The Effect of Capital Expenditure and Market Share on Profits per Region in an Indonesian Mobile Telecommunications Company

This research aims to examine the effect of capital expenditure (CAPEX) and market share on profits per region in an Indonesian mobile telecommunications company. This research uses all regions (10) during the period 2009-2016 (8 years), resulting in 80 observations. The research uses a panel data regression model and shows that CAPEX and market share have a positive influence on profit. The company in the mobile telecommunications industry should consider the demand from the aspects of customer needs and the need to regularly update technology; therefore, the company should be more selective in making investments. The selection of the performance periods used plays a role in determining whether or not CAPEX has any effect on profit, as evidenced in the model using the t-1 and t-3 periods. CAPEX does not have an influence on profit in the t-1 period, whereas CAPEX does have a positive influence on profit in the t-3 period. Market share has a positive influence on profit. With a large market share, the company has strengths including economies of scale, market power, and quality management.