Why Indonesian Telecom Stocks Are Dirt Cheap and Ready to Surge Up to 78%

JAKARTA, Investortrust.id — Indonesian telecommunications equities are trading at deep discounts compared to regional peers, creating a prime buying opportunity for global investors seeking high-upside emerging market plays.

Mirae Asset Sekuritas Indonesia reaffirmed an "Overweight" rating on Southeast Asia's largest digital economy sector, picking PT XL Smart Telecom Tbk (EXCL), the country’s leading mobile network operator, as its top investment pick with an aggressive target price of Rp 4,300 ($0.27) per share. That target represents a staggering 78.4% potential surge from current market levels.

Global emerging market investors are hunting for defensive sectors with strong cash generation and attractive valuations. Indonesia's telecom giants—EXCL, PT Indosat Tbk (ISAT), and state-backed giant PT Telkom Indonesia Tbk (TLKM)—are trading at a massive valuation discount while offering dividend yields that significantly outpace regional rivals. As post-consolidation network efficiencies kick in and average revenue per user (ARPU) expands, the sector offers an irresistible mix of capital appreciation and passive income.

Valuations Hit Rock-Bottom Levels

In a comprehensive research report released on Monday, July 27, 2026, Mirae Asset highlighted that Indonesian telecom stocks trade at just 3.9 times and 3.5 times enterprise value-to-EBITDA (EV/EBITDA) for projected 2026 and 2027 fiscal years.

That valuation structure sits at a drastic discount compared to the broader Asian regional average, where telecom players trade at 10.1 times and 9.3 times EV/EBITDA over the same period.

Adding to the sector's appeal is a robust cash payout profile. Indonesian telecom operators are projected to deliver an average dividend yield of 5.5% in 2026, easily outperforming the regional benchmark average of 3.6%.

Top Picks and Upside Potential

Mirae Asset maintained "Buy" recommendations across all three major telecom operators, pointing to sustained industry recovery, post-merger cost rationalization, and solid bottom-line earnings trajectories.

Indosat (ISAT), the nation's second-largest mobile carrier post-merger, was assigned a price target of Rp 2,800 ($0.18) per share, implying a 43.6% upside.

Meanwhile, market leader Telkom Indonesia (TLKM), the state-controlled telecommunications titan, was tagged with a price target of Rp 3,200 ($0.20) per share, representing a potential gain of 21.7%.

Fundamental Strength Over 5G Hype

Addressing technological catalysts, Mirae Asset noted in its July 27 research note that 5G network rollouts will not serve as the immediate driver for operator revenue growth.

Drawing from global implementation trends, analysts stressed that 5G deployment does not automatically lift ARPU unless paired with fundamental industry repair and effective monetization strategies.

Instead, investors should focus on core operational discipline, organic ARPU recovery, and post-consolidation synergies, which remain the primary engines powering earnings momentum across Indonesia's telecom landscape.