Telkom Indonesia Accelerates Strategic Share Buyback Program to Bolster Shareholder Value

JAKARTA – PT Telkom Indonesia (Persero) Tbk (Telkom), the nation’s leading telecommunications giant, has officially announced an accelerated execution of its share buyback program. With a total authorized budget of up to IDR 4 trillion, the move represents a pivotal element of the company’s broader capital allocation strategy. This initiative, designed to signal confidence in the firm’s long-term trajectory, comes as the company navigates a critical transformation phase under its "TLKM 30" strategic roadmap.

The Core Mandate: Executive Summary of the Buyback

The decision to expedite the buyback follows a mandate secured during the Annual General Meeting of Shareholders (RUPST) held on June 8, 2026. The program is slated for a 12-month window, spanning from June 9, 2026, to June 8, 2027. As of October 19, 2026, Telkom reported that the remaining allocation for the buyback program stands at more than IDR 3 trillion, indicating that while the program is active, the company is now shifting gears to accelerate the acquisition of its own shares.

This financial maneuver is not merely a market reaction; it is a calculated capital management strategy aimed at optimizing the company’s equity structure. By reducing the number of outstanding shares, Telkom aims to enhance earnings per share (EPS) and provide a constructive signal to the market regarding the intrinsic value of the company—which the management believes remains undervalued relative to its robust business fundamentals.

Chronology of the Initiative

The timeline for this strategic capital exercise is clearly defined to ensure transparency and regulatory compliance:

• June 8, 2026: Shareholders officially approve the buyback program during the Annual General Meeting of Shareholders (RUPST), authorizing a budget ceiling of IDR 4 trillion.
• June 9, 2026: The formal commencement of the 12-month buyback period begins.
• June 2026 – October 2026: Initial phases of the buyback are executed in line with market conditions and liquidity management.
• October 19, 2026: The company confirms that over IDR 3 trillion remains in the allocation pool, prompting the decision to accelerate the process.
• October 20, 2026: Official announcement by Telkom management regarding the acceleration of the buyback program, citing strong business fundamentals and future growth potential.

Strategic Rationale: The "TLKM 30" Transformation

The acceleration of the buyback is deeply intertwined with Telkom’s overarching transformation strategy, known as TLKM 30. As the company transitions toward a "Strategic Holding" structure—operating under a Holding Company-Operating Company (HoldCo-OpCo) model—it is undertaking a comprehensive overhaul of its portfolio.

Enhancing Operational Efficiency

The shift to a HoldCo-OpCo model is intended to streamline operations, reduce bureaucratic friction, and allow individual business units to become more agile in responding to market disruptions. By accelerating the buyback, management is signaling that these structural changes are already bearing fruit, and that the company’s internal valuation models reflect a more efficient, leaner, and more profitable entity.

Strengthening EBITDA Margins

A critical focus of the current management team is the fortification of EBITDA margins. Through the acceleration of portfolio restructuring and strict cost-efficiency measures, Telkom aims to generate the necessary cash flow to support both the buyback program and aggressive investment in next-generation infrastructure. This dual-track approach ensures that the company does not compromise its future growth potential in the pursuit of immediate shareholder returns.

Official Perspectives: Leadership Voices

Nanang Hendarno, President Director of Telkom

In a formal statement released on Tuesday, October 20, 2026, President Director Nanang Hendarno emphasized that the decision to accelerate the buyback is rooted in the management’s unwavering faith in the company’s long-term business prospects.

"We believe that Telkom possesses strong business fundamentals and significant long-term growth potential," Hendarno stated. "The execution of this buyback is a tangible manifestation of our confidence in the company’s value. It aligns with our ongoing transformation under the TLKM 30 strategy, which is designed to optimize business potential and create sustainable value for our stakeholders."

Hendarno further noted that the evaluation of the buyback pace is conducted with the highest degree of "capital allocation discipline." The company is not simply purchasing shares to inflate prices; it is ensuring that every rupiah spent provides the best possible return on investment for the firm compared to alternative capital uses.

Angelo, Director of Finance and Risk Management

Addressing the financial mechanics of the initiative, Director of Finance and Risk Management, Angelo, underscored the importance of liquidity management and financial health. He confirmed that the buyback is being funded entirely through internal cash reserves, without the need for external debt financing.

"The execution of the buyback is part of a disciplined capital allocation decision," Angelo explained. "We are carefully monitoring our cash position, investment priorities, and operational requirements. Our primary objective is to maintain the financial flexibility that Telkom is known for, ensuring that we have the liquidity to navigate any market volatility while simultaneously rewarding our shareholders."

Angelo stressed that the board of directors remains focused on maintaining a healthy balance sheet. "Our decisions are made with a long-term view. We are ensuring that the capital allocated to this program does not impede our ability to invest in the critical infrastructure necessary to maintain our market leadership in Indonesia’s digital economy."

Market Implications and Financial Stability

The decision to accelerate the buyback comes at a time when the Indonesian telecommunications sector is facing increased competition and a rapidly changing regulatory landscape. By opting for a buyback, Telkom is effectively stating that it sees no better investment than its own stock at current valuation levels.

Market Signaling

For institutional and retail investors, this move is a strong indicator of management’s internal projections. Often, buybacks are perceived as a signal that a company has excess cash and believes its stock is underpriced. In the context of Telkom, it serves to mitigate potential volatility in the share price and reinforces the company’s role as a "blue-chip" anchor in the Indonesian stock market.

Impact on Capital Structure

The buyback reduces the company’s total share count, which—all else being equal—will increase the earnings per share for remaining investors. This is a standard mechanism for improving shareholder returns. However, Telkom’s management has been careful to emphasize that this is balanced against the need to maintain capital for "strategic investments." These investments include the ongoing expansion of data centers, the rollout of 5G infrastructure, and the development of digital service platforms that are central to the HoldCo-OpCo transition.

Future Outlook: Sustaining Growth

Looking ahead to 2027, the success of this buyback program will be measured not just by the amount spent, but by the company’s ability to concurrently deliver on its operational targets. The integration of the HoldCo-OpCo model is a complex undertaking, and the market will be closely watching the upcoming quarterly results to see if the promised improvements in EBITDA margins are materializing.

Telkom’s leadership remains optimistic. By combining a disciplined capital allocation strategy—exemplified by the accelerated buyback—with a clear vision for digital transformation, the company aims to solidify its position as the primary driver of Indonesia’s digital evolution.

As the program progresses through the remainder of the 2026-2027 cycle, stakeholders can expect continued updates from the company regarding the volume and average price of the shares acquired. This transparency will be vital in maintaining investor trust as Telkom navigates the intersection of capital market participation and massive corporate restructuring.

Conclusion

The acceleration of Telkom’s buyback program is a strategic move that reflects both the financial strength of the company and the confidence of its leadership in the success of the TLKM 30 transformation. By utilizing internal cash to consolidate its equity, Telkom is positioning itself for a leaner, more efficient, and more profitable future. As the company continues to execute its vision of becoming a world-class strategic holding company, the current buyback initiative serves as a cornerstone of its commitment to long-term value creation for all shareholders.