Indosat Ooredoo Hutchison (ISAT IJ)

Stepping Into Monetization Phase

• Dec25 price tracker shows clear intentional price hikes across IM3 and Hutch mainstream packages, supporting yield improvement prospect.
• We raise our FY26F revenue forecast to +5.2% yoy, supported by stronger mobile execution, and meaningful upside to data yields.
• We raise our TP to Rp3,000 (5.3x EV/EBITDA) following initial price-repair; Mgmt. guides fiber divestment completion by year-end.

Evidence of solid price repair emerging in Dec25

We note that ISAT’s 3Q25 data yield remained relatively flat at -0.3% qoq (vs. +11.2%/+5.1% qoq for TLKM and EXCL), which management attributed to the temporary impact of promotional activity tied to the launch of its Anti-Spam & Scam Protection product. However, our Oct-Dec25 price tracker indicates that ISAT began implementing solid price-repair initiatives across its mainstream packages. For IM3, average data yields rose +22.7% on Hot Promo Monthly packages and +34% on Hot Promo Daily. For Hutch, AON, Hot Sale, and Pasti Murah packages recorded notable yield increases of +8.6%, +37.5%, and +46.4%, respectively. These adjustments confirm that yield normalization is underway heading into FY26F (see Exhibit 2 & 3).

Raising FY26F forecasts on strong mobile execution

We raise our FY26F revenue forecast to +5.2% yoy, supported by +3.6% yoy growth in mobile and an expected ~US$70mn contribution from GPUaaS, which combined drives an 11.4% uplift in our FY26F net profit est. With ISAT now actively executing price-repair initiatives, we see meaningful upside to data yield, which currently stands at Rp2.3k/GB, the lowest among peers and still trading at a ~13% discount to its 3-year average. Management is also highly focused on monetizing traffic through AI-driven personalization. Combined with a more rational market environment post-consolidation, we expect ISAT’s ARPU to increase +1.6% yoy to Rp39.3k in FY26F.

Maintain Buy with TP Rp3,000 as price repair supports re-rating potential

We raise our TP to Rp3,000, implying 5.3x EV/EBITDA 2026F (+0.5 SD to 3-year mean). ISAT has been the laggard in implementing price increases relative to peers, but with price-repair initiatives now clearly underway, we see room for a re-rating. The planned divestment of a 70% majority stake in its fiber network targeted for completion by year-end, also presents meaningful value-unlocking potential, with an estimated valuation of US$1bn (~12.7x EV/EBITDA). We believe ISAT is seeking a strategic partner with strong FiberCo expertise to enhance asset monetization and accelerate enterprise network growth, similar to value creation achieved through its DC with BDx. This strategy allows ISAT to focus on strengthening its core mobile.

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