Passpod Enters Internet Service Provider Business, Focuses on Tier-2 and 3 Cities

PT Yelooo Integra Datanet Tbk (IDX: YELO) or known for its products Passpod announced that it has acquired 49% stake in PT Telemedia Communication Pratama (TKP). TKP itself is known as an internet-based service provider (ISP). fiber optics with the Viberlink brand. Based on disclosure, the acquisition value is 147 million Rupiah, equivalent to 147 shares with a price per share of 1 million Rupiah.

"The existence of YELO has transformed the TKP business model into a Digital ISP. Connectivity will be more attractive and rich in other features," said YELO President Director Wewy Susanto.

It was also conveyed, later Viberlink will be focused on providing high-speed internet (up to 1GB) to remote villages in Indonesia. The market focus is for the general public and SMEs in the region. “Seeing the increasing demand for internet, the Company continues to accelerate the development of internet-based infrastructure fiber optics which stretches across Java Island for villages in the tier-2 and tier-3 regions.” Wewy said.

Strengthen internet service business

Passpod's seriousness to enter the connectivity business was also demonstrated by the appointment of a new commissioner at the EGMS in early January 2022 yesterday. The company appointed Fadzri Sentosa, a former director of Indosat, as the President Commissioner of YELO. Its big mission, Passpod is to build a digital ecosystem based on connectivity.

This is also done to welcome the Metaverse which will soon be enjoyed by many people. “In the world of Metaverse technology in developed countries, internet infrastructure is no longer a problem. Meanwhile, in developing countries such as Indonesia, especially in tier-2 and tier-3 cities, it is still an unresolved issue because Indonesia is an archipelagic country,” Wewy added.

Business disrupted due to pandemic

Previously, Passpod was known as a "Wifi On-demand" service provider, to help consumers get connectivity for use at home and abroad. His business has also grown by adding attraction/event ticket options and insurance on its website. Focus on circles traveler, Passpod services are quite affected due to the pandemic which has reduced tourist mobility – especially overseas – to be reduced.

In 2019, Passpod still recorded a profit (before income tax) of 1,8 billion Rupiah. However, in 2020 they lost (loss before income tax) up to 43 billion Rupiah to support business operations. Meanwhile, as per the Q3 2021 report, the company reported a decrease in losses of 19,6 billion Rupiah.

Business diversification

The entry of Passpod as a Digital ISP will certainly be a diversification for their business, as well as an effort to increase profits in the midst of a tourism climate that is still not conducive. However, to play in this business, they will be faced with various existing players. The same is true when you decide to focus on tier-2 and 3 cities, because in many cities in the area a number of ISPs have also been selling their services.

The market potential is very large. According to data from the International Telecommunication Union, home internet service subscribers (fixed broadband) in Indonesia until 2019 has exceeded 10 million. The potential is still growing, along with the need for affordable connectivity at home -- especially in supporting WFH and SFH.

However, apart from connectivity, the trend of internet service providers also provides added value, for example in the form of cable TV or SVOD services. Of course, this is a PR for Passpod and Viberlink as Digital ISP providers, which is to develop a strategy so that the services provided can be relevant to the needs of today's society.