SR Telkom 2012 Eng LoRes

(1)

Bringing the Sustainable

Digital Society

Sustainability Report

2012

(2)

DISCLAIMER

This sustainability report has a number of forward looking statements, including expectations and future sustainability performance projections. These disclosures will use a number of terms such as “commitment”, “believe”, “trust”, “hope”, “anticipate”, “estimate” “projecting”, or other similar terms. Besides that, all disclosures who do not have historical facts can be categorized as a forward looking statement. Although we

believe that these expectations can be proven to be true. Forward looking statements will include identiication of risk and uncertainty due to

changes in the economic, social and environmental issues in Indonesia.

PERSONAL CONTACT (3.4)

If you wish to obtain more information regarding this report, please contact Investor Relations, Grha Citra Caraka on 5th_{loor, Jl. Jend. Gatot} Subroto Kav. 52, Jakarta 12710, Indonesia. Tel: (62-21) 521 5109, Fax: (62-21) 522 0500 or email: investor@telkom.co.id. This document can also be downloaded via our website http://www.telkom.co.id.

PT TELEKOMUNIKASI INDONESIA, Tbk. Laporan Keberlanjutan

Sustainability Report2010

Masa Depan Anda Senantiasa Mewujudkan

Sustaining Your Future

1

Moving to Sustainability

PT TELEKOMUNIKASI INDONESIA, Tbk. Sustainability Report 2011

PT TELEKOMUNIKASI INDONESIA Tbk

Kantor Pusat/Headquarters GKP TELKOM Jl. Japati No. 1 Bandung 40133 Tel. : (62-22) 452 7101 Fax. : (62-22) 424 0313 IDX : TLKM NYSE : TLK LSE : TKIA

www.telkom-indonesia.com

2009

the world in your hand

PT TELEKOMUNIKASI INDONESIA, Tbk.

Laporan Keberlanjutan Sustainability Report 2009

Holding the World with You

(3)

Human ResouRces Development

about telkom ImpRovIng tHe

economy

enHancIng customeR satIsfactIon

sustaInabIlIty goveRnance

Bringing the Sustainable

Digital Society

With the increase of Indonesia’s economic growth, Telkom which

began it’s line of business in telecommunications, is now the largest

Indonesian Telecommunication, Information, Media, Edutainment

and Services company which is also known as TIMES.

The TIMES business which has been developed by Telkom is aimed

at supporting the growth and development of Indonesian digital

society, which goes inline with the increased access of Device

Network Application /”DNA” which is based on current Information

& Communication Technology.

(4)

RepoRt fRom tHe

pResIDent DIRectoR about tHIs RepoRt

envIRonmental ResponsIbIlIty sHaRIng wItH tHe

communIty

HIgHLIgHT

Sustainability

Performance Highlights

ECONOMIC Performance Highlights

10

11

12

69,109

77,882

71,900

Economic Value generated

(Rp in billion)

10

11

12

19,

654

17,584

22,104

Economic Value Retained

(Rp in billion)

10

11

12

14,

780

12,871

15,874

Contribution to the State

(Rp in billion)

10

11

12

49,455

60,298

49,796

Economic Value Distributed

(Rp in billion)

10

11

12

2

8

3.77

302.70

343.87

Distribution of Partnership funds

(Rp in billion)

10

11

12

9

,1

89

9

,

918

9

,

34

6

Total number of

Development Partners

RepoRt fRom tHe

communIty

(7)

economy

Sus

tainable P

erf

ormanc

e Highlights

Rp

343.87

billion

number of soft loan

distribution

Rp

10

billion

for Development Partners

entrepreneurship scholarships

1,388

Development

Partners

Distribution of Partnership

funds to Business Clusters

which have around

economy

(8)

RepoRt fRom tHe

communIty

HIgHLIgHT

ENvIRONMENTal Performance Highlights

Implementation of paperless oice. Around

9,395 rim of paper has been saved with the

use of the online oice note.

Washing oice vehicles and watering oice

plants with recycled water.

Increasing a healthy and friendly work

culture through the bike to work and earth

hour program.

Energy eiciency on 2,976 units of BTS

which are located outside the building and

are small in size and do not need a cooler

and relay station.

RepoRt fRom tHe

communIty

(9)

economy

Energy saving by switching the use of

TDM to softswitch technology which

is placed at 23 location and around 28

trunk gates

59.9a

23.9a

961.39

ton

carbon emission

reduction

per year by the use of

renewable energy

trees in an area of

36 Ha

Mangrove planting

Planting

Hand-over of

teak trees and super

mango trees

±

16,000

50,000

1,000

at panaikang maros beach, south sulawesi as part of realizing

the telkom go green action program

as telkom’s participation in the green initiative of

the city of tasikmalaya

economy

Sus

tainable P

erf

ormanc

(10)

RepoRt fRom tHe

communIty

HIgHLIgHT

Sharing with the community

Distribution of Economic and Environmental Community Development Fund

SOCIal Performance Highlights

10

11

12

14.77

19.96

9.89

Training and Education

(Rp billion)

10

11

12

5.28

6.19

3.49

Public facilities

(Rp billion)

10

11

12

4.

65

7.80

2.75

Public Health

(Rp billion)

10

11

12

10.8

5

4

8.

62

2.00

BuMN Peduli Program

(Rp billion)

10

11

12

6.

50

7.21

5.55

worship facilities

(Rp billion)

10

11

12

0.

49

1.41

1.7

3

Natural Disaster Victims

(Rp billion)

10

11

12

2.44

0.

96

2.02

Environmental Protection

(Rp billion)

RepoRt fRom tHe

communIty

(11)

economy

Training and Education assistance

•

bagimu guru kupersembahkan: four batches has

been conducted with around

253

participants

•

i-cHat application: update content database to

around

7,000

words

•

co-op program

: iltering

474

college students

from

65

State Universities and Private Universities

assistance for Worship Facilities

• Participated in constructing and renovating

554

worship facilities in Indonesia

assistance for Public Health Facilities

• Application of e-health in Jakarta and Yogyakarta

economy

Sus

tainable P

erf

ormanc

(12)

RepoRt fRom tHe

communIty

HIgHLIgHT

assistance in Public Facilities

• Placing WiFi network in

100,000

schools in

Jakarta for the “Develop a Smarter Indonesia”

• Program “Listrik Mandiri Rakyat” program for around

155

families in the city of Tasikmalaya

•

Develop cyber cities in Banyuwangi,

Banjarbaru, Manado, Gresik, Kutai,

Tasikmalaya

Natural Disaster victims relief

•

27

activities to provide assistance to natural disaster

victims

RepoRt fRom tHe

communIty

(13)

economy

Personal customer segment Business customer segment Enterprise customer

segment Wholesale & international customer segment

9

1.35%

83.25%

81.39%

90.98%

CSI

Personal customer segment Business customer segment Enterprise customer segment Wholesale & international customer segment

88

.00%

82

.

85

%

67

.0

7

%

84

.9

2

%

CLI

Customer Satisfaction

4

3

9

,324

2,441

3,207 412

344

7,685 2,227

Others Supervisor Middle Management

Senior Management

Human Resources

Telkom

Subsidiaries Ikhtisar Kinerja K

eberlanjutan

•

21,013

employees followed the competence development training

•

Rp158 billion

for training and education at average

Rp8 million

per employee

• The development of Telkom CorpU to create highly skilled people and leaders

• Provide Human Resource Appreciation to

227

persons and

34

internal

and external units of Telkom

•

25

business units received the 2012 Zero Accident Award

economy

(14)

RepoRt fRom tHe

communIty

HIgHLIgHT

Caleidoscope

1991

1974

1980

1995

1906-1965

1856-1882

the name of pt peRumtel changed to pt telekomunikasi Indonesia or telkom with a operating business divided into two telecommunication areas (“wItel”). twelve wItel then changed into seven Regional Divisions (“DIvRe”), which are Division I sumatra, Division II Jakarta and surroundings, Division III west Java, Division Ivcentral Java and DI yogyakarta, Division v east Java, Division vI kalimantan and Division vII east Indonesia.

pn telekomunikasi is divided into two divisions, which are pt Industri telekomunikasi Indonesia (”pt IntI”) whcich produces telecommunication equipment and perusahaan umum telekomunikasi (“peRumtel”) which provides services for domestic and international telecommunication.

Telkom conducted it’s Intial Public Ofering (“IPO”)

on november, 14 1995 at the Jakart stock exchange and surabaya stock exchange. In may 26, 1995, telkom established a subsidiary that handles celullar telecommunications, telkomsel.

International telecommunication has been taken over by pt Indonesian satellite corporation (“Indosat”).

on october 23, 1856, the colonial government

of the Netherlands-East Indies operated the irst

electromagnetic telegraph service in Indonesia which connected batavia (Jakarta) and buitenzorg (bogor).

(15)

economy

2005

2009

2010

2011

2012

1999

2001

2002

2004

satelit telkom-2 has been launched to replace all satellite transmitted services which was previously served by palapa b-4. this launch made it the eigth satellite launched by telkom including the palapa a-1.

telkom transformed from a Infocomm company to a tIme organizing company. telkom’s new look was introduced to the public with a new logo and tagline. “the world in your hand’’.

undersea fibre optic cable project JakalaDema which connected the islands of Java, kalimantan, sulawesi, Denpasar and mataram has been completed in april 2010.

telecommunication infrastructure reformation through the telkom nusantara super Highway project which is aimed at connecting nusantara starting from sumatra to papua, and the true broadband accessproject which provides internet access with a capacity of 20-100 mbps to all customers in Indonesia.

telkom acquired 35% of Indosat shares at telkomsel thus making it the majority shareholder at the company with around 77.7% onwership. Indosat at the other hand took over 22.5% of telkom shares at satelindo and 37.7% of telkom shares at pt aplikanusa lintasarta. In the same time telkom exclusive rights as single non moving telephone service has been revoked.

telkom released 12.7 % of it’s shares at telkomsel to singapore telecom mobile pte ltd (“singtel mobile”).

telkom launched a International Direct Dial (“IDD”) call for non-mobile telephones.

Broadband penetration through Wii Develoment

in order to realize Indonesia Digital network (“IDn”).

change of business portofolio from tIme to become tImes (telecommunication, Information, media, edutainment & services) which is aimed at business value creation.

the formation of the telkom corporate university to develop telkom Human Resources which has the competency to compete in international business. (from competence to commerce).

law no.36/1999 on telecommunication which

is efective in September 2000 has facilitated

(16)

RepoRt fRom tHe

communIty

HIgHLIgHT

MISSION

vISION

vision,

Mission

and

Strategic

Initiatives

To

become

a

leading

Telecommunication, Information,

Media, Edutainment and Services

(“TIMES”) player in the region.

• To

provide

TIMES

services with excellent

quality at competitive

price.

• To be the role model

as the best managed

Indonesian corporation.

(17)

economy

Corporate

Culture

The New Telkom Way

Basic

Belief

Always The Best

Key

Behaviours

Imagine, Focus, Action

Solid, Speed, Smart

(18)

RepoRt fRom tHe

communIty

HIgHLIgHT

Strategic

Initiatives

1

center of excellence

3

facilitating broadband

implementation through service

convergence

4

management of wireless portfolio

5

Integrating the telkom group’s

ecosystem solutions

2

aligning the business structure and

portfolio management

The strategic initiatives are based on decree of the Board of Commissioners of PT Telekomunikasi Indonesia, Tbk No.09/kEP/Dk/2012/RHS dated 30 May 2012.

RepoRt fRom tHe

communIty

(19)

economy

9

6

10

8

7

maximizing asset value on

inter-related businesses

Investing in information technology

services

Integrating

networks (“ngn”) and operational

support system, business support

system,

customer

support

system and enterprise relations

management (“obce”) to achieve

costs improvements

Investing in the wholesale business

and strategic international business

opportunities

Investing in media and edutainment

businesses

economy

(20)

RepoRt fRom tHe

communIty

HIgHLIgHT

01

MARCH

1. Through the handicraft and jewelry expo which is named the Adikriya Indonesia 2012, CDC Telkom

has been continuously sending eight development

partners.

2. Telkom placed two of it’s development partners

in a National Exhibition developed by the Dewan

Kerajinan Nasional (“Dekranas”) in conjunction with a CSR potential program from each provincial Dekranasda, municipality throughout Indonesia and State Owned Enterprises.

3. Forum Silaturahmi Isteri Karyawan Telkom (“FORSIKATEL”) of the Corporate oice engages with the female community at the Telkom Oice Japati Bandung to increase creative expertise through cooking and sewing training.

4. CDC Telkom organizes a of air SME Business at the STSI Telkom Soekarno Hatta Bandung through an activity which is supported by 60 Telkom Development Partners of the Bandung Raya Area.

03

MAy

CSR Telkom brings back a bright experience for the people of Kampung Pojok Desa Tanjungsari, Sub Region Salopa, Region Tasikmalaya via a program named

Peoples Independent Electricity for around 151 families

received a battery powered electricity.

02

APRIL

1. The inauguration of the Telkom Jatinegara Data Center as the irst Telkom Green Data Center,

which has environmentally friendly features such

as Zero Depletion Refrigerant, Zero Depletion FAP, Environment Safe Materials and Energy Saving. 2. Telkom with around seven Development Partners

attends the International Handicraft Trade Fair 2012

(“INACRAFT 2012).

01

04

02

05

03

06

07

Signiicant

Events

RepoRt fRom tHe

communIty

(21)

Human ResouRces Development about telkom ImpRovIng tHe economy enHancIng customeR satIsfactIon sustaInabIlIty goveRnance Signiicant e v ents

04

JuNE

1. Signing of a Cooperation Agreement

on the Incubation and Development

of ICT between Telkom and

18 communities and software development companies which are joined in the Bandung Digital Valley and is aimed at supporting digital

creative industry in Indonesia. 2. Telkom symbolicaly handed over

1,000 Dutch teak treens and Super Mango trees to the State Minister of Stated-Owned Enterprises Dahlan Iskan in conjunction with tree planting

at the Cimulu riverbed in front of the

Plasa Telkom Tasikmalaya.

3. CSR Telkom Group conducted a social

action with a massive circumcision for 1,000 children of poor families

around Jabodetabek which marked the start of a CSR pilar in the ield

of Culture and Politeness by the Director for Human Capital and

General Afairs (“HCGA”), Priyantono Rudito.

05

JuLI

1. Telkom Group is ready to develop a healthy Device Network Application

ecosystem so that Indonesia can obtain the best broadband

technology. This commitment has

been delivered in the executive

meeting with Apple Co-Founder, Steve Wozniak in Jakarta.

2. Telkom organized a Co-Op 2012 program as CSR program policy

for education carrying a theme

of “Optimizing Co-op beneit to

enhancing competitive advantage for

corporate and other stakeholders”.

06

AuguST

1. Telkom and IBM Indonesia have

agreed upon to cooperate in the development of Information

Technology (“IT”) in Indonesia, in

particular providing the best IT solutions for the Corporate and Small

and Medium Enterprise (“SME”). 2. Telkom dispatched 3,250

homecoming travellers to a number

of cities in Java in a Mudik Asyik Telkom Group 2012 program which

consists of frontliner outlet, sales

force and Telkomsel authorized dealers, Telkom Flexi, Speedy and PT Telkom business partners in Jabodetabek as a form of gratitude towards their cooperation.

3. Telkom cooperates with the IAIN Syekh Nurjati Cirebon rectorate and organized a staple need cheap market by distributing 2,000 packages with a value of Rp110,000 per package which is being sold to

the poor and less fortunate people at

around Rp35,000/package.

4. Telkom submitted six development

partners in the Indonesia Fashion &

Craft 2012 expo.

07

SEPTEMBER

1. The launch of Telkom CorpU as a

attraction to the center of excellence

to all staf.

2. With the collaboration between Yayasan Desa Sejahtera Indonesia (“YDSI”), Telkom allocated 50,000

mangrove trees which is worth

Rp25,000,000,- through a Go Green Action program to a number of critical points on the Panaikang Beach, Maros, South Sulawesi.

08

OCTOBER

The face of Telkom CSR for partnership is being given through it’s development partners at the INDOCRAFT annual expo,

a exhibition that showcases original

Indonesian handicrafts.

09

DECEMBER

1. Telkom CDC has coordinated with students of the Garut University (“UNIGA”), STKIP Garut, STIE Yasa Anggana and KODIM 0611 Garut

which synergicaly implements the

BUMN Membangun Desa program in a form of rebuilding poor peoples

houses in Kampung Bojong Desa Jatisari, Kecamatan Karangpawitan, Garut.

2. Telkom CSR pillar Partnership conducts a working capital

enhancement in the form of a revolving

fund towards 51 SME in the area of East Priangan (Tasikmalaya, Ciamis, Banjar and SIngaparna) which can reach a number of Rp 1,587,200,000.

(22)

RepoRt fRom tHe

communIty

HIgHLIgHT

awards

and

Certiication

awards

(2.10)

JANuARy

telkomvision, our paytv, received the great performing award in Digital media award survey, as the best market Drive in marketing award 2011 survey, and recognized by Indonesia museum of world Records (“muRI”) as the pay tv with the highest sales growth (800% within a period of one year).

MARCH

1. International recognition as the best environmental Responsibility and the best Investor Relation professional in the 2nd_{asian excellence}

Recognition award 2012 from the Hong kong-based corporate governance asia magazine.

2. award as leading company in promoting entrepreneurship, for telkom’s commitment in its role as good corporate citizen through the implementation of partnership program with micro, small & medium enterprises and community development program from ministry of cooperative and sme.

fEBRuARy

1. top brand award for speedy, flexi postpaid and flexi prepaid in the top brand award 2012 organized by frontier consulting group and marketing magazine.

2. second-place award in the child and maternal Health in the private sector for the implementation of i-cHat (I can Hear and talk/a language

learning application for the deaf) from the Oice of Special Afairs of

the president of Republic Indonesia.

3. award silver winner Inma 2012 for “kIlau” internal magazine for creative cover page, in the Ipma competition organized by the worker union of the press.

4. call center service excellence award (“ccsea”) 2012 for call center 147 telkom in telecommunication and the Internet services provider categories, event organized by care center for customer satisfaction & loyalty (“care-ccsl”) and service excellence magazine.

RepoRt fRom tHe

communIty

(23)

economy

aw

ar

ds

and

Certiica

tion

MAy

award as the world’s biggest public companies in forbes global 2000 polling by forbes Indonesia magazine.

APRIL

1. award as the best cDma operator for telkom through its telkom flexi product, as well as the best gsm operator and best operator of the year for telkomsel, a subsidiary of telkom, in selular award 2012 event organized by selular magazine, Handphone tabloid and selular online tabloid from global selular media group.

2. award in Indonesia enterprise Risk management award 2012 from business Review magazine.

3. Award as the Most Committed for CSR 2012 from the La Toi School of

csR.

JuLy

1. gold award in the telecommunication Industry category, as well as

citations in Top 100 Worldwide, Top 50 Regional in Asia-Paciic, and

special achievement award – the most engaging annual Report, in 2011 vision awards annual Report competition organized by the league of american communications professionals (“lacp”), san Diego, united states.

2. Recognized among the 8 best finalists in the Indonesian most admired knowledge enterprise (“make”) study 2012 organized by Dunamis organization services.

3. award as sales management champion and as communication management champion, in the markplus Insight award 2012 organized by marketeers magazine in cooperation with pt JIexpo as the organizer of Jakarta fair and the research institution markplus Insight.

4. citation of social business Innovation award for telkom for empowering Information and communication technology community and award as the best green ceo in the telecommunication sector for arief yahya, in the appreciation night warta ekonomi event organized by warta ekonomi magazine.

JuNE

silver award in the strategy and tactical category and bronze award in the special award category, at the bumn marketing award 2012 organized by bumn track magazine with the support of bumn marketeers club and markplus Inc.

economy

(24)

RepoRt fRom tHe

communIty

HIgHLIgHT

SEPTEMBER

awards for most consistent Dividend policy and best strategic corporate social Responsibility in the 6th_{best financial Institution awards and 2}nd

corporate awards in 2012 organized by alpha southeast asia magazine.

OCTOBER

1. awards as the best for all criteria, the best for employee net promoter score, the best for Human capital Initiative employee self service, and the best for ceo commitment, in the Indonesia Human capital study (“IHcs”) 2012 organized by Dunamis Human capital and business Review magazine.

2. award as Indonesia broadband service provider of the year 2012 in Indonesia excellence awards 2012 event organized by frost & sullivan. 3. award as the best Innovation in the marketing award 2012 event

organized by marketing magazine.

DECEMBER

1. award as best sustainability Report 2011 in the services sector category as well as runner up position for best website 2012, in the Indonesia sustainability Reporting award (“IsRa”) 2012 competition organized by the national center for sustainability Reporting (“ncsR”).

2. award as best ceo of most Innovative soe 2012 for arief yahya, president Director of telkom, in the anugerah bumn 2012 event organized by bumn track magazine in coordination with forum Humas bumn and cIs school of Innovation.

3. award as corporate governance perception Index the most trusted companies 2012 as a highly trusted company held by the Indonesian Institute for corporate governance (“IIcg”) in collaboration with swa magazine based on a survey of investors, analysts and fund managers. 4. awards for the best e-corp, the best cIo and the best future It leader

2012 in the Indonesia Digital summit 2012 event, by swa magazine. 5. award as the preferred corporation of newspaper workers unions

(“sps”) 2012 in the 1st sps-Indonesia pR summit 2012.

NOVEMBER

1. award as best corporate overall in the 4th corporate governance annual survey conducted by the Indonesian Institute for corporate Directorship (“IIcD”).

2. award in the telecommunication Industry sector in the economic challenges award 2012 organized by metro tv.

3. award as the best ceo on survival management for arief yahya, president Director of telkom and an award as the best corporate for the year 2012 for telkom, in the anugerah business Review 2012 organized by business Review magazine.

RepoRt fRom tHe

communIty

(25)

economy

1. ISO 9001:2008 Certiication

Issued to pt telekomunikasi Indonesia tbk, Divisi consumer service

barat, by tuv Rheinland cert gmbH in 2011. valid until 2013.

3. ISO/IEC 27001:2005 Certiication

Issued to pt telekomunikasi Indonesia tbk, grha citra caraka

Building, Divisi Infratel M loor and Divisi Access 7

th

loor, by TUV

Rheinland Japan ltd, in 2012. valid until 2015.

5. Customer Center of Expertise Certiication

Issued to pt telekomunikasi Indonesia tbk, by sap, in 2012. valid

until 2013.

2. ISO 9001:2008 Certiication

Issued to pt telekomunikasi Indonesia tbk, Divisi telkom flexi, by

tuv Rheinland cert gmbH in 2011. valid until 2014.

4. AS/NZS ISO 9001:2008 Certiication

Issued to pt administrasi medika (“admedika”), telkom’s indirect

subsidiary, by Veriication New Zealand Limited, in 2012. Valid until

2015.

Certiication

economy

(26)

REPORT fROM THE

PRESIDENT DIRECTOR about tHIs RepoRt

communIty HIgHlIgHt

Report from

The President

Director

(1.1), (1.2)

“We will continue to support global

eforts to control climate change,

which is the most signiicant

environmental issue in the context

of sustainability.”

REPORT fROM THE

(27)

economy

arief Yahya

President Director

R

eport fr

om

the Pr

esident Dir

ect

or

economy

(28)

REPORT fROM THE

communIty HIgHlIgHt

Dear Stakeholders,

The world we live in is facing an increasingly signiicant environmental crisis. Although a range of global

initiatives to contain this crisis have been implemented, carbon dioxide emissions have yet to be reduced

to levels considered by scientists to be safe. As a

result, extreme climatic conditions are an increasingly frequent occurrence across the world, including in

Indonesia. To address this challenge, it is vital that all

parties, including all elements of the community, the

government, and private enterprise, work together. Through such cooperative eforts, we will ensure the

ongoing sustainability of the planet and its inhabitants, thereby ensuring that future generations will be able to

live in a healthier world.

As a business operation, Telkom is strongly committed

to playing a role in overcoming this environmental crisis through the implementation of strategic measures to control the level of carbon dioxide emissions resulting

from its corporate activities. As an accountable company, we are committed to utilizingour resources to

ensure that we conduct our corporate activities in an

environmentally friendly manner.

Environmentally friendly Operations

Up to 2,876 Base Transceiver Stations (“BTS”) located outdoors and operated by Telkom utilize solar cell and micro-hydro energy, resulting in reductions in carbon emissions of 961.39 tons per year. In addition, we are

encouraging the thorough implementation of the

paperless oice concept throughout businesses within

Indonesia through the provision of business applications

to facilitate this practice. For the installation of new air conditioning units, we only utilize equipment with

environmentally friendly coolants that meet international

standards.

To the fullest extent possible, we are committed to conserving natural resources through the

implementation of the principles of “3R” (Recycle, Reuse, Reduce). These principles form an important basis for a number of pro-environment policies. Other

manifestations of our commitment to the principles of

3R include our installation of wastewater management units at our head oices in Jakarta and Bandung, with

wastewater being used to wash operational vehicles

and to maintain gardens.

We also manifest our commitment to preserving the

environment through cooperative endeavors with

communities to implement reforestation programs.

So far, the programs have involved the planting of more than 16,000 trees throughout Indonesia, the planting of

more than 50,000 mangrove seedlings in the Panaikang Maros beach area in South Sulawesi, and the provision of more than 1,000 Dutch teak and super mango seedlings to Tasikmalaya’s city reforestation program.

In addition, we have facilitated the establishment of

a number of garden parks, equipped with

cutting-edge communications facilities, in a number of regions

throughout Indonesia.

Support for Economic Development

The Company strives to ensure the achievement of economic sustainability through the creation of

economic value for the beneit of all stakeholders. In 2012, the economic value created by Telkom amounted to a total value of Rp77.88 trillion, representing an increase of 7.31% over the igure of Rp71.9 trillion achieved in 2011. The total economic value distributed to stakeholders increased dramatically in 2012, by 21% compared to the previous year.

The dramatic increase in the distributed economic

value demonstrates that Telkom’s business activities have a signiicant impact in terms of improving the economic conditions of all stakeholders, including

suppliers, employees, central and regional governments,

and members of the community. The total value of the Company’s contributions to state revenues in the form of dividends, dues, and taxes amounted to Rp15.88 trillion, representing an increase of 7% over the igure of Rp14.78 trillion recorded in the previous year.

Telkom also plays a signiicant role in improving regional

economic conditions through the payment of regional taxes, the provision of employment opportunities, the provision of guidance to small to medium enterprises

and cooperatives, the provision of TIMES facilities and

by creating economic opportunities for members of the community through their involvement in businesses

activities that supportTelkom’s operations. All of these beneits have a multiplier efect in terms of promoting regional economic growth.

The Social Dimensions of Sustainability

As a company whose growth has been driven by its harmonious relationships with all stakeholders, including

employees and members of communities surrounding its operations, we strive to increase our achievements in terms of social sustainability, in areas such as labor management, human rights, product accountability, and

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economy

As a manifestation of our commitment to human rights,

we refrain from all forms of discrimination related to

ethnicity, religion, group ailiation or gender in the management of our human resources. We actively

support diversity and provide equal opportunities for

all employees to advance their careers. Throughout

2012, 21,013 employees were provided with training, at

an average cost of Rp8 million per employee. We also established the Telkom Corporate University to develop high quality leadership skills. In the area of occupational safety and health, we successfully retained our zero accident record. In order to facilitate the growth of the

Company, we continue to develop and improve the quality of the services that we provide our customers, as demonstrated by increasingly high customer satisfaction

indicators over the years.

As a company that operates throughout Indonesia, including its most remote regions, Telkom also plays a signiicant role in supporting the government’s eforts

to improve the conditions and quality of life of marginal members of the community, to reduce poverty, to improve standards of health, and to provide public

infrastructure and facilities of an adequate standard.

In all of these areas, Telkom plays a signiicant role in the achievement of the government’s Millennium Development Goals (“MDGs”) 2015, through its

participation in Community Development and

Environmental Management Programs (“PKBL”). In

2012,we provided assistance in the areas of education

and training to a total value of Rp19.96 billion; for the

development of infrastructure and facilities, including

religious worship facilities, to a total value of Rp13.40 billion; for the development of health facilities, to a total value of Rp7.80 billion; and, through our participation in the State Owned Enterprises Care (“BUMN Peduli”)

program, for community development and disaster

relief, to a total value of Rp50.03 billion.

Moving Towards the future

We will continue to support the global community’s

endeavors to control climate change, endeavors which are of primary importance in the context of achieving

sustainability. Global warming, climate change,

and extreme weather have the potential to impact

Telkom’s business through their potential to damage telecommunications networks and infrastructure,

which in turn has the potential to negatively impact the

economic value that the Company generates.

Thus, we will continue to intensify the measures we have implemented to reduce carbon dioxide emissions and

to conserve natural resources. In the short term, we will continue to reine systems and procedures related to the management of Telkom’s environmental footprint

as a basis for the further implementation of policies that integrate environmental management into the

Company’s core strategies.

Conclusion

We would like to express our gratitude to our shareholders, particularly the Ministry for State-Owned

Enterprises, who continue to provide direction and

guidance to improve Telkom’s sustainability performance. We would also like to express our appreciation for the advice and guidance provided by Telkom’s Board of

Commissioners, which enabled the Company to improve

its sustainability performance in 2012.

Finally, the Board of Directors would like to express its

gratitude and appreciation to all employees for their

hard work and eforts towards achieving a higher level of sustainability performance this year.

Moving into 2013, let us all work even harder to improve the economic conditions of all stakeholders by

conducting our business operations in an environmentally friendly manner and by intensifying our commitment

to improving the socio-economic conditions of both employees and all members of the community.

Jayalah Indonesia! Jayalah Telkom Indonesia!

arief Yahya

President Director/CEO

R

eport fr

om

the Pr

esident Dir

ect

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RepoRt fRom tHe

pResIDent DIRectoR ABOuT THIS REPORT

communIty HIgHlIgHt

About This Report

PT Telekomunikasi Indonesia’s (“Telkom” or

“we”) 2012 Sustainability Report (“the Report”)

is the seventh such report, following the

publication of the irst report in 2006. Amongst

other purposes, this report is presented in

compliance with Article 66, Paragraph 2C of Law

Number 40, 2007, concerning Limited Liability

Companies. This act mandates the publication

of an annual report covering all activities related

to a company’s fulillment of its Environmental

and Social Responsibility (“ESR”).

According to Article 1 of this Law, ESR is deined as

“a company’s commitment to participation in sustainable economic development to improve the quality of life and the environmental conditions of the company itself, the communities amongst which it operates, and the broader public”.

through this report, we are taking the opportunity to inform all stakeholders of telkom’s performance in terms of achieving economic, environmental, and social sustainability throughout 2012. portions of the material presented in this report were included in telkom’s 2012 annual Report.

In the preparation of this report, we have endeavored to adhere to the reporting guidelines established by the global Reporting Initiative (“gRI”). these guidelines are broadly acknowledged and have achieved widespread acceptance by the international business community.

Speciically, these reporting guidelines are known as

the gRI guidelines for the preparation of sustainability Reports version 3.1 (“gRI g3.1”).

Reporting Period (3.1, 3.2, 3.3)

this Report covers the period from 1 January 2012 to 31 December 2012. the preceding report, the 2011 sustainability Report, was published in June 2012. telkom publishes its sustainability Report each year to provide a solid basis for the evaluation of management’s economic, environmental and social performance, in addition to information related to its

inancial performance, which is presented in the Annual

financial statement.

Deining Report Content (3.5)

In the selection of the topics addressed in the report, we primarily adhere to the principle of materiality. In this context, materiality is taken to refer to issues of relevance to the conduct of telkom’s business and to

issues that have a signiicant impact on and relevance

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economy

In determining the contents of this report, we involve stakeholders through their participation in discussion forums, which are attended by representatives of a full range of stakeholder groups. the outputs from these forums can be seen from the 2012 materiality map, which is presented below.

Report Boundary and Data Measurement Techniques

(3.6 - 3.9)

Data related to telkom’s sustainability performance and presented in this report relate to telkom as a holding company. the report does not include data related to the sustainability performance of the company’s subsidiary entities. financial data, including data related to economic value received and distributed (ec1), is presented in the form of consolidated data covering the company’s subsidiaries, as is standard practice

according to established inancial reporting guidelines

prevailing in Indonesia.

We use the techniques for the measurement of inancial

data established by the Indonesian financial accounting standards (pernyataan standar akuntansi keuangan, psak). for the measurement of sustainability data, we use internationally accepted data measurement techniques and units, such as gigajoules to measure units of energy and so on. the quantitative data presented in this report utilizes the principle of comparability, covering a period of at least two consecutive years, thereby enabling readers of the report to conduct a meaningful analysis of trends.

Changes from Previous years’ Reports (3.10, 3.11)

During the period covered by this report, there have been no fundamental changes to telkom’s business structure. In this context, ‘fundamental change’ refers to company actions such as acquisitions, mergers, corporate restructuring, and downsizing. similarly,

there have been no signiicant changes to the report

limits, scope or measurement techniques since the publication of the previous year’s report.

gRI Content Index and Assurance (3.12, 3.13)

we have included references to the relevant gRI index in red brackets at each relevant page to enable readers

of the report to determine the speciic GRI indicators

applied throughout this report. a complete list of these gRI indicators can be seen on page 111-113.

gRI g3.1 indicators addressed in this report refer to issues relevant to the conduct and implementation of telkom’s business. a number of gRI g3.1 indicators are not addressed in this report because they are

considered not to be of material signiicance or relevant

to telkom’s business. In addition, a number of gRI g3.1 indicators are not addressed because the required data compilation system has not yet been fully implemented. telkom’s management is endeavoring to ensure that such data is available for future reports, as part of our

ongoing eforts to improve and reine our sustainability

accounting systems and procedures.

this Report was externally assured by mazars in the form of limited assurance, whose assurance statement is presented on page 108-109. following a gRI application level checked by the national center for sustainability Reporting (“ncsR”), this report has been declared to meet the criteria for a gRI application level of a+; see page 110.

Low Medium High

L

ow

Medium

High

community economic empowerment

state budget carbon emission mitigation

competitiveness employee

Beneits Energy Eiciency

occupational Health and safety sustainable

supply chain

community Development education

and training Human

Rights

service Quality

Signiicant importane to S

tak

eholders

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RepoRt fRom tHe

envIRonmental ResponsIbIlIty

SHARINg wITH THE COMMuNITy

HIgHlIgHt RepoRt fRom tHe

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economy

32

Educational and Training Assistance

36

Religious worship Assistance

36

Assistance for the Development of Infrastructure and general facilities

38

Assistance for Health facilities and Infrastructure

38

Disaster Relief

Sharing

with the

Community

economy

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HIgHlIgHt

“telkom shares through a

number of programs intended

to improve the quality of life

of members of the community.

telkom continues to develop its

social responsibility program to

foster the abilities and creativity

of the community and to

support eforts to preserve the

environment in cooperation with

the community.”

Telkom has intensiied its commitment to the community through its Community Development Programs.

These programs are implemented in accordance with government policies and initiatives to alleviate poverty, to foster community independence, to improve community capacities and to increase the level of

corporate participation in the achievement of the MDG’s 2015.

All of the Company’s community development projects

are intended to meet the needs of the community

following assessments conducted by Telkom before each project is approved.

For Telkom, community development must emphasize

the creation of value to improve the economic, social, and cultural conditions of members of the community

and empower them to become independent. To achieve

these goals, our community development program adopts the following strategies:

1. Eicient and efective social and economic empowerment of all elements of the community. 2. Eicient and efective preservation of the

environment in cooperation with the community. 3. The empowerment of micro and small enterprises to

enable them to become strong and independent. 4. The establishment of a ive-year Community

Development and Environmental Management

Program with a focus on the development of

communities and clusters.

5. The positioning of the Community Development and Environmental Management Program as an important, integral part of the Telkom Group’s Corporate Social Responsibility (“CSR”) program to achieve the Company’s long-term goals.

6. The establishment of a CSR strategy as a central means of developing and improving the Telkom Group’s corporate reputation.

The Company’s community development program is

implemented by the Community Development Center Unit, which is managed by the Directorate for Human

Capital and General Afairs through the Community Development and Environmental Management Program.

This program focuses not merely on improving the quality of life of marginal members of the community, but also on developing and improving harmonious

relationships between Telkom and all its stakeholders,

particularly members of local communities and local

governments in areas surrounding its operations.

In order to ensure the eicient and efective achievement

of the goals of the program, all project activities involve communities and local governments at all stages of these activities, from the initial planning process until

the inal evaluation of the program’s achievements. Activities included in the Environmental Management

Program cover six main areas of philanthropic activity,

including the provision by Telkom of assistance to

support education and training, community health, religious worship, general infrastructure, disaster relief,

and environmental conservation.

The total value of funds allocated for these programs

throughout 2012 compared to the igures for 2011 can

be seen from the following table:

Table: Disbursement of funds under Community Development Program 2012-2010 (billions of Rupiah)

Sector 2012 2011 2010

“BUMN Pembina” program

Education and training 19.96 14.77 9.89 Community health 7.80 4.65 2.75 Worship facilities 7.21 6.50 5.55 General facilities 6.19 5.28 3.49 Disaster relief 1.41 0.49 1.73 Environmental protection 0.96 2.44 2.02 “BUMN Peduli” program 48.62 10.85 2.00

Total 92.14 44.99 27.43

Educational and Training Assistance

Financial assistance for training and education activities constitutes the largest single component of all the community assistance programs implemented by

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economy

This assistance is a manifestation of Telkom’s

commitment to improving the quality of education, to ensuring the availability of adequate educational infrastructure, and to creating equal opportunities for marginal members of communities to attain an

education. Activities related to the provision of assistance

for training and educational activities throughout 2012 build upon activities implemented in previous years, and consist of three principal activities, these being:

(1) Bagimu Guru Ku Persembahkan, (2) the I Can Hear and Talk (“i-CHAT”) application program and (3) the Cooperative Academic Education (“Co-Op”) program.

1. Bagimu guru ku Persembahkan

Teachers play a critically important role in

developing the nation’s human capital. Based on

this understanding, over the past six years, we have provided assistance to facilitate the training

of teachers. The primary goal of this activity is to

develop and improve the quality of education in

Indonesia. More speciically, this training is intended

to achieve the following goals:

a. Positioning teachers as agents of change within the educational sector in Indonesia;

b. Improving the level of knowledge of teachers

in the area of information, communication,

technology (“ICT”); and

c. Fostering a sense of community amongst teachers who have participated in these trainings.

In 2012, the training activities focused on character development and the use of information technology

in the teaching process. Training activities involve

four groups of 60 participants in Sumedang,

76 participants in Pandeglang, 68 participants in Denpasar and 49 participants in Palembang.

2. i–CHAT Application

Telkom is strongly committed to enabling people with

hearing disabilities to communicate and interact with

other members of the community. To achieve this goal, through Telkom’s Innovation and Development Centre Unit, we have created the i-CHAT application, which is proving to be an efective means of enabling

communication by those with hearing disabilities,

including children with special needs. Through the

use of this application, children and adults with hearing disabilities are able to communicate through the use of sign language, which is translated into

voice messages.

The i-CHAT application can be used in two modes, an of-line mode in which the program is installed

onto a computer, and an online mode in which the application is accessed through a website

(www.i-chat.web.id). At present, the application consists of ive modules, these being the Dictionary, Finger Alphabet, Thematic and Sentence Formulation modules.

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HIgHlIgHt

The i-CHAT application was irst made available for use in 2010. Since then, it has been developed and reined to improve its functionality and efectiveness.

In 2012, this application was used by 400 Special

Needs Schools (Sekolah Luar Biasa, SLB) in Medan,

Bandung, Cimahi, Semarang, Sleman, Bantul,

Surabaya and Banjarmasin. In 2012, the i-CHAT program was updated from version 3.0 to version 4.0, while the content database was updated to include 7,000 words.

3. Co-Op Program

This program has been conducted since 1997. It was

developed to establish a bridge between academic institutions and the industrial sector, in tandem with

the promulgation of the Link and Match policy by the Department of Education and Culture (“Kemdikbud”).

Over the years, we have improved the methodologies

and processes by which this program is implemented.

University students from a number of tertiary educational institutes across Indonesia participate in

the Co-Op Program, with activities implemented under the program taking from 3 to 6 months. As an integral part of the Co-Op Program, the students take part in internship programs.

The Co-Op Program beneits educational institutions

by providing them with a means to evaluate their curriculums and to assess the extent to which these curriculums meet the needs of the private sector,

particularly the telecommunication sector. In addition, the Co-Op Program provides valuable input to improve the level of skills of teaching staf at these institutions.

For students participating in the Co-Op Program, it provides them with a means of improving their skills and enabling them to apply the knowledge they acquired at their educational institutions in a real-life environment. Students taking part in the program receive remuneration in the form of pocket money while they participate. In addition, after the students complete

their education, they are provided with the opportunity

to apply for employment at the Telkom Group.

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economy

Participants in the Co-Op Program come from 74 state

and private educational institutions that have established

cooperative relationships with Telkom. The recruitment

process is conducted at individual educational

institutions in cooperation with Kemdikbud’s Board

for the Development of Partnership Programs (Dewan

Pengembangan Program Kemitraan, DPPK). In 2012, the Co-Op Program was implemented in the period from February to March and involved the selection of 1,246

students from 65 educational institutions throughout

Indonesia. Of this pool of students, 474 were selected by a committee working in cooperation with DPPK to take part in Telkom’s Co-Op Program.

Participants in the program were then placed in a number

of Telkom’s business units and operations throughout Indonesia. Participants in the Co-Op Program were

engaged in a number of activities, including routine

business tasks, business operations, and projects, including as troubleshooters. The participants in the

program facilitated the development of a number

of innovations, including innovations related to the

formulation of the Career Planning Workbook, the detection of cable disturbances, the visualization of

central spatial data to support the Speedy service, the development of a security and safety information system, and the development of a human resources

care centre information system.

Since 2008, the Telkom Co-Op Program has been transformed to become the Telkom Group Co-Op

Program, enabling participants to be placed throughout

subsidiary entities such as Telkomsel and Infomedia, as well as a number of Telkom’s community partners. The

expansion of the program in this manner has proceeded

well. In addition, Telkom has developed the Co-Op Program to beneit small and micro enterprise partners.

The goal of this development is both to improve the quality and competitiveness of these enterprises and to

encourage students participating in the Co-op program to become entrepreneurs.

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Religious worship Assistance

We play a role in improving the quality of religious

worship in Indonesia through the provision of assistance to develop and maintain religious worship facilities,

including mosques, churches, and other facilities.

By improving the quality of religious worship facilities and infrastructure, we hope that all members of communities can engage in spiritual activities in safety

and comfort.

Throughout 2012, amongst other activities, Telkom

provided assistance for the following:

1. The building of the Abubakar Bojongloa Rancaekek mosque;

2. The building of the Darussalam Petungrejo mosque, Magetan;

3. The building and restoration of a second story to the Nurul Masyriq mosque, Ujungberung Indah;

4. The building of the Yayasan Pondok Pesantren Ulul Albab mosque, Sangkan Hurip;

5. The building of the Al Ukhuwwah Al Amin Jaka Sampurna mosque, Bekasi;

6. The building of a mosque in Indonesian naval facilities (Lingkar Nusantara II TNI AL), East Lombok;

7. The building of the SMPN 2 Cilengkrang mosque; 8. The building of the Graha Yadya Hindu Dharma

worship facilities;

9. Support for Christmas celebrations at the HKBP church in Bandung; and

10. The building of the HKBP church in West Bandung.

Assistance for the Development of Infrastructure and general facilities

Telkom provides assistance to improve the quality of

life of members of the community through the use of

telecommunications facilities and infrastructure. This

assistance is provided through a number of activities including the Safe and Secure internet Program

(“INSAN”), the Broadband Learning Centre Program (“BLC”) and through the development of other infrastructure and facilities.

1. The INSAN Program (so9, so10)

The INSAN Program is a national program intended to facilitate the socialization of the safe and secure

use of the internet and thereby to ensure that its use provides maximal added value to all members of the

community. To achieve this socialization, the INSAN Program works in cooperation with the Ministry

for Communication and Information Technology

(“Kemenkominfo”) and with the involvement of a number of elements in the community. Participation

in this program is open to all parties concerned

regarding the safe and secure use of the internet.

The internet has become a primary means for members of the community to obtain useful

information. However, the internet also facilitates

access to information and material not in compliance with the cultural norms, laws and religious practices

of Indonesia. In order to reduce potential negative

impacts resulting from access to such information

and content, Telkom has launched its Nawala domain name system (“DNS”), which acts as an internet content iltering system within Indonesia. DNS Nawala is a non-commercial program implemented by Telkom in cooperation with the Indonesian Association of internet Cafes (Asosiasi Warnet Indonesia, Awari).

Telkom�

SR Telkom 2012 Eng LoRes

Bringing the Sustainable

DISCLAIMER

Bringing the Sustainable

at supporting the growth and development of Indonesian digital

Contents

CALEIDOSCOPE 12

Sustainability

billion

ENvIRONMENTal Performance Highlights

hour program.

Energy saving by switching the use of

mango trees

Sharing with the community

Training and Education assistance

• Participated in constructing and renovating

assistance in Public Facilities

activities to provide assistance to natural disaster

Customer Satisfaction

• Provide Human Resource Appreciation to

Caleidoscope

MISSION

Indonesian corporation.

Strategic

maximizing asset value on

and strategic international business

Signiicant

awards

MARCH

APRIL

SEPTEMBER

DECEMBER

NOVEMBER

1. ISO 9001:2008 Certiication

Rheinland Japan ltd, in 2012. valid until 2015.

subsidiary, by Veriication New Zealand Limited, in 2012. Valid until

Director

arief Yahya

Dear Stakeholders,

arief Yahya

About This Report

of an annual report covering all activities related

Sharing

number of programs intended

Sector 2012 2011 2010