JAKARTA – The government, through the Ministry of Communication and Digital (Komdigi), plans to hold a 2.6GHz and 700MHz frequency auction in 2025 to accelerate the adaptation of 5G networks in Indonesia. This plan is seen as a positive signal for investors to look into telecommunications stocks.

According to a report from BRI Danareksa Sekuritas, which recently held a meeting with Komdigi, this frequency auction offers opportunities for mobile operators to expand their 5G service coverage.

"Mobile operators are likely to prioritise the 2.6GHz frequency to maximise 5G advantages before moving to 700MHz," wrote analysts from BRI Danareksa Sekuritas.

The acceleration of 5G networks in Indonesia is expected to act as a positive catalyst for telecommunications companies like PT Telkom Indonesia (Persero) Tbk (TLKM), PT XL Axiata Tbk (EXCL), dan PT Indosat Tbk (ISAT). "Companies with strong Fixed Mobile Convergence (FMC) strategies will benefit significantly from this new spectrum," the analysts noted.

However, mobile operators are also facing major challenges due to the high cost of the spectrum. Komdigi, however, plans to offer a flexible payment scheme to ease the operational burden on operators.

"We currently recommend an OW (Overweight) on the telecommunications sector and continue to evaluate the risks of the upcoming spectrum auction," wrote the analysts at BRI Danareksa Sekuritas.

Additionally, BRI Danareksa Sekuritas has issued a BUY recommendation for TLKM, EXCL, and ISAT shares. The target prices for TLKM, EXCL, and ISAT shares are IDR 3,680, IDR 2,800, and IDR 3,200 per share, respectively. (KR/ZH)