XL shifts revenue growth to data, value-added services
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Mobile phone operator PT XL Axiata (EXCL) is chasing higher earnings this year from their data services, which yielded two-fold revenue growth in 2012, a year marked by an ebb in profits.
Hasnul Suhaimi, the president director of XL, said the company aimed to surpass the estimated growth in the operator industry. “The estimated growth for the industry is 7 to 8 percent. We aim to grow slightly above that by at least 1 percent,” he said recently.
He added that the operator wanted 30 percent of its overall revenue this year to flow from data services, which includes Internet access and value-added services (VAS).
Based on the operator’s 2012 full-year report, the company experienced a 14.8 percent increase in overall revenue to Rp 20.9 trillion.
Voice calls still lead the pack by contributing 39.6 percent to revenue, followed by its short message service (SMS) at 22.5 percent, with data and VAS trailing at 17.7 percent. Their earnings before interest, taxation, depreciation and amortization (EBITDA) grew 4 percent year-on-year.
However, earnings from data and VAS saw a 32 percent year-on-year increase to Rp 3.7 trillion. The growth exhibited by these services was at least twice that of SMS at 15.9 percent and voice calls at 5.6 percent.
“The strong data traction reflects the huge opportunity in data and XL is well-positioned to capture future growth,” he said.
According to him, approximately 50-60 percent of the operator’s 45.8 million subscribers utilize XL’s data services. Subscriber numbers grew 8 percent quarter-on-quarter in 2012.
He added that the focus this year would be on boosting data usage, as acquiring new users was a challenge given the degree of market saturation.
The penetration of SIM cards in Indonesia has surpassed 120 percent as more people carry two or more mobile devices.
“We are continually seeking new opportunities to expand our services beyond traditional telecommunication services,” he said.
He added that XL “will build a fair amount of infrastructure” this year to support growth, although he declined to reveal the target increment in the number of base transceiver stations (BTS) or capital expenditure this year.
He pointed out that the operator deployed 11,179 BTS with 2G and 3G capabilities in 2012, 83.8 percent more than the 2011 roll out. By the end of last year, XL had a total of 39,452 BTS.
However, market-share leader, PT Telekomunikasi Selular (Telkomsel), had 51,005 BTS as of September last year. XL has the third-largest market share.
Hasnul added that the operator had no plans to sell off their BTS.
“We have not targeted anything, although we would consider offers, as we are not in desperate need of cash,” he said.
Although XL booked higher revenue, their profits for the year dropped 2.3 percent year-on-year to Rp 2.7 trillion in 2012, while expenses rose 20.2 percent to Rp 16.6 trillion. Most of the expenditure went toward infrastructure, costing the operator Rp 5.2 trillion in 2012, 34.6 percent higher than the previous year. Under infrastructure expenses, repair and maintenance ate up Rp 1.9 trillion, 183.9 percent more than in 2011.
XL’s financial report, however, did not hurt its share price. Shares closed at Rp 5,300 apiece on Friday, 6 percent higher than its opening price.
—JP/ Mariel Grazella