PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL

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PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
PT Link Net Tbk
Signing Ceremony
5 September 2017
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
Indonesia macro: a massive opportunity
                     Rising population growth                                             Rapid GDP/capita growth(a)

                  Population (m)                                                         GDP per capita (US$)

                                           ~53% of population under 30 years of age
                                              Millennials with “internet lifestyle”
                                                                                                                3,598           5,312

                                                                                          GDP (US$bn)

                                                                             276                                                1,466
                                                     259
                                                                                                                  932

                                                     2016                   2021                                  2016           2021

                     Increasing disposable incomes(b)                                  Increasing urbanization(c)
                  Annual household                                                    As % of GDP
                  disposable incomes (US$)

                                                                                      Urban                       54%
                                                                                                                                 66%

                                                                            4,973
                                                                                                                         +12%
                                                   3,770
                                                                                      Rural                       46%
                                                                                                                                 34%

                                                     2016                   2021
                                                                                                                  2016           2030
Source: 2017 Media Partners Asia unless otherwise stated
a) Source: IMF Data (GDP refers to nominal GDP)
                                                                                                                                        1
b) Source: OECD Data
c) Source: World Bank and IMF
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
Indonesia fixed broadband and Pay TV are significantly underpenetrated
                                                                             Fixed broadband penetration rate of key comparable countries
                    Subscriber (000)

                         4,372         5,674          3,359    4,580         6,840   7,108           8,969    10,877       3,790    3,959   317,280 407,122    948     955

                                                                                                                                                                      94.8%
                                                                                                                                                              88.5%
                                   2016 penetration       2020 penetration                                                                           74.2%

                                                                                                                                             52.3%
                                                                                                             45.0%
                                                                                                    33.4%                  34.4% 38.8%
                                                                             28.3% 32.3%
                                        14.4%                  17.1%
                             9.1%                     10.6%

                                   Indonesia             Philippines            Thailand               Vietnam                Malaysia            China         Singapore

                                                                                 Pay TV penetration rate of key comparable countries
                   Subscriber (000)

                            5,750       9,270          2,396    3,999        6,540    7,628         8,562    12,353         2,510   2,952   244,955 355,881   1,062   1,161

                                                                                                                                                     85.8%
                                                                                                                                                              79.2% 77.9%
                                   2016 penetration      2020 penetration                                                                    69.0%
                                                                                                                           52.4% 52.6%
                                                                                                             44.9%
                                                                                                    40.3%
                                                                             30.7% 31.1%
                                                               22.5%
                                                      17.6%
                            11.2% 13.4%

                                   Indonesia             Philippines            Thailand               Vietnam                Malaysia            China         Singapore
Source: 2016 Media Partners Asia                                                                                                                                              2
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
Link Net at a glance

                                                          Targets large and
                                     A leading
                                                        fast growing affluent
                                  HSBB(a) provider
                                                          segment(c). Large
                                   in Indonesia(b)
                                                       subscriber base (~1.1m
                                    with ~1.9m
                                                         RGUs) with low and
                                   Homes passed
                                                             stable churn

                                                                                Strong enterprise
             Innovation led
                                                                                 portfolio offering
           premium product
                                                                                     with certain
           offering supporting
                                                                                 governmental and
            premium ARPUs
                                                                                financial institutions
                with 97%
                                                                                   including IDX
              bundling rate
                                                                                    as customers

                                    Track record of                                               Note: Company data as of 30 June 2017 unless otherwise stated
                                                                                                  a) HSBB refers to High Speed Broadband which is a fixed network capable of providing internet speeds of at least 4Mbps
                                 strong growth – 18%      Fully-owned(f),                         b) Source: 2017 Media Partners Asia. Link Net is a leading HSBB provider in Indonesia in terms of subscriber market share as of 30
                                   revenue CAGR(d)      technology neutral                           June 2017 according to Media Partners Asia
                                                                                                  c) 7.3m addressable homes – According to, and based on addressable market of Upper 1, Upper 2 and Middle 1 SEC households, as
                                 with 59% EBITDA(e)            network                               defined by, Nielsen (2Q17 definition of SEC classification) – For Greater Jakarta, Greater Surabaya (Includes Malang) and Medan.
                                                                                                     Nielsen reports based on number of people aged 10 and above. Addressable homes or households is derived by assuming each
                                     margin along          with abundant                             home or household has 4 people each

                                     with resilient           capacity                            d) Revenue CAGR over FY2014 to FY2016
                                                                                                  e) Refers to 2016. EBITDA is a non-GAAP financial measure of the Company’s performance and should not be considered as an
                                     balance sheet                                                   alternative to performance measures derived in accordance with IFAS. See slide 38 for more information, including a reconciliation to
                                                                                                     profit for the period. EBITDA margin is defined as EBITDA divided by revenue
                                                                                                  f) Limited exceptions for certain last mile owned by property developers
                                                                                                                                                                                                                                         3
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
…and operates in most attractive metropolitan areas
                                                                                                                                                                                                                                                  Total addressable HH’s: 7.3m(a)
                                                                                                                      Medan                                                                                                                       Total LN homes passed: 1.9m

                                                                                     •    Addressable households(a): 380k                                                                                                                         Total cable length: 24,890km

                                                                                     •    Homes passed: ~4k(b)
                                                                                     •    Estimated coverage ratio(c): ~1%

                                                                                                                                                                  Batam
                                                                                                                                  •    Roll outs started in June 2017

                                                                                                                                                                                                                                          1
                                                                                                                                                                                                                                         5%
                                                                                                                                                                                          Bandung
                                                                                                                                                              •

                                                                                                                                                              •
                                                                                                                                                                   Addressable households(a): 580k
                                                                                                                                                                   Homes passed: ~97k
                                                                                                                                                                                                                                                                                                1
                                                                                                                                                                                                                                                                                               18%

                                                                                                                                                              •    Estimated coverage ratio(c): ~17%
                                                                                                                                                                                                                                                   Greater Surabaya & Malang
                                                                                               1
                                                                                              77%                                                                                                                                                 •   Addressable households(a): 1,204k
                                                                                                                                                                                                                                                      Homes passed: ~351k
                                      Greater Jakarta                                                                                                                                                                                             •

                                                                                                                                                                                                                                                  •   Estimated coverage ratio(c): ~29%
                 •    Addressable households(a): 5,157k
                 •    Homes passed: ~1.457m
                 •    Estimated coverage ratio(c): ~28%

                                                                                                                                                                                                                                           Bali
                                                                                                                                                                                                                                           • Focus on hotels

 Note: Company data as of 30 June 2017 unless otherwise stated                                                                                                                                                                                   1    City homes passed / Total homes passed
 a) According to, and based on addressable market of Upper 1, Upper 2 and Middle 1 SEC households as defined by, Nielsen (2Q17 definition of SEC classification) – For Greater Jakarta, Greater Surabaya (Includes Malang) and Medan. Nielsen
    reports based on number of people aged 10 and above. Addressable homes or households is derived by assuming each home or household has 4 people each
 b) Includes homes passed for Batam, where roll outs started in June 2017
                                                                                                                                                                                                                                                                                                     4
 c) Coverage ratio calculated as homes passed divided by the total addressable households (based on Nielsen data)
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
Link Net has achieved roll-out success …
Link Net is able to gradually ramp up new roll-outs over the past 5 years, supported by continuing growth in existing markets, expansion into in
    new regions and new avenues such as partnering housing developers to accelerate this deployment, and acquiring fiber infrastructure

             Leveraging existing & new channels
                to accelerate homes passed                                                        Homes passed and cable length

                                                                                                 Homes passed (000)     Cable length (km)

                          Leveraging                           2,500                                                                          24,890      31,000
                         existing fiber                                                                                             24,266
                           backbone                                                                                   22,859                              26,000
                                                               2,000                                    19,689
                                                                                        16,309                                                            21,000
                                                               1,500     12,805                                                                           16,000
                                                                                                                                               1,909
                                                                                                                                     1,862                11,000
    Acquiring                                                                                                         1,673
                                                   Regular     1,000                                     1,433
       fiber                                                                             1,194                                                            6,000
                                                    rollout               933
  infrastructure
                         Growing                                500                                                                                       1,000
                                                                         2012            2013            2014         2015           2016     1H2017
                         homes
                         passed
                                                                                  Strong execution track record in rolling new homes passed

                                                                                  Maximized investment returns by cherry picking the premium households
            Partnering                                                            who can afford Link Net services
              home                        Extensions
            developers
                                                                                  Proven expansion strategy and technical know-how

                                                                                                                                                              5
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
Partnering home developers to accelerate homes passed

Indonet

Cowell Development

Intiland

Jakarta Garden City

Residence One, Serpong

Summarecon Apartments

           Bumi Serpong Damai (BSD)

                                      Mangkuluhur City Apartment

                                                                   Citraland, Surabaya

                                                                                         6
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
…and enlarge its subscriber base whilst maintaining its premium ARPU
                      Link Net achieved strong RGU additions with further penetrations while retaining premium ARPU

    Added new RGUs while keeping churn at 2.3%                            Maintaining premium ARPU

  ('000)                                                                (IDR '000)
                         2.3%                         2.3%
           2.2%                         2.2%                                                                           419
                                                      1,075
                                                                 2.0%
                                                                                              415
                                       1,024
                                                                                                           407
                                                      528        1.5%
                         890                                                         402
                                        503
           755                                                   1.0%
                         433
           363
                                                      547        0.5%
                                        521
                         457
           392
                                                                 –
           2014          2015           2016         1H 2017                         2014    2015          2016       1H 2017

                  Broadband          Cable TV         Churn

                                                                                                                                7
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
Highly attractive financial profile…
                                               Revenue
    (IDR billions)

                                       1,651

                     1,393                                      842

                                                         719

                     1H16              1H17              2Q16   2Q17
                                                                       8
PT Link Net Tbk Signing Ceremony 5 September 2017 - event vFINAL FINAL FINAL
… with potential leverage capacity

                                                      EBITDA                                                                                           Net Profit
  (IDR in billions)                                                                                                (IDR in billions)
  EBITDA margin (%)                                                                                                Net Profit margin (%)
                            59.8%                                                      59.1%                                                 28.5%                      29.7%

                                                                                         976                                                                              490
                                834                                                                                                           397

                             1H 2016                                                   1H 2017                                               1H 2016                     1H 2017

                                                Capex (IDR bn)(1)                                                                     Net Cash with potential leverage capacity(2)
                                                                                                                  (IDR in billions)

                                                                                                                                                           154

                          452                                                           408
                                                                                                                                      531
                                                                                                                                                                                     377

                        1H 2016                                                      1H 2017                                    Total Cash               Total Debt                Net Cash

         Source: Company information
         (1)     Capex represents additions to property and equipment                                                                                                                         9
         (2)     Total cash and debt position as of June 30, 2017. Total debt mainly comprises vendor financing
Fully-owned(a) advanced and technologically resilient HSBB network
                                                                  Future proof network with abundant bandwidth capacity and high level of network redundancy

                                                                   Headend              Distribution hubs        Node                      Subscriber premises

                 >24,800 km of cable across Indonesia                                                             Technologically agnostic approach to future rollout:
                                                                                                                  - HFC network in the existing brownfield areas and FTTH network to be
                 Has access to a total of 780 Gbps of International                                                 rolled out in new areas within the brownfield for enhancement
                 bandwidth capacity                                                                               - FTTH network to be rolled-out in greenfield areas with market skewed
                                                                                                                    to the fiber-centric infrastructure
                 Owns and has the capability to operate up to 8 Tbps fiber lines to
                 Singapore gateway
                                                                                                                  Offering a high quality HFC and FTTH network offering speeds
                 Fully owned fiber backbone and last                          mile(a)                             upgradable to 10Gbps

 a) Limited exceptions for certain last mile owned by property developers
 b) Refers to greenfield network rollouts only
 c) Gigabit Passive Optical Network                                                                                                                                                        10
Fully-owned(b) advanced and technologically resilient HSBB network (cont’d)
                  Link Net has already completed most of its end-to-end network infrastructure, assuring network quality and
                                                  reducing future investment requirement

                  International Gateway                                 Inter-city Connection            Intra-city Connection            Last Mile Roll-out

                                                                       Vertically Integrated End-to-end Network Infrastructure

               2 proprietary international                                Acquired pan-Java
                 fibre lines / submarine                                  backbone in 2017                           24,890 km(a) of cable network
                     cables providing
                bandwidth to Singapore

                  Acquired Jakabare in                                                                  100% proprietary intra-       Substantially self-owned
                 2013 and B2JS in 2015                                                                  city connection in all of       last mile roll-out(b)
                                                                                                          the operating cities

                                                                           Selective usage of Third Party Network for Quality

           a) Total cable length includes HFC and FTTH
           b) Limited exceptions for certain last mile owned by property developers                                                                              11
First Media accelerating expansion momentum
Regional expansion through intercity hub acquisition in Java

                                            Ultimate Capacity & Network Design
                                            The Network will employ DWDM technology with a maximum capacity 8000Gbps. It
                                            will be design with 1+1+R redundancy configuration using the five protection rings to
                                            achieve high network availability. The DWDM system can upgraded easily to meet
                                            future demand

                                                      Coverage
                                                      The Network will cover most of major cities in Java Island with 43 POP sites. A
                                                      full 100G wavelength will be activated at every city commissioned to provide
                                                      ample capacity to support future growth

                                            Time Delivery
                                            The DWDM system is being designed and implemented now and will be ready by Q1
                                            2018

                                                                                                                                        13
Regional expansion through intercity hub acquisition in Java
         The intercity fiber backbone will open doors to more than 43 cities that were previously untapped by Link Net

                                                                                                  Build and managed by Triasmitra Group, the
                                                                                                   telecommunication infrastructure deployer,
                                                                                                including rolling out fiber optic and power cable
                                                                                                      network with a total over 7,000 km of
                                                                                                     submarine and inland FO cable system
                                                                                                                    deployed.

                                                                                                        - Route using national way
                                     CITIES COVERED:                                                           - Total 5 Rings
 No       City     No       City    No        City     No      City      No     City                   - Total distance of 2,615 km
  1    Bandung     10    Ciranjang  19      Jombang    28   Purwakarta   37   Surabaya           - Capacity: 4 cores (North), 4 cores (South)
  2     Bekasi     11     Cirebon   20     Karawang    29   Purwodadi    38    Tegal
  3    Bobotsari   12     Depok     21      Kebumen    30   Purwokerto   39    Tjepu               To achieve 2.8 million homes passed
  4      Bogor     13 Gandrungmangu 22     Lamongan    31    Salatiga    40   Ungaran           cumulative in 5 years (existing and new cities)
  5   Bojonegoro   14      Garut    23       Madiun    32   Semarang     41     Wates
  6     Boyolali   15   Gendingan   24     Mojokerto   33      Solo      42     Weleri
  7      Cepu      16     Gresik    25      Nganjuk    34    Subang      43   Yogyakarta
  8     Ciamis     17   Indramayu   26       Patrol    35   Sukabumi
  9     Cilacap    18     Jakarta   27    Pekalongan   36   Sumedang
                                                                                                                                                    14
PT Ketrosden Triasmitra

               23 years             3 Core Businesses            15 Premier Customers
          of experience in telco    Strong competence as telco
                industry            Developer, Contractor, and
                                    Managed Service company

                                                                                    7,304 km
                                                                 More than 7,000 km of
                                                                 submarine and inland FO cable
                                                                 system deployed

                                                                              Certification

                                   The Certification
                                                                 Jartup License   Construction     ISO 9001    The Committee
                                                                 No. 325 - 2015     Service       ISO 14001    Safety & Health
                                                                                  Work Permit    OHSAS 18001     Supervisory
                                                                                    Grade 7                                      15
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