2008 & 2009 (In Rp. Tn)Total Revenue slightly increased by 1.5% to Rp. 30.7 Tn

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Expense Drivers Q2/09

5.1

6.0

Q2/08

Q2/09Depreciation • Depreciation expenses of Telkomsel : 25%• In line with the expansion of network infrastructures

18%

4.3

3.8

Q2/08

Q2/09Personnel • Employee’s income tax • Vocation pay, incentives & other benefits

12%

5.6

6.4

Q2/08

Q2/09Operation, Maint.& Tel. Services

• Total BTS’s : 24%• Overall network capacity : 44%• Affect: maintenance costs, frequency fees & power supply costs

14%

1.8

1.9

Q2/08

Q2/09General &Administrative

• Amortization of goodwill & intangible assets • Collection expenses • General and social contribution

6%

0.9

1.0

Q2/08

Q2/09Marketing • Marketing and promotion program • Customer education program

7%

as of June 30, 2008 & 2009 (In Rp. Tn)Personnel expenses has decreased by 12% and total expenses Rp. 19.1 Tn

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CAPEX in Q2/09

......continuing to increase on capacity, coverage and improve quality of service as well as to provide investment to develop our new wave businesses…

Q2/08 Q2/09

TELKOMRp3,345 bn

TELKOMSELRp.5,446 bn

24%

75%

37%

60%

Total (Rp. Bn)

8,323 9,090

as of June 30, 2008 & 2009

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Consolidated Debt Q2/09

Decreasing in forex debt to minimize forex loss on our bottom line

Forex Debt in US$ has decreased by 12% in Q2/09

Q2/08 Q2/09

62%

30%

75%

18%

18,29313,938Total (Rp. Bn)

8%

7%

IDR/Rupiah

U.S. Dollar

Japanese Yen

To minimize effect of forex fluctuatuion, company has reduced foreign debt mainly in US$...

8%

7%

as of June 30, 2008 & 2009

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Content

TELKOM in Brief


Business Results (Operational & Financial)



Thanks for your attention...

Contact Address :Investor Relations & Corporate Secretary DepartmentGrha Citra Caraka 5th flJl. Jend. Gatot Subroto Kav. 52Jakarta, 12710IndonesiaTel : +62‐21‐5215109Fax : +62‐21‐5220500Email : [email protected]

http://telkom‐indonesia.com

Any further questions?

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Business Development (1/3)

Reshetnev to build TELKOM‐3 satelite Contracts for the supply of new TEKOM satellite : TELKOM‐3

Launching on August 2011

Will offer new transponders in Ku‐band

Coverage : over South East Asia

TELKOM – Orange in network services partners agreement

TELKOM and France Telecom’s Orange Business Services Unit signed a contract

To provide advanced network services to Indonesia

TELKOM recorded on 675 of the Forbes Global 2000

In 2009, was the 3rd times2008 : rank 7292007 : rank 835

Based on the amount of income, profit, assets and market value

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FinanceAsia “Asia’s Best Companies 2009”

Best Managed Company (rank 2nd)

Best Corporate Governance (rank 6th)

Best Investor Relations (rank 4th)

Best Corporate Social Responsibility (rank 2nd)

Most Committed to a Strong Dividend Policy (rank 1st)

Contact Center Asia Pacific Top Performer 2009

The Best Outsourcing Partnership‐Asia Pacific 2009 (Silver)

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Indonesia Cellular Show 2009 The Best Operator CDMA untuk TelkomFLEXI

Top Brand Award Internet Service Provider for Speedy and Telkomnet Instan

Indonesia Institute for Corporate Directorship (IICD)

The Best Good Corporate Governance Award Non Financial Sector

Bisnis Indonesia Best Emiten for category of infrastructure, utility and transportation

CEO of the Year 2009

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Telco Operators share price at IDX *)

TELKOM share price increased by 21% …

Note :*) during period : July 15, 2008 – July 15, 2009

Rp %

6.795 8.200 1.405 21%

6.750 5.150 (1.600) ‐24%

2.100 1.280 (820) ‐39%

2.215 2.123 (92) ‐4%

July 15, 08 July 15, 09 Changes

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Subsidiaries

PT. Telekomunikasi Seluler

65% ownership(Cellular)

PT. DayamitraTelekomunikasi

99.99% ownership(Fixed Wireline - Kalimantan)

PT. Graha Sarana Duta99.99% ownership

(Property & Construction)

PT. MultimediaNusantara

99.99% ownership(Multimedia)

PT. IndonusaTelemedia

95.68% ownership(Multimedia)

PT. InfomediaNusantara51% ownership

(Telephone Directory & Call Center)

PT. Napsindo PrimatelInternational

60% ownership(Network Access Point)

PT. Pramindo IkatNusantara

99.99% ownership(Fixed Wireline - Sumatra)

PT. Pasifik SatelitNusantara

22.38% ownership(Satellite Transponder)

PT. Citra Sari Makmur25% ownership

(VSAT)

PT. Pembangunan Telekomunikasi

Indonesia3.18% ownership

(Construction & Maintenance)

PT. Batam BintanTelekomunikasi

5% ownership(Fixed Wireline – Batam & Bintan)

PT. Patra TelekomunikasiIndonesia40% ownership

(VSAT)

Consolidated Associated Companies

PT. Telkom InternationalIndonesia

99.99% ownership(Investment & Finance)

Ownership as of June 30, 2008

telkom non deal roadshow presentation deutsche bank, aug 10-12,2009

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