TLKM The IndiHome Spin-Off Is Now Signed - What Happens to Telkom's Own Segment Table?

The Spin-Off Signed - This Is the Last Quarter IndiHome Sits Inside Telkom's Own Numbers

Q2 2023 closes the loop this dataset opened in Q1's post: the Conditional Spin-Off Agreement flagged there as a subsequent event became a signed Spin-off Decree on June 27, 2023, with IndiHome legally transferring to Telkomsel effective July 1, 2023 - one day after this quarter's close. As a result, Telkom's effective ownership in Telkomsel will rise to 69.9%, with SingTel diluting to 30.1% (the low end of the range disclosed last quarter, meaning SingTel exercised its full pre-emptive right). This is the last quarter in this dataset where Consumer/IndiHome shows up as a standalone Telkom segment on the current reporting basis - the segment table in Segment Comparison below is likely the final one of its kind before the structure changes.

Operating results were more mixed than headline growth suggests: revenue grew 1.7% YoY to Rp37,388 billion this quarter, but net income attributable to owners fell 12.0% to Rp6,332 billion, and company-disclosed EBITDA margin compressed to 52.2% from 54.8% a year earlier - Telkom's own materials attribute this to "increasing cost from additional spectrum acquisition to secure capacity and quality of our network in long-term period." The Enterprise segment, which lost money in Q1 after closing FY2022 with its first full-year profit, returned to a thin Rp74 billion profit this quarter - not a strong recovery, but a reversal from the loss.

The Prescription

Telkom should publish, ahead of Q3's filing, exactly how Consumer/IndiHome will be reported once it sits inside Telkomsel rather than as a standalone Telkom segment - readers and investors need to know whether the metric disappears from Telkom's consolidated segment table entirely, gets folded into Mobile, or gets reported by Telkomsel separately. Telkom should also give a specific, quantified breakdown of the spectrum cost increase behind this quarter's EBITDA margin compression rather than the general framing offered in the presentation - "additional spectrum acquisition" without a number leaves readers unable to judge whether this is a one-off or a recurring cost step-up.

Key Financial Metrics

Q2 2023 (three months ended Jun 30, 2023) vs Q2 2022, consolidated

FX: approximately Rp15,050 = US$1 (Jun 30, 2023 market rate), used only to convert the USD columns below.

Metric	Q2 2023 (Rp)	Q2 2023 (US$)	Q2 2022 (Rp)	YoY (Rp)	YoY (US$)
Revenue	Rp37,388B	~$2,484.1M	Rp36,775B	✅ +1.7%	✅ +1.7%
Adjusted EBITDA»	~Rp19,417B	~$1,290.2M	Rp21,335B	🔴 -9.0%	🔴 -9.0%
Operating Income»	Rp11,588B	~$770.0M	Rp12,325B	⚠️ -6.0%	⚠️ -6.0%
Net Income (attributable to owners)	Rp6,332B	~$420.7M	Rp7,192B	🔴 -12.0%	🔴 -12.0%
Free Cash Flow» (OCF - capex)	Rp6,122B	~$406.8M	Rp7,143B	⚠️ -14.3%	⚠️ -14.3%
Total Cash	Rp40,521B	~$2,692.4M	Rp40,160B	➖ +0.9%	➖ +0.9%

Note: net income attributable to owners fell 12.0% this discrete quarter even though the half-year figure (Rp12,756B vs Rp13,310B, -4.2%) declines more modestly - Q1 2023's growth (+5.0% YoY, see that post) partly offset this quarter's steeper drop. The EBITDA-margin compression flagged in the opening section (52.2% vs 54.8%) is the main driver, running through to both operating income and net income. Total cash grew slightly despite the weaker operating result - the balance sheet also shows a large jump in "other payables" (Rp16,075 billion at quarter-end vs Rp463 billion at FY2022's close) that the filing doesn't itemize, worth watching once the IndiHome-Telkomsel transfer's accounting effects show up in Q3.

Revenue kept growing, but margin compression on spectrum costs pulled net income down 12% this quarter, and Enterprise's return to profit was thin. The headline event is structural, not operational: the IndiHome spin-off to Telkomsel is now legally signed. See Beyond the Usual for what that means and Target Valuation Range for what the market is pricing in.

Key Operational Metrics

• IndiHome subscribers: 9.5 million total, up 7.2% YoY, in the final quarter before the segment moves to Telkomsel
• Telkomsel subscribers: 153.3 million, up from 151.1 million in Q1 2023, with blended ARPU rising to Rp49.7 thousand from Rp45.3 thousand
• Telkomsel digital contribution: 85.6% of Telkomsel's revenue, up from 80.5% a year earlier, continuing the legacy-to-digital shift
• Capital expenditure: Rp7,121 billion this quarter (Rp6,718B property/equipment + Rp403B intangibles), down from Rp8,469 billion a year earlier

Segment Comparison

Q2 2023 vs Q2 2022 - the final quarter Consumer/IndiHome is reported as a standalone Telkom segment

Segment	External Revenue Q2 2023	External Revenue Q2 2022	YoY	Segment Result Q2 2023	Margin Q2 2023	Margin Q2 2022
Mobile	Rp21,534B	Rp21,429B	➖ +0.5%	Rp7,550B	⚠️ 35.1%	39.7%
Consumer (IndiHome)	Rp6,627B	Rp6,567B	➖ +0.9%	Rp1,954B	✅ 29.5%	18.0%
Enterprise	Rp4,777B	Rp4,522B	✅ +5.6%	Rp74B	⚠️ 1.5%	5.6%
WIB	Rp4,116B	Rp4,018B	➖ +2.4%	Rp2,260B	➖ 54.9%	56.1%
Others	Rp100B	Rp54B	✅ +85.2%	-Rp300B	n/m	n/m
Total segment	Rp37,154B	Rp36,590B	➖ +1.5%	Rp11,538B	31.1%	34.6%

Consumer's margin improvement (18.0% to 29.5%) is the standout in this segment's final standalone quarter - a strong number to close on. Mobile's margin fell nearly 5 points (39.7% to 35.1%), the segment most directly exposed to the spectrum-cost pressure Telkom cited for the consolidated EBITDA decline, since Mobile carries Telkomsel's mobile network spend.

Mobile

Margin fell to 35.1% from 39.7%, the segment absorbing most of the spectrum-cost pressure flagged in Key Financial Metrics - a reversal from Q1's improvement (30.9% to 34.9%, see that post).

Consumer (IndiHome)

Margin nearly doubled YoY (18.0% to 29.5%) in what is, per this quarter's subsequent-event disclosure, the final quarter this dataset will see IndiHome reported as a standalone Telkom segment - see Beyond the Usual.

Enterprise

Returned to a thin profit (Rp74 billion, 1.5% margin) after Q1's Rp140 billion loss - a reversal, but a much weaker recovery than the three consecutive solidly profitable quarters that built FY2022's turnaround (see FY2022's post). The segment footnote again discloses no driver for either the Q1 loss or this quarter's marginal recovery.

WIB (Wholesale and International Business)

Margin held roughly flat (56.1% to 54.9%) after several quarters of steady compression - the smallest YoY margin move of any segment this quarter, a possible sign the multi-quarter erosion flagged since 2022 is stabilizing.

Beyond the Usual

The IndiHome-Telkomsel Spin-Off Is Now Legally Signed, Effective the Day After This Quarter Closed

The Conditional Spin-Off Agreement flagged as a subsequent event in Q1's post became final this quarter: Telkom and Telkomsel signed the Spin-off Decree on June 27, 2023, following shareholder approval at Telkomsel's AGMS on June 23, 2023, with the transfer of the Rp58,250 billion IndiHome business becoming legally effective on July 1, 2023 - one day after this quarter's close. SingTel exercised its full pre-emptive right, landing Telkom's effective Telkomsel ownership at 69.9% and SingTel's at 30.1% (the low end of the range this dataset flagged last quarter). Telkom's own materials frame the intent plainly: consolidate all B2C telecom (fixed and mobile) under Telkomsel via "fixed-mobile convergence," freeing Telkom to concentrate on B2B. Practically, this means the Consumer segment table in this post is very likely the last one in this dataset's TLKM coverage reported on the current four-segment basis - a genuine structural break in how future quarters need to be read and compared against this backfill's history.

Mitratel Kept Acquiring Towers From Competitors Through the Quarter

Beyond the Indosat tower acquisition flagged in Q1's post, Mitratel's footnotes this quarter disclose it completed a second, smaller buyback (10,350,000 shares for Rp7 billion, June 7-30, 2023) on top of the Rp1,500 billion buyback approved in March, and a subsequent event shows Mitratel acquiring 90 more towers from PT Priview Geospatial Mandiri for Rp121 billion on July 26, 2023. Mitratel's tower-acquisition pace (two separate deals disclosed across two consecutive quarters) is a consistent growth thread inside the B2B infrastructure story, distinct from and smaller in scale than the IndiHome restructuring above.

Target Valuation Range

Bottom line: fairly valued - roughly Rp3,700-Rp4,850 fair-value range (bear-to-bull, TTM EV/EBITDA-based) against a Rp4,000 actual close, sitting close to base case as the market awaits clarity on how the IndiHome-Telkomsel restructuring reshapes reported segment economics.

Telkom's shares closed Q2 2023 at Rp4,000, down 1.5% from Q1's Rp4,060 close (see that post) - a modest pullback that roughly tracks this quarter's weaker net income. Over the trailing 2 years (June 2021 through June 2023), the stock moved from Rp3,150 to Rp4,000, a 27.0% net gain.

Market cap → enterprise value	Q2 2023 (period-end)
Share price (period-end)	Rp4,000
Shares outstanding	99,062,216,600
Market capitalization	~Rp396,249 billion (~$26.3 billion)
Plus: total debt	Rp55,858 billion
Less: cash	Rp40,521 billion
Enterprise value	~Rp411,586 billion

Peer-multiple sanity check	Q1 2023	Q2 2023	Change
TTM EPS	~Rp212.61	~Rp203.90	⚠️ down
P/E	~19.1x	~19.6x	⚠️ up
Book value per share (owners)	~Rp1,368.9	~Rp1,250.2	🔴 down
P/B	~2.97x	~3.20x	➖ up
TTM Adjusted EBITDA	~Rp73,232B	~Rp71,314B	⚠️ down
EV/EBITDA (TTM)	~5.7x	~5.8x	➖ up slightly

Book value per share fell sharply (Rp1,368.9 to Rp1,250.2) as owners' equity dropped from Rp135,613 billion to Rp123,845 billion, driven mostly by the FY2022 dividend payout that typically lands mid-year rather than any operating weakness. Applying the same mature-telecom EV/EBITDA range used throughout this dataset:

Scenario	Key assumption	Multiple	Implied EV	Implied price
Current (Q2 2023 close)	actual market price, for reference	~5.8x TTM Adjusted EBITDA	~Rp411,586 billion	Rp4,000
Bear	Spectrum-cost pressure on Mobile margin persists and the IndiHome restructuring creates reporting disruption	~4.8x	~Rp342,307 billion	~Rp3,704
Base	Multiple holds near current levels until Q3 clarifies the post-spin-off segment structure	~5.8x	~Rp413,621 billion	~Rp4,020
Bull	The market credits fixed-mobile convergence as value-accretive and Enterprise's recovery firms up	~6.8x	~Rp484,935 billion	~Rp4,843

The current close sits almost exactly at base case, consistent with Q1's reading - a market withholding a strong directional view until the IndiHome-Telkomsel restructuring's actual reporting and operating effects show up in a full quarter of results.

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