1H26 Results Affirm Earnings Resilience and Accelerating Shareholder Returns
TLKM delivered a resilient set of 1H26 results, with revenue rising 3.9% YoY to IDR 75.9 trillion,
supported by strong digital traction at Telkomsel as mobile ARPU increased to IDR 45.6k (+9.1% YoY),
which more than offset continued pressure in legacy and fixed broadband businesses. EBITDA grew
3.8% YoY to IDR 37.5 trillion, maintaining a stable margin of 49.4%, while normalised net profit
outperformed at approximately 6% YoY to IDR 11.3 trillion (14.9% margin), reflecting improved
operational efficiency and stronger 2Q26 momentum (+44.5% QoQ). On the capital allocation front,
TLKM continued to demonstrate disciplined investment despite ongoing expansion in AI and digital
infrastructure, signalling a more selective and efficiency-driven deployment strategy. Shareholder
returns remained a key highlight, with FY25 dividends of IDR 22.0 trillion (123.5% payout ratio, 9%
yield) alongside a new IDR 4 trillion share buyback programme, underscoring the Group’s continued
shift towards a leaner, digitally focused operating model and a stronger emphasis on sustainable
shareholder returns.
InfraNexia Phase-2 Advances, Sharpening the Under-Reflected Fiber Value Case
InfraNexia Phase 2, the continuation of Telkom Indonesia’s fiber wholesale asset spin-off valued at
an estimated IDR 49.8 trillion, is progressing towards completion and is expected to lift effective
ownership of the group’s fiber network base to 94%. This builds on Phase 1, which delivered IDR 7.7
trillion in revenue and a strong EBITDA margin of 49.4% in 1H26. The expansion reinforces the
scalability of Telkom’s open-access model, which targets a 25–30% contribution from OLOs, ISPs,
hyperscalers, and the broader data center ecosystem. Consequently, we view Phase 2 as a key
catalyst for a valuation re-rating from traditional telecom multiples toward higher infrastructure
based multiples. In parallel, Telkom’s B2B transformation continues to gain momentum across its
three core pillars: NeutraDC, InfraNexia, and Mitratel. NeutraDC recorded 49.9 MW of effective
capacity in 1H26, supported by expansions of 21.5 MW in Cikarang and 18 MW in Batam, alongside
a 2027 pipeline for Cikarang Phase 2. Furthermore, its regional footprint across Singapore, Hong
Kong, and Timor-Leste maintains utilization rates above 90% of billed capacity. This underpins robust
monetization, as reflected in 2Q26 revenue growth of 11.0% YoY and 17.0% QoQ, significantly
outpacing Telkomsel and highlighting infrastructure assets as an increasingly dominant growth
engine.
Outlook: Next Growth Engine Emerging
TLKM continues to prioritise network connectivity as its core foundation, with 1H26 capex of IDR 10.8
trillion or 14.2% of revenue, predominantly allocated to B2C and foundational B2B infrastructure,
underscoring a disciplined investment strategy that strengthens long-term service quality while
selectively building high-growth digital assets. While B2B infrastructure is still in early stages of
contribution, data centres stand out as the key growth driver, with NeutraDC supported by high
utilisation and long-term contracts, positioning it to benefit from accelerating demand in AI, cloud,
and edge computing. On the consumer side, Telkomsel’s recovery remains solid, supported by FMC
convergence and stable data growth, reinforcing earnings resilience and cash flow visibility. Looking
ahead, FY26 guidance reflects measured growth, with EBITDA margin above 50% and continued capex
support for digital infrastructure expansion, including InfraNexia Phase 2 and a roadmap toward 1GW
data centre capacity. Supported by the SCALE transformation and strategic partnerships in AI and
cloud ecosystems, TLKM is gradually transitioning into a higher-value digital infrastructure player,
with clear long-term re-rating potential driven by structural demand in AI-led connectivity and data
centre expansion.
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