Telkom Indonesia (TLKM), the nation’s telecommunications powerhouse, has once again captured investor attention by reporting strong financial performance for the second quarter and first half of 2026. The company’s latest earnings call on Monday (August 3rd) revealed a strategic pivot delivering impressive growth and profitability, significantly outpacing market consensus and laying a solid foundation for future expansion. This article delves into the key highlights shaping TLKM’s trajectory.

Normalized Net Profit Soars, Outshining Projections

TLKM’s financial engine roared in 2Q26, with an unadjusted net profit hitting approximately Rp6.3 trillion, marking a substantial 28% year-on-year (YoY) and 45% quarter-on-quarter (QoQ) surge. This achievement represents the company’s highest quarterly net profit since 3Q23, propelling the 1H26 total net profit to Rp10.6 trillion, a 1% YoY increase.

Even more compelling is the normalized net profit, a truer reflection of operational performance, which reached Rp6.2 trillion in 2Q26 (+16% YoY, +21% QoQ). For the first half of 2026, normalized net profit climbed to an impressive Rp11.3 trillion, an uptick of 6% YoY. This figure unequivocally surpassed market expectations, accounting for 55% of the 2026F consensus estimate, a significant improvement over the three-year average of 50%.

This normalized metric expertly strips away the noise of one-off events, excluding impacts from accelerated depreciation, taxes on asset transfers, unrealized investment losses, and a one-off post-tax gain of approximately Rp429 million from the divestment of healthcare businesses (AdMedika and Telkomedika). Operationally, the company demonstrated robust health, with 1H26 EBITDA growing 4% YoY to around Rp37.4 trillion, maintaining a healthy EBITDA margin of 49.4%. This operational strength was primarily fueled by a sustained increase in Average Revenue Per User (ARPU) to Rp46,000 and a steadfast customer base of 153.5 million in 2Q26.

Mobile Segment: ARPU Ascends, Subscriber Base Stabilizes

The mobile division, spearheaded by Telkomsel, continues its impressive ascent. 1H26 mobile segment revenue rose to approximately Rp42.8 trillion, a solid 5.6% YoY expansion. This growth is predominantly driven by Telkomsel’s relentless focus on value, with ARPU reaching Rp46,000 in 2Q26, a remarkable 11.7% YoY and 2% QoQ increase. Significantly, the exit ARPU for June 2026 soared past Rp47,000, signaling sustained momentum.

Concurrently, the subscriber base is showing signs of stability, holding firm at 153.5 million in 2Q26 (-3.1% YoY, -0.1% QoQ). Looking ahead, TLKM is sharpening its focus on cultivating a high-quality, low-churn customer base, a strategic move akin to a gardener nurturing premium crops for sustainable yield rather than merely expanding acreage.

IndiHome’s Strategic Recalibration and Portfolio Pruning

While the mobile segment thrives, the fixed broadband division, IndiHome, experienced a revenue dip to around Rp12.8 trillion in 1H26 (-3.8% YoY). This was accompanied by a decline in ARPU to Rp211,000 (-2.7% YoY, +3.4% QoQ) and a contraction in its customer base to 9.5 million (-5.4% YoY, -7.9% QoQ). However, management clarified during the earnings call that this subscriber reduction is a deliberate part of a strategic recalibration. The company is systematically culling subscribers who have not contributed revenue for over 12 months and are deemed unlikely to reactivate, effectively pruning the customer tree to foster healthier growth.

Streamlining Operations and Unlocking Infrastructure Value

Telkom Indonesia is not just reporting numbers; it’s actively reshaping its corporate landscape through aggressive streamlining and asset value unlocking initiatives. By the end of 2Q26, the company had executed two divestments, two mergers, and eight business closures. Notably, the divestment of its two healthcare ventures (AdMedika and Telkomedika) generated an after-tax profit of approximately Rp429 million, illustrating the tangible benefits of this strategic refinement. The roadmap for the remainder of 2026 includes the targeted completion of six additional divestments, two mergers, and four business closures, signaling a robust and ongoing portfolio optimization.

Driving Value in Fiber and Data Centers

On the infrastructure front, TLKM is actively pursuing significant milestones. For its fiber business, the company aims to finalize Phase 2 of the Infranexia asset transfer in 2H26, a move complemented by efforts to onboard a strategic partner. Management anticipates a crucial announcement by the end of 3Q26, with implementation slated to commence in 4Q26. Similarly, the data center business is a hotbed of activity, with TLKM diligently seeking a strategic partner to complete its value unlocking process by the close of 2026. These initiatives are not merely transactions; they are strategic maneuvers designed to maximize shareholder value and enhance operational efficiency.

Despite the strong 1H26 revenue growth of +4% YoY, which comfortably exceeds its original +1-3% YoY guidance, management remains circumspect about immediate changes to its 2026 guidance. The rationale is clear: upcoming divestments in 2H26 are expected to exert moderate pressure on future revenue growth. Furthermore, as divestment processes unfold, certain businesses slated for sale may see a temporary curtailment in new project development, thereby limiting their growth potential. This pragmatic approach underscores TLKM’s commitment to long-term value creation over short-term pronouncements.