Jakarta, November 5th, 2020. PT Axiata Tbk (XL Axiata) managed to get through the first nine months of 2020 (9M 2020) while still recording positive performance growth. Despite having to face tough industry challenges, XL Axiata was still able to record an increase in service revenue of 18.3 trillion IDR or an increase of 8% compared to the same period the previous year (YoY). Likewise, revenue from data services also continued to grow 12% YoY, and at the same time increased its contribution to the company's total service revenue to 92%.
President Director & CEO of XL Axiata, Dian Siswarini said, “The Covid-19 pandemic has an impact on people's purchasing power, and it is also felt by all operators. The decline in people's purchasing power has not reduced the intensity of competition in the industry. All operators are competing to offer a variety of products, which in addition to being adapted to the needs of the community to remain productive and access to entertainment, is also adjusted to the purchasing power of the community. We can see products with more affordable prices or more bonuses. That's why we strive to maintain our performance by driving sales while at the same time making efficiency in almost all lines of business. As a result, we are still able to achieve growth over the nine months this year. "
In the 9M 2020 period, XL Axiata also managed to achieve EBITDA of 9.9 trillion IDR, higher than 34% YoY. Net profit after tax for the nine months was recorded at 2.1 trillion IDR. On a quarterly basis during the third quarter of 2020, EBITDA also managed to grow 3%, higher than the previous quarter (QoQ), and net profit after tax reached 331 billion IDR.
Operating expenses in 9M 2020 decreased by 14% (YoY). This decrease could occur due to several factors, one of which is a lower infrastructure cost (-28% YoY) as a result of IFRS 16 adoption. Another factor is the interconnection expense, which resulted in a decrease of 24%YoY due to decrease in traffic using voice services. Lastly, also due to declining marketing costs 6%YoY after more use of digital channels.
Data traffic during the first nine months of 2020 increased 47% YoY from 2,386 Petabyte to 3,496 Petabyte. Meanwhile, if calculated per quarter, in the third quarter of 2020, data traffic increased 4% QoQ. The increase in traffic cannot be separated from the increase in the total number of subscribers, namely to 56.9 million, an increase from 55.7 million in the previous quarter.
The penetration rate of customers' smartphones increased slightly from 87% in the previous quarter to 88%. On the other hand, the average revenue per subscriber or blended ARPU for this period is 36,000 IDR from 34,000 IDR at the same period last year.
During 9M 2020, XL Axiata introduced several new offers, namely the XTRA UNLIMITED TURBO feature and 1 hour Unlimited for XL prepaid customers, and the Edu-Pack package for AXIS customers, as well as myPRIO x unlimited for Priority postpaid customers.
XL Axiata also continues to use digital IT, artificial intelligence and data analytics to identify the needs of each customer segment for telecommunications and data services. Thus the company can be more precise in making new service products that are needed by each customer segment. In addition, product offerings can also be more targeted, according to the character of each segment.
The Covid-19 pandemic has not prevented XL Axiata from continuing to build the network. Until the end of September 2020, XL Axiata was recorded to have a total of more than 142 thousand Base Transceiver Stations (BTS). This number increased by about 10% of the number of BTS in the same period last year. Of that total, 53,055 is 4G BTS. Meanwhile, in terms of area coverage, XL Axiata's 4G network has served customers in 458 cities / regencies in almost all provinces in the Republic of Indonesia.
In order to prepare the network towards 5G, XL Axiata also continues the network fiberization process. This fiberization also supports the improvement of data network quality in each area because one of the benefits of this process is that the transport network capacity becomes larger. Fiberization has proven to be able to improve network quality to support a number of data services with large capacities, such as live video streaming.
From a financial perspective, the company's balance sheet remains healthy with a higher cash balance after receiving additional sales from towers. Free Cash Flow (FCF) is also at a healthy level, namely 4.8 trillion IDR or an increase of 162% YoY. XL Axiata currently does not have loans in US Dollar denominations, 59% of which have floating interest and maturities do not coincide.
Future Services
XL Axiata also does not stop into implementing a number of innovative projects, in means to strengthen business processes and improve service quality for customers. One such innovative project is SAP4HANA, in which XL Axiata became the first operator in Southeast Asia to implement it to simplify internal data and processes and also increase productivity.
In order to provide a better experience to customers, XL Axiata has just launched the myXL application, which has enhanced its benefits. This new application has been simplified and easier to use because it has the ability to personalize each customer who uses it. This way, customers will find it easier to obtain services that suit their needs.
The next future service that has been prepared is Live.On. This service allows each user to have full control over large data packet data services with one quota to determine all required applications, network, and usage period. Users will also get maximum access speed, the accumulated data remaining up to 1,000 GB. This service is completely digital. XL Axiata hopes that this service will answer customer expectations in the future which has a very dynamic character.
Ready to enter a new order
The management of XL Axiata has prepared various anticipatory steps to face the pandemic in order to ensure the continuity of telecommunication services for the community in the current emergency period. Since the work from home policy, implemented on March 17th, 2020, the company has also implemented a Business Continuity Plan to ensure that the customer service transition can be carried out smoothly. For the purposes of network development, everything is still going according to plan, with no significant delays, with the delivery of network equipment and materials delivered on time.
Since the beginning of the Covid-19 outbreak in Indonesia, XL Axiata has also implemented social programs. Among other things, in the form of launching a free 2GB/day data access program to help people more easily access applications that support work and study from home. Humanitarian donation programs, both cash and non-cash related to the need to deal with the current situation (pandemic), have also been carried out in various regions, including through related government agencies. The total value of assistance provided, both cash and non-cash, reached over (IDR) 100 billion for all Covid-19 prevention programs, including providing free data access.