Fixed Broadband Heats Up as Penetration Hits 41 Percent

JAKARTA, Investortrust.id — Competition in Indonesia’s fixed broadband market is entering a new phase as penetration is projected to reach 41 percent in 2026, a sharp jump that is reshaping the outlook for major telecom stocks including Telkom Indonesia or TLKM, Indosat Ooredoo Hutchison or ISAT, and XL Axiata or EXCL. The acceleration is expected to intensify competition while expanding the overall broadband addressable market.

Research by BRI Danareksa Sekuritas said the rapid expansion in national fixed broadband market share is being driven by several structural factors. These include aggressive rollout of fixed wireless access, or FWA, using the 1.4 GHz spectrum, disruptive pricing strategies by internet service providers, and adoption of an open access FiberCo model. FiberCo is a business model in which a company owns and operates fiber-optic network infrastructure and leases access to multiple internet or telecom service providers, instead of selling retail services directly to end users.

Analysts Kafi Ananta and Erindra Krisnawan wrote that after stagnating at around 18 to 19 percent for the past three years, fixed broadband penetration including FWA was projected to rise from about 24 percent last year to as high as 41 percent in fiscal year 2026. The shift marks one of the fastest growth phases for Indonesia’s home internet market.

The first growth driver was the opening of access through FWA 1.4 GHz services operated by challenger providers such as Surge, traded as WIFI, and MyRepublic. WIFI alone targeted up to 5 million subscribers by 2026, signaling aggressive customer acquisition.

The second factor was disruptive pricing from challengers such as WIFI and DATA, with monthly tariffs around Rp 100,000 to Rp 116,000, levels later followed by INET. These prices undercut traditional fiber offerings and accelerated household adoption.

The third driver was the open access FiberCo model, in which neutral fiber infrastructure providers lease capacity to multiple operators. Examples included LINK and Telkom’s infrastructure unit InfraCo, a model that significantly lowered industry entry barriers.

In this phase, WIFI through its Starlite and IRA units, MORA through MyRepublic and Oxygen, and DATA via NetHome were seen as the main proxies for incremental home connection growth. These companies were expected to capture a large share of new broadband users.

However, the report warned that aggressive expansion front loaded capital expenditure, or capex, and execution risks for challenger ISPs. With low pricing, profitability would depend heavily on reducing capex per home passed and maintaining take up rates above 50 to 60 percent.

For mobile network operators, or MNOs, rising fixed broadband competition and wider adoption of open access fiber could pressure average revenue per user, known as ARPU. TLKM was seen as the most exposed, with fixed broadband contributing around 18 percent of revenue, compared with about 7 percent for EXCL and 2 percent for ISAT.

Despite these pressures, prospects for MNOs were still considered solid. Sustainable mobile performance during the post consolidation price recovery phase remained the main anchor for core earnings, supporting an overweight view on the telecom sector.

BRI Danareksa said shares of WIFI and INET looked relatively attractive, trading at 12.4 times and 18.9 times estimated 2026 enterprise value to EBITDA, or EV to EBITDA. Consensus projections pointed to EBITDA growth of around 2.2 times for WIFI and 12 times for INET this year.

Meanwhile, ISAT was rated buy with a target price of Rp 3,000. TLKM was also maintained at buy with a target price of Rp 4,000, while EXCL was recommended buy with a target price of Rp 4,100.