Sector Update / Telecommunications / Click here for full PDF version
Author(s): Aurelia Barus +62 21 5088 7168 ext. 719 ;Belva Monica
- Net foreign selling in the telco sector totalled -Rp958bn during 28th Jan-6th Feb 2026, or 7% of the JCI's net outflow.
- Following strong 2025 inflows, still saw foreign inflows, leaving room for rotation into other sectors (ie. telcos) if -ve surprises emerge.
- We view current price levels as attractive entry opportunities for the telco sector, as the fundamental outlook remains intact.
Foreign net selling in the telco sector (28 Jan-6 Feb 2026)
During 28 Jan-6 Feb 2026, amid MSCI -related issues and concerns over potentially higher costs, particularly for , telco operator stocks declined by -14% (), -36% (), and -13% (), underperforming the JCI's -12% decline. Net foreign outflows from the telco operator sector reached -Rp958bn, accounting for 7% of the JCI's net outflow, following net foreign inflows of Rp3.8tr from 1stJan 2025 to 27thJan 2026. Tower stocks fared better at -9% (), -13% (), and -16% () with net foreign outflows of -Rp166.1bn during the same period, reflecting lower liquidity and persistent net outflows since FY25 (Fig. 1).
continued to see net foreign inflows despite overhangs
In comparison, recorded strong net foreign inflows of Rp7.5tr from 1 Jan 2025 to 27 Jan 2026, followed by additional foreign inflows of Rp89.7bn during 28 Jan-6 Feb 2026, despite overhangs from the Martabe IUP revocation, the potential transfer of the Martabe IUP to Danantara, and the MSCI issue. If further negative surprises emerge, larger foreign selling in could occur and potentially rotate into other sectors, including telcos.
Buybacksheadroom remains ample to cushionshareprice declines
Four telco operators and tower players have ample buyback headroom, which could help cushion further share price declines: 1): Buyback of up to Rp3tr (28 May 2025-27 May 2026). Repurchased 8.9mn shares in Jun-Dec25, implying c.Rp30.3bn spent and substantial remaining capacity (~9 days of ADTV ); 2): Buyback period extended to 29 Apr 2026. Repurchased 57.0mn shares in Nov-Dec25, implying c.Rp124.4bn spent or 35% of its Rp360bn limit; 3): Buyback valid 16 Sep 2025 -15 Sep 2026; only ~27% of the Rp1tr facility being utilized as of Jan26; 4): Buyback of up to Rp300bn (up to 0.97% of shares) during 02 Feb 2026 - 01 May 2026. In the prior program (04 Sep 2025 - 03 Dec 2025), 122.5mn shares were repurchased, deploying Rp71.5bn (36% of the facility).
A good entry point for telco stocks as things settled
As negative issues slowly settled down, we believe the recent pullback offers an attractive entry point for telco stocks. Growth and dividend outlooks for telco operators are improving and could extend to the tower sector, supported by potential upside from FWA deployment, largely via colocation, which shall support margins. In addition, the government's decision to raise SOE pension fund equity allocations to up to 20% (from 8%), along with Danantara's entry into the capital market, should support share price performance in the near-term. Currently, telco operators trade at 4.7-5.4x EV/EBITDA FY26F (10-75% discount to the regional peers, while growth outlook in FY24-27F and dividend yield are catching up). Meanwhile, the telco tower sector trade at 6.1-11.8x EV/EBITDA FY26F (at -1 std. below its LT mean).
Sumber : IPS