Solusi Sinergi Digital (WIFI IJ)

FTTH Cost Advantage and FWA-Driven Growth Momentum; Initiate with Buy Rating

• WIFI benefits from its structurally lower FTTH capex at ~Rp750k/HC driven by network design, enabling its competitive pricing at Rp100k.
• We project WIFI to reach ~12mn subs. by FY30F (vs. company’s 25mn target), with FWA as the primary driver, contributing ~65% of total subs.
• We initiate with a Buy rating and TP of Rp4,400. As a high-growth play in the sector, WIFI currently trades at an attractive 5x FY27F EV/ EBITDA.

Structurally lower cost with a differentiated network design

WIFI benefits from its lower cost base, underpinned by a differentiated FTTH network design that enables capex of ~Rp750k/home-connect, materially below the industry avg. of ~Rp1.5mn/home-pass. This advantage is driven by ownership of backbone, an efficient 1:32 split-ratio architecture, and fiber deployment along KAI railway corridors, which allows direct fiber connection to ONT without extensive last-mile overbuild. In addition, WIFI sources CPE at an avg. cost of ~US$15/unit, below industry norm of ~US$35, and collocates network equipment within KAI stations at no incremental rental cost.

Unlocking an additional growth engine through FWA beyond FTTH

FWA is expected to be WIFI’s primary growth driver, offering a structurally faster time-to-market than FTTH by avoiding extensive last-mile fiber rollout. WIFI targets up to 5mn paying FWA subscribers by FY26F, supported by the deployment of ~5,000 sites on existing TowerCo infrastructure. By utilizing under-occupied tower layers, WIFI secures lower lease costs of ~Rp7-10mn/ site/month, below the ~Rp12.1mn implied tenancy revenue of TBIG & TOWR in 3Q25. Customer acquisition is accelerated through partnerships with local distributors, supported by a fixed Rp10k/subs monthly incentive and a one-off acquisition fee. While FWA capex is estimated at ~Rp1.3mn/user, including CPE costs borne by WIFI, the resulting 16–18-month payback period remains attractive and economically viable for a scalable ISP model.

Initiate with Buy rating with a DCF-based TP of Rp4,400

We initiate coverage with a Buy rating, positioning WIFI as a high-growth proxy with revenue/earnings CAGR of 69%/80%, respectively, over FY25-29F. With meaningful earnings contribution expected to materialize from FY27F onwards, we believe the current valuation of 5.0x FY27F EV/EBITDA offers attractive risk-reward. Tactical (3M) view: UW. Despite our positive long-term view, we see near-term sentiment on the stock may remain challenged as investors focus shifts from growth to profitability visibility following the 3Q25 earnings miss. Additional overhangs include upcoming costs in FY26 (i.e., spectrum-related and one-off customer acquisition costs for FWA). Current retail-dominated positioning could also drive ST share price volatility.

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