IOH boasts accelerating AI revenues and investments

• Indosat Ooredoo Hutchison (IOH) has been focused on the development of AI services and supporting infrastructure for some time
• Now it is reporting modest but accelerating AI-related revenues
• Its capex investments have also ramped up significantly, giving investors the jitters

Indosat Ooredoo Hutchison (IOH), the second-largest operator in Indonesia and one of Asia Pacific’s leading AI-native telcos, is doing something that many of its telco peers are not yet ready or able to do – it is identifying AI service revenues in its financial statements and, although the numbers are modest, it is reporting accelerating growth from its AI-enabled services. 

But such growth doesn’t come without upfront investments and, right now, accelerated AI investments are giving investors some cause for concern.

The telco has just reported its financials for the first nine months of 2026 and most, if not all, of its numbers are heading in the right direction. 

Total revenues for the January-to-September period came in at 45.8tn rupiah ($2.52bn), up by 11% compared with the same period in 2025, while EBITDA grew by 8.8% to 21.05tn rupiah ($1.15bn), though the EBITDA margin dipped slightly to 46% from 47% for the corresponding period in 2025. 

IOH, which is still in the early days of provisioning AI-related services, reported AI cloud revenues of $50m for the first nine months of 2026, but it expects its full year AI cloud service revenues to hit $100m, compared with just $28m for the whole of 2025, “reflecting growing demand for AI computing and cloud services,” the operator noted. “This momentum demonstrates how Indosat is translating its broader technology investments into new revenue streams while building a more diversified growth engine alongside its core telecommunications business,” it added. 

Those numbers are going to continue to grow quickly, as, in its slide deck for investors, IOH noted that it has AI cloud contracted revenues worth more than $300m for 2027. It also has plenty of other AI-related service plans to implement, including the recently-announced Indosat Intelligence Suite, developed with security tech specialist F5, which aims to provide enterprises with “a trusted and governed environment that simplifies how businesses access and deploy AI, without requiring them to build and manage complex infrastructure themselves.” 

But those numbers and plans need to be underpinned by state-of-the-art AI infrastructure – IOH is a long-time partner and customer of Nvidia – as well as connectivity and supporting systems, so IOH has been busy this year developing an infrastructure model that supports its ambitions and spreads the investment load:   

Earlier this year it teamed up with the Arsari Group to form PT Infra Fiber Teknologi (IFT), an 86,000 kms wholesale fibre network operation that has now been dubbed RAIA Grid and which will provide the connectivity to the telco’s AI infrastructure, whether centralised datacentres or distributed hubs. It also forged a new AI infrastructure joint venture called Zankore with the help of Nvidia, Nokia and Ooredoo Group, which aims to play a major role not only in Indonesia and the South-East Asia region but also influence global developments: Zankore recently secured $3.1bn in debt funding. 

But, while it develops its AI-related opportunities, IOH also has its traditional telecom services and infrastructure to consider too and it is currently in the throes of building out its 5G network – to add to its 216,000 4G base stations, it now has about 19,400 5G base stations deployed, up from just 1,400 a year ago. 

All of this means IOH is in the midst of an intense investment programme: Its capex for the first nine months of 2026 hit almost 29tn rupiah ($1.59bn) – of which almost 64% was allocated to its mobile infrastructure investments and about 36% to its AI cloud investments – giving it a capex-to-revenue ratio for the period of 63.4%. 

Those kinds of investment numbers gave investors a bit of a fright, as despite the growing sales and earnings, IOH’s share price dipped by 6.7% to 1,465 rupiah as questions were raised about the ability of IOH to generate a decent return on its investments. 

At the same time, IOH is not alone in investing heavily during a short period to gain 5G coverage quickly, its AI plans are well known and articulated, and it has scale: It ended September with 91.5 million mobile customers – down by a few million following the implementation of a government-mandated biometric SIM card registration process designed to weed out duplicated registrations – but its monthly mobile ARPU (average revenue per user) is up by 16.5% compared with a year ago to 46,000 rupiah ($2.65). In addition, IOH reported a 21% year-on-year increase in high-speed broadband subscribers to 446,000. 

Vikram Sinha, the president and CEO of IOH, who recently signed a five-year extension to his contract, noted: “Our strong core business is the foundation of our transformation. We continue to focus on delivering a better customer experience, strengthening monetisation, and maximising the value of our network and spectrum investments. This financial strength also enables us to invest in the next wave of growth. Our AI investments are beginning to translate into tangible business contributions, and we are building the capabilities to capture growing demand for AI infrastructure and solutions, both in Indonesia and beyond. Ultimately, our purpose remains to empower Indonesia by making technology more accessible and creating lasting value for our customers and the wider economy.”

- Ray Le Maistre, Editorial Director, TelecomTV