Economist: Telkomsel's Corporate Action To Gojek Is Needed To Stay Competitive On Global Candidates

Illustration. (Photo: Doc. GoTo)

JAKARTA - Recently, there has been a lot of discussion regarding Telkomsel's investment in ride-hailing company Gojek (now GoTo). It is interesting to look at this from an economic and investment perspective, as the global telecommunications sector is facing many challenges.

Indonesia's internet economy is booming at a high of 70 billion US dollars and signals an optimistic projection of 146 billion US dollars according to the e-Conomy SEA 2021 report by Google, Temasek and Bain.

Harris Turino, economist and member of the Indonesian House of Representatives, Commission VI, as well as a member of the working committee for investment by Indonesian State-Owned Enterprises in sharing economy companies, explained his views. He stated that, from a corporate action perspective, Telkomsel's investment in Gojek was needed to overcome the voice and messaging business as well as the declining global telecommunications trend.

"Telkom needs to find new revenue streams that will support sustainable business growth as a telecommunications company," Haris said in a statement, quoted Friday, July 8.

Investment in Gojek, the largest ride-hailing base in Indonesia, brings more synergy than business benefits. Harris stated, the cooperation between the two giant companies can bring social and economic value to a wider base.

For example, he said, they could collaborate on a synergy program in which Gojek or SME drivers use Telkomsel as their provider and provide special packages.

"Telkomsel invests in Gojek at a lower price than today's IPO. This indicates that there is a lot of growth potential in the future and unrealized gains or losses in the capital market are part of business activities," he explained.

Harris also explained that this type of investment is carried out by Telkom and other companies in the global market in order to remain competitive.

"A sharing economy company like Gojek is not for the short term but a long term business plan because it does not only consider profit/loss but sustainable growth that will support the company fundamentally and continue to contribute to the Indonesian economy," he said.