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 the three remaining mobile operators in Indonesia: Telkomsel, Indosat, and XLSmart. The sums offered to the government illustrate the differing strategies of the three operators.
Unlike previous frequency auctions which produced a single winner, the 700 MHz and 2.6 GHz auction “divided” the spectrum on offer among all the mobile operators. However, as each operator submitted different bids, the frequencies won also differed.
PT XLSmart Telecom Sejahtera Tbk. (EXCL) submitted the largest total bid for the two frequencies. For the 700 MHz frequency, XLSmart offered Rp 1.06 trillion, and Rp 231.6 billion for the 2.6 GHz frequency. This means the total offered by the company, the product of the merger between XL Axiata and Smartfren, was approximately Rp 1.3 trillion.
The total number of blocks XLSmart obtained from the two bids was 80 MHz, comprising 30 MHz in the 700 MHz frequency and 50 MHz in the 2.6 GHz frequency. This means XLSmart must spend Rp 16.25 billion per MHz to acquire the new frequencies.
PT Telekomunikasi Selular, a subsidiary of PT Telkom Indonesia (Persero) Tbk., was the operator with the second-largest bid, at more than Rp 1.18 trillion. Telkomsel offered Rp 545.84 billion for the 2.6 GHz frequency and Rp 642.5 billion for the 700 MHz frequency.
The total blocks secured by Telkomsel were 100 MHz, comprising 20 MHz in the 700 MHz frequency and 80 MHz in the 2.6 GHz frequency. Telkomsel therefore spent Rp 11.8 billion per MHz.
Company data shows Telkomsel had only operated 5,400 5G base transceiver stations (BTS) as of Q1 2026. This figure is only around half of the nearly 10,000 5G BTS operated by Indosat, and fewer than the more than 12,000 5G BTS operated by XLSmart over the same period.
PT Indosat Tbk, or Indosat Ooredoo Hutchison, was the most frugal operator, bidding Rp 507.48 billion for 20 MHz in the 700 MHz frequency and Rp 372 billion for 60 MHz in the 2.6 GHz frequency. Indosat’s total bid in the auction was Rp 879 billion.
This means Indosat successfully acquired an additional 80 MHz at a price of Rp 11 billion per MHz.
Building 5G
The strategies of the three operators in the 700 MHz and 2.6 GHz auction reflect the current map of frequency ownership. At present, Telkomsel is the dominant holder with 165 MHz of radio frequency band blocks. XLSmart holds 152 MHz but must return 15 MHz at the end of 2026 as a condition of its merger, reducing its holdings to 137 MHz. Indosat now controls 135 MHz.
These figures illustrate how desperate XLSmart is to obtain additional new frequencies in order to maintain its lead over Indosat and keep pace with Telkomsel. If it failed to become the dominant holder of the 700 MHz frequency, XLSmart would struggle to maintain its operational efficiency.
Telkomsel chose to play it safe in order to protect its dominance. Following the auction, the frequencies to be controlled by the red-and-white operator total 265 MHz, far ahead of XLSmart at 217 MHz (reduced by 15 MHz at the end of 2026) and Indosat at 215 MHz.
In recent years, Indosat has consistently emerged as the most “thrifty” operator. Indosat and Tri did win a frequency auction in October 2022, but that auction was largely a continuation of the frequency “reshuffle” following the merger between the two companies. Since the merger, Indosat has also consistently divested tower access and, more recently, its fibre optic backbone, to be managed by third parties.
For Telkomsel, the additional frequencies also bring new challenges. One of the conditions set by Komdigi for the winners of the 700 MHz and 2.6 GHz frequency auction is to accelerate the availability of 5G services to 51 percent of the national population. As the operator with the most frequencies and the widest service coverage of the three, Telkomsel will be forced to be more aggressive in deploying 5G BTS.