Indonesia Telecoms: 2Q26F results preview Quick Note

研报英文原文证据摘录

Indonesia Telecoms: 2Q26F results preview Quick Note

but

still down ~14.1% YTD, with the share continuing to drift toward ~21.5% and margin

holding steady at ~45.7%.

Heading into 2H26F, we believe the results of the spectrum auctions remain the key

catalyst for the sector. Post-auction, TLKM leads with 265MHz of spectrum, followed by

EXCL at 217MHz (excluding the 900MHz block due back to the government by the year-

end) and ISAT at 215MHz. Given its smaller subscriber base, EXCL may need to utilize

spectrum more aggressively to compete — a push for share that could complicate the

industry's path to pricing rationality, in our view. In addition, we expect starter pack

volumes to fall ~25-50% in 2H26F as the biometric registration requirement takes hold,

with ARPU repricing providing a partial offset to weaker subscriber additions.

We reiterate Buy on TLKM and ISAT as our preferred Indonesia telco names. TLKM offers

the most defensive earnings profile via its non-cellular growth engines, while ISAT leads

on earnings momentum, margin expansion, and capital allocation flexibility after the

IFT/NFT transaction, in our view.

Valuation and risks

TLKM – Our TP of IDR3,650 is based on DCF methodology, in which we assume a risk-

free rate of 6.0%, an equity risk premium of 5.1% and a terminal growth rate of 1.5%. At

our TP, the stock would trade at 5.8x FY26F EV/EBITDA (vs. 4.2x at the current price).

Risks are adverse macroeconomics, lower data traffic growth, irrational competition, lower

ARPUs, declining cellular revenue market share from outside Java and difficulties in

getting new sites for network expansion. We maintain our Buy rating.

ISAT – Our TP of IDR3,300 is based on DCF methodology, in which we assume a risk-