TOWR recorded revenue of Rp3.21 trillion in 1Q25 (-2.38% QoQ; +5.31% YoY), relatively in line with our estimate, consensus, and the 5-year historical average (Phintas: 24.57%; Cons: 24.24%; Avg 5-Years: 23.8%). The sequential decline in revenue was mainly driven by a sharp drop in the connectivity segment, which fell -14.43% QoQ to Rp350 billion, as well as a slight contraction in the tower segment the main contributor which declined -1.56% QoQ. On the other hand, the FTTH segment posted solid growth of +37.11% QoQ and +84.75% YoY, reaching Rp218 billion, reflecting strong momentum in the fiber-to-the-home (FTTH) rollout.

On the profitability side, EBITDA came in at Rp2.68 trillion in 1Q25 (-2.76% QoQ; +5.25% YoY), in line with our estimate, consensus, and the 5-year average (Phintas: 24.55%; Cons: 24.19%; Avg 5-Years: 23.8%). The QoQ EBITDA contraction slightly pressured the EBITDA margin to 83.48% in 1Q25 (vs 83.54% in 1Q24). This margin pressure extended down to the bottom line, with net profit declining to Rp803 billion (-9.56% QoQ; +0.66% YoY), and net profit margin narrowing to 25.02% from 26.17% in 1Q24.

On the Operationally side, TOWR showed signs of a quarterly slowdown. Total towers increased marginally to 35.51k units (+0.30% QoQ), while total tenants remained flat at 58.04k (+0.02% QoQ), resulting in a slight decline in tenancy ratio to 1.63x (vs 1.64x in 4Q24). On the fiber side, total FTTT fiber length rose slightly by +0.61% QoQ to 218.84k km, while FTTH subscribers grew a solid +7.96% QoQ. Meanwhile, average monthly revenue per tenant dropped -1.46% QoQ to Rp12.3 million, and revenue per fiber ticked up only slightly by +0.19% QoQ to Rp839k, signaling ongoing monetization pressure in early-stage fiber expansion.

We maintain our BUY recommendation on TOWR with a target price of Rp650, in line with our previous report. While margin pressure remains a near-term concern, we see TOWR’s competitive edge in the fiber segment as a key long-term growth engine amid softening tower performance during the ongoing industry consolidation. Furthermore, asset monetization both in fiber and towers will be essential to support profitability and sustain future growth. Downside Risks: 1) Elevated interest rates that could pressure profitability; 2) Intensifying competition in the fiber segment which may squeeze margins; and 3) High site deactivations following the EXCL-FREN consolidation.

By PHINTRACO SEKURITAS | Research
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