---
endpoint: analytics
pattern: Telecoms
status: done
latency_ms: 163820
conversation_id: 09c8acc3-e676-43d6-888d-41487da94866
citations: 9
created: 2026-05-31 19:31:49Z
---

# What catalysts could drive upside/downside for Telkom in the next 12–18 months?

# Telkom Indonesia (TLKM IJ / TLK US) — 12–18 Month Catalyst Map

Telkom enters its catalyst window with the industry restructuring into a 3-player oligopoly under Danantara's SOE governance overhaul. The setup is unusually rich in self-help catalysts (data-center monetization, InfraCo carve-out, capex step-down, higher payout) but balanced against structurally weak mobile ARPU and macro/purchasing-power headwinds. The next 12–18 months will reveal whether management's "Five Bold Moves" execution can translate into earnings inflection.

CLSA's archive includes dedicated coverage threads — *Indonesian market (First step for better SOE governance)* (2-Jun-2025), *Indonesia TMT (Weekly news and comments)* (10-Jun-2025 with TLKM as primary subject, plus weekly cadence 15/22-May, 19-Jun-2025), *Indonesian market (Awaiting animal spirit)* (20-May-2025), *Bits & pieces (Where the Wild Things AREN'T)* (23-May-2025), and *Price Action — DeMark warning* (6-May-2025). These flag TLKM as a key Indonesian large-cap covered against the SOE-reform and TMT-consolidation backdrop.

---

## Upside Catalysts (Next 12–18 Months)

### 1. Industry Consolidation → 3-Player Rational Market
The XL Axiata–Smartfren merger (now **XLSmart Telecom**, ~73 million subs) collapses the cellular industry from 4 to 3 players (Telkomsel, IOH, XLSmart) [7]. Management has explicitly stated that "**this merger could help reduce market aggression, shifting operators' focus towards profitability and driving more substantial industry growth**" [4]. This is the single largest structural tailwind — it should support ARPU recovery and lower customer-acquisition cost intensity.

- **Watch**: ARPU stabilization quarter-on-quarter, marketing/promo intensity from XLSmart post-integration, signs of price-floor coordination.
- **Trigger**: April-2025 XL-Smart consolidation closing followed by Telkomsel's 30th anniversary and FY24 dividend announcement is a packaged catalyst window [6].

### 2. Data Center Monetization (NeutraDC)
Telkom operates **35 data centers** across Indonesia/Singapore/HK/Timor Leste, with a hyperscale facility in **Cikarang** and a new hyperscale being constructed in **Batam** [5]. Management is in the **"final stage of strategic partner selection to unlock value"** in the DC business, targeting completion in 2025 [1]. A strategic partnership (potential minority stake sale or JV) would crystallize the sum-of-the-parts discount.

- **Comp**: DCI Indonesia (the listed pure-play) trades at premium DC multiples; a partial monetization at hyperscale-comparable multiples is the cleanest re-rating path.
- **Trigger**: Partnership announcement; first major contract on the 51 MW Cikarang hyperscale and 80 MW EDGNEX-class Batam facility.

### 3. InfraCo / TIF (Telkom Infrastruktur Indonesia) Carve-Out
TIF was established as Telkom's infrastructure-managed-service entity and **"started the initial phase of commercialization by securing license and first sales to one of major ASP in Indonesia"** in December 2024 [1]. This is an asset-light pivot — comparable to Singtel's NetLink Trust playbook — that could eventually be spun off / IPO'd.

- **Trigger**: Asset transfer scale-up, first large external customer (tower-co or fiber-co), tower/fiber rationalization with TBIG/TOWR.

### 4. Capex Intensity Reduction → FCF Inflection
Management guided FY25 capex/revenue at **17–19%** (vs 16.3% realized in 2024 with back-end loading) as the medium-term run-rate through 2028 [3]. This is materially lower than the historical ~25% intensity. Combined with billing-system integration completion, the FCF profile improves structurally.

### 5. Higher Dividend Payout
Management has explicitly indicated they will **"propose a higher dividend this year compared to last year"** with the historical range of 60–90% payout ratio remaining a reference [3]. With falling capex intensity, a step-up toward the upper-end of the band is plausible.

- **Watch**: AGMS dividend resolution; commentary on permanently raising the payout floor.

### 6. Fixed-Mobile Convergence (FMC) Acceleration
**Convergence ratio reached 57% by December 2024**, with one-billing system integration now complete [1]. Telkomsel's IndiHome integration delivered **revenue growth of +10.7% YoY in 2024 to IDR 113.3tn** and consumer fixed-broadband subscribers grew 2.5% QoQ to 9.6 million by year-end [2]. By December 2025, fixed broadband subs reached 10.3 million [7].

- **Trigger**: Sustained quarterly FBB net-adds at 200–300k pace; ARPU stabilization on bundled FMC packages.

### 7. SOE Governance Reform Under Danantara
The launch of Indonesia's sovereign wealth holding (**Danantara**) puts TLKM and other major SOEs (BMRI, BBRI, BBNI, SMGR) under a centralized capital-allocation discipline framework — a CLSA-flagged catalyst per their 2-Jun-2025 *Indonesian market (First step for better SOE governance)* note. The "Danantara" event appears explicitly in TLKM's own share-price-and-key-events timeline alongside the XL-Smart consolidation [6].

- **Trigger**: Specific Danantara guidance on TLKM dividend/payout, capex sign-off, or restructuring; potential capital recycling mandates.

### 8. 5G Rollout
Telkomsel has deployed **>4,900 5G base stations by December 2025** (up from ~1,000 at end-2024), with GSMA projecting 5G could add ~US$41bn to Indonesian GDP between 2024–2030 [7]. A timely 3.5 GHz mid-band auction would be the bigger catalyst.

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## Downside Risks (Next 12–18 Months)

### 1. Mobile ARPU Pressure
Telkomsel's ARPU was projected to **decline 6.6% from 2023 to 2024** on legacy-service erosion and weak consumer purchasing power [9]. Even with consolidation, ARPU stabilization is not yet evident in reported numbers. Analysts (Goldman, etc.) have explicitly probed management on the sustainability of any ARPU recovery [3].

### 2. Macro / Consumer Purchasing Power
Multiple Telkom disclosures flag "**weakening public purchasing power**" and macro pressure as headwinds [9]. Indonesia's industry growth is projected to **stagnate at ~1.4%** in 2024 [8]. CLSA's *Awaiting animal spirit* (20-May-2025) note suggests sentiment on the Indonesian large-cap complex remains cautious.

### 3. New Entrants and OTT Cannibalization
- **IconNet** (PLN subsidiary) has captured second place in fixed broadband market share, leveraging electricity-grid coverage outside Java [5].
- OTT (WhatsApp, Netflix, YouTube) continues to bypass operator infrastructure without proportional payment.
- **LEO satellite** (Starlink) is a structural challenge to terrestrial cellular, though could become a partner.

### 4. Legacy Revenue Decay
Mobile services — "**previously the main growth driver, are stagnating as legacy offerings such as SMS and telephony can no longer support the rising network investment needs**" [7]. The pivot toward digital infrastructure (DCs, fiber, towers, LEO) requires significant investment before payoff.

### 5. Spectrum & Regulatory
**Mid-band spectrum allocation (3.5 GHz) remains suboptimal** per OpenSignal, hindering 5G monetization [7]. Regulatory action on OTT cost-sharing is a slow process. Data protection regulations and customer-focused rules add operating constraints.

### 6. Execution Risk on the Pivot
Telkom is "shifting its focus to digital infrastructure businesses such as **data centers, fiber networks, towers, and low-orbit satellite services**" [7]. These ventures require strategic partnerships and significant capex commitments before yielding returns — execution slip in the DC partner-selection or TIF scale-up directly cancels the upside thesis.

### 7. New Management Onboarding
The 27-May-2025 AGMS confirmed material board changes — including new President Director **Dian Siswarini** (ex-XL Axiata CEO) and CFO **Arthur Angelo Syailendra**. Management transition introduces near-term strategy-execution uncertainty even as the new team's XL background could accelerate FMC and consolidation playbooks.

### 8. Technical / Sentiment
CLSA's 6-May-2025 *Price Action (DeMark warning)* note flagged TLKM alongside other Asian large-caps — worth monitoring for tactical setups, though structural catalysts dominate the 12–18 month view.

---

## Catalyst Calendar Summary

| Window | Catalyst | Direction |
|---|---|---|
| Mid-2025 | NeutraDC strategic-partner announcement | Upside |
| 2025 AGMS | Dividend payout step-up | Upside |
| 2H25–1H26 | Telkomsel ARPU recovery from XLSmart pricing discipline | Upside |
| Ongoing | Danantara-driven SOE capital allocation reforms | Upside (mixed) |
| Ongoing | TIF (InfraCo) commercialization & external customer wins | Upside |
| 12–18M | Capex intensity glide to 17–19% → FCF inflection | Upside |
| Ongoing | Mobile ARPU pressure from purchasing-power weakness | Downside |
| Ongoing | IconNet / Biznet FBB share gains | Downside |
| Quarterly | OTT/LEO disruption | Downside |
| Quarterly | New management execution | Two-sided |

---

## Bottom Line

The 12–18 month risk/reward skews positive **if** management delivers on three concrete near-term catalysts: (1) the NeutraDC strategic-partner deal, (2) a higher FY25 dividend payout, and (3) evidence of ARPU stabilization post-XLSmart consolidation. Conversely, sustained ARPU declines despite a 3-player market would invalidate the consolidation thesis and force the discussion back to legacy decay versus digital-infra runway.

---
**Sources**

[1] Q4 2024 Telkom Indonesia Earnings Call — convergence ratio, NeutraDC partnership, TIF/InfraCo
[2] Q4 2024 Telkom Indonesia Earnings Call — Telkomsel revenue +10.7% YoY, IndiHome subscribers
[3] Q4 2024 Telkom Indonesia Earnings Call — Capex 17–19% guidance, dividend commentary
[4] Telkom Indonesia 2024 6-K Annual Report — XL/Smartfren merger view, 5G expansion
[5] Telkom Indonesia 2024 6-K Annual Report — NeutraDC, 35 data centers, hyperscale build
[6] Telkom Indonesia Q4 2025 Earnings Slides — Key events timeline (Danantara, XL-Smart consolidation, FY24 dividend)
[7] Telkom Indonesia Annual Report 2025 — XLSmart 73M subs, 5G rollout, digital infra pivot
[8] Telkom Indonesia 2024 6-K Annual Report — Industry growth 1.4% stagnation, OTT challenges
[9] Telkom Indonesia 2024 6-K Annual Report — ARPU -6.6% decline, purchasing power weakness

Also referenced (CLSA archive, not chunk-cited): *Indonesian market (First step for better SOE governance)* — CLSA, 2-Jun-2025; *Indonesia TMT (Weekly news and comments)* series — CLSA, 10/15/22-May & 19-Jun-2025; *Indonesian market (Awaiting animal spirit)* — CLSA, 20-May-2025; *Bits & pieces (Where the Wild Things AREN'T)* — CLSA, 23-May-2025; *Price Action (DeMark warning)* — CLSA, 6-May-2025.

## Citations

- [1] **Q4 2024 Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk** · external
- [2] **Q4 2024 Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk** · external
- [3] **Q4 2024 Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk** · external
- [4] **2025 6-K Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk** · external
- [5] **2025 6-K Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk** · external
- [6] **PT Telkom Indonesia (Persero) Tbk Slide 1: Q4 2025 Earnings Call** · external
- [7] **AnnualReport2025-TLKM-att5.pdf** · external
- [8] **2025 6-K Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk** · external
- [9] **2025 6-K Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk** · external

