Half Year 2026 Telkom Indonesia (Persero) Tbk PT Earnings Call

August 3, 2026

Speaker #1: Please enter the meeting passcode followed by the pound sign. You have joined the meeting as an attendee and will be muted throughout the meeting.

Speaker #2: Good morning, and thank you for joining us today for Telkom Indonesia's Half Year 2026 Earnings Call. Before we start, let me remind you that today's call and the responses to questions may contain forward-looking statements within the meaning of Safe Harbor.

Bret Ginesky: Good morning, thank you for joining us today for Telkom Indonesia's H1 2026 earnings call. Before we start, let me remind you that today's call and the responses to questions may contain forward-looking statements within the meaning of Safe Harbor. Actual results could differ materially from projections or estimates and may involve risks and uncertainties that may cause actual results to be different from what we have discussed today. Following the presentation, we will have a Q&A session. The first few questions will be taken from written-in questions, then we will open the queue to verbal questions. I would note this is different from what we have done in the past. We will open it up to verbal questions afterwards. Just please raise your hand for that. First, I'd like to introduce our board members who are joining us today.

Bret Ginesky: Good morning, thank you for joining us today for Telkom Indonesia's H1 2026 Earnings Call. Before we start, let me remind you that today's call and the responses to questions may contain forward-looking statements within the meaning of Safe Harbor. Actual results could differ materially from projections or estimates and may involve risks and uncertainties that may cause actual results to be different from what we have discussed today.

Speaker #2: Actual results could differ materially from projections or estimates, and may involve risks and uncertainties that may cause actual results to be different from what we have discussed today.

Speaker #2: Following the presentation, we will have a Q&A session. The first question will be taken the first few questions will be taken from written-in questions, and then we will open the queue to verbal questions.

Bret Ginesky: Following the presentation, we will have a Q&A session. The first few questions will be taken from written-in questions, then we will open the queue to verbal questions. I would note this is different from what we have done in the past. We will open it up to verbal questions afterwards. Just please raise your hand for that. First, I'd like to introduce our board members who are joining us today.

Speaker #2: I would note this is different from what we have done in the past, so we will open it up to verbal questions afterwards. Just please raise your hand for that.

Speaker #2: First, I'd like to introduce our board members who are joining us today: Ibu Dian Sosorini, our President-Director and CEO, and Bapak Angelo Shalendra, our Director of Finance and Risk Management.

Bret Ginesky: Ibu Dian Siswarini, our President Director and CEO. Bapak Angelo Syailendra, our Director of Finance and Risk Management. Ibu Veranita Yosephine, our Director of Enterprise. Bapak Nanang Hendarno, our Director of Network. Bapak Seno Soemadji, our Director of Strategic Business Development and Portfolio. Bapak Faizal Rochmad Djoemadi, our Director of Digital IT. Bapak Willy Saelan, our Director of Human Capital. Bapak Andy Kelana, our Director of Legal and Compliance, who is joining us online. Bapak Budi Satria, our Director of Wholesale and International Service. Also joining us are the board of directors of our subsidiary, Telkomsel. Bapak Nugroho, Telkomsel's President Director. Bapak Daru Mulyawan, the Director of Finance and Risk Management. Bapak Stanislaus Susatyo, Director of Sales. Bapak Lionel Chng as Director of Marketing.

Speaker #2: Ibu Veronica Yosefin, our Director of Enterprise; Bapak Nanang Hendarno, our Director of Network; and Bapak Seno Somaji, our Director of Strategic Business Development and Portfolio.

Speaker #2: Bapak Faizal Rachmadi Jamadi, our Director of Digital IT; Bapak Willy Ceylon, our Director of Human Capital; and Bapak Andy Kalana, our Director of Legal and Compliance, is joining us online.

Speaker #2: And Bapak Budi Satria, our Director of Wholesale and International Service. Also joining us are the Board of Directors of our subsidiary, Telkomsel. Bapak Nugroho, Telkomsel's President Director.

Bret Ginesky: Bapak Budi Satria, our Director of Wholesale and International Service. Also joining us are the board of directors of our subsidiary, Telkomsel. Bapak Nugroho, Telkomsel's President Director. Bapak Daru Mulyawan, the Director of Finance and Risk Management. Bapak Stanislaus Susatyo, Director of Sales. Bapak Lionel Chng as Director of Marketing. Now, I would like to hand the call to our President, Director, and CEO, Ibu Dian Siswarini, to discuss our H1 2026 results and strategic initiatives.

Speaker #2: Bapak Daru Mulyawan, the Director of Finance and Risk Management; Bapak Stanislaw Susachio, Director of Sales; and Bapak Lionel Cheng, as Director of Marketing. Now, I would like to hand the call to our President Director and CEO, Ibu Dian Sosorini, to discuss our first half 2026 results and strategic initiatives.

Bret Ginesky: Now, I would like to hand the call to our President, Director, and CEO, Ibu Dian Siswarini, to discuss our H1 2026 results and strategic initiatives.

Speaker #3: Thank you, Brad. Good morning, everyone, and thank you for joining. Let me start the presentation with micro-situations. The current macro-situation continues to show headwinds.

Dian Siswarini: Thank you, Brad. Good morning, everyone, and thank you for joining. Let me start the presentation with macro situations. The current macro situation continues to show headwinds. Recently, we have seen the government working to implement good policy as Bank Indonesia raised rates by 100 basis points and issued new policies to attract foreign capital. We have seen the initiation of needed reforms in subsidy programs that ideally will lead to more efficient utilization of the state budget and support future economic expansion. While GDP is increased by 5.6% in Q1, we remain cautious. First, the base effect was off a weak Q1 2025, and second, we have seen further weakness in consumer confidence and retail sales data. We believe there is potential for the rupiah's recent performance to impact our CapEx and operating costs. Although to date, we are not yet seeing an impact.

Speaker #3: Recently, we have seen the government working to implement good policy, as Bank Indonesia raised rates by 100 basis points and issued new policies to attract foreign capital.

Speaker #3: Moreover, we have seen the initiation of needed reforms in subsidy programs that, ideally, will lead to more efficient utilization of the state budget and support future economic expansion.

Speaker #3: While GDP increased by 5.6% in the first quarter, we remain cautious. First, the base effect was off a weak first quarter 2025, and second, we have seen further weakness in consumer confidence and retail sales data.

Dian Siswarini: While GDP is increased by 5.6% in Q1, we remain cautious. First, the base effect was off a weak Q1 2025, and second, we have seen further weakness in consumer confidence and retail sales data. We believe there is potential for the rupiah's recent performance to impact our CapEx and operating costs. Although to date, we are not yet seeing an impact.

Speaker #3: Moreover, we believe there is potential for the rupiah's recent performance to impact our CAPEX and operating costs. Also, to date, we are not yet seeing an impact.

Speaker #3: Furthermore, inflation has picked up year on year, but for the most part, this is due to low base effect figures. We would be cautious in the coming months about imported inflation due to the war in the Middle East, and the risk of an impact from El Niño, as some segments are seeing project costs rise due to the geopolitical situation.

Dian Siswarini: Inflation has picked up year on year, but for the most part, it is due to low base effect figures. We would be cautious in the coming months of imported inflation due to the war in the Middle East and the risk of an impact from El Niño, as some segments are seeing project cost rising due to the geopolitical situation. Despite this current cautious period, we reported strong results in H1 2026 and continue to see opportunities for Market Repair to continue. Within our TLKM 30 vision, we are seeing solid progress in transforming the business to a leaner, more profitable business. Over the last 12 months, we have achieved many initiatives towards our four transformational pillars of operational and service excellence, streamlining of assets, unlocking value, and driving modus operandi shift.

Dian Siswarini: Inflation has picked up year-on-year, but for the most part, it is due to low base effect figures. We would be cautious in the coming months of imported inflation due to the war in the Middle East and the risk of an impact from El Niño, as some segments are seeing project cost rising due to the geopolitical situation.

Speaker #3: Despite this current cautious period, we reported strong results in the first half of 2026 and continue to see opportunities for market repair to continue.

Dian Siswarini: Despite this current cautious period, we reported strong results in H1 2026 and continue to see opportunities for Market Repair to continue. Within our TLKM 30 vision, we are seeing solid progress in transforming the business to a leaner, more profitable business. Over the last 12 months, we have achieved many initiatives towards our four transformational pillars of operational and service excellence, streamlining of assets, unlocking value, and driving modus operandi shift.

Speaker #3: Within our Telkom 30 vision, we are seeing solid progress in transforming the business into a leaner, more profitable company. Over the last 12 months, we have achieved many initiatives towards our four transformational pillars of operational and service excellence: streamlining assets, allocating value, and driving a shift in modus operandi.

Speaker #3: In the first half of 2026, we saw our operating cash flow increase by 7% year on year, as we continue to see strong cash generation from the business.

Dian Siswarini: In H1 2026, we saw our operating cash flow increase by 7% year on year as we continue to see strong cash generation from the business. Our free cash flow to the firm increased by 12.8% on a trailing 12-month period as we see improving operating cash flows and an annualized decrease in CapEx in H1 2026. Through ERP streamlining and natural attrition, our full-time employees or FTE have decreased by 9.7% year on year to 17,438 personnel. We anticipate this figure to continue to decline through H2 2026. At Telkomsel, not only has ARPU continued to increase to over IDR 46,000 in Q2 2026, the exit month ARPU for June was over IDR 47,000. Loan digital business data revenue increased by 14% year on year to IDR 17.1 trillion, all driving to nearly 40 at Telkomsel.

Dian Siswarini: In H1 2026, we saw our operating cash flow increase by 7% year-on-year as we continue to see strong cash generation from the business. Our free cash flow to the firm increased by 12.8% on a trailing 12-month period as we see improving operating cash flows and an annualized decrease in CapEx in H1 2026. Through ERP streamlining and natural attrition, our full-time employees or FTE have decreased by 9.7% year-on-year to 17,438 personnel.

Speaker #3: Moreover, our Free Cash Flow to the Firm increased by 12.8% on a trailing 12-month period, as we see improving operating cash flows and an annualized decrease in CAPEX in the first half of 2026.

Speaker #3: Through ERP, streamlining, and natural attrition, our full-time employees, or FTEs, have decreased by 9.7% year-on-year to 17,438 personnel, and we anticipate this figure will continue to decline through the second half of 2026.

Dian Siswarini: We anticipate this figure to continue to decline through H2 2026. At Telkomsel, not only has ARPU continued to increase to over IDR 46,000 in Q2 2026, the exit month ARPU for June was over IDR 47,000. Loan digital business data revenue increased by 14% year-on-year to IDR 17.1 trillion, all driving to nearly 40 at Telkomsel.

Speaker #3: Moreover, at Telkomsel, not only has our ARPU continued to increase to offer Rp 46,000 in the second quarter of 2026, the exit month ARPU for June was offered at Rp 47,000.

Speaker #3: As 10 loan digital business data revenue increased by 14% year-on-year, to 17.1 trillion rupiah, all driving margin to nearly 40% at Telkomsel.

Speaker #3: On streamlining, our initiatives continue to progress with 12 companies that we have either sold, closed down, or folded into existing businesses. Through these transactions, we also expect an impact of increased workforce efficiency.

Dian Siswarini: On streamlining, our initiatives continue to progress with 12 companies that we have been sold, closed down, or folded into existing businesses. Through these sections, we also expect an impact of increased workforce efficiency. We are focused on better management of our CapEx spending, as more than 94% of deployed CapEx was to core business segments, namely B2C and B2B Infra. Our progress on our third pillar, unlocking value, is evident as we anticipate phase two of the Infranexia asset transfer to be completed in H2 2026. We have noted that we will focus on industrial consolidation opportunities through year end 2026, followed by bringing in a strategic partner for the fiber business. We are progressing in identifying a strategic partner to enter our data center business while noting we recently signed an MoU to expand our data center footprint in Singapore.

Speaker #3: Moreover, we are focused on better management of our CAPEX spending, as more than 94% of deployed CAPEX was allocated to core business segments, namely B2C and B2B infrastructure.

Speaker #3: Our progress on our third pillar, unlocking value, is evident as we anticipate phase two of the InfraNext year asset transfer to be completed in the second half of 2026.

Dian Siswarini: Our progress on our third pillar, unlocking value, is evident as we anticipate phase two of the Infranexia asset transfer to be completed in H2 2026. We have noted that we will focus on industrial consolidation opportunities through year end 2026, followed by bringing in a strategic partner for the fiber business. We are progressing in identifying a strategic partner to enter our data center business while noting we recently signed an MoU to expand our data center footprint in Singapore.

Speaker #3: We have noted that we will focus on industrial consolidation opportunities through year-end 2026, followed by bringing in a strategic partner for the fiber business.

Speaker #3: In addition, we are progressing in identifying a strategic partner to enter our data center business, while noting that we recently signed an MOU to expand our data center footprint in Singapore.

Speaker #3: In the first half of this year, the modus operandi shift pillar progress is reflected in our reported financials. Our segment reporting has been reclassified to be clearer and to allow investors to value this business segment more appropriately.

Dian Siswarini: In H1 of this year, the modus operandi shift pillar progress is reflected in our reported financials. Our segment reporting has been reclassified to be clearer and allow investors to value these business segments more appropriately while enhancing the transparency into each segment performance. As we continue the transformation process, we expect value to be realized. Our end state structure with a lower headcount, efficient whole co and transparent op co setup is coming into focus. In achieving this, we will continue to streamline and move forward with our unlocking value initiatives. Now, I would like to shift the topic to provide an overview of our H1 2026 results, of which Angela will provide a more comprehensive discussion later in the call. Our consolidated revenues are the high end of our full year 2026 guidance, up 3.9% year on year to IDR 75.9 trillion.

Speaker #3: While enhancing the transparency into each segment's performance. As we continue the transformation process, we expect value to be realized. Our end-state structure, with a lower headcount, an efficient whole core, and a transparent opco setup, is coming into focus.

Dian Siswarini: Our end state structure with a lower headcount, efficient whole co and transparent op co setup is coming into focus. In achieving this, we will continue to streamline and move forward with our unlocking value initiatives. Now, I would like to shift the topic to provide an overview of our H1 2026 results, of which Angela will provide a more comprehensive discussion later in the call. Our consolidated revenues are the high end of our full year 2026 guidance, up 3.9% year-on-year to IDR 75.9 trillion.

Speaker #3: In achieving this, we will continue to streamline and move forward with our unlocking value initiatives. Now, I would like to shift the topic to provide an overview of our first half 2026 results.

Speaker #3: Of which, Angel will provide a more comprehensive discussion later in the call. Our consolidated revenues are at the high end of our full year 2026 guidance, up 3.9% year on year, to Rp75.9 trillion.

Speaker #3: The continued success of market repair at Telkomsel, driven by strong data revenue growth, supported an increase in revenues at Telkomsel by 3.3% year on year to Rp55.6 trillion.

Dian Siswarini: The continued success of Market Repair at Telkomsel, driven by strong data revenue growth, supported an increase in revenues at Telkomsel by 3.3% year on year to IDR 55.6 trillion, offsetting the decrease in legacy and fixed broadband. At the whole co, we reported mixed results with revenue growth in B2B Infra and others, while B2B ICT and international business showed a modest decline. The consolidated EBITDA margin in Q2 increased to over 50.4%, in line with our guidance and contributing to the H1 pick up in EBITDA margin to 49.4%. As we noted on our last call, the margin pressure in H1 is more a function of higher growth in a few lower margin businesses that should decline in H2, allowing us to meet our EBITDA margin targets.

Dian Siswarini: The continued success of Market Repair at Telkomsel, driven by strong data revenue growth, supported an increase in revenues at Telkomsel by 3.3% year-on-year to IDR 55.6 trillion, offsetting the decrease in legacy and fixed broadband. At the whole co, we reported mixed results with revenue growth in B2B Infra and others, while B2B ICT and international business showed a modest decline.

Speaker #3: Offsetting the decrease in legacy and fixed broadband. At the hold call, we reported mixed results, with revenue growth in B2B infra and others, while B2B ICT and international business showed a modest decline.

Speaker #3: The consolidated EBITDA margin in the second quarter increased to over 50.4%, in line with our guidance and contributing to the first half of the year's pickup in EBITDA margin to 49.4%.

Dian Siswarini: The consolidated EBITDA margin in Q2 increased to over 50.4%, in line with our guidance and contributing to the H1 pick up in EBITDA margin to 49.4%. As we noted on our last call, the margin pressure in H1 is more a function of higher growth in a few lower margin businesses that should decline in H2, allowing us to meet our EBITDA margin targets.

Speaker #3: As we noted on our last call, the margin pressure in the first half is more a function of higher growth in a few lower-margin businesses that should decline in the second half.

Speaker #3: Allowing us to meet our EBITDA margin targets. At Telkomsel, the EBITDA margin decreased to 46.2% quarter-on-quarter, as the growth in revenue was offset by higher costs associated with the strategic calibration at IndiHome and management bonus accruals.

Dian Siswarini: At Telkomsel, the EBITDA margin decreased to 46.2% Q-on-Q, as the growth in revenue was offset by higher costs associated with the strategic calibration at IndiHome and management bonus accruals. Our reported net income of IDR 10.6 trillion increased 1.4% year on year. However, after adjusting for one-off item, the core net income is IDR 11.3 trillion or up 6.2% year on year. On the next few slides, I would like to review the results at Telkomsel and strategic initiatives at IndiHome. Telkomsel's Market Repair strategy has translated into solid improvements in Q-on-Q financials, supporting a 5.3% revenue growth year on year to IDR 28.02 trillion and 1.6% Q-on-Q. Telkomsel's EBITDA increased 10.3% year on year, and net income increased 24.9% year on year in Q2 2026.

Speaker #3: Our reported net income of Rp10.6 trillion increased 1.4% year on year. However, after adjusting for one-off items, the core net income is Rp11.3 trillion, or up 6.2% year on year.

Speaker #3: On the next few slides, I would like to review the results at Telkomsel and strategic initiatives at IndiHome. Telkomsel's market repair strategy has translated into solid improvements in quarter-on-quarter financials, supporting a 5.3% revenue growth year over year to Rp 28.02 trillion, and 1.6% quarter on quarter.

Dian Siswarini: On the next few slides, I would like to review the results at Telkomsel and strategic initiatives at IndiHome. Telkomsel's Market Repair strategy has translated into solid improvements in Q-on-Q financials, supporting a 5.3% revenue growth year-on-year to IDR 28.02 trillion and 1.6% Q-on-Q. Telkomsel's EBITDA increased 10.3% year-on-year, and net income increased 24.9% year-on-year in Q2 2026.

Speaker #3: Telkomsel's EBITDA increased 10.3% year on year, and net income increased 24.9% year on year in the second quarter of 2026. We continue to see the mobile ARPU moving higher, up 11.6% year on year to Rp46,000, and up 2% quarter on quarter.

Dian Siswarini: We continue to see the mobile ARPU moving higher, up 11.6% year on year to IDR 46,000 and up 2% Q-on-Q. The exit ARPU in June of IDR 47,000 was supported by a strong World Cup boost. Our data yield remained relatively flat Q-on-Q at IDR 3.1 per MB. Noting that payload figures have been slowly decreasing year on year and Q-on-Q, partially attributed to the year on year decline in customer base as we have focused on maintaining higher quality, low churn customers. In Q2 2026, despite the ARPU increase and the strong data yield, we note that our customer base only slightly contracted Q-on-Q.

Dian Siswarini: We continue to see the mobile ARPU moving higher, up 11.6% year-on-year to IDR 46,000 and up 2% Q-on-Q. The exit ARPU in June of IDR 47,000 was supported by a strong World Cup boost. Our data yield remained relatively flat Q-on-Q at IDR 3.1 per MB. Noting that payload figures have been slowly decreasing year-on-year and Q-on-Q, partially attributed to the year-on-year decline in customer base as we have focused on maintaining higher quality, low churn customers.

Speaker #3: The exit of our pool in June at 47,000 rupiah was supported by a strong World Cup boost. Our data yield remained relatively flat quarter on quarter at 3.1 rupiah per megabyte, noting that payload figures have been slowly decreasing year on year and quarter on quarter, partially attributed to the year-on-year decline in customer base, as we have focused on maintaining higher quality, low-churn customers.

Speaker #3: In the second quarter of 2026, despite our pool increase and the strong data yield, we note that our customer base only slightly contracted quarter on quarter.

Dian Siswarini: In Q2 2026, despite the ARPU increase and the strong data yield, we note that our customer base only slightly contracted Q-on-Q. Looking into Q3, we anticipate that the operating environment will be more challenging as there is no festive season or special event to support demand prior to a likely pickup in Q4 2026. IndiHome continues to see pressure from pricing on a year-on-year basis, which has led to 3.8% decrease in year-on-year revenues, while Q-on-Q figures increased by 0.6% to IDR 6.4 trillion.

Speaker #3: Looking into the third quarter, we anticipate that the operating environment will be more challenging, as there is no festive season or special event to support demand, prior to a likely pickup in the fourth quarter of 2026.

Dian Siswarini: Looking into Q3, we anticipate that the operating environment will be more challenging as there is no festive season or special event to support demand prior to a likely pickup in Q4 2026. IndiHome continues to see pressure from pricing on a year-on-year basis, which has led to 3.8% decrease in year-on-year revenues, while Q-on-Q figures increased by 0.6% to IDR 6.4 trillion. The ARPU increased 3.4% to IDR 211,000 from IDR 204,000 Q-on-Q. Preliminary as a result of the strategic recalibration efforts that lowered to total FBB subscribers at Telkomsel by nearly 8% to 9.5 million. I would like to speak about this in a little more detail to explain the recalibration that Telkomsel management employed. Following the historical strong growth in this segment, management conducted an in-depth review of the customer base and updated its parameters for definition of subscribers.

Speaker #3: IndiHome continues to see pressure from pricing on a year-on-year basis, which has led to a 3.8% decrease in year-on-year revenues, while quarter-on-quarter figures increased by 0.6% to Rp6.4 trillion.

Speaker #3: The ARPU increased 3.4% to 211,000 from 204,000 quarter-on-quarter, primarily as a result of the strategic recalibration efforts that lowered the total FBB subscribers at Telkomsel by nearly 8% to 9.5 million.

Dian Siswarini: The ARPU increased 3.4% to IDR 211,000 from IDR 204,000 Q-on-Q. Preliminary as a result of the strategic recalibration efforts that lowered to total FBB subscribers at Telkomsel by nearly 8% to 9.5 million. I would like to speak about this in a little more detail to explain the recalibration that Telkomsel management employed. Following the historical strong growth in this segment, management conducted an in-depth review of the customer base and updated its parameters for definition of subscribers.

Speaker #3: I would like to speak about this in a little more detail to explain the recalibration that Telkomsel management employed. Following the historically strong growth in this segment, management conducted an in-depth review of the customer base and updated its parameters for the definition of subscribers.

Speaker #3: Following the systemic review of all 10.3 million customers, management concluded that a number of customers had not been generating revenue for over 12 months, and were highly unlikely to renew the service.

Dian Siswarini: Following the systemic review of all 10.3 million customers, management concluded that a number of customers had not been generating revenue for over 12 months and were highly unlikely to renew the service. These customers were removed from our subscriber base. In order to position the company for future growth, there were OpEx impacts to Telkomsel from this change. Accordingly, those costs were IDR 100 billion of provision costs, along with IDR 130 billion of costs related to adjusting to the updated customer life cycle. Moving forward, IndiHome is focusing on quality-driven growth and moved away from volume-driven business. This will include a more comprehensive customer acquisition strategy, including layered verification processes, AV CNC action to reuse existing port from clean customers, modernization of the network, ARPU mix enhancement by focusing for more strategy and locking in customers via convergence. As we saw, our strong convergence ratio now exceeds 65%.

Speaker #3: These customers were removed from our subscriber base. In order to position the company for future growth, there were OPEX impacts to Telkomsel from this change.

Speaker #3: Accordingly, those costs were Rp 100 billion of provision costs, along with Rp 130 billion of costs related to adjusting to the updated customer life cycle.

Speaker #3: Moving forward, IndiHome is focusing on quality-driven growth and moving away from a volume-driven business. This will include a more comprehensive customer acquisition strategy, including layered verification processes, efficiency actions to reduce exceeding existing port from clean customers, modernizing the network, our pool mix enhancement by focusing on a more-for-more strategy, and locking in customers via convergence, as we saw our strong convergence ratio now exceed 65%.

Dian Siswarini: Moving forward, IndiHome is focusing on quality-driven growth and moved away from volume-driven business. This will include a more comprehensive customer acquisition strategy, including layered verification processes, AV CNC action to reuse existing port from clean customers, modernization of the network, ARPU mix enhancement by focusing for more strategy and locking in customers via convergence.

Dian Siswarini: As we saw, our strong convergence ratio now exceeds 65%. I would also like to update you on the spectrum auction that was a subsequent event to the quarter. We are quite happy with the results as we added 100 MHz to our spectrum, which now totals 265 MHz. The additional spectrum consists of 20 MHz of 700 MHz and 80 MHz of 2.6 GHz.

Speaker #3: I would also like to update you on the spectrum auction that was a subsequent event to the quarter. We are quite happy with the results, as we added 100 megahertz to our spectrum, which now totals 265 megahertz.

Dian Siswarini: I would also like to update you on the spectrum auction that was a subsequent event to the quarter. We are quite happy with the results as we added 100 MHz to our spectrum, which now totals 265 MHz. The additional spectrum consists of 20 MHz of 700 MHz and 80 MHz of 2.6 GHz. The additional spectrum will support our ambitions to improve our coverage, improve capacity, and 5G build-out, which will provide customers with an improved digital experience. The total upfront fee is IDR 1.2 trillion, and the total we will pay in the first year is IDR 2.1 trillion, including the annual fees. This will have a larger initial impact on cash flow, but limited P&L impact in 2026. I would now like to turn presentation over to Angelo, our CFO. Please, Angelo.

Speaker #3: The additional spectrum consists of 20 megahertz of 700 megahertz and 80 megahertz of 2.6 gigahertz. The additional spectrum will support our ambitions to improve our coverage, improve capacity, and 5G build-out, which will provide customers with an improved digital experience.

Dian Siswarini: The additional spectrum will support our ambitions to improve our coverage, improve capacity, and 5G build-out, which will provide customers with an improved digital experience. The total upfront fee is IDR 1.2 trillion, and the total we will pay in the first year is IDR 2.1 trillion, including the annual fees. This will have a larger initial impact on cash flow, but limited P&L impact in 2026. I would now like to turn presentation over to Angelo, our CFO. Please, Angelo.

Speaker #3: The total upfront fee is Rp1.2 trillion, and the total we will pay in the first year is Rp2.1 trillion, including the annual fees.

Speaker #3: This will have a larger initial impact on cash flow, but limited P&L impact in 2026. I would now like to turn the presentation over to Angelo, our CFO.

Speaker #3: CFRO. Please, Angelo.

Speaker #2: Thank you, Bu Dian. The mapping of the revenues by new business segments is broken down more clearly in this slide. I would emphasize the disclosure of our inter-segment and external revenue, where total gross revenue in the first half of 2026 reached IDR 118.9 trillion, with IDR 43.1 trillion from inter-segment revenues.

Arthur Angelo Syailendra: Thank you, Budian. The mapping of the revenues by new business segments is broken down more clearly in this slide. I would emphasize the disclosure of our intersegment and external revenue, where total gross revenue in H1 2026 reached IDR 118.9 trillion, with IDR 43.1 trillion from intersegment revenues. The intersegment revenues are generated through internal transactions between subsidiaries, while external revenues come from the non-group related. On a year-on-year basis, external revenue increased by 3.9% to IDR 75.9 trillion and now represents 63.8% of our gross revenues, which is up from 63.5% last Q and contributed positively to our consolidated revenue. As we look to unlock business value, the sizable intersegment revenue will continue to be monetized. An example is through opening up access to our existing infrastructure. We can tap the opportunity to generate sizable external revenues, which will further amplify our business economics.

Speaker #2: The inter-segment revenues are generated through internal transactions between subsidiaries, while external revenues come from non-group related parties. On a year-on-year basis, external revenue increased by 3.9% to IDR 75.9 trillion, and now represents 63.8% of our gross revenues, up from 63.5% last quarter, and contributed positively to our consolidated revenue.

Arthur Angelo Syailendra: On a year-on-year basis, external revenue increased by 3.9% to IDR 75.9 trillion and now represents 63.8% of our gross revenues, which is up from 63.5% last Q and contributed positively to our consolidated revenue. As we look to unlock business value, the sizable intersegment revenue will continue to be monetized. An example is through opening up access to our existing infrastructure. We can tap the opportunity to generate sizable external revenues, which will further amplify our business economics.

Speaker #2: As we look to unlock business value, the sizable inter-segment revenue will continue to be monetized. An example is that, through opening up access to our existing infrastructure, we can tap the opportunity to generate sizable external revenues, which will further amplify our business economics.

Speaker #2: If we disaggregate the gross revenue by segment, it becomes evident that there is a massive value-unlocking opportunity in our B2B infra segment, as we have IDR 33.1 trillion in gross revenue in the first half of 2026, with IDR 28.4 trillion, or 85.9%, coming from internal revenue sources.

Arthur Angelo Syailendra: If we disaggregate the gross revenue by segment, it becomes evident that there is a massive value unlocking opportunity in our B2B Infra segment, as we have IDR 33.1 trillion in gross revenue in H1 2026, with IDR 28.4 trillion or 85.9% from internal revenue sources. More specifically, our B2B Infra, B2B ICT, and international business have shown results in line with our expectations. The B2B Infra segment reported revenue growth of 19% to IDR 33.1 trillion, of which 14.1% are external revenue, driven by our tower business and data centers. Our tower business saw its tenancy ratio increase to 1.57 from 1.53 in the previous year, and our DC occupancy increase to 88%. Our B2B ICT business reported a decrease of 5.4% in total revenues to IDR 8.8 trillion, of which 83.1% are external revenue.

Speaker #2: More specifically, our B2B Infra, B2B ICT, and International Business have shown results in line with our expectations. The B2B Infrastructure segment reported revenue growth of 19% to IDR 33.1 trillion, of which 14.1% is external revenue, driven by our tower business and data centers.

Arthur Angelo Syailendra: The B2B Infra segment reported revenue growth of 19% to IDR 33.1 trillion, of which 14.1% are external revenue, driven by our tower business and data centers. Our tower business saw its tenancy ratio increase to 1.57 from 1.53 in the previous year, and our DC occupancy increase to 88%. Our B2B ICT business reported a decrease of 5.4% in total revenues to IDR 8.8 trillion, of which 83.1% are external revenue.

Speaker #2: As our tower business saw its tenancy ratio increase to 1.57 from 1.53 in the previous year, and our DC occupancy increased to 88%. Our B2B ICT business reported a decrease of 5.4% in total revenue to IDR 8.8 trillion, of which 83.1% was external revenue.

Speaker #2: This is primarily due to the impact from subsidiaries that we are in the process of streamlining, deliberately slowing down their business growth, along with a decrease in overall government IT spending.

Arthur Angelo Syailendra: This is primarily due to the impact from subsidiaries that we are in the process of streamlining deliberately, slowing down their business growth along with a decrease in government overall IT spending. Our international business reported total segment revenue of IDR 6.3 trillion, of which 90.8% is external revenue. We see strong demand for our international subsea cable business and are looking to invest more aggressively in expanding capacity at this higher margin business. Simultaneously, we are slowly decreasing our exposure to the international voice business. This should lead to a pickup in EBITDA margin in this business over the medium term. Revenue growth may be offset from the decreasing exposure to voice hubbing, which has low margin. We have also shifted more of our CapEx spending to this segment in 2026 within our B2B Infra segment.

Speaker #2: Our international business reported total segment revenue of IDR 6.3 trillion, of which 90.8% is external revenue. We see strong demand for our international subsea cable business and are looking to invest more aggressively in expanding capacity in this higher-margin business.

Speaker #2: Simultaneously, we are slowly decreasing our exposure to the international voice business. This should lead to a pickup in EBITDA margin in this business over the medium term, but revenue growth may be offset by the decreasing exposure to voice hubbing, which has low margin.

Arthur Angelo Syailendra: Simultaneously, we are slowly decreasing our exposure to the international voice business. This should lead to a pickup in EBITDA margin in this business over the medium term. Revenue growth may be offset from the decreasing exposure to voice hubbing, which has low margin. We have also shifted more of our CapEx spending to this segment in 2026 within our B2B Infra segment.

Speaker #2: We have also shifted more of our capex spending to this segment in 2026 within our B2B infra segment. There are some adjustments we would make to our reported net income based on items that we believe to be non-core in nature.

Arthur Angelo Syailendra: There are some adjustments we would make to our reported net income based on items that we believe to be non-core in nature. First, we anticipate elevated transformation advisory costs into 2026 as we are making solid progress on our streamlining initiative. The costs are across multiple transactions from the sale of AdMedika and TelkoMedika to the closing of businesses and reach IDR 49.6 billion in H1 2026. We also anticipate this figure will continue to rise along with sale proceeds from divestment through year-end. Due to accounting policy change in our FY2025 results that changed the useful life of some of our network assets, we experienced IDR 867 billion increase in depreciation expense in H1 2026 that will likely persist throughout the year.

Speaker #2: First, we anticipate elevated transformation advisory costs into 2026, as we are making solid progress on our streamlining initiative. The costs are across multiple transactions, from the sale of Art Medica and Telco Medica to the closing of businesses, and reach IDR 49.6 billion in the first half of 2026.

Speaker #2: We also anticipate this figure will continue to rise, along with sale proceeds from divestment, through year-end. Due to an accounting policy change in our FY25 results that changed the useful life of some of our network assets, we experienced an IDR 867 billion increase in depletion expense in the first half of 2026 that will likely persist throughout the year.

Arthur Angelo Syailendra: Due to accounting policy change in our FY2025 results that changed the useful life of some of our network assets, we experienced IDR 867 billion increase in depreciation expense in H1 2026 that will likely persist throughout the year. At our Telkomsel subsidiary, the investment in GoTo is impacted by mark to market adjustment as the share price decreased from IDR 58 per share in H1 2025 to IDR 50 per share in H1 2026.

Speaker #2: At our telecom sales subsidiary, the investment in GOTO is impacted by mark-to-market adjustment as the share price decreased from IDR 58 per share in first half 2025 to IDR 50 per share in first half 2026.

Arthur Angelo Syailendra: At our Telkomsel subsidiary, the investment in GoTo is impacted by mark to market adjustment as the share price decreased from IDR 58 per share in H1 2025 to IDR 50 per share in H1 2026. This had an impact on the consolidated net income of IDR 235 billion. In addition, the tax impact is the difference of IDR 180 billion due to different tax rate between Telkom Group at 19% and Infranexia TIF at 22% following the phase one of the Infranexia transaction. In addition, IDR 191 billion is related to the tax impact from the useful life change in our fiber asset. All in all, we calculate normalized net income at IDR 11.3 trillion or an increase on a consolidated basis of 6.2% on year-on-year basis.

Speaker #2: This had an impact on the consolidated net income of IDR 235 billion. In addition, the tax impact is the difference of IDR 180 billion, due to the different tax rates between the Telkom group at 19% and Infra Annexative at 22%, following the phase one of the Infra Annexia transaction.

Arthur Angelo Syailendra: This had an impact on the consolidated net income of IDR 235 billion. In addition, the tax impact is the difference of IDR 180 billion due to different tax rate between Telkom Group at 19% and Infranexia TIF at 22% following the phase one of the Infranexia transaction. In addition, IDR 191 billion is related to the tax impact from the useful life change in our fiber asset. All in all, we calculate normalized net income at IDR 11.3 trillion or an increase on a consolidated basis of 6.2% on year-on-year basis.

Speaker #2: In addition, IDR 191 billion is related to the tax impact from the useful life change in our fiber asset. All in all, we calculate normalized net income at IDR 11.3 trillion, or an increase on a consolidated basis of 6.2% on a year-on-year basis.

Speaker #2: As we transform the business, we believe the primary focus should be on our cash flow generation and our ability to grow this across the business segments.

Arthur Angelo Syailendra: As we transform the business, we believe the primary focus should be on our cash flow generation and its ability to grow this across the business segments. Our operating cash flow increased 2.6% year-on-year to IDR 66.1 trillion, supported by stronger revenues on the strength of our ARPU increase and lower corporate income tax, primarily due a timing issue on tax restitution. In addition, the free cash flow to the firm increased by 12.8% on a trailing 12 months basis to IDR 36.9 trillion. With the limited leverage employed, the company has strong capacity to pay elevated dividends. Hence, we would suggest looking at the FCF in analyzing our dividend payment capacity. As we can see, our FCFE of IDR 36.5 trillion is well above the dividend that we have made on 10 July and implies a strong capacity to pay elevated dividends in 2026 and beyond.

Speaker #2: Our operating cash flow increased 2.6% year-on-year to IDR 66.1 trillion, supported by stronger revenues on the strength of our R2 increase and lower corporate income tax, primarily due to a timing issue on tax restitution.

Speaker #2: In addition, the free cash flow to the firm increased by 12.8% on a trailing 12-month basis to IDR 36.9 trillion. With the limited leverage employed, the company has strong capacity to pay elevated dividends.

Arthur Angelo Syailendra: With the limited leverage employed, the company has strong capacity to pay elevated dividends. Hence, we would suggest looking at the FCF in analyzing our dividend payment capacity. As we can see, our FCFE of IDR 36.5 trillion is well above the dividend that we have made on 10 July and implies a strong capacity to pay elevated dividends in 2026 and beyond.

Speaker #2: Hence, we would suggest looking at the FCFF in analyzing our dividend payment capacity. As we can see, our FCFE of IDR 36.5 trillion is well above the dividend that we have paid on July 10 and implies a strong capacity to pay elevated dividends in 2026 and beyond.

Speaker #2: I would also note that this is prior to minority interest adjustment. Moving on to capex, in the first half of 2026, more than 94% of our capex was deployed toward our core business, B2C and B2B infra.

Arthur Angelo Syailendra: I would also note that this is prior to minority interest adjustment. Moving on to CapEx, in H1 2026, more than 94% of our CapEx was deployed toward our core business, B2C and B2B Infra. Since the current management team joined last year, we have made efforts to manage CapEx spending as we want to implement a discipline and more efficient costing structure. In H1 2026, Telkom Group realized CapEx of PPE and intangibles reached IDR 10.8 trillion, which equates to 14.2% of our total revenue. This represents a decrease of 1.5% on year-on-year basis in absolute spending and led to our C2R ratio decreasing by 78 basis points. We would also note that the network modernization will likely have an impact on our overall CapEx. Let's review our 2026 guidance and our achievement through H1 2026 on the next slide.

Speaker #2: Since the current management team joined last year, we have made efforts to manage CapEx spending, as we want to implement a disciplined and more efficient costing structure.

Speaker #2: In the first half of 2026, the telecom group realized capex of PPE and intangibles reached IDR 10.8 trillion, which equates to 14.2% of our total revenue. This represents a decrease of 1.5% on a year-on-year basis in absolute spending and led to our C2R ratio decreasing by 78 basis points.

Arthur Angelo Syailendra: In H1 2026, Telkom Group realized CapEx of PPE and intangibles reached IDR 10.8 trillion, which equates to 14.2% of our total revenue. This represents a decrease of 1.5% on year-on-year basis in absolute spending and led to our C2R ratio decreasing by 78 basis points. We would also note that the network modernization will likely have an impact on our overall CapEx. Let's review our 2026 guidance and our achievement through H1 2026 on the next slide.

Speaker #2: We would also note that the network modernization will likely have an impact on our overall capex. Now, let's review our 2026 guidance and our achievements through the first half of 2026 on the next slide.

Speaker #2: Through the first half of 2026, our revenue and Capex guidance is well within our target, while our EBITDA margin is slightly below. Our revenues were up 3.9%, above the 1% to 3% growth target.

Arthur Angelo Syailendra: Through H1 2026, our revenue and CapEx guidance is well within our guidance, while our EBITDA margin is slightly below. Our revenues were up 3.9% above the 1% to 3% growth target. Our EBITDA margin was 49.4%, which is slightly below our more than 50% guidance. Our C2R was 14.2%, which is currently below our 17% to 19% guidance. We are making no adjustment to our guidance at this time as all results are in line with our expectations. There are a few items we would like to point out. First, on the EBITDA margin, we saw the Q2 stand-alone EBITDA margin increase to over 50% and believe that there is potential upside in the second semester.

Speaker #2: Our EBITDA margin was 49.4%, which is slightly below our more than 50% guidance. Our C2R was 14.2%, which is currently below our 17–19% guidance.

Speaker #2: We are making no adjustment to our guidance at this time, as all results are in line with our expectations. There are a few items we would like to point out.

Arthur Angelo Syailendra: There are a few items we would like to point out. First, on the EBITDA margin, we saw the Q2 stand-alone EBITDA margin increase to over 50% and believe that there is potential upside in the second semester. On our C2R outlook, we anticipate that our FY2026 target of 17% to 19% is still achievable, although we forecast to be at the high end of the target, including the spectrum cost. We continue to be cautious on the impact of the geopolitical tension that could impact a number of our input costs. I would now like to turn the call back over to Brad to manage the Q&A. Thank you.

Speaker #2: First, on the EBITDA margin, we saw the second quarter standalone EBITDA margin increase to over 50%, and believe that there is potential upside in the second semester.

Speaker #2: On our C2R outlook, we anticipate that our FY26 target of 17% to 19% is still achievable, although we forecast to be at the high end of the target, including the spectrum costs.

Arthur Angelo Syailendra: On our C2R outlook, we anticipate that our FY2026 target of 17% to 19% is still achievable, although we forecast to be at the high end of the target, including the spectrum cost. We continue to be cautious on the impact of the geopolitical tension that could impact a number of our input costs. I would now like to turn the call back over to Brad to manage the Q&A. Thank you.

Speaker #2: We continue to be cautious about the impact of geopolitical tensions that could affect a number of our input costs. I would now like to turn the call back over to Brad to manage the Q&A.

Speaker #2: Thank you.

Speaker #1: Thank you, Angelo. I'd like to now move to the Q&A section of the call. As a reminder, we are going to start with two questions that have already been submitted in writing, and then beyond that, I think there are a couple more questions that have been written in during the conference call as well.

Bret Ginesky: Thank you, Angelo. I'd like to now move to the Q&A section of the call. As a reminder, we are going to start with two questions that came from written in already. Beyond that, I think there's a couple questions that have already been written in the conference call as well. We'll move to those questions, then we will go opening up everything to verbal questions. Let me start with the first question we have here. This question is, what are the published bid values for the newly acquired spectrum, and how will the spectrum cost and related network deployment be reflected in the financial statements? This comes from a number of different investors and analysts. We'll ask this first to Pak Daru, then Pak Nugi will probably add in on the Telkomsel side.

Speaker #1: We'll move to those questions, and then we will open up everything for verbal questions. So, let me start with the first question we have here.

Bret Ginesky: Let me start with the first question we have here. This question is, what are the published bid values for the newly acquired spectrum, and how will the spectrum cost and related network deployment be reflected in the financial statements? This comes from a number of different investors and analysts. We'll ask this first to Pak Daru, then Pak Nugi will probably add in on the Telkomsel side.

Speaker #1: The question is: What are the published bid values for the newly acquired spectrum, and how will the spectrum cost and related network deployment be reflected in the financial statements?

Speaker #1: This comes from a number of different investors and analysts. We'll ask this first to Pa Daru, and then Pa Nugi will probably add on the telecom sales side.

Speaker #3: Okay, thank you for the questions. The spectrum award consists of a one-time upfront payment of Rp1.2 trillion, followed by annual license fees over the license term, with both recognized as operating expenses.

Daru Mulyawan: Okay. Thank you for the questions. The spectrum award consists of a one-time upfront payment of IDR 1.2 trillion, followed by annual license fees for the license term, with both recognized as operating expenses. While the financial impact has been incorporated into our updated full year 2026 EBITDA margin guidance of around 46%, while the higher CapEx to revenue guidance of around 15% reflects the additional network deployment following the spectrum acquisition. Strategically, the new spectrum strengthens our coverage and capacity and supports the continued expansion of both 4G and 5G. Thank you.

Speaker #3: The financial impact has been incorporated into our updated full-year 2026 EBITDA margin guidance of around 46%, while the higher CapEx-to-revenue guidance of around 15% reflects the additional network deployment following the spectrum acquisition.

Speaker #3: Surgically, the new spectrum strengthened our coverage and capacity, and supported the continued expansion of both 4G and 5G. Thank you.

Speaker #1: Thank you, Pa Daru. The next question we have is also coming from a couple of different investors and analysts. What progress has Telkom made under its portfolio restructuring and infrastructure value unlocking program?

Bret Ginesky: Thank you, Pak Daru. The next question we have is also coming from a couple of different investors and analysts. What progress has Telkom made under its portfolio restructuring and infrastructure value unlocking program? What are the key milestones and priorities going forward? I think we can start with Pak Angelo speaking about the streamlining, then following that, Pak Seno can add on the unlocking of value.

Speaker #1: And what are the key milestones and priorities going forward? I think we can start with Pa Angelo, speaking about the streamlining, and then following that, Pa Senno can add on the unlocking of value.

Speaker #3: Thank you, Brad. Our restructuring program is progressing across two parallel workstreams: one is the streamlining of the group subsidiary portfolio that we deem to be non-core, and the other is unlocking value from strategic infrastructure assets.

Arthur Angelo Syailendra: Thank you, Brett. Our restructuring program is progressing across two parallel workstreams. One being streamlining of the group subsidiary portfolio that we deem to be non-core, unlocking value from strategic infrastructure assets. On portfolio streamlining, we completed the AdMedika and TelkoMedika divestment in June 2026, recognizing an after-tax gain of IDR 429 billion, which is equivalent to a pre-tax disposal gain of IDR 550 billion. More broadly, we have now completed two divestments, two mergers, and the closure of eight businesses, marking tangible progress toward a more focused group structure. We continue to advance the remaining initiatives, which include further divestment, business closure, and merger or transfer of business. These processes are being prioritized based on their strategic relevance, valuation, execution readiness, and their potential to improve efficiency and capital allocation.

Speaker #3: On portfolio streamlining, we completed the Add Medica and Telco Medica divestment in June 2026, recognizing an after-tax gain of IDR 429 billion, which is equivalent to a pre-tax disposal gain of IDR 550 billion.

Speaker #3: More broadly, we have now completed two divestments, two mergers, and the closure of eight businesses, marking tangible progress toward a more focused group structure.

Arthur Angelo Syailendra: More broadly, we have now completed two divestments, two mergers, and the closure of eight businesses, marking tangible progress toward a more focused group structure. We continue to advance the remaining initiatives, which include further divestment, business closure, and merger or transfer of business. These processes are being prioritized based on their strategic relevance, valuation, execution readiness, and their potential to improve efficiency and capital allocation. With this, I will pass this along to Pak Seno with respect to unlocking value from strategic infrastructure assets. Thank you.

Speaker #3: We continue to advance the remaining initiatives, which include further divestments, business closures, and mergers or transfers of business. These processes are being prioritized based on their strategic relevance, valuation, execution readiness, and their potential to improve efficiency and capital allocation.

Speaker #3: With this, I will pass this along to Pa Senno with respect to unlocking value from strategic infrastructure assets. Thank you.

Arthur Angelo Syailendra: With this, I will pass this along to Pak Seno with respect to unlocking value from strategic infrastructure assets. Thank you.

Speaker #2: Thank you, Pa Angelo. Thank you, Brad. So right now, we continue to advance the remaining initiatives. This includes divestment, business closure, mergers, and transfer.

Seno Soemadji: Thank you, Pak Angelo. Thank you, Brett. Right now, we continue to advance the remaining initiatives. These include divestment, business closure, mergers, and transfer. These processes are being prioritized based on strategic relevance, valuation, execution, readiness, and their potential to improve efficiency and capital allocation, particularly on some streams. One on the Falcon, the data center. We got a good development that we signed a good MoU with the Singapore government. This marks our important milestone towards development of digital infrastructure in the region. Secondly, on the other potential infrastructure, we are still endorsing the consolidation of the industry itself. Right now, we're going to mark the important milestone by end of this Q, and hopefully, we're going to have more, I would say, concrete action by end of this year. Thank you.

Speaker #2: These processes are being prioritized based on strategic relevance, valuation, execution, readiness, and their potential to improve efficiency and capital allocation. Particularly on some streams, one on the Falcon, the data center, we had good development, as we signed a good MOU with the Singapore government.

Seno Soemadji: We got a good development that we signed a good MoU with the Singapore government. This marks our important milestone towards development of digital infrastructure in the region. Secondly, on the other potential infrastructure, we are still endorsing the consolidation of the industry itself. Right now, we're going to mark the important milestone by end of this Q, and hopefully, we're going to have more, I would say, concrete action by end of this year. Thank you.

Speaker #2: This marked our important milestone towards development of digital infrastructure in the region. And secondly, on the other potential infrastructure, we are still endorsing the consolidation of the industry itself, and right now we're going to mark the important milestone by end of this Q, and hopefully we're going to have more, I would say, concrete action by end of this year.

Speaker #2: Thank you.

Speaker #1: Thank you, Pa Angelo and Pa Senno. The next question we have is from a couple of different analysts—it's overlapping with each other—but I'm going to break it down in a couple of different ways.

Bret Ginesky: Thank you, Pak Angelo and Pak Seno. The next question we have, we have a question from a couple of different analysts that's overlapping with each other. I'm going to break it down in a couple of different ways. This is coming from Piyush with HSBC. In Telkomsel, what changes in CapEx outlook for 2026 post-spectrum auction, and how does it impact 2026 Telkom Group CapEx outlook? Also, what led to the sharp Q1Q increase in marketing expenses by 47% Q1Q and G&A expenses by 35% Q1Q? What led to the decline in EBITDA Q over Q despite an increase in mobile ARPU? Can you share the outlook for the mobile subs and IndiHome subs growth? These are all coming from Piyush and also one's coming from another analyst. Also, last question. In Telkomsel, what led to the steep drop in IndiHome subs Q1Q?

Speaker #1: So this is coming from Piyush, HSBC. In telecom, what changes in capex outlook for 2026 post-spectrum auction, and how does it impact the 2026 telecom group capex outlook?

Speaker #1: Also, what led to the sharp Q on Q increase in marketing expenses by 47% Q on Q and GNA expenses by 35% Q on Q?

Speaker #1: And what led to the decline in EBITDA quarter over quarter despite an increase in mobile ARPU? Can you share the outlook for mobile subscriber and IndiHome subscriber growth?

Bret Ginesky: What led to the decline in EBITDA Q over Q despite an increase in mobile ARPU? Can you share the outlook for the mobile subs and IndiHome subs growth? These are all coming from Piyush and also one's coming from another analyst. Also, last question. In Telkomsel, what led to the steep drop in IndiHome subs Q1Q? Lionel, do you want to start with that, then we can move on with other people at Telkomsel. Pak Daru.

Speaker #1: These are all coming from Piyush, and also one's coming from another analyst. But also, last question: in Telkomsel, what led to the steep drop in IndiHome subs quarter-on-quarter?

Speaker #1: Lionel, do you want to start with that, and then we can move on to other people at Telkomsel with Pak Daru?

Bret Ginesky: Lionel, do you want to start with that, then we can move on with other people at Telkomsel. Pak Daru.

Speaker #2: Thank you. With regards to the IndiHome subs, that is something that I will cover right now. As mentioned by Ibu Dian, we do a periodic cleansing of our subscriber base, and this time around, we decided to reduce the subscriber base for customers that had not been active with us for more than 12 months.

Lionel Chng: Thank you. With regards to the IndiHome subs, that is something that I will cover right now. As mentioned by Ibu Dian, we do a periodic cleansing of our subscriber base, and this time around, we decided to reduce the subscriber base for customers that had not been active with us for more than 12 months. We believe that this is a necessary and important exercise that we do, and it is important also to highlight that there is no revenue impact from that exercise that we did.

Speaker #2: We believe that this is a necessary and important exercise that we do, and it's important also to highlight that there is no revenue impact from the exercise that we did.

Speaker #3: Okay, let me continue with the EBITDA question. The EBITDA decline was primarily driven by three factors. The first is continued pressure from legacy business erosion, and the second is one-off expenses related to FPP-based calibration and customer coalition optimization, as just explained by Pa Lionel.

Daru Mulyawan: Okay, let me continue with the EBITDA question. The EBITDA decline was primarily driven by three factors. The first is continued pressure from legacy business erosion. The second is one-off expenses related to FBB-based calibration and customer coalition optimization, as just explained by Pak Lionel. The third is higher commercial spending associated with major events, including the World Cup. While mobile ARPU improved, the uplift was not sufficient to fully offset these temporary and structural pressures. Looking ahead, we expect profitability to improve as the calibration impact normalizes

Speaker #3: And the third is higher commercial spending associated with major events, including the World Cup. While mobile ARPU improved, the uplift was not sufficient to fully offset these temporary and structural pressures.

Daru Mulyawan: While mobile ARPU improved, the uplift was not sufficient to fully offset these temporary and structural pressures. Looking ahead, we expect profitability to improve as the calibration impact normalizes Legacy decline moderates, our focus on higher quality mobile and FMC customer translate into better monetization. Thank you.

Speaker #3: Looking ahead, we expect profitability to improve as the calibration impact normalizes, legacy decline moderates, and our focus on higher-quality mobile and FMC customers translates into better monetization.

[Company Representative] (Telkomsel): Legacy decline moderates, our focus on higher quality mobile and FMC customer translate into better monetization. Thank you.

Speaker #1: Thank you, Pa Daru and Pa Lionel. The next question we have is from Arthur at Citi. Can you clarify your revenue outlook? The first half of 2026 revenue growth was 4%, while outlook remains at 1% to 3%.

Bret Ginesky: Thank you, Pak Daryo and Pak Lionel. The next question we have is from Arthur at Citi. Can you clarify your revenue outlook? The H1 of 2026 revenue growth was 4%, while outlook remains at 1% to 3%. Are you expecting softness in the H2 of 2026? Maybe Bu Dian can contribute to this.

Speaker #1: Are you expecting softness in the second half of 2026? Maybe Ibu Dian can contribute to this.

Speaker #4: Thank you for the question. Yes, our revenue grew 3.9% in the first half—above the full-year guidance of 1% to 3%. Actually, there are a few factors impacting our decision to not adjust the revenue target.

Dian Siswarini: Thank you for the question. Yes, our revenue grew 3.9% in H1, above the full-year guidance of 1% to 3%. Actually, there are a few factors that are impacting our decision to not adjust the revenue target. First, we see additional progress in streamlining and expect in H2 of the year, there will be further divestments that could have a modest impact on total revenues. Second, in H2 2025, we saw strong revenue pick up as Market Repair at Telkomsel had already started to impact the figures. The third factor, we are trying to provide accurate guidance to investors, and we do not want to overpromise. I think when you see our strategy, we are more focused on EBITDA margin growth versus revenue growth. That is what we really want to deliver as we continue to transform the businesses.

Speaker #4: First, we see additional progress in streamlining, and expect that in the second half of the year there will be further divestments that could have a modest impact on total revenues.

Speaker #4: Second, in the second half of 2025, we saw strong revenue pick up as market repair at Telkomsel had already started to impact the figures.

Speaker #4: And the third factor, we are trying to provide accurate guidance to investors, and we do not want to offer promises. I think when you see our strategy, we are more focused on EBITDA margin growth versus revenue growth.

Dian Siswarini: The third factor, we are trying to provide accurate guidance to investors, and we do not want to overpromise. I think when you see our strategy, we are more focused on EBITDA margin growth versus revenue growth. That is what we really want to deliver as we continue to transform the businesses. Thank you.

Speaker #4: And that is what we really want to deliver as we continue to transform the businesses. Thank you.

Dian Siswarini: Thank you.

Speaker #1: Thank you, Ibu Dian. Now, we'll go to the people who have raised their hands. The first person is Ranjan. Could you please unmute your mic and ask your question?

Bret Ginesky: Thank you, Dian. Now we'll go to the people who have raised their hands. The first person, Ranjan, could you please unmute your mic and ask your question?

Speaker #5: Hi, good morning, and thank you for the presentation and the opportunity. A couple of questions from my side. Firstly, on the 5G—congratulations on the spectrum auction.

[Analyst]: Hi, good morning. Thank you for the presentation and the opportunity. A couple of questions from my side. Firstly, on the 5G. Congratulations on the spectrum auction. We were just wondering if you can help us understand how will the rollout be planned for 5G in Indonesia. We noticed that one of your competitors had a pretty strong increase in CapEx spending to roll out the network. That's the first one. The second question is on B2B ICT segment. We know that the revenues can be quite lumpy from quarter-to-quarter. Is Q2 one of those quarters where we have recorded higher revenues and it could run at a lower rate in the coming quarters? Thank you.

Speaker #5: We were just wondering if you can help us understand how the rollout will be planned for 5G in Indonesia. We noticed that one of your competitors has shown a pretty strong increase in CapEx spending.

Speaker #5: To roll out the network. That's the second one. That's the first one. The second question is on the B2B ICT segment. We know that the revenues can be quite lumpy from quarter to quarter.

[Analyst]: That's the first one. The second question is on B2B ICT segment. We know that the revenues can be quite lumpy from quarter-to-quarter. Is Q2 one of those quarters where we have recorded higher revenues and it could run at a lower rate in the coming quarters? Thank you.

Speaker #5: Is the second quarter one of those quarters where we have recorded higher revenues, and could it run at a lower rate in the coming quarters?

Speaker #5: Thank you.

Speaker #1: Thank you for the two questions, Ranjan. The first question on the spectrum, the 5G rollout, was a little bit broken up, what you’re saying, but I think we can start with Ibu Dian. Do you want to talk a little bit, or Daru?

Bret Ginesky: Thank you for the two questions, Ranjan. The first question on the spectrum, the 5G rollout. This is a little bit broken up what you are saying, but I think we can start with Bu Dian. Do you want to talk a little bit or?

Speaker #2: I will cover it.

[Company Representative] (Telkomsel): We will cover that. Thank you very much for the question, Ranjan. The first part, with this new spectrum that we now have, we are doing it in a phase-by-phase approach. The first part is this. Over 2026 H1, we rolled out more than 6,000 sites, and that has already been fully maximized from sales and marketing perspective. In the coming year, the balance of the year, we expect to roll out an additional 107 cities where we have identified from both sales and marketing opportunities for us to, number 1, improve our customer experience, and then number 2, be able to compete more aggressively versus our competition. Finally, look for opportunities for us to monetize. This spectrum allows us to go far wider than ever before and also far deeper.

Lionel Chng: We will cover that. Thank you very much for the question, Ranjan. The first part, with this new spectrum that we now have, we are doing it in a phase-by-phase approach. The first part is this. Over 2026 H1, we rolled out more than 6,000 sites, and that has already been fully maximized from sales and marketing perspective.

Speaker #3: Thank you very much for the question, Ranjan. For the first part, with this new spectrum that we now have, we're implementing it in a phase-by-phase approach.

Speaker #3: In the first half of 2026, we rolled out more than 6,000 sites, and that has already been fully maximized from a sales and marketing perspective.

Speaker #3: In the remainder of the year, we expect to roll out an additional 107 cities where we have identified both sales and marketing opportunities. Our goals are, number one, to improve our customer experience and, number two, to be able to compete more aggressively versus our competition.

Lionel Chng: In the coming year, the balance of the year, we expect to roll out an additional 107 cities where we have identified from both sales and marketing opportunities for us to, number 1, improve our customer experience, and then number 2, be able to compete more aggressively versus our competition. Finally, look for opportunities for us to monetize. This spectrum allows us to go far wider than ever before and also far deeper. We expect that to be an additional incremental subscriber base that we can tap into but also increase our payload. We view it very positively. Finally, CapEx to revenue ratio will remain at about 15%.

Speaker #3: And finally, look for opportunities for us to monetize. So, this spectrum allows us to go far wider than ever before, and also far deeper.

Speaker #3: And we expect that to be an additional incremental subscriber base that we can tap into, but also increase our payload. So we view it very positively.

Lionel Chng: We expect that to be an additional incremental subscriber base that we can tap into but also increase our payload. We view it very positively. Finally, CapEx to revenue ratio will remain at about 15%.

Speaker #3: Finally, CapEx to revenue ratio will remain at about 15%.

Speaker #1: Thank you, Lionel. Daru, is there anything you wanted to add? And then, on the next part of your question regarding the B2B ICT revenue and the outlook for that.

Bret Ginesky: Thank you, Lionel. Daryo, is there anything you wanted to add or no? Okay. The next part of your question on the B2B ICT revenue and the outlook for that going forward, I think Bu Dian will contribute to this one.

Speaker #1: Going forward, I think Ibu Dian will contribute to this one.

Speaker #4: Okay, thank you for the question. Yes, for the B2B ICT, we see for the first half of 2025, there is some moderate contraction. First, it's because we streamlined several ICT businesses from our portfolio, which impacts the revenue contraction.

Dian Siswarini: Okay, thank you for the question. Yes, for the B2B ICT, we see for the H1 2025, there's some moderate contraction. Because we streamlined several ICT businesses from our portfolio that impact to the revenue contraction. We see that from total revenue, B2B ICT external revenue was broadly stable at IDR 7.3 trillion, which is on 1.3%, while the whole segment declined to IDR 600 billion from IDR 1.4 trillion. We see that from Q1 to Q2, momentum in this business actually improved materially from Q1. Based on these core segment figures, external revenue increased to approximately IDR 4.2 trillion, up 35.5% Q on Q and 15.6% year on year, while segment result recovered to around IDR 1.1 trillion, reversing the Q1 loss.

Speaker #4: But we see that from total revenue, B2B ICT external revenue was broadly stable at Rp7.3 trillion, which is up 1.3%. While the whole segment declined to Rp600 billion from Rp1.4 trillion.

Speaker #4: What we see is that from the first quarter to the second quarter, momentum in this business actually improved materially from the first quarter. Based on this closed segment figures, external revenue increased to approximately 4.2 trillion, up 35.5% quarter on quarter.

Dian Siswarini: Based on these core segment figures, external revenue increased to approximately IDR 4.2 trillion, up 35.5% Q on Q and 15.6% year-on-year, while segment result recovered to around IDR 1.1 trillion, reversing the Q1 loss. We see scope for further improvement through stricter contract selection, a good pipelining, stronger collection discipline, and also a greater focus on higher quality connectivity and also ICT solution. The consolidation of enterprise capabilities into Telkom Enterprise. We're quite optimistic that this B2B ICT business will be better in the H2 and upcoming years.

Speaker #4: And 15.6% year on year, while segment result recovered to around 1.1 trillion rupiah, reversing the first quarter loss. We see scope for further improvement through strict contract selection, a good pipelining, stronger collection discipline, and also a greater focus on higher quality connectivity and also ICT solution.

Dian Siswarini: We see scope for further improvement through stricter contract selection, a good pipelining, stronger collection discipline, and also a greater focus on higher quality connectivity and also ICT solution. The consolidation of enterprise capabilities into Telkom Enterprise. We're quite optimistic that this B2B ICT business will be better in the H2 and upcoming years.

Speaker #4: And the consolidation of enterprise capabilities into Telecom Enterprise. So, we are quite optimistic that this B2B ICT business will be better in the second half and in the upcoming years.

Bret Ginesky: Thank you, Budian. Maybe if I can add just a little bit too. When we talk about the subsidiaries of these companies that are underperforming a little bit or that are being streamlined. Part of it is also there are companies that we've not streamlined yet, but we plan to streamline, so we're asking them to slow down generating new revenues and going after new projects. That has an impact on this segment as well, particularly in the B2B ICT. We'll go to the next question from Raymond Casoni. Raymond, if you could please unmute your line.

Speaker #1: Thank you, Ibu Dian. And maybe, if I can add just a little bit too—when we talk about the subsidiaries of these companies that are underperforming a little bit, or that are being streamlined, part of it is also that there are companies that we've not streamlined yet, but we plan to streamline.

Speaker #1: So we're asking them to slow down generating new revenues and going after new projects. So that has an impact on this segment as well, particularly in the B2B ICT.

Speaker #1: Now we'll go to the next question from Raymond Kafasi. Raymond, if you could please unmute your line.

Speaker #6: Hello. Thanks for the.

Raymond Casoni: Hello. Hi, Bu. Thanks, Brad, for the call.

Raymond Kosasih: Hello. Hi, Bu. Thanks, Brad, for the call.

Speaker #1: Raymond, we can barely hear you.

Bret Ginesky: Raymond, we can barely hear you.

Speaker #6: Yeah, sorry. Can you hear me? Okay, sorry about that. A couple of things from me. The first one is on cellular. If I look at the segment information, the EBITDA quarter-on-quarter is pretty much flat.

Raymond Casoni: Yeah. Sorry. Can you hear me? Okay. Sorry about that. A couple of things from me. The first one is on the cellular. If I look at from the segment information, the EBITDA Q on Q is pretty much flat. Yet, the spectrum fees, charges starts kicking in 2027, roughly annual cost will be about IDR 1 trillion. My question is, do you see any risk that the ability about the Market Repair will be sufficient to cover all these increases or there is challenges about raising prices, particularly on the lower segment? Because otherwise, if you cannot raise prices across the board, then this additional spectrum fee charges may not be value accretive. That's point number one. Point number two on the B2B ICT revenue profile. I've been looking at this for a number of years. I noticed that the revenue profile is very volatile.

Raymond Kosasih: Yeah. Sorry. Can you hear me? Okay. Sorry about that. A couple of things from me. The first one is on the cellular. If I look at from the segment information, the EBITDA Q on Q is pretty much flat. Yet, the spectrum fees, charges starts kicking in 2027, roughly annual cost will be about IDR 1 trillion. My question is, do you see any risk that the ability about the Market Repair will be sufficient to cover all these increases or there is challenges about raising prices, particularly on the lower segment?

Speaker #6: Yet the spectrum fee charges start kicking in 2027. Roughly, the annual cost will be about 1 trillion rupiah. So my question is, do you see any risk that the ability of the market repair will be sufficient to cover all these increases, or are there challenges around raising prices, particularly in the lower segment?

Speaker #6: Because otherwise, if you cannot raise prices across the board, then this spectrum fee charge—additional spectrum fee charges—may not be value-creative. So that's point number one.

Raymond Kosasih: Because otherwise, if you cannot raise prices across the board, then this additional spectrum fee charges may not be value accretive. That's point number one. Point number two on the B2B ICT revenue profile. I've been looking at this for a number of years. I noticed that the revenue profile is very volatile.

Speaker #6: Point number two on the B2B ICT revenue profile—I’ve been looking at this for a number of years. I noticed that the revenue profile is very volatile.

Speaker #6: Meaning some are actually based on a contract basis. This is different from the B2B infra profiles. It's a bit difficult for us to forecast future revenue for B2B ICT, given that that's maybe based on a project basis.

Raymond Casoni: Meaning some actually based on the contract basis. This is different than the B2B Infra profiles. It's a bit difficult for us to forecast future revenue for B2B ICT, given that that may be based on a project basis. Meanwhile, if I look at the cost structure in the B2B ICT, there's a lot of fixed cost. Meaning in a quarter where your revenue is low, the margin got hit. If I remember correctly, your Q1 B2B ICT EBITDA margin is actually negative. When the revenue jumps, then there is a big swing in the B2B ICT EBITDA margin. Maybe you can give a comment maybe how you're going to improve the B2B ICT future revenue profiles. That's the second one. The third one is on your account receivables. We've been looking at this for more than a decade, actually.

Raymond Kosasih: Meaning some actually based on the contract basis. This is different than the B2B Infra profiles. It's a bit difficult for us to forecast future revenue for B2B ICT, given that that may be based on a project basis. Meanwhile, if I look at the cost structure in the B2B ICT, there's a lot of fixed cost. Meaning in a quarter where your revenue is low, the margin got hit.

Speaker #6: And meanwhile, if I look at the cost structure in the B2B ICT, there's a lot of fixed cost. Meaning in a quarter where your revenue is low, the margin got hit. If I remember correctly, your first quarter B2B ICT EBITDA margin is actually negative.

Raymond Kosasih: If I remember correctly, your Q1 B2B ICT EBITDA margin is actually negative. When the revenue jumps, then there is a big swing in the B2B ICT EBITDA margin. Maybe you can give a comment maybe how you're going to improve the B2B ICT future revenue profiles. That's the second one. The third one is on your account receivables. We've been looking at this for more than a decade, actually. The outstanding remains flat, hasn't come down. One thing that I noticed closely is that the past due for more than three months has actually gone up. Maybe if you can give a comment on that. Thank you.

Speaker #6: But when the revenue jumps, then there is a big swing in the B2B ICT EBITDA margin. So maybe you can give a comment, maybe on how you're going to improve the B2B ICT future revenue profile.

Speaker #6: So that's the second one. The third one is on your account receivables. We've been looking at this for more than a decade, actually. The outstanding remains flat; it hasn't come down.

Raymond Casoni: The outstanding remains flat, hasn't come down. One thing that I noticed closely is that the past due for more than three months has actually gone up. Maybe if you can give a comment on that. Thank you.

Speaker #6: But one thing that I noticed closely is that the past due for more than three months has actually gone up. Maybe you can give a comment on that.

Speaker #6: Thank you.

Speaker #1: Thank you, Raymond. Maybe we can first start with Lionel on the telecom cell side, and then we'll move to the B2B ICT question, and then the receivables question afterwards.

Bret Ginesky: Thank you, Raymond. Maybe we can first start with Lionel on the Telkomsel side, then we'll move to the B2B ICT question, and then the receivables question afterwards.

Speaker #3: Yeah, thank you very much, Raymond. So, for overall cellular, from a segment information perspective, we remain optimistic to deliver our fiscal year '26 low to mid single-digit cellular revenue growth guidance.

Lionel Chng: Thank you very much, Raymond. For overall cellular, from a segment information, we remain optimistic to deliver our fiscal year 2026 low to mid single-digit cellular revenue growth guidance, supported by Market Repair. You rightly pointed out that Market Repair is an important component. We are also monitoring very closely the macroeconomic situation. These are not the only drivers that we see as potential areas of growth. As we demonstrated during the World Cup campaign, the opportunity for us to attach value-added services that has consumer demand is one opportunity. The second area that we are looking at is also in terms of monetizing the new spectrum that comes on board, because there are new ways for us to serve the customers better and also identify new ways for us to increase our paying users.

Speaker #3: Supported by market repair, you rightly pointed out that market repair is an important component. We are also monitoring very closely the macroeconomic situation. But these are not the only drivers that we see as potential areas of growth.

Speaker #3: We've demonstrated as we demonstrated during the World Cup campaign, the opportunity for us to attach value added services that make that has consumer demand is one opportunity.

Speaker #3: The second area that we are looking at is also in terms of monetizing the new spectrum that comes on board, because there are new ways for us to serve the customer better and also identify new ways for us to increase our paying users.

Lionel Chng: The second area that we are looking at is also in terms of monetizing the new spectrum that comes on board, because there are new ways for us to serve the customers better and also identify new ways for us to increase our paying users. Finally, there are cities that we are still a market follower and not the market leader, and we intend to monetize that and grow that segment as much as we can.

Speaker #3: And finally, there are cities where we are still a market follower and not the market leader. We intend to monetize that and grow that segment as much as we can.

Lionel Chng: Finally, there are cities that we are still a market follower and not the market leader, and we intend to monetize that and grow that segment as much as we can. Market Repair does provide the opportunity for revenue growth, but we are also very cautious to watch out for our subscriber base also. Those are the key areas for us as we look into the balance of fiscal year 2026. We do see the incremental cost, but we are also cautiously optimistic about the revenue potential and our subscriber potential into the H2. Thank you.

Speaker #3: Market repair does provide the opportunity for revenue growth, but we are also very cautious to watch out for the subscriber base as well. So, those are the key areas for us as we look into the balance of fiscal year ’26.

Lionel Chng: Market Repair does provide the opportunity for revenue growth, but we are also very cautious to watch out for our subscriber base also. Those are the key areas for us as we look into the balance of fiscal year 2026. We do see the incremental cost, but we are also cautiously optimistic about the revenue potential and our subscriber potential into the H2. Thank you.

Speaker #3: We do see the incremental cost, but we are also cautiously optimistic about the revenue potential and our subscriber potential into the second half. Thank you.

Speaker #1: Thank you, Lionel. And the next part of the question, part two, on the B2B ICT and the volatility in the revenues—Angelo can take that one.

Bret Ginesky: Thank you, Lionel. The next part of the question, part two on the B2B ICT and the volatility and the revenues. Angelo can take that one.

Speaker #2: Yeah, thank you for the question, Raymond. I think we probably mentioned it in our last quarterly call. I think previously we did some sort of, like, what you call it, reconciliation on an annual basis, Raymond.

Arthur Angelo Syailendra: Yeah. Thank you for the question, Raymond. I think we probably mentioned it in our last quarter call. I think previously, we did some sort of, what you call it, reconciliation on annual basis, Raymond. We are now doing it on quarterly basis. Right? Therefore, going forward, we expect this kind of lumpiness with respect to adjustment towards revenue and costs are being clearer. Right? Also, less lumpy. Right? Actually, 2026 is the first time we're doing it on quarterly basis. We hope that this addresses your question on ways for us to address your difficulty in forecasting the revenue and also cost for this business going forward. That's on the first point.

Speaker #2: We are now doing it on a quarterly basis. And therefore, going forward, we expect this kind of lumpiness with respect to adjustments towards revenue and costs to be clearer.

Speaker #2: And also less lumpy. And this is actually 2026—the first time we're doing it on a quarterly basis. So we hope that this addresses your question on ways for us to help with your difficulty in forecasting the revenue and also the costs for this business going forward.

Arthur Angelo Syailendra: Also, less lumpy. Right? Actually, 2026 is the first time we're doing it on quarterly basis. We hope that this addresses your question on ways for us to address your difficulty in forecasting the revenue and also cost for this business going forward. That's on the first point.

Speaker #2: So that's on the first point.

Speaker #1: Yeah, and then on your third point, on the receivables and some of the increase in the past due receivables for the three months and beyond, I think Angelo can take that one as well.

Bret Ginesky: Yeah. Then on your third point, on the receivables and some of the increase in the past due receivables for the 3 months and beyond, I think Angela can take that one as well.

Speaker #2: Okay, I think your question—just to make sure I get the question right—you have a question about the past due of accounts receivable, more than three months, that is going up on a quarter-on-quarter basis.

Arthur Angelo Syailendra: Okay. I think your question, I just want to make sure I get the question right. You have a question on the past due for account receivable, more than 3 months, that going up on quarter-on-quarter basis. I think the increase in past due receivable was reflected in our more prudent provisioning, if you look at our provisioning figures, rather than indicating a broad deterioration in the receivable quality. Our focus is not simply on managing the accounting provision, but also on improving the underlying quality of our receivable. Going forward, we are strengthening customer and contract quality. Not only that, we're also enhancing our billing and collection process, while maintaining a tighter control over provisioning and discretionary overhead costs.

Speaker #2: Now, I think the increase in past due receivables was reflected in our more prudent provisioning. If you look at our provisioning figures, rather than indicating a broad deterioration in the receivable quality, our focus is not simply on managing the accounting provision, but also on improving the underlying quality of our receivables.

Arthur Angelo Syailendra: Our focus is not simply on managing the accounting provision, but also on improving the underlying quality of our receivable. Going forward, we are strengthening customer and contract quality. Not only that, we're also enhancing our billing and collection process, while maintaining a tighter control over provisioning and discretionary overhead costs.

Speaker #2: Going forward, we are strengthening customer and contract quality. But not only that, we are also enhancing our billing and collection process, while maintaining tighter control of our provisioning and discretionary overhead costs.

Speaker #2: Now, you can see that, as a result, provisioning requirements will continue to depend on our collection performance, but we also expect better receivable quality over time as this initiative takes effect. Some of this has been touched upon by the Telkomsel team earlier, with regard to what they do on cleansing or recalibrating the base for IndiHome customers.

Arthur Angelo Syailendra: You can see that as a result, provisioning requirement will continue to depend on our collection performance, but we also expect better receivable quality over time as these initiatives take effect. Some of it has been touched upon by Telkomsel team earlier by what they do on cleansing or recalibrating the base for IndiHome customer. From a broader cash generation perspective, Raymond, net net, when you see the overall totality, you can see in our operating cash flow. We continue to see a very healthy cash conversion. Our operating cash flow actually does increase 7% year-on-year to IDR 34.9 trillion, outpacing revenue net income growth, which indicates that the increase in provisioning has not translated into deterioration in the group overall cash generating ability.

Speaker #2: Now, from a broader cash generation perspective, Raymond, net-net, when you see the overall totality, you can see it in our operating cash flow, right?

Arthur Angelo Syailendra: We continue to see a very healthy cash conversion. Our operating cash flow actually does increase 7% year-on-year to IDR 34.9 trillion, outpacing revenue net income growth, which indicates that the increase in provisioning has not translated into deterioration in the group overall cash generating ability. Cash flow is essentially a very good reflection of how we'll be able to convert our receivable, be that 3, 6, 12 months or whatever have you, into real cash. Thank you.

Speaker #2: We continue to see a very healthy cash conversion. Our operating cash flow actually increased 7% year-on-year to Rp 34.9 trillion, outpacing revenue and net income growth, which indicates that the increase in provisioning has not translated into deterioration in the group's overall cash-generating ability.

Speaker #2: Because cash flow is essentially a very good reflection of how we are able to convert our receivables, be that 3, 6, 12 months, or whatever have you, into real cash.

Arthur Angelo Syailendra: cash flow is essentially a very good reflection of how we'll be able to convert our receivable, be that 3, 6, 12 months or whatever have you, into real cash. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you, Angelo. Thank you, Raymond, for the question. The next question is a follow-up from Piyush. Piyush, please unmute your mic and ask your question.

Bret Ginesky: Thank you, Angela. Thank you, Raymond, for the question. Next question is a follow-up from Piyush. Piyush, please unmute your mic and ask your question.

Speaker #4: Yeah, hi. Thanks a lot. Great, thanks, management. A few follow-ups. Firstly, on Telkomsel, could you also share your 2027 capex outlook and on the 5G rollout?

[Analyst] (HSBC): Yeah. Hi. Thanks a lot, Bret. Thanks, management. Few follow-ups. Firstly, on Telkomsel, could you also share your 2027 CapEx outlook? On the 5G rollout, could you expand a little bit on your network rollout as well as population coverage targets for 2026, 2027 and beyond? What's your strategy for 5G FWA to complement your fiber broadband business, if you can shed some light. Secondly, just on the housekeeping. I remember on VRP you had earlier mentioned an IDR 1 to 1.2 trillion budget for 2026. Can you shed some light on how much is booked for One Edge and is it still on target for the full year? Thank you.

Piyush Choudhary [Director of Telecoms Analyst: Yeah. Hi. Thanks a lot, Bret. Thanks, management. Few follow-ups. Firstly, on Telkomsel, could you also share your 2027 CapEx outlook? On the 5G rollout, could you expand a little bit on your network rollout as well as population coverage targets for 2026, 2027 and beyond? What's your strategy for 5G FWA to complement your fiber broadband business, if you can shed some light. Secondly, just on the housekeeping. I remember on VRP you had earlier mentioned an IDR 1 to 1.2 trillion budget for 2026. Can you shed some light on how much is booked for One Edge and is it still on target for the full year? Thank you.

Speaker #4: Could you expand a little bit on your network rollout, as well as population coverage targets for 2026, 2027, and beyond? And what's your strategy for 5G FWA to complement your fiber broadband business?

Speaker #4: If you can shed some light. Secondly, just on the housekeeping, I remember on ERP you had earlier mentioned a one to 1.2 trillion budget for 2026.

Speaker #4: Can you shed some light on how much is booked for 1H, and is it still on target for the full year? Thank you.

Speaker #2: Thank you, Piyush, for the question. Haidaru will contribute, and potentially Panugi and Talaynil as well.

Bret Ginesky: Thank you, Piyush, for the question. Pak Daru will contribute and potentially Pak Nugi and Pak Lano as well.

Speaker #3: Yeah, yeah. So the main objective of having this additional spectrum on 700 as well as 2,600 is mainly to make sure that Telkomsel will keep competitive in terms of network quality, as one of the value propositions to the market.

[Company Representative] (Telkomsel): Yeah. The main objective of having this additional spectrum on 700 as well as 2,600, is mainly to make sure that Telkomsel will keep competitive in terms of network quality as one of the value proposition to the market. One of the main program for that is to continue expanding our 5G. It is not only for mobile, but also for the FWA, as you mentioned just now. The penetration of fixed broadband using fiber is deemed to be not visible in all areas, especially when we are trying to penetrate to the low-end segment. This FWA with 5G together with 2,600 MHz is the ideal spectrum. It will come with the specific solution in which the ONT is no longer the normal ONT. It is no longer like the common orbits, but it is more like the ONT with SIM card.

Nugi Nugroho: Yeah. The main objective of having this additional spectrum on 700 as well as 2,600, is mainly to make sure that Telkomsel will keep competitive in terms of network quality as one of the value proposition to the market. One of the main program for that is to continue expanding our 5G. It is not only for mobile, but also for the FWA, as you mentioned just now.

Speaker #3: And one of the main programs for that is to continue expanding our 5G. It's not only for mobile, but also for FWA, as you mentioned just now.

Nugi Nugroho: The penetration of fixed broadband using fiber is deemed to be not visible in all areas, especially when we are trying to penetrate to the low-end segment. This FWA with 5G together with 2,600 MHz is the ideal spectrum. It will come with the specific solution in which the ONT is no longer the normal ONT. It is no longer like the common orbits, but it is more like the ONT with SIM card. Whenever the demand is getting bigger, we can always upgrade the SLA and service quality accordingly.

Speaker #3: The penetration of fixed broadband using fiber is deemed to not be visible in all areas, especially when we are trying to penetrate into the low-end segment.

Speaker #3: And this FWA with 5G, together with 2,600 megahertz, is the ideal spectrum, and it will come with a specific solution in which the ONT is no longer the normal ONT.

Speaker #3: It's no longer like the common orbits, but it is more like the ONT with SIM card. So, whenever the demand is getting bigger, we can always upgrade the SLA and service quality accordingly.

Arthur Angelo Syailendra: Whenever the demand is getting bigger, we can always upgrade the SLA and service quality accordingly.

Speaker #1: Continuing from Deepa Nuki's explanation, as of June 26 we had deployed around 6,000 5G PTS, expanding our 5G coverage to more than 107 cities and regions across Indonesia.

Daru Mulyawan: Okay. Continue from the Pak Nugi explanation that, as of 26 June 2026, we had deployed around 6,000 5G BTS, expanding our 5G coverage to more than 107 cities and regencies across Indonesia. We have therefore updated full year 2026 CapEx to revenue guidance to around 15%, reflecting higher deployment investment following the spectrum acquisition. The rollout will remain disciplined and phased based on network needs, customer demand, and return feasibility. Thank you.

Speaker #1: We have therefore updated full-year 2026 capex-to-revenue guidance to around 15%, reflecting higher deployment investment following the spectrum acquisition. But the rollout will remain disciplined and phased, based on network needs, customer demand, and return feasibility.

Speaker #1: Thank you.

Speaker #2: Thank you, Haidaru. Panugi, the next question is another follow-up question, coming from—sorry—Ranjan.

Bret Ginesky: Thank you, Pak Daru, Pak Nugi. The next question is another follow-up question coming from Ran, sorry, Ranjan.

Speaker #5: Hi. Thank you for the opportunity again. Two quick follow-ups. On the fixed broadband revenues, the customer numbers have declined. They've also mentioned pricing pressures in the market as well.

[Analyst]: Hi. Thank you for the opportunity again. Two quick follow-ups. On the fixed broadband revenues, the customer numbers have declined. You've also mentioned pricing pressures in the market as well. With that context, can you help us understand the growth in the fixed broadband revenues on a quarter-on-quarter basis? The second question, again, is in your working capital. There seems to be a big increase in other payables to IDR 24.9 trillion. If you can help us understand what's behind that. Thank you.

Speaker #5: With that context, can you help us understand the growth in the fixed broadband revenues on a quarter-on-quarter basis? The second question, again, is on your working capital.

Speaker #5: There seems to be a big increase in other payables, to 24.9 trillion rupiah. If you can, help us understand what's behind that. Thank you.

Speaker #2: I can take the payable. That's an easy one, Ranjan. That's because that's the dividend payable that we already booked, but we haven't paid in the first half of '26.

Arthur Angelo Syailendra: I can take the payable. That's an easy one, Ranjan. That's because that's the dividend payable that we already booked, but we haven't paid in H1 2026. If you recall, we paid our dividend sometimes in the third week of June for H1 2025, while we only pay our dividend on 10 July 2026, but we already committed the amount, therefore you see that amount in our payable. Thank you.

Speaker #2: If you recall, we paid our dividend sometime on the 30th of June for the first half of 2025. Well, we only pay our dividend on July 10, 2026, but we've already committed the amount, and therefore you see that amount in our payable.

Speaker #2: Thank you.

Speaker #1: And Lionel here, just adding more perspective. Thank you very much for the follow-up question. So, you do see that revenue declined year-on-year.

Lionel Chng: Lionel here. Just adding more perspective. Thank you very much for the follow-up question. You do see that revenue declined year-on-year, and that has been a challenge that we've been trying to address. In the last two quarters, you saw that our revenue started to stabilize quarter-on-quarter. This perhaps is the first quarter where we see it quarter-on-quarter growth. That has been driven by a few factors. Number one, the active subscribers have started to increase, and we saw a double-digit increase in year-on-year on the active subscribers. Churn has reduced by double digit also. This combination has helped us to stabilize the business for us to be able to grow quarter-on-quarter. However, market pressures do continue to exist, especially in the low-end segment.

Lionel Chng: Lionel here. Just adding more perspective. Thank you very much for the follow-up question. You do see that revenue declined year-on-year, and that has been a challenge that we've been trying to address. In the last two quarters, you saw that our revenue started to stabilize quarter-on-quarter. This perhaps is the Q1 where we see it quarter-on-quarter growth. That has been driven by a few factors. Number one, the active subscribers have started to increase, and we saw a double-digit increase in year-on-year on the active subscribers.

Speaker #1: And that has been quite—it has been a challenge that we've been trying to address. In the last two quarters, you saw that our revenue started to stabilize quarter on quarter.

Speaker #1: And this, perhaps, is the first quarter where we see quarter-on-quarter growth. That has been driven by a few factors. Number one, the active subscribers have started to increase.

Speaker #1: And we saw a double-digit increase in year on year. On the active subscribers, churn has reduced by double-digit also. And this combination has helped us to stabilize the business for us to be able to grow quarter on quarter.

Lionel Chng: Churn has reduced by double digit also. This combination has helped us to stabilize the business for us to be able to grow quarter-on-quarter. However, market pressures do continue to exist, especially in the low-end segment. To cover that a little bit more, our focus is while we compete in the low-end segment, it is a red ocean that we wish to steer away from. A lot of our focus will be in the mid to high-end segment, where we will intend to do a combination of things.

Speaker #1: However, market pressures still continue to exist, especially in the low-end segment. So, to cover that a little bit more, our focus is on how we compete in the low-end segment.

Lionel Chng: To cover that a little bit more, our focus is while we compete in the low-end segment, it is a red ocean that we wish to steer away from. A lot of our focus will be in the mid to high-end segment, where we will intend to do a combination of things. More higher speed for same price, higher speed for a slightly increased price, number one. Number two, be able to offer things which our competitors have not been very successful at. For example, additional VAS and OTT, especially in entertainment, that we intend to bundle together at a very affordable price. Finally, fixed mobile convergence continues to be an important strategy. That is a differentiator for us. Fixed wireless access also will be another area that we'll play in with the additional spectrum.

Speaker #1: It is a red ocean that we wish to steer away from. A lot of our focus will be in the mid- to high-end segment, where we intend to do a combination of things.

Speaker #1: More higher speed for the same price, higher speed for a slightly increased price—number one. Number two, be able to offer things which our competitors have not been very successful at.

Lionel Chng: More higher speed for same price, higher speed for a slightly increased price, number one. Number two, be able to offer things which our competitors have not been very successful at. For example, additional VAS and OTT, especially in entertainment, that we intend to bundle together at a very affordable price. Finally, fixed mobile convergence continues to be an important strategy. That is a differentiator for us. Fixed wireless access also will be another area that we'll play in with the additional spectrum. The opportunity, while we are cautious about the outlook, we intend to grow this business.

Speaker #1: For example, additional VESAs and OTT, especially in entertainment, that we intend to bundle together at a very affordable price. And finally, fixed mobile convergence continues to be an important strategy.

Speaker #1: That is a differentiator for us. Fixed wireless access also will be another area that we'll play in with the additional spectrum. So the opportunity—while we are cautious about the outlook—we intend to grow this business.

Lionel Chng: The opportunity, while we are cautious about the outlook, we intend to grow this business.

Bret Ginesky: In addition to that

Speaker #2: In addition to that, there will be some other innovations needed for the fixed broadband market here in Indonesia, because we believe that, especially for the high-end segments, there are big opportunities that we can explore.

Nugi Nugroho: In addition to that There will be some other innovation needed for the fixed broadband market here in Indonesia. Because we believe that especially for the high-end segments, there are big opportunities that we can explore. Not only to make sure that it will create more stickiness to our high-value customers, but at the same time, it will also bring their ARPU growth by at least double-digit.

[Company Representative] (Telkomsel): There will be some other innovation needed for the fixed broadband market here in Indonesia. Because we believe that especially for the high-end segments, there are big opportunities that we can explore. Not only to make sure that it will create more stickiness to our high-value customers, but at the same time, it will also bring their ARPU growth by at least double-digit. We are working on it. On the regulatory side, since we are maybe the only country with thousands of fixed broadband ISPs, we've been talking also to the regulator to make sure that it is more streamlined and to create a healthier industry for the fixed broadband business. Thank you.

Speaker #2: And not only to make sure that it will create more stickiness with our high-value customers, but at the same time, it will also bring their ARPU growth by at least double digits.

Speaker #2: So, we are working on it. And on the regulatory side, since we are maybe the only country with thousands of fixed broadband ISPs, we've also been talking to the regulator to make sure that it is more streamlined and to create a healthier industry for the fixed broadband business.

Nugi Nugroho: We are working on it. On the regulatory side, since we are maybe the only country with thousands of fixed broadband ISPs, we've been talking also to the regulator to make sure that it is more streamlined and to create a healthier industry for the fixed broadband business. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you, Panugi, Pak Lionel, and Pak Angelo. We'll have one last question. Arthur from Citi, if you can unmute and ask your question.

Bret Ginesky: Thank you, Pak Nugi, Pak Lionel, and Pak Angelo. We'll have one last question. Arthur from Citi, if you can unmute and ask your question.

Speaker #4: Hi. Thanks for the opportunity. I just wanted to check up on the asset divestment program. If you can get any clarity in terms of the timing— which assets are expected to be divested first, what are the timelines, and what milestones we should expect?

[Analyst]: Hi. Thanks for the opportunity. Just wanted to check up on the asset divestment program. If you can get any clarity in terms of the timing, which assets are expected to be divested first, what are the timelines and milestones that we should expect? Maybe questions on the proceeds, given that your balance sheet is actually quite full, so you don't actually need to do the divestment. I'm just wondering what the plans are on this. Thank you.

Arthur Pineda: Hi. Thanks for the opportunity. Just wanted to check up on the asset divestment program. If you can get any clarity in terms of the timing, which assets are expected to be divested first, what are the timelines and milestones that we should expect? Maybe questions on the proceeds, given that your balance sheet is actually quite full, so you don't actually need to do the divestment. I'm just wondering what the plans are on this. Thank you.

Speaker #4: And maybe questions on the proceeds, given that your balance sheet is actually quite full. So you don't actually need to do the divestment.

Speaker #4: So, I'm just wondering what the plans are on this. Thank you.

Speaker #1: Hey, Arthur. I think Angelo can take this one.

Bret Ginesky: Hey, Arthur. I think Angelo can take this one.

Speaker #5: Yeah, no, thanks, Arthur. I think, as I mentioned previously, right, divestment is a term that we use when it comes to divesting assets that we deem to be non-core.

Arthur Angelo Syailendra: Yeah. No. Thanks, Arthur. I think as I mentioned previously, divestment is a term that we use when it comes to divestment of asset that we deem to be non-core. On that particular universe, I think we anticipate to do about remaining three to four divestment till the end of the year.

Speaker #5: Now, on that particular universe, I think we anticipate doing about three to four remaining divestments by the end of the year.

[Analyst]: Sorry, Angelo. Sorry, I was referring to the InfraCo and the data center. Sorry.

Arthur Pineda: Sorry, Angelo. Sorry, I was referring to the InfraCo and the data center. Sorry.

Speaker #4: Sorry, Angelo. I'm sorry. I was referring to the Infraco and the data center. Sorry, I was not very clear on that question.

Arthur Angelo Syailendra: Oh, okay.

[Analyst]: I was not very clear in my question.

Arthur Pineda: I was not very clear in my question.

Speaker #5: Just probably. Yeah, that should probably be handled by Pa Senno. Thank you.

Arthur Angelo Syailendra: Yeah. That's probably better be handled by Pak Seno. Thank you.

Bret Ginesky: Oh, sorry. Okay. We thought you were talking about the pre-money side of it. Maybe Pak Seno can handle this. You're asking about the timing of the data center, any type of data center or InfraCo transaction as well, correct?

Speaker #1: Sorry. Okay, so you're talking about the streamlining side of it. Maybe Pa Senno can handle this. You're asking about the timing of the data center—any type of data center or Infraco transaction as well, correct?

Seno Soemadji: Yes.

Seno Soemadji: Yes. Okay. Okay. Thank you for the question again. In terms of InfraCo, we expect the important milestone to happen by end of this Q. Hence our target can start rolling to be implemented or executed by our last Q in this year. In terms of data center, we expect more or less the same timeline. However, probably the formalization of the end initiative would be signed by end of this year. Thank you.

Seno Soemadji: Okay.

Speaker #1: Okay, thank you for the question again. So in terms of Infraco, we expect the important milestone to happen by the end of this quarter. Hence, our target can start rolling to be implemented or executed by our last quarter this year.

Lionel Chng: Okay. Thank you for the question again. In terms of InfraCo, we expect the important milestone to happen by end of this Q. Hence our target can start rolling to be implemented or executed by our last Q in this year. In terms of data center, we expect more or less the same timeline. However, probably the formalization of the end initiative would be signed by end of this year. Thank you.

Speaker #1: And in terms of the data center, we expect more or less the same timeline. However, the formalization of the end initiative will probably be signed by the end of this year.

Speaker #1: Thank you.

Speaker #4: Thank you, everyone. I have one announcement I’d also like to make. The full PowerPoint presentation will be up probably around early afternoon today. That will be the 65- to 70-page slide deck, which has all of the financials of the subsidiary as well in it.

Bret Ginesky: Thank you, everyone. I have one announcement I'd also like to make. The full PowerPoint presentation will be up probably around early afternoon today. That will be the 65, 70-page slide deck, which has all of the financials of the subsidiary as well in it, and other information that you guys are looking for. That's typically how we do it. We put up the earnings call presentation first, that comes a couple of hours after the call. That will be up on the website, you'll get notification on that. I'd also like to thank everyone for participating and thank our board of directors and the board of directors at Telkomsel also for participating. If you have any additional questions, please feel free to email us or contact us directly at investor@telkom.co.id. Thank you.

Speaker #4: And other information that you guys are looking for. So that's typically how we do it. We put up the earnings call presentation first, and then that comes a couple of hours after the call.

Bret Ginesky: We put up the earnings call presentation first, that comes a couple of hours after the call. That will be up on the website, you'll get notification on that. I'd also like to thank everyone for participating and thank our board of directors and the board of directors at Telkomsel also for participating. If you have any additional questions, please feel free to email us or contact us directly at investor@telkom.co.id. Thank you.

Speaker #4: So that will be up on the website, and you'll get a notification about that. I'd also like to thank everyone for participating, and thank our Board of Directors and the Board of Directors at Telkomsel also for participating.

Speaker #4: If you have any additional questions, please feel free to email us or contact us directly at investor@telkom.co.id. Thank you.

Operator: The recording has stopped. Goodbye

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