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elecommunication operator PT XL Axiata obtained a Rp 2.5 trillion (US$265 million) loan from state-owned lender Bank Mandiri to support its investment in data services and pay its maturing debts.

In a file submitted to the Indonesia Stock Exchange (IDX) on Monday, XL unveiled the loan agreement, signed last Friday. “The loan has a maturity period of five years with a maximum draw down period of 12 months after the signing of the agreement,” XL said in the file.

The company declined to specify the interest rate for the loans.

“The loans will certainly result in a higher interest burden. However, we have to do this,” XL president director Hasnul Suhaimi said.

According to its financial report, XL’s total liabilities were Rp 20.18 trillion at the end of the first year half, of which Rp 11.9 was long term liabilities and Rp 8.28 trillion current liabilities.

Hasnul said that part of the new loans from Mandiri would be used to pay this year’s mature debts amounting Rp 1.75 trillion.

Out of the total mature debts, loans from Mandiri reached Rp 1.1 trillion, while loans from The Bank of Tokyo Mitsubishi UFJ touched $25 million and the remaining debt was held by Sweden’s Export Kredit Nämnden.

The remaining funds of the new loans will be used to finance capital expenditure, Hasnul said. The
company has allocated Rp 7 trillion to Rp 8 trillion as capital expenditure this year, of which about 60 percent will be used to expand its 3G network.

XL has launched 5,464 new base transceiver stations from January to June this year, making a total of 33,737 towers for 2G and 3G wireless communication. The figure was up 35.1 percent compared to last year’s first half.

Up to the end of the first period, XL has spent about Rp 5.2 trillion on capital projects. The massive investment has hurt the company’s financial performance in the first half of the year as its operating expenses surged higher, leading to a lower net profit of Rp 1.46 trillion, down 4 percent from the same period last year.

XL is one of the telecommunication providers to make a massive investment in an attempt to grab higher income from data services. The companies have turned their eyes to the data business as income from phone calls and text messages have reached their limit.

XL reported that its data users grew 32 percent to 26.5 million, representing about 58 percent of the company’s 45.9 million subscribers. The number of subscribers also rose around 18 percent compared to last year.

Increase in the number of data users helped XL to see higher revenue from data services, which rose 68 percent to Rp 1.58 trillion in the first six months of this year. XL collected Rp 10.17 trillion in revenue in the first half of the year.

—JP/ Raras Cahyafitri