XA Update Report | PT Telekomunikasi Indonesia Tbk. (TLKM) – Operational Improvements Continue on the Road to Unlock Value Despite Accounting Headwinds
By Leonardo Lijuwardi (Senior Analyst) & Gwenda Deanita (Associate)
20-May-2026
TLKM recorded 4Q25 revenue of IDR 37.1T (+1.4% QoQ, -1.7% YoY) and closed FY25 at IDR 146.7T (-2.2% YoY), as weakness across most segments — voice, interconnection, and network services — was only partially offset by a recovery in data & internet. At the operational level, opex rose +10.1% YoY & +15.8% in 4Q25 to IDR 31.7T, driven by a surge in D&A (+41.9% QoQ, +26.7% YoY) on accelerated asset depreciation and higher personnel costs from the Early Retirement Program. This weighed heavily on operating profit, which contracted to IDR 5.5T (-41.0% QoQ, -39.2% YoY), with OPM compressing sharply to 14.7% (vs. 25.3% in 3Q25). Net profit declined to IDR 2T (-57.8% QoQ, -57.1% YoY), with NPM at 5.5% (vs. 13.1% in 3Q25). On a full-year basis, FY25 net profit stood at IDR 17.8T (-20.5% YoY), with NPM at 12.1% (vs. 14.9% in FY24). Looking ahead, management guides for normalized revenue growth of 1–3% in FY26, implying a gradual recovery from the -2.2% reported in FY25.
🔹 Business Segmentation: Better ARPU in 4Q25 for Telkomsel but Flat Performance for IndiHome
• Better 4Q25 Performance – Rising ARPU drives quarterly growth in data & internet. TLKM’s mobile (Telkomsel) ARPU rose to IDR 45k (+3.6% QoQ & +2.3% YoY) in 4Q25, with total customer remained relatively stable (-1% QoQ, -2.1% YoY), lifting data & internet segment revenue to IDR 25.2T (+13.1% QoQ, +11.6% YoY). The quarterly uplift was further supported by an accounting reclassification of Telkomsel’s product services. On a full-year basis, however, segment revenue remained broadly flat (-0.5% YoY), as intensifying competition and structural shifts in mobile usage behavior continued to weigh on Telkomsel’s digital business (-1.9% YoY).
• IndiHome Under Pressure as Competition and Behavioral Shifts Erode ARPU. IndiHome revenue declined to IDR 6.4T in 4Q25 (-1.4% QoQ, -3.0% YoY), with FY25 revenue broadly flat at IDR 26.2T (-0.5% YoY). The weakness tracks a deteriorating ARPU trajectory (-2.7% QoQ, -10.1% YoY), we view this trend as not only aligned with customers increasingly opting for lower-priced internet packages, but also reflecting intensifying competition within the FBB industry, as evidenced by competitive market dynamics, selective customer acquisition, and a structural shift in customer preference toward internet-only packages.
• Network & other Telco services faces quarterly distortion from one-off items. FY25 revenue was broadly flat at IDR 13.5T (+0.2% YoY), supported by solid performance in solution services, network, and payment solutions. The sharp 4Q25 decline to IDR 2.2T (-42.1% QoQ) is largely technical, driven by the deconsolidation of the e-health business (AdMedika) ahead of divestment and an accounting reclassification related to Telkomsel’s product solutions services.
🔹 Operational Performance : Expenses Surging Up Driven by D&A – Accounting Treatment & G&A Expenses
• Surging D&A expense due to changes in accounting treatment. D&A expense rose sharply in 4Q25 (+41.9% QoQ, +26.7% YoY), driven by accelerated depreciation following a reclassification of drop cable and select network assets, bringing FY25 D&A expenses rose +10.15% YoY to IDR 37.6T (FY24: IDR 34.2T). Useful economic lives were revised from 25 years to approximately 5–10 years, better reflecting industry-standard accounting practices. The change is also expected to produce a more representative asset valuation in the context of TLKM’s planned fiber asset spin-off into PT Telkom Infrastruktur Indonesia (Infranexia) which will be completed in 3Q26.
• Opex further pressured by personnel and G&A expenses. Beyond the D&A expense surge, opex rose to IDR 4.5T (+16.5% QoQ, +10.1% YoY), further pressured by higher personnel costs associated with an Early Retirement Program (ERP) covering 612 employees. G&A expenses came in at IDR 1.6T (-3.8% QoQ, +22.8% YoY), with the quarterly decline attributable to improved B2B subscription collections. On a full-year basis, FY25 G&A expenses grew by 6% YoY, primarily reflecting higher provision bookings at Telkomsel for Indihome B2C and postpaid mobile segment. Bring all together, 4Q25 operating profit dragged down to IDR 5.5T (-41% QoQ, -39.2% YoY) and brought the FY25 operating profit to IDR 34.6T (-16.4% YoY).
🔹 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, a modest recovery from the -2.2% in FY25. EBITDA margin is targeted above 50% (FY25: 49%), reflecting management’s confidence. Capex intensity is expected to be at around 17-19% of revenue, suggesting no material step-up in the network investment. Based on the latest guidance, we project TLKM’s FY26F revenue to grow by +1.2% YoY, supported by improving ARPU, particularly from Telkomsel, alongside a more disciplined monetization strategy. We also expect FY26 to mark the beginning of earnings normalization, driven by improving operational efficiency and a healthier cost structure. Consequently, we forecast FY26F net profit to recover to IDR 23.7T (+32.8% YoY).
🔹 Upgrade to “Buy” Recommendation with Target Price of IDR 3,700 (Upside +20.1%)
• NHKSI Research upgrades its recommendation on Telkom Indonesia (TLKM) from Hold to Buy 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, supported by relatively limited foreign selling pressure reflected in its recent price action, as well as 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
