XL’s revenue beats rivals, but profits fall
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PT XL Axiata (EXCL), Indonesia’s third-biggest telephone operator, controlled by the Malaysian Axiata Group, booked a lower net profit in the first half of this year than in the same period last year, as network expansion costs soared to meet the growing demand for data services.
XL booked Rp 1.46 trillion (US$154.76 million) net profit in the January-June period this year, down 4 percent from the same period a year ago, though its revenue growth beat rival telco giants at 12.53 percent to Rp 10.17 trillion, the company announced on Wednesday.
That compares with 3.3 percent revenue growth booked by PT Indosat (ISAT) and 6.8 percent by PT Telekomunikasi Indonesia (TLKM), as telephone companies across the country face tight competition in a market where almost 240 million people own at least one mobile phone.
“We have seen continued traction on data and thus we remain focused on expanding coverage and capacity,” XL’s president director Hasnul Suhaimi said in a press statement.
The contribution of XL’s data service revenue has reached 19 percent of usage revenue compared to 13 percent last year. Revenue from data grew by 68 percent to Rp 1.58 trillion in the first six months of this year.
Data users increased by 32 percent from a year ago to 26.5 million, representing almost 58 percent of XL’s 45.9 million subscribers, an 18 percent increase from last year.
“To further support the data growth and demand, we have accelerated infrastructure development. This is also in anticipation of higher traffic in the upcoming Lebaran [Idul Fitri] season,” he added.
XL’s operating expense rose more than revenue, by 22 percent to Rp 5.2 trillion, mainly due to a 44 percent surge in infrastructure expense for rental sites, towers and leased lines, while network license fees also increased in line with the rollout of base transceiver stations (BTS) and 3G infrastructure to support data business.
During the first six months of this year, XL has rolled out 5,464 BTS, making a total 33,737 to facilitate 2G and 3G wireless communication between mobile phones and a network, up 35.1 percent from last year.
The company allocated 60 percent of its capital expenditure for this year to expand the 3G network.
Meanwhile, XL’s revenue from voice only grew 7 percent to Rp 4.13 trillion in the period, but still dominates overall revenue. SMS revenue grew 20 percent to Rp 2.3 trillion.
Overall average revenue per user (ARPU), which measures revenue generated per user, declined 6 percent to Rp 30,000 in the first semester this year compared with the last, as local telephone companies compete to offer lower rate and grab the huge market potential.