XA Update Report | PT Telekomunikasi Indonesia Tbk. (TLKM) – 1Q26: Mobile Growth & ARPU Recovery Reinforce the Normalization Story Despite Non-Cash Earnings Headwinds
By Leonardo Lijuwardi (Senior Research Analyst) & Gwenda Deanita (Research Associate)
15-June-2026
TLKM delivered consolidated revenue of IDR 37.2T in 1Q26, growing a modest +1.5% YoY, broadly inline with management guidance, with growth anchored squarely in Telkomsel’s digital business, which expanded +8.8% YoY and drove Data, Internet & IT services line up +10.9% YoY to IDR 23.6T on the back of disciplined pricing execution and rising ARPU to IDR 45.1k (+6.4% YoY). other segments, however, still continue to cap top-line momentum. Net income reported at IDR 4.3T (-21.7% YoY), which decline largely due to non-cash story, driven by depreciation adjustment of IDR 498B and GOTO MTM loss of IDR 309B. Excluding them, normalized net profit for 1Q26 stood at IDR 5.1T (-3.7% YoY). EBITDA margins of 48.3%, slightly below management target. Overall, 1Q26 performance remains in line with management target. Beyond earnings, TLKM also maintained healthy cash flow driven by OCF recovery and continued capex discipline. We maintain our “Buy” recommendation on TLKM in IDR 3,700 / share.
🔹 Business Segmentation: Continued recovery in mobile ARPU, while IndiHome & SMS, Fixed and Cellular Voice still faces pressure
• ARPU recovery continued in 1Q26. TLKM’s ARPU rose to IDR 45.1k in 1Q26 (4Q25: IDR 45k, 1Q25: IDR 42.4k), leading the B2C revenue to increase by 2.3% to IDR 27T. Data, internet & IT service has driven the increase of this B2C revenue which grew by 13.9% YoY, supported by the industry mobile recovery, traffic rationalization and product simplification.
• Continuing pressure in IndiHome ARPU and Declining in SMS, Fixed & Cellular Voice. Revenue pressure in the fixed broadband segment persists, with IndiHome recorded 1Q26 declined to IDR 6.38T (-0.2% QoQ & -4.3% YoY). This decline was driven by the softer ARPU (-8.9% YoY, -0.1% QoQ), reflecting ongoing competitive pricing dynamics and continued optimization of entry-level packages. The SMS, fixed and cellular voice revenue also decreased to IDR 1.5T in YoY basis (+5.5% QoQ & -41.4% YoY) as accelerating OTT substitution and the broader migration toward data-driven communication render traditional messaging increasingly obsolete.
• Fiber and digital ecosystem starts to accelerate. B2B Infrastructure delivered steady 6.8% YoY growth to IDR 2.4T, anchored by accelerating MTEL-FTTT penetration that positions the segment as a durable recurring revenue driver amid Indonesia’s ongoing tower densification cycle. On the international front, voice hubbing normalization continued to weigh on the segment, nudging revenue down 1.2% YoY to IDR 2.8T despite resilient subsea cable growth, while the standout of the quarter was the Others/Ancillary segment, surging 34.5% YoY to IDR 1.9T on the back of e-payment and digital gaming momentum — offering an early but meaningful glimpse into the company’s digital ecosystem ambitions.
🔹 Operational Performance : Maintaining Stable Opex in QoQ Basis Amid YoY Increase
• Marketing expense declined as disciplined spending applied. The marketing expense recorded IDR 715bn in 1Q26 (-21.3% QoQ, -6.7% YoY), primarily due to higher promotion during holiday season in the previous quarter. Altogether, marketing expenses only accounted for 1.9% of TLKM’s total revenue, in line with historical average on 2-3%.
• Well controlled operating expenses. Opex rose by 4.4% YoY in 1Q26, with O&M expenses climbing to IDR 11.1T (+15.5% YoY), driven by higher network operating activities, though the QoQ increase was contained at 1.3%, reflecting management control and cost optimization. On the other side, personnel expense declined to IDR 4T (-9.6% QoQ, -3.1% YoY) on the back of a reduced headcount of 18,539 FTEs (1Q25: 19,712), with a sharper 9.6% QoQ drop attributable to the IDR 937B Early Retirement Program cost booked in 4Q25.
• Surging D&A expense due to accounting adjustment. Depreciation adjustment on the estimated useful lives of several fixed asset of IDR 498B has led D&A expenses to IDR 8.7T (+3.8% YoY) in 1Q26. TLKM also recorded other expense, amounted to IDR 343B, of which IDR 309B was unrealized GOTO investment market-to-market loss and partially cushioned by forex gain.
🔹 Management’s Guidance for FY26 & Our Forecast View
• Aiming for a better EBITDA margin & normalized performance. Management guides for normalized revenue growth of 1–3% in FY26 with EBITDA margin targeted above 50% (vs. 48.3% in 1Q26) and capex intensity held steady at 17–19% of revenue — signaling execution focus over incremental network spend. In line with this, we project FY26F revenue growth of +1.2% YoY, underpinned by continued ARPU improvement at Telkomsel and a more disciplined monetization approach. We view FY26 as the beginning of a meaningful earnings normalization cycle, as operational efficiency gains and a healthier cost structure feed through to the bottom line — forecasting FY26F net profit recovery to IDR 23.7T (+32.8% YoY).
🔹 Maintain “Buy” Recommendation with Target Price of IDR 3,700 (Upside +29.4%)
• NHKSI Research maintains its “Buy” recommendation on Telkom Indonesia (TLKM) with a target price of IDR 3,700/share, implying a valuation of 5.4x F-EV/EBITDA (+1 standard deviation above its 3-year historical average). We view TLKM’s current valuation as attractive also its defensive characteristics which position the stock as a portfolio hedge amid heightened volatility in the Indonesian equity market. Beyond its resilient and stable business profile, TLKM’s strategic initiatives including operational streamlining, value unlocking from fiber assets through Infranexia, and expansion of its data center business could provide positive medium-term catalysts as the company transitions into a more mature business phase.
• In the near term, we see several positive catalysts that could justify a rerating for TLKM, including the successful execution of operational efficiency initiatives, alongside potential improvements in ARPU and yield in line with a recovering industry environment. On the other hand, key downside risks include weaker consumer purchasing power which may dampen demand for data services, intensifying competition among telecom operators particularly on pricing, as well as potential delays in TLKM’s business transformation process.
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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
