By Eko B. Supriyanto, Chairman of the Infobank Institute
NOT the least bit of road to Rome. There are many ways to build an ecosystem. That’s what Telkomsel, the golden child of PT Telkom did when it became a shareholder of Gojek-Tokopedia (GoTo). GoTo is the number one decacorn in Indonesia in the digital economy.
Telkomsel’s step to invest in GoTo is not only seen as a short-term and portfolio investment. However, it should at least be looked at in the long-term – buying the future when the digital economy is growing rapidly. So, Telkomsel’s investment in GoTo cannot be seen as one-sided and short-term.
According to the Infobank Institute, there are three important things. One, the start-up industry in Indonesia, apart from needing the support of many parties, is also expected to seize opportunities in the future. Technology companies will be the backbone of the development of the digital industry going forward.
Two, currently Indonesia has become a major player, particularly in Southeast Asia, in the growth of the digital economy. A number of decacorns from Indonesia became the main players, namely GoTo, Blibli, Traveloka, and Tiket.com.
Three, according to data from the Ministry of Trade of the Republic of Indonesia, Indonesia’s digital economy is projected to grow eightfold, from Rp632 trillion to Rp4.531 trillion in 2030. Also, the e-commerce sector, which will play an important role in the digital economy in the future (2030). Even more proud, Indonesia’s gross domestic product (GDP) will grow to Rp24.000 trillion in the same year.
Indeed, now digital developments in the world are undergoing a correction. Not only in Indonesia, but all over the world. Nasdaq shares (year to date), such as Grab Holding, Uber, Amazon, Tesla, Apple, and Microsoft, experienced declines. Also, Alibaba’s shares, Sea Limited, including Twitter on the NYSE stock market. In fact, Kakao Bank in Korea (KRX) shares also dropped. This is a symptom of world stocks.
So, the decline in digital shares in Indonesia does not only hit GoTo. Previously also experienced by Bukalapak (BUKA). What is clear, it is happening all over the world. All this because the world was hit by high inflation, which made interest rates rise – eventually the stock market experienced a correction, including GoTo. Stock fluctuations are common. In fact, Amazon’s experience only made profits after six years and became a listed company.
Now Telkomsel – which is GoTo’s shareholder – is also experiencing an unrealized loss. It is only recorded in the books in accordance with PSAK 71. The value of the unrealized loss, as recorded in the March 2022 financial report, was Rp881 billion.
Well, this unrealized loss that is now a lot of fuss. At least by looking at the many conspiracy theories – mixing data with assumptions and suspicions, using political conspiracy analysis.
It is true that any profit or loss of Telkomsel will always be recorded in its parent company (Telkom). However, Telkomsel’s investment is certainly not arbitrary – apart from Telkom, Telkomsel’s shareholder is Singtel, the largest telecommunications company in Singapore.
Not Just a Short-Term Portfolio Investment
According to Infobank Institute records, Telkomsel entered in November 2020 by providing loans in the form of interest-free convertible bonds to Gojek with a three-year tenor. It was stated that Telkomsel could execute convertible bonds into shares. The price is in accordance with the agreement at the beginning of the issuance of convertible bonds.
In May 2021 Telkomsel converted into GoTo shares for Rp71,81 million per share. After the stock split was carried out, the number of Telkomsel shares in GoTo changed from 89.125 shares to 23.722.133.875 shares.
The story of this unrealized loss began when at the time of closing the book on March 31, 2022, an unrealized loss was recorded against GoTo’s share price of Rp881 billion. This story is pulled into the realm of law. In fact, the case of unrealized loss has happened at BP Jamsostek in 2020. So far, the Attorney General of the Republic of Indonesia has not found any “horror” stories of state losses.
That recording loss reserves is a form of prudence. This can be compared with the Bukalapak case which included a potential gain – in the end, as of March, it recorded a large profit of Rp14,42 trillion (after the previous period (2021) a loss of Rp1,67 trillion). The potential gain is mentioned from the increase in investment in Allo Bank – whose share price is flying. Even though BUKA is not the controlling shareholder, the increase in shares is still listed.
Returning to Telkomsel’s investment on GoTo, it need to be emphasized, of course cannot be seen in a short-term. We see Amazon’s case which made a profit when became a listed company. In fact, it took Amazon six years.
According to the Infobank Institute, there are several important things that need to be underlined. One, Telkomsel’s investment is the right step. As a telco company, Telkomsel also wants to take part in the advancement of digitalization in Indonesia.
Aside from that – Telkomsel’s investment in GoTo is not solely aimed at short-term financial gains. Telkomsel is here to become a strategic investor – where many business opportunities can be exploited from the cooperation of the two companies. Just look at GoTo which has the most complete ecosystem with on-demand business, e-commerce, and finance.
Two, see also Google. Google invested in GoTo not only seeing the return on investment, but also the business opportunity behind it. GoTo uses various Google systems in their business, such as Google Cloud and others. This is what Telkomsel is aiming to maximize their investment.
The same thing was done by Astra International, the largest motorcycle and car manufacturer in Indonesia. Once mentioned by one of its executives, Astra’s investment in GoTo does not look at the short-term side and is not merely a portfolio investment. There are synergies and collaborations that can be carried out by Astra with GoTo in the long-term.
Three, another example is a state-owned Singaporean company, the Government of Singapore Investment Corporation (GIC), which invests a lot in start-up companies. GIC is a credible investment company with a long track record. The decline in stock prices collected by GIC did not make the government’s trust lost, let alone suspects that GIC was not credible or unprofessional. GIC invests in BUKA, Jago, GoTo, and a number of other companies in Indonesia.
Four, it is a matter of pride, if there is an original Indonesian decacorn and it is also owned by an Indonesian company, such as Telkomsel. So far, there have been many voices, digital companies are owned by foreigners, now Telkomsel – has seen the future of the digital economy in Indonesia.
Five, investing in the largest digital company in Indonesia (GoTo) is of course a lot of business gaps that can be collaborated with a business approach. This wide opportunity can be utilized by using the millions of GoTo ecosystem. According to records, there are 2,5 million Gojek drivers, and not to mention the millions of Tokopedia customers. Of course, the Gojek and Tokopedia markets can be used well by Telkomsel, for example in buying credit.
Stocks Fall, Don’t Be Criminalized
And, GoTo stock price fluctuations are purely a market mechanism that is happening in the world. As mentioned, there has been a decline in the shares of Tesla, Amazon, Kakao Bank, Nubank, and others. Also, Netflix stock. The world is burning with inflation, and even the effects of the Ukraine-Russia war.
So, Telkomsel’s unrealized loss in GoTo does not need to be brought into the realm of politics, not to mention “criminalized” with groundless reasons. Telkomsel’s investment in GoTo is not solely for short-term interests and portfolio investment. It’s called stock prices, of course there are ups and downs. And, GoTo stocks are not low quality stocks, but good quality digital stocks.
And, Telkomsel bought GoTO shares – as a telco company – also wants to take part in advancing economy digitalization which will grow fast. Telkomsel may buy the future of the digital economy in Indonesia.
Don’t push unrealized loss as a form of state loss or being criminalized. Connected to Telkom as parent company. See now, that BP Jamsostek experienced a “trauma” in stock investment after being criminalized. Its move to reduce playing stock has caused loss in Indonesia stock market – because BP Jamsostek is the market leader in the Indonesian stock market. Aside from the last year stock rebound, BP Jamsostek did not enjoy that big cake.
It’s time to look at the investment side with a business approach and not politicization and criminalization. This is because “politicization” and “criminalization” have made the capital market and investment world not market-friendly. Don’t create unfounded fears in the market. (*)