A Tax Bill That Reopens a Story This Dataset Told in Real Time
On October 3, 2025 - three days after this quarter closed - Indonesia's tax authority issued Telkomsel a Tax Underpayment Assessment Letter ("SKPKB") for Rp14,566 billion including penalties, of which Rp14,467 billion relates directly to the 2023 transfer of the IndiHome business from Telkom to Telkomsel - the same restructuring this dataset covered as a subsequent event in Q1 2023's post and its formal signing in Q2 2023's post. Telkom's own footnote states it "maintains its strong technical position to defend its case" and cites a Directorate General of Taxes decree that had approved book-value accounting for the spin-off - meaning the tax authority now appears to be challenging a transaction structure it had itself previously approved. Telkom has booked no provision for this specific dispute, judging the risk not probable enough to require one. This is a materially different scale of contingent liability than anything else flagged in this dataset's TLKM coverage - roughly 61% of FY2024's entire net income attributable to owners, in a single disputed assessment (see Beyond the Usual).
Operationally, the quarter continued softening: net income attributable to owners fell 17.2% YoY to Rp4,809 billion this quarter (Rp15,784 billion on a nine-month basis, -10.7% YoY), with company-disclosed nine-month EBITDA down 4.0% to Rp54.4 trillion (margin 49.6%). Mobile ARPU decline moderated to -4.7% YoY from Q2's -7.4% (see that post) - still negative, but decelerating. The stock, meanwhile, kept recovering: closing at Rp3,060, up 10.1% from Q2's Rp2,780 close, though this price predates the October 3 tax assessment by three days, meaning the market hadn't yet had the chance to price in the news covered in this post.
The same subsequent-events footnote also formalizes the fiber-asset spin-off first disclosed in Q2's post: on October 20, 2025, Telkom signed a Conditional Spin-Off Agreement with TIF for its Wholesale Fiber Connectivity business, valued at Rp35,787 billion - the concrete number behind the roughly Rp150 trillion asset-unlock plan flagged last quarter.
The Prescription
Telkom should give investors a clear, quantified assessment of the Rp14.5 trillion tax dispute's realistic downside scenario - "maintains its strong technical position" is a standard defensive framing, but a liability of this scale relative to annual earnings deserves a more substantive risk disclosure than the brief footnote treatment it received. Given the tax authority is now disputing a structure it had itself pre-approved via decree, Telkom's investor communications should also address whether this signals a broader shift in how Indonesian tax authorities are treating past corporate restructurings - relevant given the newly signed fiber spin-off uses a similar book-value transfer structure and could face the same challenge down the line.
Key Financial Metrics
Q3 2025 (three months ended Sep 30, 2025) vs Q3 2024, consolidated
FX: approximately Rp16,650 = US$1 (Sep 30, 2025 market rate), used only to convert the USD columns below.
| Metric | Q3 2025 (Rp) | Q3 2025 (US$) | Q3 2024 (Rp) | YoY (Rp) | YoY (US$) |
|---|---|---|---|---|---|
| Revenue | Rp36,613B | ~$2,199.0M | Rp36,927B | ➖ -0.9% | ➖ -0.9% |
| Adjusted EBITDA» | Rp18,300B | ~$1,099.1M | ~Rp18,936B | ➖ -3.4% | ➖ -3.4% |
| Operating Income» | Rp9,272B | ~$556.9M | Rp10,815B | 🔴 -14.3% | 🔴 -14.3% |
| Net Income (attributable to owners) | Rp4,809B | ~$288.8M | Rp5,914B | 🔴 -18.7% | 🔴 -18.7% |
| Free Cash Flow» (OCF - capex) | Rp10,234B | ~$614.5M | Rp8,782B | ✅ +16.5% | ✅ +16.5% |
| Total Cash | Rp31,554B | ~$1,895.0M | Rp24,540B | ✅ +28.6% | ✅ +28.6% |
Revenue and EBITDA declines were modest, but operating income and net income fell much further, largely on the Rp771 billion accelerated depreciation charge disclosed this quarter for underutilized network assets (see Beyond the Usual) and a small -Rp84 billion GoTo mark-to-market loss. Free cash flow kept growing strongly (+16.5%), extending the multi-quarter improvement this dataset has tracked since FY2024.
Net income fell nearly 19% on an accelerated depreciation charge and continued ARPU softness - but the number that actually matters landed three days after this quarter closed: a Rp14.5 trillion tax dispute over the 2023 IndiHome spin-off this dataset covered in real time. See Beyond the Usual for the full detail.
Key Operational Metrics
- Telkomsel standalone EBITDA margin: 44.8%, up 1.1 points YoY, on stable mobile customer base and strong data-payload growth
- Mobile ARPU: Rp42.4 thousand, down 4.7% YoY - an improvement from Q2's 7.4% decline (see that post)
- Fixed broadband (FBB): 10.3 million subscribers (+9.4% YoY), ARPU Rp216.7 thousand (+9.4% YoY) - continuing to outperform Mobile
- Fully depreciated assets still in use: Rp98,157 billion at cost, up from Rp89,480 billion at FY2024's close, as the company continues modernizing network assets
- Capital expenditure: Rp6,798 billion this quarter (Rp6,263B property/equipment + Rp535B intangibles), down from Rp7,486 billion a year earlier
Segment Comparison
Q3 2025 vs Q3 2024 (restated)
| Segment | External Revenue Q3 2025 | External Revenue Q3 2024 (restated) | YoY | Segment Result Q3 2025 | Margin Q3 2025 | Margin Q3 2024 |
|---|---|---|---|---|---|---|
| Mobile | Rp20,106B | Rp20,607B | ➖ -2.4% | Rp5,731B | ➖ 28.5% | 30.6% |
| Consumer (IndiHome) | Rp6,510B | Rp6,666B | ➖ -2.3% | Rp1,514B | 🔴 23.3% | 32.7% |
| Enterprise | Rp4,855B | Rp4,989B | ➖ -2.7% | Rp305B | ➖ 6.3% | 7.0% |
| WIB | Rp4,517B | Rp4,183B | ➖ +8.0% | Rp2,125B | ⚠️ 47.0% | 55.0% |
| Others | Rp539B | Rp359B | ✅ +50.1% | -Rp108B | n/m | n/m |
| Total segment | Rp36,527B | Rp36,804B | ➖ -0.8% | Rp9,567B | 26.2% | 32.3%* |
*Restated comparative basis.
Consumer's margin drop (32.7% to 23.3%) is the sharpest single-segment move this quarter, a real reversal from Q2's improvement (33.9% to 39.4%, see that post) and the segment now directly implicated in the tax dispute over its own 2023 restructuring (see Beyond the Usual). WIB's margin kept falling (55.0% to 47.0%), continuing the multi-year erosion.
Mobile
Margin fell again (30.6% to 28.5%), though the decline moderated from Q2's sharper drop - consistent with the ARPU deceleration flagged in Key Operational Metrics.
Consumer (IndiHome)
Margin fell sharply (32.7% to 23.3%) the same quarter its own 2023 restructuring became the subject of a major tax dispute - the filing doesn't connect the two directly, but the timing is worth watching into Q4.
Enterprise
Margin held roughly flat (7.0% to 6.3%), a quieter quarter for this dataset's most historically volatile segment after Q2's stronger 10.6% reading.
WIB (Wholesale and International Business)
Margin fell to 47.0% from 55.0% despite genuine revenue growth (+8.0%) driven by Mitratel and data-center/cloud - the multi-year erosion continues, now this segment's defining trend across nearly every quarter in this dataset's 2024-2025 coverage.
Beyond the Usual
A Rp14.5 Trillion Tax Assessment Directly Challenges the 2023 IndiHome Spin-Off
On October 3, 2025, three days after this quarter closed, Indonesia's tax authority issued Telkomsel a Tax Underpayment Assessment Letter totaling Rp14,566 billion including penalties, covering VAT, Article 23 Income Tax, and Corporate Income Tax for fiscal year 2023. The overwhelming majority - Rp14,467 billion - relates to Article 23 and Corporate Income Tax on the transfer of the IndiHome business from Telkom to Telkomsel, the exact restructuring this dataset tracked as it happened: flagged as a subsequent event in Q1 2023's post and formally signed as disclosed in Q2 2023's post. Telkom's footnote states the company "maintains its strong technical position to defend its case," and notes that Indonesia's Directorate General of Taxes had itself previously approved book-value accounting for the spin-off via a specific decree (KEP-260/WPJ.19/2023) - meaning the tax authority now appears to be challenging a transaction structure it had formally pre-approved. No provision has been recorded, as management judges the risk doesn't currently meet the threshold requiring one. This is, by a wide margin, the largest disclosed contingent liability in this dataset's entire TLKM coverage - equivalent to roughly 61% of FY2024's full-year net income attributable to owners - and is a genuinely material dispute for anyone modeling Telkom's forward cash flows or tax risk, regardless of how the company's own technical defense ultimately holds up. A separate, much smaller VAT dispute for 2021-2022 (Rp507 billion, disclosed October 9, 2025) was largely accepted with a Rp154 billion provision recorded.
The Fiber Spin-Off Flagged Last Quarter Is Now Signed at a Rp35.8 Trillion Valuation
The FiberCo/TIF restructuring first disclosed in Q2's post took its next concrete step: on October 20, 2025, Telkom signed a Conditional Spin-Off Agreement with TIF for its Wholesale Fiber Connectivity business and assets, valued at Rp35,787 billion. Telkom's own framing describes the goal as sharpening focus on business development, improving efficiency, and strengthening its position as Indonesia's leading connectivity infrastructure provider, alongside broader national digital-inclusion objectives. Given the tax dispute over the structurally similar 2023 IndiHome transfer disclosed in the same filing (see above), this transaction's own tax treatment is worth watching closely in future quarters - a similar book-value spin-off structure now carries a demonstrated precedent for tax-authority challenge.
An Accelerated Depreciation Charge for Underutilized Assets Explains Most of This Quarter's Cost Increase
Telkom disclosed conducting a physical-condition evaluation of its assets this year, recognizing a Rp771 billion accelerated depreciation charge for asset types assessed as no longer optimally utilized - a real, itemized, and disclosed driver behind this quarter's 8.9% QoQ jump in depreciation and amortization expense (to Rp8.9 trillion), rather than an unexplained cost increase. The filing separately notes that fully depreciated property and equipment still in active use grew to Rp98,157 billion at cost from Rp89,480 billion at FY2024's close, as Telkom continues modernizing its network - a useful data point for gauging the scale of aging infrastructure still generating revenue.
Target Valuation Range
Bottom line: undervalued, with a major unresolved risk - roughly Rp2,750-Rp3,850 fair-value range (bear-to-bull, TTM EV/EBITDA-based) against a Rp3,060 actual close, though this close predates the Rp14.5 trillion tax assessment by three days and doesn't yet reflect that risk.
Telkom's shares closed Q3 2025 at Rp3,060, up 10.1% from Q2's Rp2,780 close (see that post) - a second straight quarterly gain, continuing the recovery off Q1's record low. Over the trailing 2 years (September 2023 through September 2025), the stock moved from Rp3,750 to Rp3,060, an 18.4% decline - a meaningful improvement from Q2's 30.5% reading, though still a real multi-year drawdown. Critically, this closing price is from September 30, 2025, three days before the October 3 tax assessment became public - meaning none of the multiples below reflect the market's actual reaction to that news, which arrived after this quarter's books closed.
| Market cap → enterprise value | Q3 2025 (period-end) |
|---|---|
| Share price (period-end) | Rp3,060 |
| Shares outstanding | 99,062,216,600 |
| Market capitalization | ~Rp303,130 billion (~$18.2 billion) |
| Plus: total debt | Rp53,521 billion |
| Less: cash | Rp31,554 billion |
| Enterprise value | ~Rp325,097 billion |
| Peer-multiple sanity check | Q2 2025 | Q3 2025 | Change |
|---|---|---|---|
| TTM EPS | ~Rp230.75 | ~Rp219.61 | ⚠️ down |
| P/E | ~12.0x | ~13.9x | ⚠️ up |
| Book value per share (owners) | ~Rp1,333.8 | ~Rp1,384.4 | ✅ up |
| P/B | ~2.08x | ~2.21x | ➖ up slightly |
| TTM Adjusted EBITDA | ~Rp72,000B | ~Rp71,364B | ➖ down slightly |
| EV/EBITDA (TTM) | ~4.2x | ~4.6x | ⚠️ up |
Multiples ticked up modestly as the share-price recovery outpaced trailing earnings, which fell on the accelerated-depreciation charge. Applying the same range used in recent quarters:
| Scenario | Key assumption | Multiple | Implied EV | Implied price |
|---|---|---|---|---|
| Current (Q3 2025 close) | actual market price, for reference, predates the tax assessment | ~4.6x TTM Adjusted EBITDA | ~Rp325,097 billion | Rp3,060 |
| Bear | The market prices in a meaningful probability the Rp14.5tn tax dispute isn't fully won, and ARPU pressure persists | ~3.8x | ~Rp271,183 billion | ~Rp2,761 |
| Base | The multiple holds near current levels pending the tax dispute's resolution and confirmation the fiber spin-off proceeds smoothly | ~4.6x | ~Rp328,274 billion | ~Rp3,091 |
| Bull | Telkom's technical defense prevails on the tax assessment, ARPU stabilizes fully, and the fiber spin-off is well-received | ~5.4x | ~Rp385,366 billion | ~Rp3,857 |
Because this quarter's closing price predates the tax assessment, the current close should be read as a pre-news baseline rather than the market's actual verdict on the dispute - the real test of how investors weigh a Rp14.5 trillion contingent liability against Telkom's "strong technical position" defense will show up in Q4's price action, not this quarter's.
Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk's unaudited consolidated financial statements as of and for the nine-month period ended September 30, 2025 (with discrete third-quarter figures derived by subtracting the already-reported six-month results), reflecting subsequent events through the report's issuance, plus the Company's 9M25 corporate presentation.