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Tag: Indonesia

  • PT Telkom’s profit grows 24.9% in FY16

    PT Telkom’s profit grows 24.9% in FY16

    Indonesia’s PT Telkom has reported a 24.9% increase in net profit for FY16 to 19.35 trillion rupees ($1.45 billion), on the back of a strong performance in the company’s data and internet businesses.

    Total revenue grew 13.5% to 116.33 trillion rupees, with revenue from the company’s data, internet and IP business growing 31.5% from 2015 to account for 37% of total revenues.

    Fixed broadband subscribers grew 8.8% to 4.3 million, which includes 1.6 million subscribers to its IndiHome fiber broadband services.

    Wireless subsidiary Telkomsel, in which Telkom owns a 35% stake, reported a net income of 9.79 trillion rupiah, up from 7.818 trillion in 2015. Total users grew 13.9% year-on-year to 173.92 million, with mobile broadband users up 37.1% to 60 million.

    Telkom’s capex grew 10.6% year-on-year as the company spent heavily on fixed and mobile network expansion, mainly focused on access and backhaul infrastructure.

    The company said it had deployed nearly 25,000km of terrestrial and subsea fiber during the year, including with its participation in the recently-completed SEA-ME-WE 5 subsea cable project, which links 16 nations in Southeast Asia, the Middle East and Africa.

  • DBS to launch mobile-only banking service in Indonesia

    DBS to launch mobile-only banking service in Indonesia

    The Development Bank of Singapore (DBS) plans to introduce a smartphone-based mobile banking option for the Indonesian market as a way to further digitalize the banks’ operations and utilize digital innovation to its advantage.

    Digital transformation is part of a larger agenda for DBS, seeing that the need for digitalization is no longer seen by the banking industry as a threat to its business but as a tool of cooperation to innovate services, said Bank DBS Indonesia’s head of digital banking, Leonardo Koesmanto.

    DBS will open a new mobile-only bank in Indonesia in the early part of the second quarter of 2017 to promote a more digital, branchless and signature-less experience for its customers in this market. The system will function through biometrics and will require the presence of an electronic ID (e-KTP) to register or use its operations.

    “We are taking the more scalable digital route because these days, bigger banks are shrinking their number of branches. With this investment we can serve more people more effectively,” Leonardo said on Wednesday.

    It is likely that DBS’s mobile-only banking option in Indonesia will be rolled out through a soft launch around next month, in order to assess the feasibility of the technology and root out teething faults. The idea has already been tried by DBS in India.

    DBS currently has around 30 physical branches in Indonesia. Leonardo commented that in order for banks to truly achieve growth in a market, they would need 300 to 400 branches.

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  • Visa QR payments coming to Indonesia, Pakistan, Vietnam

    Visa QR payments coming to Indonesia, Pakistan, Vietnam

    Visa will soon be expanding its QR-based mobile payment service to ten more markets, including Indonesia, Pakistan and Vietnam.

    The service, named mVisa, is now live in India, Kenya and Rwanda, and will soon be available to merchants and consumers in the three new APAC markets, as well as Egypt, Ghana, Kazakhstan, and Nigeria.

    mVisa, a mobile solution, aims to provide easy and secure digital commerce to financial institutions, merchants and consumers in emerging markets.

    The service is designed to help merchants overcome infrastructure issues by allowing consumers to use their mobile phones to make cashless purchases at merchant outlets, pay bills remotely and send money to friends and family members by securely linking their Visa debit, credit or prepaid account to the mVisa application.

    mVisa digitizes the underlying account and allows consumers to transfer funds from their account to the retailer’s account reliably and securely by scanning a QR code.

    Use cases of mVisa include the allowing subscribers of Tata Sky, a direct-to-home service provider in India, to recharge their account by using their mobile phones to scan the WR code directly from the TV screen or online. This function allows Tata Sky customers to order and pay for monthly or one-time services from home without having to visit a physical retail outlet.

    Mahanagar Gas Limited, a utility provider in Mumbai, also issues customer bills printed with the mVisa QR code. Customers scan the QR code on the bill, as they would at a merchant outlet, and complete their transaction at their leisure.

  • SingPost boosts stakes in Indonesian entity

    SingPost boosts stakes in Indonesian entity

    It will benefit from the growing e-commerce market in the country. Singapore Post announced just recently that it will be upping its stakes in an Indonesian entity through Quantium Solutions International Pte Ltd.

    According to OCBC Investment Research, QSI has entered into a share purchase agreement with PT Rantai Bumi Laut (RBL) to acquire 1,800
    ordinary shares, representing 18% of the issued share capital of PT Quantium Solutions Logistics Indonesia (QSLI) for a cash consideration of US$54k.

    QSI is a JV between SingPost (66% stake) and Alibaba Investment Limited (34% stake) whereas QSLI is in the business of e-commerce logistics fulfilment in Indonesia.

    “Recall that QSI set up QSLI with RBL in Jan 2014 with an initial paid-up capital of about S$375k, of which 49% was subscribed by QSI. According to a study by Google and Temasek last year, 18m people in Indonesia fell into the category of online buyers, representing about 7% of the population. By 2025, it is expected that Indonesia will dominate 52% of all e-commerce activity in SE Asia, due to its huge population and island geography,” OCBC said.

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  • 80 Mln Indonesia’s Cell Phone Users Become Opportunities for Fintech Industry

    80 Mln Indonesia’s Cell Phone Users Become Opportunities for Fintech Industry

    Minister of Communications and Informatics Rudiantara says financial technology, or fintech will be used as an effort to expand access of financial services to public, or financial inclusion. This relates to the use of mobile technology amid Indonesia society.

    Rudiantara revealed in Indonesia there are 170 million people own mobile phones and 130 million people access the internet. Of the figure, as many as 100 million people access the internet via mobile phones. However, a number of people in Indonesia who have a bank account, based on data from Bank Indonesia, only reach 90 million.

    “This means there are 80 million people have cell phones but are not given access of application related to finance and banking. Incredible,” said Rudiantara as quoted from the official page of Communications Ministry, Saturday (3/4/2017).

    Based on the fact, Rudiantara said, the banking sector in Indonesia now needs to formulate new technology-based business model.

    He said this in ‘Cooperation of National Movement of 1000 Digital Startups’ event initiated by PT Bank Bukopin Tbk (BBKP) at the Ministry of Communications, Jakarta, last week.

    “For Indonesian banking it is only a matter of time to think of new business model, especially for consumer banking. Bank management must think to integrate itself to the new banking technology wave, that is, financial technology (fintech),” he explained.

    The application of technology in the banking aspects is very diverse. Therefore, the Minister of Communication and Informatics expects the banking world to understand the characteristics of consumer.

    “Fintech is diverse, but that much developing is virtual lending which relates to consumer banking. Why, people prefer to use fintech to borrow money rather than go to the bank? The reason is that in terms of time, because the process is fast,” Rudiantara explained.

    He said that currently there are more or less 140 facilities of fintech services that have been registered. Indeed, the cost or interest is higher than that of traditional banking. But it is much better than moneylenders.

    “This indicates that SMEs that borrow can count, although getting larger interests but there is assurance to be able to get a loan more quickly to develop business,” he explained.

    He also expressed his appreciation for bank role, especially Bank Bukopin Tbk, which helped develop the startups and joint fintech.

    “Because there remain few banks that want to get involved. This is a national program, not a program of Communications and Informatics Ministry. In 2020 we expect to reach 1000 qualified startups that go through a phase that has been determined,” he concluded.

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  • Uber agreed to, then scrapped, a non-compete deal with Indonesian unicorn Go-Jek

    Uber agreed to, then scrapped, a non-compete deal with Indonesian unicorn Go-Jek

    Uber may have a reputation for steamrolling its competitors, but it can be conciliatory at times. In 2015, a year before its retreat from China via the sale of its Chinese business to rival Didi, the U.S. company agreed to a non-compete deal with Go-Jek, a fast-growing on-demand service from Indonesia that’s valued at over $1 billion, TechCrunch has learned.

    In a bid to strengthen their collective battle against Grab, the Singapore-based firm represent in six countries, the two companies floated a collaboration that would ensure they didn’t compete directly in Indonesia, the largest economy in Southeast Asia, according to a person who was involved in discussions. In practical terms, it meant Uber would stick to offering private cars in the country, while Go-Jek would focus only on two-wheeled motorbikes on-demand.

    The agreement fell apart when Uber CEO Travis Kalanick was made aware of the arrangement. Our source said the Uber chief didn’t want to miss out on potential marketshare and thus scrapped the deal. It wasn’t long before they did invade each other’s spaces: Uber introduced ‘Motor,’ its bike taxi service, in Indonesia in April 2016, while Go-Jek announced its GoCar service the following month.

    Uber declined to comment. Go-Jek did not respond to multiple requests for comment.

    Indonesia, and its capital city Jakarta, has become a hot battleground for Uber, Grab and Go-Jek. The country is the largest in Southeast Asia with a population of 250 million people, and it is currently estimated to account for one-third of the region’s ride-sharing market based on revenue, according to figures from a report co-authored by Google. The same study predicts that ride sharing across Southeast Asia will grow by more than five-fold to reach $13.1 billion by 2015, with Indonesia alone worth $5.6 billion.

    Agreeing to an alliance might have made sense for a young Go-Jek, but times have changed. The company, which specializes in motorbike taxis on-demand, had a breakout 2016 in which it attracted investment dollars from major firms Warburg Pincus, DST and Sequoia Capital, all of which took part in its recent $500 million financing round. Now valued at $1.3 billion, the company’s stock has continued to soar as it fends off the challenge from Grab and Uber, two vastly larger companies that have raised billions of dollars more. Today, Go-Jek is arguably Indonesia top ride-sharing firm, and it is reported to be in talks with Chinese tech giant Tencent over a new investment that could bring in as much as $1 billion at a pre-money valuation of $2 billion.

    Beyond imitating its business by expanding into motorbikes, Uber and Grab have also taken a leaf out of its monetization playbook. Grab has copied Go-Jek’s by introducing non-transportation services via motorbike and developing its own mobile payments service, which is designed to seed its platform beyond the initial early adopters that have registered and used it thus far.

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  • Indonesia Signs Currency Swap Deal with Korea

    Indonesia Signs Currency Swap Deal with Korea

    Bank Indonesia (BI) and the Bank of Korea signed a bilateral currency swap arrangement (BCSA). Through the deal, both central banks will be able to swap currencies for a value of KRW 10.7 trillion or Rp115 trillion.

    The agreement was signed by BI governor Agus D.W. Martowardojo and Bank of Korea governor Lee Ju-Yeo, March 6. Agus said the BCSA extension will economic ties between the two nations through the use of their respective currencies.

    “The goal is to reduce our dependency on using a certain currency,” Agus said on Monday, March 6, 2017.

    According to Agus, the BCSA is part of the government’s initiative to deepen the financial market and support economic defense “especially in facing today’s economic uncertainties,” Agus said.

    The BCSA also guarantees the use of Indonesia and South Korea’s currencies in trading, to support the regional financial stability.

    Agus said the deal is valid for three years and can be extended if the two countries agree.

    The first BCSA between BI and Bank of Korea was signed on March 6, 2014, based on economic ties—especially in trade—between the two nations.

    South Korea is Indonesia’s fourth import destination with an average market share of 6.5 percent a year from 2010-2015. Korea is also Indonesia’s sixth export destination, with an annual market share of 6.8 percent in the same period.

    However, most transactions are denominated in US dollar. “That’s why we need to diversify the use of our own currency when trading with regional countries, to stabilize the rupiah,” Agus said.

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  • Australia Eyes Indonesian Mining and Tourism

    Australia Eyes Indonesian Mining and Tourism

    Head Of the Indonesian Investment Coordinating Board (BKPM), Thomas Trikasih Lembong, predicted that Australia’s investment in Indonesia could increase up to USD 3 billion (around Rp 40 trillion) throughout the next three to five years. Most of Australia’s investment is predicted to be centered on the mining and tourism sector.

    “That’s the sum total of the projects we are trying to develop. Two-thirds will be in the mining industry and one-third in the tourism sector, lifestyle, and others,” Thomas said on Tuesday, March 7, 2017.

    Thomas explained that Australia’s has an exceptional mining industry. A number of the largest mining companies in the world is owned by Australia, such as EMR Capital, who purchased a gold and silver mine in North Sumatera, and Newcrest, who is currently operating the gold mine in North Maluku.

    In addition, Thomas said that the Indonesian government is really interested in cooperating with Australia in the tourism sector.

    “Many tourists from Japan, China, and Indonesia travel to Australia. They have great taste, management, and good designs. We need that in order to develop Indonesian tourism sector,” Thomas said.

    Currently, according to Thomas, Indonesian and Australian officials are committed to developing both countries’ tourism sector, especially coastal and maritime tourism. Thomas stated that Indonesia owns a varied number of islands and diving tourist destinations.

    “But we don’t have a maritime tourism industry, while Australia has a good reputation in yacht spots,” Thomas said.

    Australian Minister for Trade, Tourism, and Investment Steven Ciobo, stated that Indonesia could develop many tourist destinations in addition to Bali. Ciobo asserted that by having investments reeling in and the development of various infrastructures across regions, the number of tourists entering Indonesia can significantly increase.

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  • Garuda Indonesia Increases Flight Frequency of Routes to Australia

    Garuda Indonesia Increases Flight Frequency of Routes to Australia

    National airliner Garuda Indonesia (GIAA.JK) will increase its flight frequency to destinations in Australia during the holiday period from May to October, 2017.

    The company targets its passenger growth from flights to Australia to reach 650,000 passengers this year.

    “Flight frequency from Jakarta to Australia is increased to five times from four times each week, while the frequency for Bali-Australia route is raised to seven times from six times per week,” said M Arif Wibowo, President Director of Garuda Indonesia on Tuesday (3/7).

    He said the addition of frequency on flights to Australia will be adjusted with market demand during the holiday period. Thus the flight frequency will be different each period.

    The addition of frequency is part of Garuda Indonesia’s effort in meeting demands and rising market growth, and is line with the synergy commitment the company has implemented with Tourism Australia. The cooperation has boosted the number of passengers on Australia flights to more than 644,237 passengers in 2016.

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  • Rupiah May Extend Gain

    Rupiah May Extend Gain

    Reza Priyambada, a senior analyst of PT Binaartha Sekuritas, predicts that the rupiah will extend its gain. The rupiah is expected to move to around a support level of Rp13,385 and resistance level of Rp13,327.

    “Recent strengthening of the rupiah may open the opportunity for a rebound in the rupiah to extend its gain,” Reza said in a written statement on Tuesday, March 7, 2017.

    Rupiah moved in the positive zone yesterday. It strengthened by 33 points or 2.5 percent to Rp13,350 per US dollar. Raza said that stronger rupiah was due to weaker US dollar as Asian currencies got stronger.

    Rupiah has also strengthened as the Indian Ocean Rim Association (IORA) Summit takes place. The summit is expected to stimulate increase in foreign investment in Indonesia which may trigger economic growth and bolster foreign exchange reserves.

    Rupiah remained strong despite negative sentiment over China who has cut its growth target for 2017, from 6.5-7.0 percent to 6.5 percent.

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  • President Jokowi calls for better transportation between Sumatra and Java

    President Jokowi calls for better transportation between Sumatra and Java

    President Joko Widodo (Jokowi), during a closed-door meeting on Monday, emphasized the need for improving transportation services between the islands of Sumatra and Java by operating better ferries.

    “We are concerned about the operation of the toll road from Lampung Province to Palembang, which leads to vehicle queues in Merak-Bakauheni crossing lane,” the Lampung Governor M Ridho Ficardo stated here on Monday.

    Jokowi and Vice President M. Jusuf Kalla (Jokowi), along with Ricardo and other officials, held a meeting in the Presidents Office to discuss the National Strategic Project and Prioritized Program.

    Ficardo stressed that the transportation authority should deploy several ferries of better quality to improve cargo transportation between Merak and Bakauheni ports that connect Sumatra and Java islands.

    According to Ficardo, the authority should operate ferry trips every hour to transport cargo and passengers.

    He reiterated that the authority can increase the ticket price to provide better services and deploy faster ferries.

    “The improved toll road should be offset by better crossing access. It is fine to increase the price to provide better services,” Ficardo pointed out.

    The meeting also discussed the development of industrial areas in Tanggamus District that builds maritime industry, Mesuji District, and Waypisan District.

    The governor added that the industrial area in Mesuji District could be developed, because the region has a mine of low calorie coals that can supply fuel for power plants.

    The Trans Sumatera toll road has entered the second phase of construction with the development of toll road of 250 kilometers. The government is targeting its completion in 2018.

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  • Bank Indonesia Prepares for Fed Rate Hike

    Bank Indonesia Prepares for Fed Rate Hike

    Bank Indonesia Governor Agus Martowardojo said the central bank is preparing for the impact of Fed Fund Rate (FFR) hike in March. Agus said there were clear signs of a US’ interest rates increase during The Federal Reserves’ monthly meeting in February.

    “The probability is 90 percent, that’s why all market participants are getting ready,” the former finance minister said yesterday.

    Agus said that although a Fed Rate hike will likely be followed by a rupiah correction, the impact will not negatively impact the domestic monetary situations.

    He claimed the country’s economic resilience is quite strong, referring to the sustained economic growth in the range of 5.0 percent. Similarly, inflation has been within a safe range of three to five percent in the last two years.

    Other defensive factors are Indonesia’s healthy balance of payments that goes well in hand with a controlled current account deficit. As of February 2017, the country’s balance of payment was at a surplus of US$4.5 billion. The foreign exchange reserve was around US$116.9 billion.

    Bank Mandiri chief economist Anton Gunawan predicts the Fed Fund Rate will rise three times this year. However, he said there is a tendency that investors will prefer Asian markets rather than return to America’s.

    Anton said the rupiah could still see a fairly stable exchange rate to trade between Rp13,200 and Rp13,400 per US dollar.

    “The hedging liability also serves to reduce pressure on the rupiah,” he said.

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  • Indonesia Offers Cooperation With IORA Member States

    Indonesia Offers Cooperation With IORA Member States

    The Indonesian government decided to use the Indian Ocean Rim Association (IORA) Summit as an opportunity to broaden its partnership in the industrial sector by offering several sectors for investment to IORA member states.

    Some of the sectors being offered include the shipping industry and its equipment, seafood processing, automotive components, petro chemical and coal gasification, and downstream agriculture products.

    “The abovemetioned sectors are included in export-oriented labour-intensive industries and import substitution,” said Industrial Minister Airlangga Hartanto on Monday, March 6, 2017.

    The partnership will allow Indonesia to access IORA members states market, which mostly consists of non-traditional markets. “The partnership can be done through a bilateral supply chain cooperation,” Airlangga said.

    Airlangga added that other efforts that need to be done are initiating business matching with IORA member states, and optimizing the role of Indonesian Embassies in promoting the domestic industrial ability and its market potential.

    “Improving partnership as in industrial capacity development training, has been conducted in cooperation with Mozambique and Seychelles at the small and middle-sized industry,” Airlangga said.

    Airlangga asserted IORA member states present highly prospective economic potential, including its large market of 2.7 billion population, and the fact that around 70 percent of the world’s trade passes through the region.

    The IORA also stores 55 percent of the global oil reserve and 40 percent of the global gas reserve. IORA member states also produce on-third of the world’s total tuna production.

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  • Fluff Bakery taking cupcakes international

    Fluff Bakery taking cupcakes international

    Four years after opening cupcake shop Fluff Bakery, a Singapore couple plans to launch franchises in Indonesia and Malaysia.

    Ashraf Alami and Nursyazanna Syaira Mohammad Suhimi left their jobs to set up in a shophouse four years ago, and from 600 cupcakes a day they now sell double that.

    Their venture has been highlighted in Parliament by Minister for Trade and Industry S Iswaran when talking about bright spots in Asean countries and the potential for small businesses in the region.

    “A rising middle class has created demand in sectors such as retail and food and beverage,” he said. “The digital economy also presents unprecedented opportunities for companies – no matter how small – to reach out.”

    Fluff Bakery’s social-media presence has found fans as far away as Malaysia, where it has launched some pop-up stores. The first saw all 500 cupcakes snapped up in 30 minutes, and the second time around they sold 1000 cupcakes in about an hour.

    Ashraf says they hope to open a store in Kuala Lumpur in May.

    Meanwhile, it its latest budget Singapore’s government has pegged S$600 million (US$424.5 million) to establish an international partnership fund to help Singapore firms scale up and internationalise.

    “As an SME, expanding overseas is very daunting, because you don’t have many resources,” says Ashraf. “Any assistance or guidance – financial, networking – is more than welcome.”

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  • Royal Bank of Scotland Ends Business Activities in Indonesia

    Royal Bank of Scotland Ends Business Activities in Indonesia

    Although the bank started under the name ABN AMRO BANK NV Indonesia, the majority of its shares was acquired by the Royal Bank of Scotland Plc in 2010. After this acquisition the bank’s name changed to RBS NV.

    Earlier, in December 2015, the bank’s branch in Surabaya (East Java) had already been closed. The ending of all of RBS NV’s business activities in Indonesia is part of the bank’s overall business strategy. Besides Indonesia, it decided to end its business networks in 24 other countries. Due to the RBS Group’s losses across the world, it decided to focus on the domestic market of the United Kingdom (UK) in order to improve its earnings. RBS NV’s corporate activities in Indonesia were profitable until the end of 2014. After that year its activities in Indonesia resulted in net losses and therefore it decided to end its businesses here gradually.

    Through OJK Board of Commissioners Decree No. 7/KDK.03/2017 on the Revocation of the Permit of The Royal Bank of Scotland NV’s Branch in Indonesia, dated 28 February 2017, the license of the bank has been revoked. According to the OJK, RBS NV Indonesia has completed all its obligations and therefore its request for the license revocation was approved. However, those who still (claim to) have rights and obligations with the local branch of Royal Bank of Scotland in Indonesia can contact the disclosure team, located at the Indonesia Stock Exchange (IDX) building (Tower 2, second floor) in South Jakarta until 31 March 2017.