Netflix Allowance Boosts Telkom
On Tuesday (7/7), PT Telekomunikasi Indonesia Tbk (TLKM) announced that their network's longstanding ban on Netflix would finally be lifted. Users of IndiHome, Telkomsel, and wifi.id would now be able to fully access the highly demanded streaming platform, though a 10% VAT will be placed. Telkom's Vice President of Corporate Communication, Arif Prabowo, explains that the unblocking of Netflix is a result of their commitment towards being accepted in Indonesia and their promise to benefit their service in accordance with local regulations and standards. This includes ensuring the availability of integrated tool systems for content limiting and parental control, as well as implementing content codes. Furthermore, they assured their users' convenience by supposedly providing top-notch customer service. The allowance of Netflix is trusted to cater TelkomGroup customers with safe and easy access to top-class entertainment. Moreover, it is hoped that with this provision, Netflix would enrich their collection of locally produced movies to flourish the Indonesian film industry further.
Telkom (TLKM) 's stocks rose by 1.97% at the start of session two on Tuesday (7/7) following the news from Telkom, which had just unblocked Netflix. Based on the Indonesia Stock Exchange (IDX) data, Telkom stocks increased by 1.64% to Rp3,110 per share with a transaction value of Rp342.46 billion and a trading volume of 111.10 million shares. On the other hand, Telkoms's stock price stagnated at Rp3,120 on Wednesday (7/8). Panin Securities analyst, Indra Then, suggested buying current Telkom stocks when viewed in long-term conditions. However, for now, he couldn't determine the stock movements because there was no pattern from TLKM. Even so, this stock still has the potential for appreciation if it continues to be supported by excellent and robust fundamentals. For other telecommunications companies, Indra stated that technically it had rebounded, such as XL Axiata (EXCL) and PT Indosat Tbk (ISAT).
Telkom's decision to remove Netflix's ban is in line with the new tax policy on digital purchases from companies that generate at least 600 million rupiahs and 12,000 in traffics in a year. The first six global companies that will be affected by the late policy include the following: Netflix, Amazon Web Services Inc, Google LLC, Google Ireland Ltd, Google Asia Pacific Pte Ltd, and Spotify AB. In May, The Directorate General of Taxes of the Ministry of Finance announced that customers would have to pay value-added taxes (Pajak Pertambahan Nilai) from every foreign purchase through e-commerce platforms starting from July 1st, 2020. Indonesia is projected to earn an impressive sum of 110 billion rupiahs in taxes from purchases on Netflix based on the research done by Statista GmBh-- a German-based statistics company. Additionally, the study shows that Netflix could gain 76.62 million dollars or equal to 1.10 trillion rupiahs within the country this year. This circumstance raises a lot of questions on Netflix's participation in the imposing of the digital tax policy as they are now not banned by Telkom anymore, for they are expected to contribute significantly due to the increasing demand for streaming platforms caused by the pandemic. The policy itself is believed to perform admirably because income from taxation is extremely crucial during these unprecedented times as Indonesia's state budget is continuously depleting.
Sources
CNBC Indonesia
Bisnis.com
Tempo
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