Indonesia’s telecommunications giant, PT Telkom Indonesia (Persero) Tbk (TLKM), has reported a challenging first half of 2025, with its net profit for the period registering a significant 7% year-on-year decline. The figures, released in their latest financial statement for 2Q25, landed well below market consensus expectations, signaling potential headwinds for the state-owned enterprise.
Understanding the Financial Headwinds
Net and Operating Profit Under Pressure
For the second quarter of 2025, Telkom Indonesia posted a net profit of IDR 5.1 trillion, marking a 10% year-on-year decrease and an 11% quarter-on-quarter drop. This performance brought the total net profit for the first half of 2025 to IDR 11 trillion, a 7% contraction from the same period last year. This crucial 1H25 figure represented only 46% of the full-year 2025 consensus estimates, underscoring the earnings miss.
Operational efficiency also faced hurdles. The company’s operating profit in 2Q25 declined to IDR 9.7 trillion, down 7% year-on-year and 4% quarter-on-quarter. Consequently, the operating profit for 1H25 stood at IDR 19.9 trillion, an 8% year-on-year decrease, also falling short of the 46% consensus forecast for 2025. This dual dip in both net and operating profit highlights a challenging period for the firm.
Mobile Segment Navigates Shifting Tides
A closer look at the mobile segment reveals strategic adjustments influencing key metrics. Telkom’s mobile subscriber base in 2Q25 decreased to 158.4 million, a marginal 0.9% year-on-year decline and 0.2% quarter-on-quarter dip. Concurrently, the average revenue per user (ARPU) for the mobile segment also saw a notable drop to IDR 41.2 thousand, down 8% year-on-year and 3% quarter-on-quarter.
Telkom management has addressed these declines, stating that the figures were “within expectations.” The company attributes this to a deliberate strategy focused on reducing “churn loops” and implementing a more disciplined approach to “renewal package” pricing. This indicates a potential shift from aggressive subscriber acquisition at all costs to a more focused strategy on subscriber quality and sustainable revenue generation, even if it means short-term subscriber and ARPU contraction.
What Lies Ahead for TLKM?
The 1H25 results paint a picture of a company navigating a competitive landscape while recalibrating its growth engines. While the decline in subscribers and ARPU might concern some investors, Telkom’s explanation suggests a strategic pivot towards long-term value creation rather than purely volume-driven growth. Investors will keenly watch how this disciplined approach translates into future financial performance and market positioning. The full financial report can be accessed here.