One major factor reshaping the industry is changing consumer behavior. The rapid growth of mobile applications, such as TikTok, YouTube and mobile banking, has significantly influenced data consumption trends. These platforms are not only driving higher usage but also altering how and when consumers engage with telecom services.

Contributing to this shift is the growing competitiveness of data package offerings. The emergence of volume- and speed-based pricing models, combined with frequent promotions, is prompting consumers to change their usage habits and switch providers in pursuit of better deals. As a result, customer retention has become more challenging, driving up marketing and promotional costs.

Experts note that the Indonesian telecom market is now highly saturated. Multiple operators are competing aggressively for market share, sparking price wars that particularly affect data packages. This intense rivalry has led to declining average revenue per user (ARPU) and tighter profit margins, forcing operators to offer more data at lower prices: a strategy that, while consumer-friendly, risks long-term profitability.

At the same time, customer expectations continue to rise. Modern users demand fast, seamless and personalized experiences, pushing telecom companies to integrate artificial intelligence, automation and digital platforms to remain competitive.

Extending telecom infrastructure to less populated regions, such as rural and remote areas, is often costly and economically unviable.

Despite these headwinds, PT Indosat Tbk (Indosat Ooredoo Hutchison; IOH) delivered resilient results in the second quarter of 2025. The Company maintained profitability and strengthened its digital and physical infrastructure while accelerating its transformation from a telco into an AI-powered technology company, or “techco”.

Indosat recorded a Profit for the Period Attributable to Owners of the Parent of Rp 1.024 trillion (US$62.2 million), while EBITDA (earnings before interest, taxes, depreciation and amortization) reached Rp 12.9 trillion with a healthy EBITDA margin of 47.4 percent, driven by effective cost management and strong operational discipline.

In the second quarter, Indosat’s revenue stood at Rp 27.1 trillion, reflecting a slight decline of 0.8 percent. This dip is largely attributed to evolving consumer usage patterns and heightened market competition.

“Thanks to the continued resilience and dedication of all involved, Indosat’s commitment to long-term value creation remains unwavering. We continue to focus on sustained profitability, enhanced operational efficiency and our transformation into an AI techco,” stated Vikram Sinha, President Director and CEO of Indosat Ooredoo Hutchison.

“More importantly, we remain committed to our broader purpose, empowering Indonesia through inclusive technology,” he added.

Despite top-line pressure, Indosat upheld strong financial discipline. ARPU rose to Rp 38,900, indicating better monetization and growing relevance of its services. The customer base reached 95.4 million, reflecting the ongoing trend of SIM card consolidation in the market. Data traffic increased 10.3 percent year-on-year, supported by sustained investment in digital infrastructure.

To accommodate growing data demand, Indosat expanded its 4G network to over 203,000 base transceiver stations (BTS), adding more than 15,000 BTS in the first half of 2025. This demonstrates both operational momentum and confidence in Indonesia’s digital growth trajectory.

Capital expenditure totaled Rp 7.5 trillion, with approximately 79 percent allocated to initiatives that directly enhance customer experience.

The Company preserved financial flexibility for future investments by ending the period with a net debt-to-EBITDA ratio of 0.49%.

Inclusive innovation

As part of its commitment to inclusive innovation, Indosat launched its AI Experience Center (AIEC) in Jayapura, Papua, bringing artificial intelligence to underserved communities with a focus on advancing education and healthcare services. This initiative reflects the Company’s mission to ensure that the benefits of technology reach all levels of society.

Further cementing its role as a digital leader, Indosat was named a key partner of the Indonesia AI Center of Excellence, a national initiative spearheaded by the Ministry of Communications and Digital. In collaboration with global technology partners like Nvidia and Cisco, the program aims to boost Indonesia’s AI ecosystem by nurturing local talent, supporting business transformation and fostering innovation.

“Our journey is far from over. We are confident in our direction, focused on innovation and collaboration and committed to making a real impact, both for our business and for the country,” Sinha said.

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