Source: Kompas.id | July 19, 2025

Telecommunications operators in Indonesia face various business challenges. The discourse on limiting internet-based communication (voice over internet protocol/VoIP) is considered not a solution to increase revenue from telecommunications operator user spending.

Nafan Aji Gusta, Senior Investment Information Officer at Mirae Asset Sekuritas Indonesia, told Kompas on Saturday (July 19, 2025) that telecommunications operators that dominate the market, such as PT Telkom Indonesia (Persero) Tbk, PT Indosat Tbk, and PT XLSmart Telecom Sejahtera Tbk, are currently working to restore their fundamental performance.

This effort is being undertaken because telecommunications operators have been promoting tariff discounts to increase revenue from user spending for at least the past ten years. “Their fundamental performance has been under pressure to increase market penetration. As a result, their profit margins have been squeezed,” Nafan said.

However, since 2024, these companies have committed to ending the tariff war. They have been gradually increasing their data and mobile data rates to reduce competition. The next challenge faced is the slow growth in average revenue per user (ARPU) on a monthly basis.

In the first three months of 2025, the ARPU of PT Telkom Indonesia Tbk, through its subsidiary, PT Telekomunikasi Selular (Telkomsel), with 158.81 million subscribers, decreased 6 percent compared to the first quarter of 2024. PT Indosat Tbk, with its Indosat Ooredoo and Tri products, recorded a 5 percent annual increase in ARPU.

PT XLSmart Telecom Sejahtera Tbk, which recently successfully merged XL, Axis, and Smartfren users, recorded a 9 percent year-on-year decline in ARPU.

A Mirae Asset Sekuritas report in June 2025 predicted that ARPU recovery would remain on track in the second half of 2025. This was supported by a gradual recovery in consumer demand and greater interest in high-value telecommunications packages.

Risks that could hamper ARPU growth for each telecommunications operator include weaker-than-expected purchasing power, increasingly fierce competition in fixed broadband and cellular services, and pressure from illegal internet providers that could disrupt market pricing.

Ciptadana Sekuritas Asia research at the end of June also predicted that ARPU growth for the three telecommunications operators until the end of 2025 would be relatively moderate, with the potential for a slight increase in the second half due to seasonal factors and weak purchasing power. Citing its report, Ciptadana Sekuritas predicts that the monthly ARPU of PT Telkom Indonesia (Persero) Tbk products will be at Rp 43,000, PT Indosat Tbk at Rp 34,000, and PT XLSmart Telecom Sejahtera Tbk at Rp 40,000.