The Slimming of a Giant: Telkom Indonesia to Cut 60 Subsidiaries Down to 14

JAKARTA, Investortrust.id — PT Telkom Indonesia (Persero) Tbk (TLKM), the nation’s dominant telecommunications provider, is embarking on a drastic corporate diet. The state-controlled giant plans to collapse its sprawling web of 60 subsidiaries into a lean 14-entity structure, utilizing a mix of mergers, liquidations, and strategic divestments.

“This downsizing is a cornerstone of Telkom’s transformation to sharpen our focus on core business while bolstering operational efficiency and enterprise value,” Chief Executive Officer Dian Siswarini told reporters during a business update in Jakarta on Wednesday evening.

The maneuver represents more than just a balance-sheet cleanup; it is a fundamental pivot for a company that has historically suffered from "conglomerate discount"—a valuation lag caused by overly diversified and opaque operations. By streamlining its portfolio, Telkom aims to transform into a "strategic holding" company, a model that allows the parent firm to exert tighter governance while granting subsidiaries the agility to compete in the private sector.

The first casualties of this new discipline are the group’s healthcare administration arms, AdMedika and TelkoMedika. Managed under the subsidiary Telkom Metra, these units were acquired years ago but are now deemed peripheral. Dian confirmed that Telkom Metra has signed a conditional sale and purchase agreement (CSPA) to offload the assets to a strategic partner. “We have extracted the positive value from these acquisitions, and it is time to exit. They do not represent Telkom’s core strength,” she said.

Beyond the healthcare exit, the company is eyeing "value unlocking" events for its crown jewels: data centers and telecommunications towers. Rather than mere utility providers, Telkom views these assets as the backbone of the region’s digital economy. The goal is to accelerate their growth through corporate actions—potentially involving strategic partners or public listings—to ensure they contribute more robustly to the group’s bottom line.

The Danantara Mandate

This restructuring is not merely an internal whim but a high-stakes directive from the top of the Indonesian government. The overhaul is a manifestation of President Prabowo Subianto’s vision, executed through Danantara, Indonesia’s powerful new state-investment agency designed to consolidate and professionalize state-owned enterprises (SOEs).

Under the "Telkom 30" banner, the company is tasked with a total portfolio realignment. The government’s mandate originally suggested a reduction to a maximum of 20 companies; Telkom’s leadership has chosen to go further, targeting an even tighter 14-entity core.

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A New Frontier in B2B ICT

While Telkom is trimming the fat, it is also planting new seeds. Dian announced the formation of a new entity dedicated to Business-to-Business (B2B) Information and Communication Technology (ICT). A task force is currently operational, with the goal of launching the dedicated unit by year-end.

This shift toward B2B services marks a strategic hedge against the maturing consumer mobile market. By integrating its infrastructure assets with specialized ICT services, Telkom hopes to capture the burgeoning demand for enterprise digitalization across Southeast Asia.

Financial Discipline and Global Ambition

Arthur Angelo Syailendra, Telkom’s Director of Finance and Risk Management, underscored that the reduction from 60 to 14 entities is a necessary prerequisite for financial health. The move is expected to improve dividend payout ratios—which the company has pledged to maintain at a minimum of 89% for 2025—and provide a buffer against "global uncertainty."

Ultimately, the goal is for Telkom to shed its image as a sluggish state utility and emerge as a "world-class provider." Success will depend on whether the company can maintain governance discipline while navigating the complex regulatory waters of Jakarta and the competitive pressures of a digital-first economy.

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