Analysis The Bargaining Power Of Telecommunications Companies With Public Sector Customers Regarding Value-Capture Innovation: A Case Study Of Telkom Witel Yogya Jateng Selatan

Abstract

This study aims to analyze the bargaining power of telecommunications companies toward public sector customers and its implications for value capture innovation, with a case study at PT Telkom Indonesia (Persero) Tbk Witel Yogyakarta Jateng Selatan. The background of this research is based on the characteristics of the public sector, which is oriented toward formal regulations and price considerations, thereby limiting the company’s flexibility in creating and capturing value. This study employs a qualitative approach through observation, interviews, and documentation conducted during an internship in the Government Service Division. The analysis focuses on factors influencing bargaining power, such as state-owned enterprise status and institutional legitimacy, operational and infrastructure advantages, as well as government procurement regulations. The results indicate that the company’s bargaining power is relatively limited due to the dominance of price-based tender systems and administrative compliance, which constrains value capture innovation. Nevertheless, there are opportunities to enhance bargaining power through collaborative strategies, such as service co-creation, strengthening customer relationships, and developing solutions tailored to the specific needs of government institutions. These findings highlight the need for companies to move beyond formal tender approaches by leveraging non-formal interaction spaces, through understanding latent customer needs, building relational proximity, and delivering contextualized solutions to expand value capture amid the constraints of rigid procurement structures.