Telecom - ASEAN: Overall steady quarter; spectrum auctions bring capex guidance in focus

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Telecom - ASEAN: Overall steady quarter; spectrum auctions bring capex guidance in focus

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Telecom - ASEAN

Overall steady quarter; spectrum auctions

bring capex guidance in focus

Price Objective Change

ARPU momentum to continue, despite no festive uplift 24 July 2026

We expect 2Q26 to be a steady quarter for Indonesian telcos, with the broader pricing Equity

recovery story intact, though without a major sequential uplift. 1Q was supported by Eid- ASEAN

driven usage and industry-wide clean-up of low-value subscribers, while 2Q should see Telecommunications

some offset from higher data consumption during the FIFA World Cup. Overall, we Sukriti Bansal >>

expect ARPU momentum to continue, but with sequential growth moderating to flat-to- Research Analyst

LSD levels across operators. With most of the subscriber clean-up now largely behind Merrill+65 6678Lynch0454(Singapore)

the industry, we expect subscriber trends to be broadly flattish to modestly positive. sukriti.bansal@bofa.com

Overall, for 2Q, we expect ARPU to grow sequentially by c.2% for TSEL and c.1% for XL Jessie Lo >>

Research Analyst

Smart, while for ISAT we expect ARPUs to be flat QoQ. That said, with bulk of the subs Merrill Lynch (Singapore)

clean-up likely behind, we expect flattish to modest increase in subs in the qtr. Overall, jessie.lo@bofa.com

we forecast 2Q revenue/EBITDA growth of 11%/10% YoY for ISAT and 8%/18% YoY for

XL Smart (QoQ: -2%/-1%), and 2%/3% YoY for TLKM (4%/9% YoY for TSEL).

Exhibit 1: Indo Telcos stock recs.

5G auctions complete – will look out for capex guidance We prefer TLKM and ISAT

The 5G spectrum auctions in the 700MHz and 2.6GHz bands have now been completed, Previous Current

PT Telkom (TLKMF/TLK)making capex guidance one of the key focus areas this quarter.