XA Update Report | PT Telekomunikasi Indonesia Tbk. (TLKM) – 1H26 | 2Q26: ARPU Recovery Gains Momentum, Supporting Revenue Recovery

 

 

By Leonardo Lijuwardi

12-August-2026

 

TLKM delivered a solid 2Q26 performance, with revenue growing +6.4% YoY and +4.0% QoQ to IDR 38.69T, while net profit increased +27.5% YoY and +44.5% QoQ to IDR 6.28T, supported by improving mobile monetization at Telkomsel. On a 1H basis, TLKM recorded revenue growth of +3.9% YoY to IDR 75.88T in 1H26, while net profit increased +1.4% YoY to IDR 10.62T. Telkomsel’s stronger ARPU recovery remained the key catalyst, supporting growth in Data, Internet & IT Services and driving a recovery in mobile revenue. Meanwhile, IndiHome and legacy businesses remained under pressure amid intensifying fixed broadband (FBB) competition and the ongoing shift in traffic toward OTT platforms. Improving cost discipline also strengthened operating leverage and margin recovery, indicating that Telkomsel’s market repair is beginning to translate more meaningfully into revenue and earnings. With ARPU recovery gaining further traction and growth quality improving, we view 2Q26 as an early indication of a more sustainable earnings recovery cycle for TLKM. Reflecting this recovery, we raise our FY26F revenue and net profit estimates by 1.13% and 1.17%, respectively, while maintaining our “Buy” recommendation with a target price of IDR 3,700/share.

 

 

🔹Business Segmentation: Continued Mobile ARPU Recovery Drives Stronger Data, Internet & IT Services, While IndiHome Contracts and SMS, Fixed & Cellular Voice Remain Under Pressure

 

• Continued ARPU recovery drives stronger Data, Internet & IT Services. ARPU recovery continued to strengthen in 2Q26, supporting the recovery in mobile revenue. Mobile ARPU increased to IDR 46.0k in 2Q26 (+2.0% QoQ; +9.0% YoY), extending the recovery trend from IDR 41.3k in 2Q25 and IDR 45.1k in 1Q26. Data yield also increased +10.4% YoY to IDR 3.11/MB, while data payload remained relatively stable at 11,525 PB (+0.7% YoY). The combination of pricing discipline, improved customer productivity, and healthier customer spending behavior is beginning to translate into stronger monetization without compromising engagement. Data, Internet & IT Services revenue reached IDR 24.5T in 2Q26 (+16.0% YoY; +3.8% QoQ), making it the key contributor to consolidated revenue growth. On a 1H26 basis, the segment grew +11.2% YoY to IDR 48.2T, driven by growth in Telkomsel’s Digital Business, improved customer productivity, healthier monetization, and stronger value realization from its customer base.

 

 

• IndiHome remains under competitive pressure but is showing signs of stabilization. IndiHome revenue declined -3.4% YoY to IDR 12.8T in 1H26, primarily due to intensifying competition and strategic calibration toward a higher-quality customer base. However, segment revenue in 2Q26 increased +0.7% QoQ to IDR 6.4T, while FBB ARPU increased +3.4% QoQ to approximately IDR 211k. Convergence penetration also increased to 65% from 59% in 1Q26, indicating that customer mix optimization is beginning to yield results.

 

 

•Legacy services continue to experience structural declines amid the ongoing shift toward OTT platforms. Interconnection revenue declined -10.4% YoY to IDR 4.44T in 1H26, primarily due to lower voice hubbing revenue, in line with changing consumer behavior toward OTT platforms. Meanwhile, SMS, Fixed & Cellular Voice revenue declined -29.0% YoY to IDR 3.44T in 1H26, reflecting the declining relevance of traditional voice and SMS services. We view this trend as a structural headwind that will continue to constrain TLKM’s growth in its legacy segments.

 

 

🔹 Operational Performance: Quarterly Operating Expenses Remained Well Controlled with Discipline Both QoQ and YoY

 

• Opex discipline strengthened on a QoQ basis. Total operating expenses in 2Q26 stood at IDR 27.49T, down -2.7% QoQ and up only +0.9% YoY, indicating that revenue growth is beginning to translate into stronger operating leverage. O&M expenses declined -6.5% QoQ to IDR 10.4T, following the normalization of elevated revenue-linked ecosystem and connectivity costs recorded in 1Q26. On a 1H26 basis, operating expenses increased +3.8% YoY to IDR 55.75T, largely reflecting the high-base effect from 1Q26.

•Interconnection costs were optimized, while personnel expenses improved alongside workforce optimization. Personnel expenses declined to IDR 3.7T (-8.4% QoQ; -5.7% YoY) in 2Q26, supported by ongoing workforce optimization and disciplined personnel cost management. On a 1H26 basis, personnel expenses declined -4.4% YoY to IDR 7.7T. Another area of cost efficiency was interconnection expenses, which declined -9.7% YoY to IDR 3.79T in 1H26. On a quarterly basis, interconnection expenses increased +8.4% QoQ but declined -7.6% YoY, reaching IDR 1.97T in 2Q26
• D&A began normalizing following the accounting adjustment in 1Q26. D&A expenses declined -2.2% QoQ to IDR 8.5T in 2Q26, reflecting the moderation of incremental depreciation expenses following changes in the estimated useful life of network assets. This normalization also supported margin recovery in 2Q26, with Operating Profit Margin improving to 29.0%, from 24.0% in 1Q26 and 25.1% in 2Q25.

 

 

 

🔹FY26 Outlook: Stronger ARPU Recovery Supports Upward Revisions to Revenue and Earnings

 

•We raise our FY26F revenue and net profit estimates. Taking into account the stronger-than-expected ARPU recovery and the positive impact from the 1Q26 accounting recognition, which had already incorporated several adjustments and accounting effects, we revise our FY26F revenue estimate to IDR 150.2T (+1.13% from NHKSI Research’s previous forecast of IDR 148.6T) and FY26F net profit to IDR 22.1T (+1.17% from NHKSI Research’s previous forecast of IDR 21.9T). Based on our latest estimates, 1H26 has achieved 50.5% of our FY26F revenue estimate and 48.0% of our FY26F net profit estimate.

• Stronger ARPU Recovery Supports Revenue Improvement. The increasingly consistent recovery in Telkomsel’s ARPU is the key driver behind our earnings revisions. Mobile ARPU increased from IDR 41.3k in 2Q25 to IDR 46.0k in 2Q26, while data yield improved from IDR 2.82/MB to IDR 3.11/MB. We view this development as an indication that market repair and pricing discipline are driving a structural improvement in revenue quality, rather than merely a recovery in volume. Management has maintained its FY26 guidance for normalized revenue growth of 1–3%, EBITDA margin of >50%, and a capex-to-revenue ratio of 17–19%. As of 1H26, revenue growth reached 3.9%, EBITDA margin stood at 49.4%, while the capex-to-revenue ratio was only 14.2%, providing room for TLKM to maintain disciplined capital allocation while continuing to strengthen its digital connectivity and infrastructure assets.

🔹Maintain “Buy” Recommendation with Target Price of IDR 3,700/share (Upside +42.9%)

 

• NHKSI Research maintains its “Buy” recommendation on Telkom Indonesia (TLKM) with a target price of IDR 3,700/share, implying a FY26F forward EV/EBITDA of 5.3x, or +1 standard deviation above the historical average. We view the strengthening and recovery of ARPU as the key catalyst for revenue and earnings recovery, while disciplined Opex, lower capex intensity, and healthier cash flow provide additional support for margins and free cash flow. Beyond core earnings, continued value unlocking from fiber, tower, and data center assets remains a key strategic catalyst that could drive TLKM’s valuation rerating over the medium term.

 

 

• In the near term, we see continued ARPU recovery, stronger mobile monetization, improving operating leverage, and progress on value-unlocking initiatives as the key catalysts. Key risks remain intensifying competition in fixed broadband (FBB), structural declines in legacy voice/SMS services, potential price competition in the mobile segment, and weaker consumer purchasing power that could limit the sustainability of ARPU recovery. Nevertheless, with stronger mobile monetization, improving cost discipline, and potential value unlocking from TLKM’s assets, we see TLKM’s risk-reward becoming increasingly attractive heading into 2H26.

 

 

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NH Korindo Sekuritas Indonesia berizin dan diawasi Otoritas Jasa Keuangan (OJK). Untuk informasi lebih lanjut, anda dapat menghubuni CS kami via email CSO@nhsec.co.id