Nvidia and TSMC to unveil first domestic wafer for Blackwell chips, Axios reports
Introduction & Market Context
Indosat Ooredoo Hutchison (IDX:ISAT) presented its Q2 2025 financial results on July 30, 2025, revealing a mixed performance characterized by slight revenue decline but stable EBITDA. The company’s stock fell 3.57% following the presentation, reflecting investor concerns about declining revenue despite operational improvements and strategic initiatives.
The telecom provider is navigating a transformative period in Indonesia’s telecommunications industry, which the company describes as "moving in the right direction" with market correction measures and industry consolidation creating a more rational competitive environment. However, challenges in lower middle-class consumption continue to impact overall market growth.
Quarterly Performance Highlights
Indosat reported Q2 2025 revenue of 13,532 billion IDR, representing a slight decline of 0.3% quarter-over-quarter, which the company attributed to "post-festive seasonality." Despite this revenue dip, EBITDA increased by 0.4% to 6,440 billion IDR, with the EBITDA margin improving to 47.6%.
The company maintained its customer base at 95.4 million subscribers while increasing its digital engagement, with app monthly active users growing by 1.7 million to 47.4 million. Average Revenue Per User (ARPU) declined slightly by 1.8% to 38,500 IDR, though the company emphasized this was "holding firm" given seasonal factors.
As shown in the following chart of quarterly performance metrics:
For the first half of 2025, Indosat’s performance showed more significant year-over-year challenges, with revenue declining 3.1% compared to 1H 2024 and EBITDA falling 4.2%. Normalized net profit attributable to owners decreased by 19.5% year-over-year to 2,175 billion IDR.
The comprehensive financial indicators for both quarterly and half-year performance are illustrated in this chart:
Detailed Financial Analysis
Indosat’s cost optimization efforts have partially offset the revenue decline, with total Cost of Services (CoS) and Operating Expenses (OPEX) decreasing by 2.1% year-over-year in 1H 2025. Particularly notable were reductions in personnel costs (-23%), marketing expenses (-19%), and general and administrative expenses (-13%).
The company’s detailed cost breakdown reveals its focus on operational efficiency:
Despite revenue challenges, Indosat has significantly increased its capital expenditure, with 1H 2025 CAPEX reaching 7,474 billion IDR, a 65.3% increase year-over-year. This pushed the CAPEX to revenue ratio to 27.6%, up 11.4 percentage points from 1H 2024. The second quarter saw an even more dramatic increase in investment, with Q2 CAPEX up 85.2% from Q1.
This substantial investment strategy is visualized in the following chart:
The increased capital expenditure has impacted Indosat’s debt position, with net debt rising 33.8% year-over-year to 12,524 billion IDR. However, the company maintains that its balance sheet remains strong, with a net debt to EBITDA ratio of 0.49x, still well below industry warning levels.
Strategic Initiatives
Indosat’s presentation highlighted its transformation into an "AI-driven Techco" as a central strategic focus. The company has invested US$400 million in capital expenditure year-to-date, adding over 20,000 base transceiver stations (BTS) to enhance network coverage and quality.
A key initiative is the launch of an AI Centre of Excellence in partnership with Komdigi, NVIDIA, and Cisco, positioning the company at the forefront of AI development in Indonesia:
The company also launched a Security Operations Center with Cisco, reporting that its technology company initiatives are on track to deliver US$35 million in new revenue in 2025. Indosat claims to be the first in Asia to have GB200 servers operational, with over 20 customers already using these advanced services.
On the consumer side, Indosat has implemented market stabilization efforts including a price increase for starter packs to 35,000 IDR and approximately 10% price increases for entry-level monthly plans. The company is leveraging AI for hyper-personalization of customer offerings, which it believes will drive ARPU growth despite market challenges.
The following chart shows ARPU trends over the past 10 quarters, demonstrating the company’s focus on maintaining price stability:
Forward-Looking Statements
For the full year 2025, Indosat maintains its guidance of revenue growth "better than market," though the earnings call transcript suggests cautious investor reception to this claim given current performance. The company projects low single-digit EBITDA growth and plans total CAPEX spending of approximately 13 trillion IDR.
CEO Vikram Sinha highlighted positive trends in customer spending beginning mid-June and continuing into July, suggesting potential improvement in the second half of the year. The company’s strategic focus remains on AI-driven growth, with CMO Vivek Mehendiratta emphasizing a shift toward hyper-personalization as a key differentiator.
Indosat faces both opportunities and challenges ahead. While its investment in infrastructure and AI capabilities positions it for potential future growth, the current revenue decline and market pressures have created investor skepticism. The company’s ability to translate its technological investments into revenue growth while maintaining profitability will be crucial to its performance in the coming quarters.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.