Ministry of Communications and Digital Opens 700 MHz Spectrum Auction as Analysts Recommend Telkom Shares
The Ministry of Communications and Digital (Komdigi) has opened the bidding process for the 700 MHz and 2.6 GHz radio frequency bands for mobile network services in 2026. The auction winners are expected to be announced by late July 2026.
Bob Setiadi, an analyst at CGS International Sekuritas Indonesia, stated that PT Telkom Indonesia Tbk (TLKM) is reviewing the bidding requirements and aims to secure as much spectrum as possible. Management noted that only two other telecommunications operators have submitted bids for both frequency bands.
They also noted that payment terms have become more favourable, with the government now requiring twice the annual spectrum fee in the first year compared to the previous threefold requirement.
‘Finally, they stated that 5G rollout will be cautious, based on market readiness and 5G headset penetration,’ Bob said in his research on 12 May 2026.
However, challenges to consider include an unfavourable macroeconomic environment, purchasing power, intensifying competition in the telecom sector, and asset unlocking execution developments, which need monitoring for TLKM’s future performance.
‘Revenue and net profit in 2026 are likely to rise, driven by improved ARPU in mobile business and growth in other lines,’ Gani told Kontan on Tuesday, 26 May 2026.
Looking ahead, management forecasts normalized revenue growth of 1% to 3% in 2026, indicating a gradual recovery from a 2.2% decline in 2025.
‘We expect 2026 to mark the start of revenue normalisation, driven by improved operational efficiency and healthier cost structures,’ said Leonardo Lijuwardi, an analyst at NH Korindo Sekuritas Indonesia, in his research on 20 May 2026.
Leonardo added that TLKM’s valuation is attractive, supported by relatively limited foreign selling pressure reflected in recent share price movements, and its defensive characteristics position it as a portfolio hedge amid high volatility in Indonesia’s equity market.
In the short term, Leonardo said positive catalysts for TLKM include successful implementation of operational efficiency initiatives, alongside potential ARPU growth and results in line with a recovering industry environment.
‘Key downside risks include weaker consumer purchasing power reducing data service demand, intensifying competition among telecom operators, particularly in pricing, and potential delays in TLKM’s business transformation process,’ Leonardo said.
Meanwhile, John Te, an analyst at UBS Sekuritas Indonesia, noted that phase two of the fibre optic asset separation has been delayed by a quarter due to licensing issues and is expected to be completed in Q3 2026. Telkom is also exploring consolidating fibre optic assets owned by other state-owned enterprises into its Infranexia offering.
‘Despite a profit decline, Telkom plans to match or exceed the absolute dividend amount for 2025 profits,’ John said in his research on 12 May 2026.
Leonardo projected TLKM’s 2026 revenue and net profit to reach Rp 151.04 trillion and Rp 23.78 trillion respectively, compared to Rp 146.7 trillion revenue and Rp 17.8 trillion net profit in 2025.
Leonardo, John, and Gani issued buy recommendations for TLKM with price targets of Rp 3,700, Rp 3,600, and Rp 4,200 per share respectively.
Bob recommended adding TLKM shares with a target price of Rp 4,100 per share.