Telkomsel Spends Big, Indosat Stays Lean, XLSmart Goes All Out in Spectrum Auction

The Ministry of Communication and Digital has announced the results of the 700 MHz and 2.6 GHz frequency auction contested by Indonesia’s three remaining mobile operators: Telkomsel, Indosat, and XLSmart. The amounts offered to the government reflect the differing strategies of each company. Unlike previous auctions that produced a single winner, this auction divided the spectrum among all three operators, with each securing different amounts of frequency based on their bids. XLSmart Telecom Sejahtera Tbk. submitted the largest total bid, offering Rp 1.06 trillion for the 700 MHz band and Rp 231.6 billion for the 2.6 GHz band, totalling approximately Rp 1.3 trillion. The company, formed from the merger of XL Axiata and Smartfren, secured 80 MHz of spectrum, comprising 30 MHz in the 700 MHz band and 50 MHz in the 2.6 GHz band, at a cost of Rp 16.25 billion per MHz. Telkomsel, a subsidiary of state-owned PT Telkom Indonesia, was the second-highest bidder with a total offer of over Rp 1.18 trillion, consisting of Rp 545.84 billion for 2.6 GHz and Rp 642.5 billion for 700 MHz. The operator gained 100 MHz of spectrum, 20 MHz in the 700 MHz band and 80 MHz in the 2.6 GHz band, at a cost of Rp 11.8 billion per MHz. Company data indicates that Telkomsel had only deployed 5,400 5G base transceiver stations by the first quarter of 2026, significantly fewer than Indosat’s nearly 10,000 and XLSmart’s over 12,000. Indosat Ooredoo Hutchison took the most economical approach, bidding Rp 507.48 billion for 20 MHz in the 700 MHz band and Rp 372 billion for 60 MHz in the 2.6 GHz band, for a total of Rp 879 billion. This secured Indosat an additional 80 MHz of spectrum at a cost of Rp 11 billion per MHz. The auction strategies highlight the current spectrum holdings, with Telkomsel leading at 165 MHz, XLSmart at 152 MHz, and Indosat at 135 MHz. XLSmart’s aggressive bidding reflects a need to maintain its edge over Indosat and close the gap with Telkomsel, as failing to secure additional spectrum would have hampered its operational efficiency. Telkomsel opted for a safer approach to preserve its dominance, with its post-auction spectrum holding rising to 265 MHz, compared to XLSmart’s 217 MHz and Indosat’s 215 MHz. Indosat has consistently pursued a lean operational strategy, having previously divested tower assets and, more recently, its fibre optic network. For Telkomsel, the additional spectrum also brings new obligations, as the Ministry of Communication and Digital requires auction winners to accelerate 5G service coverage to 51 percent of the national population.