---
endpoint: analytics
pattern: Telecoms
status: done
latency_ms: 125948
conversation_id: e7cd3dca-cf08-4554-babf-1963a2a6af7b
citations: 0
created: 2026-05-31 18:42:42Z
---

# What are the key risks to Telkom’s growth trajectory?

# Key Risks to Telkom Indonesia's (TLKM) Growth Trajectory

Based on CLSA's internal research coverage of Telkom Indonesia (TLKM IJ) spanning March 2024 through April 2025, the key risks to the growth trajectory cluster around five interrelated themes. CLSA's own "Investment risks" framing explicitly names the top two, and quarterly notes layer additional operational concerns on top.

## 1. Mobile Competition — The Dominant Risk

CLSA flags **competition as the single biggest risk** to Telkom across every note in the corpus, with the framing carried verbatim from the March 2024 downgrade through the April 2025 update: *"Competition and a transition from legacy businesses are the biggest risks for Telkom"* [1][2].

Specific competitive pressure points:

- **Ex-Java market intensity**: Competition outside Java remains tight because most subscribers there use daily/weekly data packs, and **Telkomsel's ex-Java data price sits at a premium to other operators**, leaving it "vulnerable for revenue share loss" [5]. Telkom does not intend to bring ex-Java pricing down, choosing instead to wait for the sector to find a new equilibrium and then raise prices in unison [5].
- **No data price hike materialising**: A typical 10% pre-Lebaran data price hike across operators did NOT recur in FY24 — CLSA flagged that *"a data price hike is crucial for sector growth and no price hike may derail the sector growth trajectory"* [4].
- **4Q23 was the inflection point** for CLSA's caution — Telkom missed peers on growth, prompting CLSA to downgrade from BUY to O-PF and cut its TP from Rp5,000 to Rp4,100, citing *"rising competition that might result in lower sectorial growth"* [3].

## 2. Mobile Revenue & ARPU Decline — Already Materialising

The competition risk has translated into hard numbers. Per CLSA's 4Q24 review (April 2025), Telkomsel's quarterly ARPU and mobile revenue YoY growth trajectory:

| Quarter | ARPU (Rp '000) | Mobile Revenue Growth YoY |
|---|---|---|
| 1Q23 | 46.6 | +0.7% |
| 4Q23 | 46.7 | −2.2% |
| 1Q24 | 45.5 | +2.3% |
| 2Q24 | 45.2 | −2.3% |
| 3Q24 | 43.1 | −5.4% |
| 4Q24 | 44.1 | −5.4% |

Source: CLSA / Telkom [7]

CLSA also explicitly acknowledged Telkom *"has struggled to grow in recent years as it lost market share in the mobile segment and the sector did not raise prices in unison in 1H24"* [9]. Mobile revenue YoY turned negative through 2024 and the ARPU level has stepped down from the high Rp 46s to the low Rp 44s.

## 3. Transition from Legacy Businesses — Execution Risk

The second leg of CLSA's standing risk statement: *"The financial performance of its non-cellular business is unpredictable, given a lack of clarity in released data"* [1][2]. Legacy revenue at Telkomsel collapsed -55% YoY in FY23 (from Rp 16.1tn to Rp 7.3tn) and the drag from legacy declines is being offset only partially by data — meaning the mix shift itself is a growth headwind unless data price discipline returns [6].

## 4. FMC (Fixed-Mobile Convergence) Synergy Delays

Telkom's integration of IndiHome into Telkomsel — the strategic anchor for re-acceleration — is **taking longer than initially planned** [6]. Specific risks per CLSA's July 2024 note:

- Unified billing for households using both IndiHome and Telkomsel only targeted for completion by 3Q24 [6].
- Stated synergy value of Rp 1–2tn is back-end loaded and contingent on cross-selling that has yet to ramp [6].
- Ebitda margin guidance of 50–52% (FY24, vs FY23 52%) leaves "small" scope for improvement due to price competition [6].
- *"Without a data price hike, the Ebitda margin for Telkom group will likely be flat YoY or decline slightly"* [6].

## 5. Government Interference (SOE Status)

As a state-owned enterprise, CLSA notes *"Potential for greater government interference could impact the firm more than its non-state-owned-enterprise competitors"* [1][2] — this risk is structural and asymmetric versus private-sector peers Indosat (ISAT) and XL (EXCL), particularly relevant for political/regulatory cycles in Indonesia.

## 6. Near-Term Operational Headwinds (Cost & Capex)

Beyond the secular risks, near-term frictions:

- **Cost pressure**: FY24 total operating costs grew 3.1% YoY (2.0% ex-early retirement program), with 4Q24 Ebitda declining 2% QoQ due to higher operating costs [10].
- **Early retirement scheme**: Telkom rolled out an early retirement program targeting opex reduction for 2H24 and 25CL, which dampens near-term Ebitda — *"growth in the near term will likely be challenging due to competition"* [8].
- **Conservative 2025 guidance**: Low single-digit revenue growth and the same 50–52% Ebitda margin range, signaling management itself does not see a sharp re-acceleration despite cost actions and lower capex intensity (17–19% vs 23% in 2024) [10].

## Risk-Adjusted Conclusion (per CLSA)

CLSA has progressively cut its TP from Rp 5,000 (pre-Mar 2024) → Rp 4,100 (Mar 2024) → Rp 3,500 → Rp 2,900 (Apr 2025), maintaining only an O-PF rating, with the de-rating driven primarily by competition-induced ARPU/revenue pressure and FMC synergy slippage [3][10]. The recovery thesis hinges on a sector-wide price hike that has yet to materialise [4].

---
**Sources**
[1] Telkom – O-PF (A new page) — CLSA (11 Jul 2024) — Investment risks section, 607933620LinqAlpha.PDF
[2] Telkom – O-PF (Returning cash) — CLSA (21 Apr 2025) — Investment risks section, 607956442LinqAlpha.PDF
[3] Telkom – O-PF (Patchy execution) — CLSA (26 Mar 2024) — 4Q23 results / downgrade rationale, 607925206LinqAlpha.PDF
[4] Telkom – O-PF (Patchy execution) — CLSA (26 Mar 2024) — Signs of rising competition, 607925206LinqAlpha.PDF
[5] Telkom – O-PF (A new page) — CLSA (11 Jul 2024) — Ex-Java competition / data price commentary, 607933620LinqAlpha.PDF
[6] Telkom – O-PF (A new page) — CLSA (11 Jul 2024) — FMC synergy delayed, 607933620LinqAlpha.PDF
[7] Telkom – O-PF (Returning cash) — CLSA (21 Apr 2025) — ARPU & mobile revenue growth table, 607956442LinqAlpha.PDF
[8] Telkom – O-PF (A new page) — CLSA (11 Jul 2024) — Other key takeaways / near-term growth challenges, 607933620LinqAlpha.PDF
[9] Telkom – O-PF (Returning cash) — CLSA (21 Apr 2025) — Investment thesis, 607956442LinqAlpha.PDF
[10] Telkom – O-PF (Returning cash) — CLSA (21 Apr 2025) — Returning cash / 2025 guidance, 607956442LinqAlpha.PDF

*Note: CLSA's coverage corpus on TLKM in this workspace runs through 21 April 2025 — the "latest CLSA view" referenced is as of that vintage. Public-data cross-checks (transcripts, filings, news) were not blocked, but the internal CLSA archive provided complete coverage of the risk framework for this question.*

