Sustained focus on “3R – Revamp, Rise & Reinvent” transformation
More than 84,000 BTS in close to 100 cities & market leader in 4G with over 8,000 BTS in close to 100 cities
Nationwide UMTS900 for 3G data services
Launched Mobile Broadband (MBB) Product
1st Indonesian telco to commercially launch 4.5G Ready on the 1,800 MHz spectrum
As one of Indonesia’s leading telecommunication service providers, XL offers an array of innovative telecommunications products and services ranging from voice, SMS and Value Added Services (VAS) to mobile data covering more than 90% of the population throughout Indonesia. With over 20 years experience, XL armed with deep understanding of its subscribers needs, is credited with bringing mobile services to ordinary Indonesians when it introduced the budget “IDR1/second” programme in 2007, allowing more middle and lower income groups access to mobile services. XL has grown from a small company offering basic telephony services into one of the country’s largest telecommunications companies, with extensive network infrastructure and services.
XL’s network runs on GSM 900/DCS 1800, IMT-2000/3G technologies and 4G LTE and it holds several licenses, including Closed Regular Network (Leased Line), Internet Services Protocol (ISP), Voice over Internet Protocol (VoIP), Internet Interconnection Services (NAP), and an e-money (electronic money) license from the Central Bank of Indonesia, which enables XL to provide remittance services to its subscribers. As the second largest telecommunications company in the market in terms of market capitalisation, XL continues to innovate and is transforming itself into a leading mobile data provider, serving the burgeoning demand for data amongst Indonesians. XL is dynamic in managing and operating its business, and fast in adapting to changes in the industry and market landscape, to deliver excellent service quality to its customers.
In 2016, XL continued with the implementation of the “3R – Revamp, Rise & Reinvent” Transformation Agenda to position the business for data. In line with this, there was strong focus on enhancing the Company’s data infrastructure through a wider, stronger and better network to attract data savvy customers. As a result, XL’s 4G footprint now spans close to 100 cities and areas across the country with more than 8,200 sites, with smartphone penetration rising to 63%, the highest in the industry. By end December 2016, XL had 29 million smartphone subscribers, signifying an increase of 64% Year on Year (YoY).
Given the low penetration of fixed broadband in Indonesia, XL launched its Mobile Broadband (MBB) solution XL Go which utilises Mi-Fi on 4G LTE and 3G networks to connect several devices. During the year, increased growth in 4G LTE services and smartphone subscribers contributed to total traffic growth of 162% YoY.
The Company improved its nationwide network coverage by utilizing the UMTS900 frequency for 3G services. This will be implemented across Indonesia, including Sumatra and Kalimantan, in line with the Indonesia Broadband plan to expand digital access in remote areas of the country.
In 2016, XL was the first telecommunications operator in Indonesia to commercially launch 4.5G on the 1,800 MHz spectrum, covering Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek), Bandung, Surabaya and Denpasar.
In line with its Transformation Agenda, the Company conducted a range of balance sheet management initiatives with the aim of strengthening its balance sheet and reducing the effect of foreign currency fluctuations. This included a rights issue in the first half of 2016 offering 2.14 billion new shares, the proceeds of which were used to repay a loan from the parent company. XL also completed the sale and leaseback of 2,500 towers, and the proceeds were used to pare down debt. Consequently, the Company has improved its gearing ratio and strengthened its financial position. XL’s diligent focus on cost management resulted in an increase in EBITDA margins to 37.6% in 2016 compared to 36.6% a year ago.
In 2016, XL recorded revenue of IDR21.4 trillion, lower by 7% YoY due to the shift in customer behaviour which resulted in a decline in Legacy Services revenue. Service revenue however, only declined by 4% YoY to IDR18.3 trillion as the decline in Legacy Services revenue was offset by stronger growth in data revenues. Service revenue now accounts for 86% of total gross revenue.
EBITDA reduced by 4% YoY to IDR8.1 trillion due to the decline in revenue but was offset by cost efficiencies achieved during the year. As a result, EBITDA margin improved to 37.6% in 2016 from 36.6% in 2015.
XL recorded a net profit of IDR376 billion in 2016 compared to a net loss of IDR25 billion in 2015. This was driven by gains from the sale and leaseback of towers conducted during the year as well as the strengthening of the value of the Indonesian Rupiah.
(normalised > 100%)
Moving forward into 2017, XL will continue focusing on the execution of its 3R Transformation Agenda to position the business to be more data-centric as Indonesia continues to see explosive growth from data services due to rapidly increasing demand. XL has laid strong foundations with the strengthening of both its 4G LTE network and the roll out of UMTS900 improving quality and coverage for 3G services. Customers are beginning to recognize these benefits which have resulted in increased smartphone penetration of 63% across its subscriber base being the highest amongst operators in Indonesia.
In 2017, XL will persist with its strategy to acquire data savvy smartphone customers by further improving and widening the coverage of its data network. The Company will also ramp up marketing and communications efforts to educate the market on its stronger network proposition as well as increase its innovative data-focused bundled offerings to entice smartphone customers. XL continues to be at the technological forefront with the testing and implementation of 4.5G, the first operator in Indonesia to do so. As the Company seeks to build a stronger, more profitable and sustainable business, it will continue to focus its efforts on cost efficiencies to improve returns to all stakeholders.