CASE

bo STUDY
TELKOMSEL
SUBSIDIARY OF
PT. TELEKOMUNIKASI INDONESIA. TBK
Company Name
Phone
Email

BLEMBA 62
Syndicate 4
Indah Critaning 29119425
Ekawati Sinaga 29119478
Gideon Mula Gabe Sitorus 29119579
Humaidi AshShiddieqy MS 29118391

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PREFACE

First of all, we would like to thank Mr. Widhyawan Prawiraatmaja for the wonderful lessons that
have been taught during the class. We learned about business strategy, ethical leadership, and also a
really valuable wisdom from you and guest lecturers you’ve invited. For our final assignment, we
provide an analysis of Telkomsel, which is the main contributor of PT. Telkom Indonesia, Tbk’s profit.
Syndicate 4 works alltogether to analyze the performance of Telkomsel reaching Sustainable
Competitive Advantage. Each team members have a role to give a deep research on certain areas, as
follow :

Ekawati Sinaga

Eka provide the brief overview about Telkom and the position of Telkomsel
in the company. In general also explain Telkomsel’s strategy based on our
understanding in 5 Generic Competitive Strategy.

Humaidi AshShiddieqy MS

Humaidi elaborates the competitive advantage of Telkomsel as a market

leader in Telecommunication industry. Other than competitive advantage,
Humaidi also identify how Telkomsel generate profit trough it’s business
model.

Gideon Mula Gabe Sitorus

Gideon analyze the performance of Telkomsel in financial point of view.

Financial analysis was conducted trough companies’ financial report and
compare it to visualize the position of Telkomsel within telecommunication
industry in Indonesia.

Indah Critaning

Indah analyze the other contributors that make the company reach
Sustainable Competitive Advantage. Company’s values, ethichal leadersip,
and culture are elaborated to give us deeper understanding about the “why”
of sustainable competitive advantage.

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BUSINESS OVERVIEW

As one of the most populous countries in the world, the advancement of telecommunication is
vital in Indonesia. One of the efforts in digital acceleration is the establishment of PT Telkom. Initially,
PT Telkom was a private company that provided telegraph and postal services in 1882. In 1965 the
company divided in to 2 companies, PN Pos&Giro and PN Telekomunikasi. PN Telekomunikasi then
developed and changed its name several times until 1991, becoming PT Telkom and conducting an
initial public offering (IPO) in code “TLKM”. In its journey, PT Telkom has experienced many
disruptions, especially in terms of technology. Disruptions can be turned in to threat or opportunity.
With its adaptability and ability to look for opportunities, PT Telkom can survive and thrive in the midst
of disruption.
The success of PT Telkom can be seen from the various achievements. In 2019, Telkom
become the most valuable brand in Indonesia with 4762 Million USD value (Statistica, 2019).
Fundamental transformation can be seen in its business lines that included business and portfolio
transformation, infrastructure transformations, human capital transformation, and culture
transformations.To become a leading company in the telecommunications sector, Telkom implements
a customer-oriented business strategy with a lean and agile principle in organization. Various
transformations are purposed to provide the best service for customer so that they can become a
leadig company, then in the end they can help digital development in Indonesia.
The aim was stated in the Vison and Mission below:

Telkom Vision
To be the most preferred digital telco to empower the society.
Telkom Mission
1. Advance rapid buildout of sustainable intelligent digital infrastructure and platforms that is
affordable and accessible to all.
2. Nature best-in-class digital talent that helps develop nation's digital capabilities and increase
digital adoption.
3. Orchestrate digital ecosystem to deliver superior customer experience.

As an effort to achieve its vision and mission, Telkom integrates all its resources such as the
subsidiaries. Telkomsel is a subsidiary that contributes the largest profit. In 2019 fiscal year,
Telkomsel contributed 70% of Telkom’s total profit. Telkom owns 65% shares in Telkomsel, 35%
others are Singtel’s, Singapore telecommunication company. Telkomsel currently the largest cellular
operator in Indonesia. Aligned with the parent company, they intended to be the leader of
telecommunication service with customer-oriented value and have the responsibility for developement
in Indonesia since telecommunication is critical part of digital society. The stated Vision and Mission
also related with parent company’s, as follows:

Telkomsel Vision
Be a world-class, trusted provider of mobile digital lifestyle services a nd solutions

Telkomsel Mission
Deliver mobile digital services and solutions that exceed customers’ expectations, create
value for our stakeholders, and support the economic development of the nation.

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TELKOMSEL STRATEGY

Telecommunications industry is very sensitive to external conditionsso it takes a strong

relationship with all stakeholders. Government is one of the most important stakeholders in this
industry.Telkomsel's role in the national strategy to form a digital society has made the government
provide full support and it become an advantage for Telkomsel benefits compared to other providers.
With the support of government, Telkomselwas the first-mover in telecommunication industry in
Indonesia. This condition brings much benefit for company. Telkomsel enter the blue ocean market. A
blue-ocean strategy offers growth in revenues and profits by discovering or inventing new industry
segments that create altogether new demand (Thompson, 2018). Telkomsel was founded in 1995
along with Indosat and released the first postpaid card, the Halo card. The presence of Telkomsel
created new market and became catalyzer of communication in Indonesia. In the beginning, access to
SIM cards was very limited and sold at a high price but as the technology is leveraging and
competitors enter the market, supply is increasing and SIM cards more accessible to broader
segments. Eventough many competitors enter the market, Telkomsel still lead the market. With
adequate infrastructure, good relations with stakeholders and continuous innovation, Telkomsel is
ahead of its competitors, making it possible to use differentiation strategies.
specifically, Telkomsel use broad differentiation strategy. A broad differentiation strategy—
seeking to differentiate the company’s product offering from rivals with attributes that will appeal to a
broad spectrum of buyers (Thompson, 2018).Telkomsel focused on value drivers in the products and
services. The value drivers of Telkomsel are :
1. Offering the fastest network. Telkomsel is a pioneer in communication technology in Indonesia,
starting from 2G, 3G, 4G and 5G networks which are in the process of being tested.In
telecommunication industry, they enter blue ocean and create new demand.
2. Telkomsel penetrate various market segments with its product diversifications. In general, the
products divided to Kartu Halo, Simpati, Kartu As, and Loop. Each product proposes value
proposition to certain market.
3. Network coverage reached 95% in Indonesia. This means Telkomsel covers most of regions in
Indonesia with 228.000 base transceiver station (BTS). In many rural areas, Telkomsel is the only
telecommunication network due to high fixed costs of building new networks. This condition
become the competitive advantage of Telkomsel.
4. Telkomsel provide varios custumer services channels such as 24 hours call service, my
telkomsel apps, social media, virtual assistant, and GraPari (offline service center). GraPari
usually located in the city center with a convenient room.
5. In order to add value to the product, Telkomsel provide extra benefit such as Telkomsel Point,
gaming, music, video service, etc.Together with stakeholders, Telkomsel also create digital
ecosystem that make customer engaged and loyal to its products.
6. Emphasize human resource management activities that improve the skills, expertise, and
knowledge of company personnel. Telkomsel empower the human resource with various skill
upgrading such as special training, higher degree scholarship, etc. They also have a well known
learning center to upgrade skill and knowledge.
Telkomsel's success in executing business strategies creates huge profits for its owners, Telkom
and Singtel.Singtel as one of the owner also influence Telkomsel in many ways as Singtel is a
Singapore based telecommunication company that already establish the competitive advantage for a
long time. In company’s (telkomsel) point of view, this affiliation brings advantage especially in terms of
technological innovation to lead the telecommunication market.

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COMPETITIVE ADVANTAGE

Telkomsel as a market leader in Indonesia, therefore the right strategy and steps are needed
to create and maintain Telkomsel company resources and capabilities that are sustainable
competitive advantage. We identify the competitive advantages of Telkomsel, as follows:

1. Digital Network System

Telkomsel enhanced Digital Network capability by deploying NB-IOT within ten biggest cities in
Indonesia to ensure that Telkomsel is competitive as far as digital network readiness is concerned.
They continued to leverage of spectrum assets and harness advanced technologies to lead the
industry, which included the delivery of exceptional connection with 23,0000 new LTE network
element that could covered about 95% of the population throughout Indonesia.
As the technology leader in the country, Telkomsel anticipate that high connectivity and low latency
of 5G will greatly enable industry 4.0 and create new business opportunities. Therefore, keep to trial
5G technology in Batam, aiming to create aligned with growing industrial digitalization such as high
speed for smart surveillance, augmented reality support for maintenance and repair situation, and
autonomous drone for smart air patrols.

2. Shaping a Customer-Centric Organization

Telkomsel organization has to change completely, not merely moving from structure A to structure
B, but fundamentally changing in order to accommodate the change in business paradigm from
Product-Centric to Customer-Centric. To support this system, Human Capital Management (HCM)
has had to emphasizes the ownership and accountability of each market segment served. On this
way, Telkomsel can move more dynamically to suit the needs of each very diverse consumer
segment.

3. Building and Acquiring Future-Fit Capabilities

The success of the transformation is determined by the employees who run the business. HCM
simultaneously bring a variety of programs that encourage capabilities (core-competencies) as well as
an innovation culture in company. HCM used two approaches: Build and Buy. An effort to Build
Future-Fit Capabilities, HCM implemented integrated program under a series of TED
(Transformational Expert Development). Meanwhile, to achieve quick wins in business competition, in
some case HCM also hired external talent to accelerate the learning process and more quickly fulfill
necessary capabilities.
Barney and Clark (2007) proposed a V-R-I-O framework to assess whether a resource will
provide a sustainable competitive advantage. VRIO of Telkomsel is provided in Exhibit 1. Based on
Exhibit 1, Research and Development (R&D) can give Sustainable Competitive Advantage (SCA)
because valuable for consumers with the research and development of technology that can produce
new service and simplify to consumer. It is rare and costly to imitate because Telkomsel as a big
company in Indonesia which makes infrastructure strongly and difficult to follow by other competitors.
And R&D always need in telecommunication industry, so it cannot be replaced by other.

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BUSINESS MODEL

In this paper, we will adopt a business model framework by Osterwalder and Pigneur’s (2010)
which is called The Business Model Canvas (BMC Model) to analyse the business model of
Telkomsel.

1. Value Propositions
Telkomsel as pioneer in telecommunication industry have value proposition based on customer
needs which can be described in the 4 products offered to consumers :
 KartuHalo : Positioned as the postpaid brand of choice for professionals and corporate
customers, kartuHalo provides an unparalleled suite of full mobile servicesand exclusive
privileges. As the coolest and best value postpaid card for middle and upper segments.
 simPATI : Positioned as the prepaid brand for the savvy middle class segment, simPATI
continued to offer an exciting range of innovative packages and campaigns to drive demand
for mobile Data.
 KartuAs : Positioned as an ‘Affordable, Value Prepaid Brand’, Kartu As is Telkomsel’s
prepaid brand targeted at value seekers and offering the best value to customers.
 Loop : Positioned as the prepaid brand which targets the youth segment. With the tagline “Ini
KITA” (This Is Us).

2. Customers
Telkomsel has a broad customer base where they need to establish some characteristics of the
customers in each Customer Segment. These characteristics can be based on various selections as
in Exhibit 2.

3. Channel
Telkomsel has a direct channel management to continue their success in providing the best
services to customers. They continued to improve service quality in all customer touch points.
Customer service channels were split into two categories, namely (a) assisted channels which are
like GraPARI, Call Centers, E-care) and (b) unaided/independent services (MyGraPARI,
MyTelkomsel, IVR, Virtual Assistants).

4. Customer Relationship
Telkomsel has a variety of products with unique specifications to maintain current customers and
to engage new customers. For current customers, Telkomsel have a priority member (Gold
Customer) that can gain more benefits, e.g call and internet bonus and a community for Telkomsel
users (simpatizone), who can create a new atmosphere and give feedback to Telkomsel
(collaboration). For a new customer, Telkomsel always gives promotion (in selected merchants, and
bonus in pulse, tariff, talk time, etc.)

5. Key Resources
For Telkomsel, Data is a key resource in the digital industry, and a critical enabler in Telkomsel's
efforts to better understand consumers. Today, Telkomsel embarks on a transformation journey to
become a customer-centric organization. The shift in strategic and business model requires HCM
(Human Capital Management) to attract and develop the right leadership and talent, fully engage the
organization around the strategy, and build a culture that supports changes.

6. Key Activities
Telkomsel provides services in telecommunication that people can connect to each other long
distance in production, Telkomsel has been reinforcing the prepaid SIM card registration for
cleansing effect, resulting in a better quality customer base with higher number of real active

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subscribers. Increasing the number of HVC customers (high value customers) with a personal
package program, lifestyle & loyalty program as well as network priorities and problem solving for
HVC customers.

7. Key Partners
Telkomsel do strategic alliance with non-competitors, which is formed Telkomsel Mitra Innovation
(TMI), in collaboration with MDI Ventures Telkom and SingTel Innov8, a Singtel corporate venture
capital. TMI is expected to enable access to various exciting new opportunities in the technology
sector. And also joint-venture between Telkom Indonesia and eBay.

8. Revenue Stream
Telkomsel generates revenues from Asset Sales : Physical Product (Sim Card). Usage Fee :
Customer pays according to the length of time using the product / service.

9. Cost Structure
Based on Annual Report Telkomsel (2019) cost-driven by Operation & Maintenance. Related to
the company initiative to build more BTS (Base Transceiver Station) infrastructure towards
strengthening 4G LTE services and maximizing Data service quality .Fixed Cost : Quantity of
Production, Building, and so on. Variable cost : Commercial event, cost of services, and others
costs.

BUSINESS PERFORMANCE

In Indonesia we already well know the big players in the telecommunication industry through
their brand, there are: Telkomsel, XL, Indosat, and Smartfren. The Telecommunications industry in
Indonesia has been supporting our national GDP up to 3.80% in 2017 (VidyantinaHeppy A., 2018).
With a total of users in the market is more than 300 million people. Not to mention in this pandemic
era the potential user will grow even further. Because maybe some of the middle to upper class’
children can join as the user in order to do the online class. Also, some of the workers will increase
their internet quota due to work from home policy. This can be an opportunity if company can create
different product that suitable to the user, or being customer centric.This opportunity is quite
challenging thou to fulfil the needs company should prepare with the right treatment, wrong move can
cause some cost that affect the financial of the company or maybe even lost.Because it also means
there will be huge traffic and huge consumption bandwidth up to 13%, this would increase cost
(koran.tempo.co, 2020).
Telkom is the most powerful telecommunication company in Indonesia. They are the only Big
Capitalization company that comes from the telecommunication industry. Their competitors such as:
PT. Indosat Ooredoo Tbk. (Indosat/ISAT), PT. XL Axiata Tbk (XL/EXCL), and PT. Smartfren Telecom
Tbk. (Smartfren/FREN) all of them in the middle capitalization area when it comes to investment view.
We can see it through their number of market capitalization, assets and companies’ other financial
capability from Exhibit 3 in 2019.
As we see from Exhibit 3, PT. Telekomunikasi Indonesia Tbk. (Telkomsel) dominated the
Telecommunication Industry. They have the biggest Market Capitalization in total Rp. 267,470 (in
billion rupiah). They are also quite healthy companies, more than 50% of their assets come from their
equity and not liabilities. Not like their competitor such as PT. Indosat Ooredoo Tbk. (Indosat/ISAT)
which 80% of their assets come from liabilities and PT. XL Axiata Tbk (XL/EXCL) which almost 80%
of their assets come from liabilities. Those companies are quite risky and unhealthy because we can
assume that the asset came from either its soft loans or hard loans. The financing for daily operation

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also probably came from loans itself. While Telkomsel on the other hand, they have healthy financing
to support their operation. They only use below 50% from loans to support their operation.
We also can see how dominant Telkomsel is from this table of users in Exhibit 4. Total users
of Telkomsel at least three times from their competitor, they even have ten times more users than
Smartfren. Even though in the total scale from 2017-2019 the user of Telkomsel is slowly decreasing,
like shown in table below of comparison from 3 big player in telecommunication industry.

In figure 1,we can see

the decrease of users from time
to time. Even though the
interesting part is while their
user decreasing the number of
data cellular is increasing each
year as can be seen in Exhibit 5.
and probably it will massively
increase in 2020 because of
pandemic COVID-19 and the
work and learn from home
policy.

Figure 1 : Table Comparison of User toward 3 big player of Indonesia Telecommunication

Industry (Source from: katadata.co.id (Tamara, 2019))

Telkomsel still leads the market indeed in overall status, but they only focus on their
telecommunication sector revenue from the sales of: internet credits, voice credits, sim card, etc. that
come through their subsidiary PT. Telekomunikasi Seluler. If they are not careful, and always stuck
in their own comfort zone and cannot overcome this small matter sooner or later, they will go down.

FINANCIAL ANALYSIS

The most important aspect of a company is their financial status. After all it will always about
the money, no matter how good your company strategy, or how powerful your brand is. It all will
useless if there is no prove from your financial statement. Exhibit 6 shown Telkomsel Financial Status
for 5 years.
All of the data in Exhibit 6 was collected directly from the company website in
https://www.telkom.co.id/sites/about-telkom/id_ID/page/ir-laporan-keuangan. From Exhibit 6we can
see that Telkomsel is really powerful company in this industry. They prove that they had increase in
revenue and profit as a total for 5 years. They only had decrease revenue in 2017 to 2018 but they
bounce back up and increase again in 2019. Probably the cause of this decreasing is because the
policy of Government that make All of the provider in Indonesia lose their potential sales from the sim
card sales. Due to nowadays all new sim card is should registered and it is limited for each person.

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In Investor insight for their fundamental analysis, the comparison toward their competitor is shown in
the Figure 2. in the end of period 2019:

2019 TLKM EXCL ISAT FREN

P/BV 2.93 2.34 21.67 0.01
P/E Ratio 14.56 10.82 7.21 - (because FREN
was loss in 2019)
ROE 36.15% 52.11% 115% -12.68%
EPS Rp. 188.40 Rp. 67 Rp. 288.74 Rp. -7.07
Beta Coefficient 0.12 0.54 2.79 2.47
Dividend & Yield Rp. 154/share - - -
(5.64%)

Figure 2: Table comparison of Fundamental Analysis (all the data was calculated manually based on each company’s annual report from
Exhibit 3).

Based on the calculation of Fundamental analysis above we can see that almost every
company in this industry is over value toward their P/BV ratio that is more than 1 point. But it is a
normal thing for Big Capitalization such as Telkomsel to have an over value price, because it’s a
market nature that all big caps/ Big Capitalization is over value. We also can see how well Telkomsel
performs towards their P/E ratio. Telkomsel has the highest P/E ratio it means there is a profitable
company and it is worth to invest in it. Even though they have less earning for each share, but it is
also common sense since they have the highest capitalization. Unlikely in Indosat who have the
smallest capitalization that we can see in the capability table in the previous section, no wonder their
EPS rate has become the highest.
Telkomsel also has less risk as their price is not easily volatile. It showed from their beta
coefficient that it showed almost zero and less than 1. Not like the other companies that are very
volatile and very affected by the market like Indosat and Smartfren with Beta Coefficient higher than 2.
Telkomsel also has a dividend to give for their investors, while the others did not give. Telkomsel also
proves that their trendline is uptrend even though there are also some small corrections like shown in
the picture (Exhibit7), and nowadays they are in the sideways area, but as a whole they keep getting
increasing, and this chart shows us that this company is healthy. Maybe the investor is always
interested in Telkomsel corporate action. Like in this pandemic era.
Telkomsel created many interesting programs to answer each demographic customer's needs
such as: Ilmupedia. Ilmupedia is a product of Internet Quota Package that created by Telkomsel to
support all students from elementary school up to university student in Indonesia so, they can learn
from home in peace and affordable price, and also use it in all educational e-learning platform up to
130 sites of university in Indonesia (koran.tempo.co, 2020). Telkomsel also increased their spectrum
of net as big as 900, 1,800, 2,100, and 2,300 megahertz to optimize the network and connection and
give their best services in order to support this country to fight COVID-19. Somehow, this corporate
action keeps making their stocks/share lively and healthy in the eye of investors.

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TELKOMSEL CORPORATE CULTURE

Supporting the transition of Telkomsel to become a digital company and leading mobile digital
business, Telkomsel have established various strategies with the goal of transforming all aspects of
our business, people, organization and corporate culture to capture opportunities in the digital
business and support their leadership in digital. In the context of Culture and People Transformation,
Telkomsel explores new business opportunities to strengthen the business foundation through
development core competency, mindset, and digital culture in the company.
Telkomsel corporate culture is called "The Telkomsel Way" . In its implementation derived to be a
code of conduct.
Each Telkomsel employee is obliged to accept and apply the corporate culture and code of
ethics to guide them while determining work relationships, mindset, attitudes and daily behavior with
fellow employees and/or other parties including but not limited to companies, governments,
communities, and the media.
The Telkomsel Way is a belief system that continually
builds and develops to make the company always to be a
winner, with competitive growth . The Telkomsel Way consist
three elements (see in the figure 3) :
1. Philosophy to be the Best, Always The Best and its
compose Values of integrity, respect, enthusiasm,
loyalty, totality.
2. Principles to be the Star, consist of Solid, Speed, Smart
(3S).
3. Practices to be the Winner, GREAT People, Great
Strategy and Great Innovation (3G).
All employees are expected to be honest and ethical
while handling conflicts of interest between personal and
professional relationships, in complying with internal company
Figure 3. GREAT People (Source :
requirements, applicable laws and regulations, in carrying out
Telkomsel Website)
internal controls, and in procedures related to the company's
financial reporting processes and legal compliance.
The company maintains its openness and ethical approach in conducting its business with
customers, suppliers, communities, and other members of the community. Therefore, employees are
required to provide complete and correct information about the products and services provided by the
company to prevent misinterpretation.
Employees shall demonstrate responsibility to the community and respect their obligations to the
community, by becoming economic, intellectual, and social assets to the communities in which the
company operates. The public will benefit from the company's presence through the contribution of
time, expertise, technology, and resources owned by the company.
Noncompliance with the code of ethics will result in employees being disciplined, including
termination of employment or business relationships with suppliers or customers. Where appropriate,
sanctions for violations may be followed up with civil and/or criminal charges.
A positive corporate culture helps companies achieve significantly higher organizational
effectiveness, including increased productivity, employee engagement, financial performance, and
customer satisfaction. A strong culture boosts commitment and engagement while fostering

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collaboration, communication, and teamwork—which translates to a positive employee experience

and a buoyant bottom line. Company culture is how to operate internally and employer brand, is how
the outside world views its culture, is a competitive advantage we can leverage consistently, a
differentiator that can’t duplicated, is unique to the organization, helping to shape its company’s brand
identity, improve employee retention, and inspire and motivate your people.
(2015 article in Harvard Business Review).
Under leadership CEO “SetyantoHantoro '' Telkomsel implemented the campaign “Let’s
Rebound and Go Digital” . This campaign delivered a lot of success. Employee awareness to
respond to the transformation process increases significantly . Based on a survey conducted by PR
Award-Marketing Interactive-Singapore 2020, Level of employee enthusiasm reached 93%, more
than 88% of employees understand and accept the transformation of Telkomsel. The level of
management and employee commitment increase 45% to be 90%. In this competition Telkomsel
received finalist of category “Best Employee Engagement”, and “Silver Winner” category “Best Insight-
Driven”.

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REFERENCES
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Barney, J.B and Clark, D.N. (2007). Resource-Based Theory: Creating and Sustaining Competitive
Advantage. New York: Oxford University Press.

Bevacqua, Julie.(2018). Leadership Insight, The Competitive Advantages of Company Culture.

PR Award Marketing, Singapore 2020

CNNIndonesia.com (2015). Telkomsel Operator Terbaik se-Asia Pasifik. Retrieved October 09, 2020,
from https://www.cnnindonesia.com/teknologi/20150619190043-185-61201/telkomsel-
operator-terbaik-se-asia-pasifik

Dinamis - Selular.ID. Retrieved October 10, 2020, from https://selular.id/2019/12/catatan-akhir-tahun-

2019-industri-telekomunikasi-masih-sangat-dinamis/
Khairuddin, I. (2019b). Selular Telco Outlook 2020: Tantangan Industri Seluler Indonesia Saat

Febrian, A. (2018). Tiga besar penguasa industri telekomunikasi, siapa paling oke pasca registrasi?
Retrieved October 10, 2020, from https://industri.kontan.co.id/news/tiga-besar-penguasa-
industri-telekomunikasi-siapa-paling-oke
Khairuddin, I. (2019a). Catatan Akhir Tahun 2019: Industri Telekomunikasi Masih Sangat

Hantoro: - Ekonomi dan Bisnis - koran.tempo.co. Retrieved October 10, 2020, from
https://koran.tempo.co/read/ekonomi-dan-bisnis/451769/direktur-utama-pt-telekomunikasi-
selular-telkomsel-setyanto-hantoro?read=true

Ini - Selular.ID. Retrieved October 9, 2020, from https://selular.id/2019/12/selular-telco-outlook-2020-

tantangan-industri-seluler-indonesia-saat-ini/
koran.tempo.co. (2020). Direktur Utama PT Telekomunikasi Selular (Telkomsel) Setyanto

Intipesan.com, Sept 2015

Osterwalder, A. and Pigneur, Y. (2010): Business Model Generation, John Wiley and SonsInc, 1.
edition, 2010.

Statistica.(2019).Brand Value : Most Valuable Indonesian Brands. Retrieved from

(https://www.statista.com/statistics/381351/brand-value-most-valuable-indonesian-brands/) on
October 11th 2020

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Tamara, N. H. (2019). Pasang Surut Kinerja Tiga Raksasa Telekomunikasi - Analisis Data
Katadata.co.id.RetrievedOctober 10, 2020, from
https://katadata.co.id/nazmi/analisisdata/5e9a57af9d231/pasang-surut-kinerja-tiga-
raksasatelekomunikasi

Telco Outlook 2020: Menyoroti Wajah Industri Selular di Tengah Tumbuhnya Ekonomi Digital -
Selular.ID. (2019). Retrieved October 9, 2020, from https://selular.id/2019/11/telco-outlook-
2020-menyoroti-wajah-industri-selular-di-tengah-tumbuhnya-ekonomi-digital/

Thompson, Arthur Jr. (2008).Crafting and Executing Strategy.New York : McGraw-Hill Education

Telkomsel. (2019). Annual Report 2019. Jakarta: Telkomsel.

Telkomsel. (2020). Vision and Mission. Retrieved from : www.telkomsel.com

Teece, D. J. (2010): Business Models, Business Strategy and Innovation, Long Range Planning, Vol.
43, 2010.

Vidyantina Heppy A., etc. (2018). Analisa Industri Telekomunikasi Indonesia untuk Mendukung
Efisiensi.

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APPENDIX

Exhibit 1. VRIO Analysis

Is Costly to Is Organized to Competitive Consequences Performance Implication
Capabilities Is Valuable? Is Rare ? Imitate? Exploit ?
Management Team YES NO NO NO Competitive Parity Average Returns
R&D YES YES YES YES Sustainable CA Above-Average Return
Management Information YES NO NO NO Competitive Parity Average Returns
System
HCM YES NO NO NO Competitive Parity Average Returns
Marketing YES YES NO NO Temporary CA AverageReturnstoAboveAveragereturns
Distribution YES YES NO NO Temporary CA AverageReturnstoAboveAveragereturns

Exhibit 2. Customers Value Propositions

Segmentation Description
Demographic Age : 13-65 y.o
Gender : Male and Female
Income : All Income
Job : All occupation
Education : Middle, Senior high school, University
Nationality : Indonesian
Geographic Region : All Region in Indonesia – Sabang to Marauke
Population size : All population size
Behavior People who need mobile phone with stable connection and
available in all area Indonesia
Psychographic a. People who have daily activities continue to move (mobile)
where need the speed and stable connection.
b. Seeking for the best provider and provide multiple choices

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Exhibit 3. Comparison of Companies

(In billion rupiah) TLKM FREN EXCL ISAT

Market Capitalization 267,470 20,910 23,550 11,250
Total Assets 221,208 27,650 62,725 62,813
Total Liabilities 103,958 9,505 43,603 49,105
Total Equity 117,250 18,145 19,122 13,707
Outstanding Share 109,122,300 94,193,900 17,913,200 1,309,100

Source: Each Company Annual Report in 2019

Exhibit 4. Market Domination

Telkomsel XL Indosat Smartfren
(TLKM) (EXCL) (ISAT) (FREN)
Total User 170,000,000 55,000,000 50,000,000 15,000,000
(“Telco Outlook 2020: Menyoroti Wajah Industri Selular di Tengah Tumbuhnya Ekonomi Digital - Selular.ID,” 2019)

Exhibit 5. Celluler Data User

((Source from: katadata.co.id (Tamara, 2019))

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Exhibit 6. Financial Analysis

TELKOMSEL 2019 2018 2017 2016 2015

Revenue 135,567 130,784 128,256 116,333 102,470

(in billion Rupiah)
Total Cost 93,173 91,939 84,323 76,418 70,052
Operating Profit 42,394 38,845 43,933 39,915 32,418
(in billion Rupiah)
Earnings Per Rp. 188.40 Rp. 182.03 Rp. 223.55 Rp. 196,19 Rp. 157,77
Share (EPS)
Earnings Per ADS Rp. 18,839.68 Rp. 18,202.70 Rp. 22,354.64 Rp. 19,619.11 Rp. 15,777.00

Source: Company Annual Report

Exhibit 7. TrendlineTelkomsel

((Source from: katadata.co.id (Tamara, 2019))

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Exhibit 8. SWOT Matrix
Strengths-Weakneses-
Opportunities-Threats
(SWOT) Matrix
OPPORTUNITIES - O
1 Signal coverage in
Indonesia
2 Number of BTS towers
3 Customer loyalty
4 Additional services (RBT,
5G, T-Cash)
5 Network and quality
customer service
6 Market segmentation and
market share
THREATS - T
1 Data flow versus number
of BTS
2 Indonesia's population
profile is shaped like a
pyramid
STRENGTHS – S WEAKNESSES - W
1 Telkomsel recorded 1 Increase in depreciation, operating and
an increase in new maintenance expenses.
subscribers in the last
5 years
2 Telkomsel has 550 2 The research and development carried out is
thousand service not directly related to Telkomsel's core
centers with ISO: business.
9001 version 2000
standard, in the form
of Call Centers,
GraPARI,
GeraiHALO,
KiosHALO, Dealer
Outlet, and M-Kiosk.
3 Product diversification 3 As of December 2019, Total Liabilities
policy increased by 6.4%
4 Cooperation with
global (foreign)
telecommunication
companies.
5 Effectiveness of
pricing policies.
6 Telkomsel's financial
strength is greater
than its competitors
SO – STRATEGIES WO -- STRATEGIES
1 Bundling with 1 Leasing BTS to reduce maintenance burden
handphone branded (W1, O2)
products (S3, O3)
2 Improve the quality of 2 Cooperate with other operators in sharing BTS
customer service (S2, (W1, O1, O2, O6)
O1, O5)
3 New Product services
(S1, O2, O6)
ST – STRATEGIES WT -- STRATEGIES
1 Collaborating with 1 Penelitianteknologibarusupayahambatancuaca
other operators in the di Indonesia tidakmenjadimasalahlagi ((W3,
use of Shared BTS T4, T10)
(S6, T1)
Creating innovative, 2 Trying to develop new technologies in data
varied advertisements flow efficiency and the number of BTS (W1,
to attract new W3, T1, T4)
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Indonesia's weather that 2 customers and retain

interferes with existing customers
4 telecommunications (S1, S6, T2,) 3
Cuaca Indonesia yang
menggangutelekomunikasi

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