Telkom is expanding to Middle East

PT Telekomunikasi Indonesia (TLKM IJ, BUY, TP: IDR3,200) is planning to expand to the Middle East by finding a strategic partner. The company will start in the Middle east with Mobile Virtual Network Operator (MVNO). Management also stated that the investment funds will be not taken from this year’s capex but rather from the company’s operational expenses. In 2015, TLKM will allocate USD2bn of capex, funded from internal and external cash, where around 70% of it will be allocated to PT Telkomsel’s cellular business, 20% for broadband business, and the rest for tower infrastructure.