New TOWR IJ Preemptive Rights Issue announcement

TOWR has announced a new preemptive rights issue plan, which is set for approval at the RUPSLB on April 23. This aligns with the company’s previous commitment after canceling its earlier rights issue plan of 5 billion shares at Rp900/sh (Rp4.5tr max proceeds) at the end of FY24. The new plan, disclosed on March 10, 2025, proposes issuing up to 15 billion new shares, with a maximum dilution effect of 23.06%. Based on the latest closing price, the rights issue could raise up to Rp7.7tr, making it a potentially larger fundraising effort than the previous plan.

Comment:

Since the last rights issue, TOWR has announced a CSPA agreement to acquire ~40% of DATA IJ, an infrastructure and ISP player in fixed broadband, with a potential move toward an MTO. While the transaction value remains undisclosed, we still anticipate significant fiber capex commitments from TOWR overall. Additionally, we identified at least two major M&A targets that could further accelerate its growth.

We remain positive on TOWR due to its strong cash flow generation, consistently reinforced by strategic acquisitions. Despite ongoing expansion, its net debt/EBITDA has remained steady at ~4.3x, highlighting its ability to sustain growth while maintaining financial stability.

Telkomsel, Google, and Komdigi Strengthen Digital Message Security Cooperation

The Ministry of Communication and Digital (Komdigi), Telkomsel, and Google have announced a partnership to enhance digital communication security in Indonesia through the implementation of Rich Communication Services (RCS). RCS offers various security features, including business verification and enhanced protection against scams and phishing. This technology enables users to communicate more securely and effectively, ensuring that messages are exchanged only between verified senders and intended recipients. (Kontan)

TLKM Accelerates B2B Business, Expands Telkom Solution to SOE and Private Markets

TLKM has launched Telkom Solution as its flagship brand for providing integrated digital solutions in the Business-to-Business (B2B) market. Telkom Solution supports various sectors, including government agencies, state-owned enterprises (SOEs), regional enterprises, and private companies, helping them leverage digital technology more effectively to enhance competitiveness and business performance. Currently, Telkom Solution focuses on three key offerings: Connectivity++, Cyber Security, and Artificial Intelligence (AI) for enterprise business segments. (Bisnis)

TLKM Expands Data Center Capacity to Seize AI Opportunities

Telkom Group is strengthening its data center infrastructure to meet the growing demand for digital services and artificial intelligence (AI). Through NeutraDC, the company is expanding the HyperScale Data Center (HDC) in Cikarang by 18 megawatts (MW) and building a new HDC in Batam with an initial 18 MW capacity. Currently operating 42 MW across 33 locations—28 in Indonesia and five overseas—Telkom’s expansion aims to support key technologies like cloud computing, AI, 5G, and IoT, ensuring it remains at the forefront of Indonesia’s digital transformation. (Kontan)

Telkomsel 5G Now Covers Jabotabek with Speeds Up to 500 Mbps

Telkomsel has ensured full 5G network coverage across Jakarta, Bogor, Tangerang, and Bekasi (Jabotabek). Customers in the area can experience download speeds ranging from 110 Mbps to a maximum of 500 Mbps. Meanwhile, upload speeds can reach up to 50-110 Mbps, which is five times faster than 4G. As of March 2025, 5G handset penetration in Jabotabek has surpassed 30%, with an average monthly 5G data consumption of 30 GB per user. (Detik)

Kemkomdigi and World Bank Discuss Internet Expansion Strategy

The Ministry of Communication and Digital (Kemkomdigi) met with World Bank representatives to discuss strategies for expanding internet access, including plans to optimize spectrum frequency allocation and involve the private sector in developing digital infrastructure. The discussion also covered strategies for utilizing 700 MHz, 2.6 GHz, and 3.5 GHz spectrum frequencies to improve internet service quality. By adopting global best practices, the government aims to enhance network capacity more efficiently and inclusively. (InvestorDaily)

OJK Targets 70% of Fintech P2P Lending for Productive Sectors by 2028

The Financial Services Authority (OJK) aims to increase peer-to-peer (P2P) lending allocations to productive sectors to 70% by 2028. However, as of December 2024, the realized funding to this sector has only reached Rp8.45 trillion, or 30.19% of total disbursements. OJK is also assessing the readiness of supervisory infrastructure and the state of the fintech lending industry (LPBBTI). Additionally, adjustments to the maximum daily economic benefits of P2P lending are expected to improve financial access for underserved communities outside the non-LPBBTI industry. (Bisnis)

OTHER FOREIGN TRENDS

Can AI Like Manus Replace Project Managers?

The AI agent Manus has demonstrated the ability to manage 50 simultaneous tasks with remarkable precision, surpassing DeepSeek in areas such as social media analysis, financial transactions, research, and shopping. As AI capabilities continue to advance, the debate arises on whether AI can replace project managers. While AI may optimize workflows and manage structured projects, human oversight remains essential for strategic decision-making and leadership. (SosMed)

U.S. and China Clash Over AI Governance Amid Rising Tensions

At the AI Action Summit in Paris, the U.S. and China clashed over artificial intelligence governance, highlighting growing geopolitical tensions. Chinese Ambassador to the U.S., Xie Feng, called for international cooperation to prevent AI risks, warning that unregulated AI could become a major threat. Meanwhile, U.S. Vice President J.D. Vance argued that AI security should be managed among trusted allies, criticizing collaboration with authoritarian regimes. As the U.S. imposes restrictions on China's AI sector, Beijing pushes back, seeking to strengthen its leadership. With both nations opposing views, a global agreement on AI regulation remains challenging. (SosMed)

AI Stocks Plunge as Investor Sentiment Shifts

AI stocks saw a sharp decline, dropping between 7.8% and 19.9% in the past month, with Tesla down 36.7%, as the market narrative around AI shifts. While analysts cite recession and tariff concerns, a deeper issue is emerging: skepticism over AI’s immediate economic impact. Recent reports challenge the hype, including:

1. Microsoft CEO Satya Nadella’s remarks on AI’s lack of tangible economic gains,
2. OpenAI’s ChatGPT failure rate,
3. Higher scores of AI chatbots are a direct result of being trained on their benchmark tests
4. AI falls short in complex reasoning tests
5. Google’s AI scientist has been rejected by scientists
6. AGI is still far away (even by Chinese scientists)
7. Apple’s efforts are failing
8. Larry Ellison’s AI-based farming is losing big money despite receiving $500 million investment,
9. OpenAI and Microsoft are breaking up
10. Google has canceled several data centers
11. Klarna retracted its claim of using GenAI to automate call centers and Forbes concluded that GenAI is still a long way in future for call centers. (SosMed)

China’s SpaceSail to Challenge Starlink with Global Satellite Internet Expansion

China’s SpaceSail is set to launch satellite broadband services in over 30 countries, including South Africa, positioning itself as a strong competitor to Elon Musk’s Starlink. With plans to deploy 648 satellites by 2025 and 15,000 by 2030, SpaceSail could reshape the industry with competitive pricing, rapid expansion, and strategic political advantages in regions where Starlink faces regulatory hurdles. As satellite internet becomes crucial for global connectivity, the rivalry between U.S.-backed Starlink and China-backed SpaceSail may have significant geopolitical implications, intensifying competition in the satellite broadband sector. (SosMed)

CoreWeave IPO, OpenAI Secures Long-Term Contract Worth Rp195.4Tr

CoreWeave, (cloud-based graphics processing unit infrastructure to artificial intelligence developers - AI startup backed by Nvidia), signed a long-term contract worth US$11.9bn (Rp195.4tr) with OpenAI ahead of its stock market debut. CoreWeave, a U.S.-based cloud computing company, specializes in providing GPU-based infrastructure for AI developers. Under this agreement, CoreWeave will supply AI infrastructure to OpenAI. The deal also includes a US$350mn private share placement to OpenAI during the initial public offering (IPO), granting OpenAI equity in CoreWeave as part of their long-term partnership. (Bisnis)

Microsoft is open to using natural gas to power AI data centers to keep up with demand

Microsoft’s vice president of energy, Bobby Hollis, said the tech company would consider natural gas with carbon capture as a power solution for data centers. Chevron and Exxon recently announced they are developing natural gas solutions for data centers. The tech sector has largely relied on renewable power, but the industry is increasingly turning to alternative power sources as data center electricity consumption rises. (CNBC)

Malaysian telcos face lower profitability this year as infrastructure costs, stagnant ARPU growth take a toll

Malaysian telecommunications companies are expected to experience lower profitability in 2025 due to high infrastructure costs for network upgrades and stagnant ARPU growth, according to Apex Securities. While 5G adoption surged by 119.9% to 18.2mn subscribers in 2024, the decline in 4G subscriptions (-28.1%yoy) signals a major shift in consumer preference. Telcos are aggressively pushing 5G adoption through competitive pricing, bundled postpaid plans, and free upgrades, but rising operational costs and intensifying competition are squeezing margins. With ARPU expected to decline further, and optimism over the data center boom fading, Apex Securities has downgraded the Malaysian telco sector to 'neutral', citing cost pressures and limited earnings growth potential. (TheEdge)

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