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XL to strengthen data services, dual brands under new boss
Out with the old: An employee of PT XL Axiata takes a selfie during a group photo session with Dian Siswarini (center right) and Hasnul Suhaimi (center left) after an annual shareholders meeting in Jakarta on Wednesday
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span class="inline inline-center">Out with the old: An employee of PT XL Axiata takes a selfie during a group photo session with Dian Siswarini (center right) and Hasnul Suhaimi (center left) after an annual shareholders meeting in Jakarta on Wednesday. Dian has been named new XL Axiata president director and CEO, replacing Hasnul, who had led the company since October 2006. JP/Ricky Yudhistira
Telecommunications operator PT XL Axiata (EXCL) aims to upgrade its data services in line with the market trend, as well as strengthen its brands ' XL and Axis ' to deal with tighter competition, according to the company's newly appointed CEO.
'The telco industry is facing a very challenging year, with voice calls and SMS dropping significantly. Therefore, we have to improve our data service in the future,' said Dian Siswarini, who has replaced Hasnul Suhaimi at the helm of the firm.
Data service was much more segmented than voice service and that would require the company to identify consumers' needs and how to satisfy them, she said.
XL's data traffic surged by 126.7 percent to 123,824 terabytes last year from 54,615 terabytes in 2013, according to the company's internal data.
Under her leadership, Dian said, XL would also start carrying out its dual brand strategy, promoting XL and Axis.
XL's chief brand & customer management officer, Rashad J. Sanchez, previously said that XL would target middle and premium
consumers craving quality data services, while Axis would mainly target those who were not heavy data consumers and were more price-sensitive.
Around 51 percent of XL's 59.6 million subscribers last year were data subscribers.
The publicly listed company is to spend Rp 7 trillion (US$537 million) in capital expenditure (capex) this year, most of which will be allocated to its 3G and 4G network.
On Wednesday, XL chief finance officer Mohamed Adlan said his company would also pay its mandatory debt this year of Rp 3.9 trillion, slashing the firm's total loans to Rp 25.7 trillion this year from Rp 29.6 trillion last year.
Amid financial losses last year, XL was upbeat that it could wholly finance its capex and debt-repayment this year with its internal cash, he said.
'With the fund from our tower sales [to PT Solusi Tunas Pratama], our cash and cash equivalent currently hits Rp 7 trillion [apart from this year's operational cashflow],' he said.
XL aimed to lower its net debt to EBITDA ratio from its current level of 2.7, he added. EBITDA is earnings before interest, taxes, depreciation and amortization.
The firm's EBITDA stood at Rp 8.6 trillion last year, remaining stagnant from its EBITDA in the previous year.
XL's head of investor relations, Feiruz Ikhwan, said previously that the company's net debt to EBITDA ratio would be reduced to 2.5.
XL, which acquired PT Axis Telekom Indonesia for $865 million last year, booked Rp 891.06 billion in losses last year, a huge slump from Rp 1.03 trillion of profit in 2013.
XL's foreign exchange loss hit Rp 1.29 trillion last year, a 24.8 percent increase from Rp 1.03 trillion in 2013.
Adlan explained that XL had been forced to take US dollar-loans for the acquisition of Axis last year when the rupiah's liquidity was not good.
The company would try to maximize its rupiah spending in capex and hedge its foreign currency-denominated loans at a higher level than the current 63 percent to cushion the possible impact of the rupiah's weakening this year, Adlan said.
XL aims to grow in line with the market this year, meaning 6 to 7 percent growth.
