Jakarta, 5 September 2019. PT XL Axiata Tbk (XL Axiata) will continue improving the quality of its data network outside Java in a bid to strengthen its business foundation for the future. XL Axiata President Director & CEO Dian Siswarini believes that strong data network infrastructure outside Java will help the company to improve the quality of its services and increase market share. XL Axiata will also continue optimizing the benefits of its data service through the dual brand strategy.
Dian Siswarini said, “We will stick to our 3R strategy by developing and expanding network infrastructure, particularly outside Java. We will also continue the dual brand strategy that has brought excellent results in the last three years. We are still on track and deliver expected results. We believe that the growth trend we see in 1H 2019 will continue until the end of 2019.”
Dian added that entering the second half of 2019, the company has absorbed 60% of capex this year, most of which were used to continue expanding data network in many areas outside Java that saw a significant increase in data traffic. The focus on coverage expansion outside Java has borne fruit. Traffic outside Java has increased rapidly, allowing the company’s revenue to grow.
Dian said that in 1H 2019, XL Axiata completed 90% of network rollout with around 19,000 new BTS; most of which are located outside Java. Today, 4G services are available in around 292 cities/regencies outside Java with over 14,000 4G BTS outside Java, from the total 408 cities/regencies in Indonesia with more than 37,000 4G BTS.
XL Axiata hopes that it can provide 4G services to 440 cities/regencies with over 135,000 BTS by the end of this year. If the target is realized, XL Axiata will cover around 95% of the Indonesian population.
In addition, XL Axiata is also boosting network fiberization, both in Java and outside Java. Fiberization will drive transport network capacity by more than five-fold compared to non-fiber transport network. According to XL Axiata's data traffic over the past two years, traffic in Java rose by more than five-fold and traffic outside Java increased three-fold. Therefore, capacity expansion through fiberization has become an urgent need to maintain customers' convenience in accessing data and Internet services.
To date, XL Axiata’s network fiberization has reached around 30% of the total network and has covered all provincial capital cities as well as big cities in Java, Madura, Sumatra, Kalimantan, Sulawesi, Bali and Lombok. Those cities and areas urgently need fiber network as they experience a significant data traffic growth. XL Axiata expects 50% BTS will be connected to fiber network by the end of 2019. The ratio will be increased to around 70% by the end of 2020.
To strengthen infrastructure outside Java, XL Axiata also utilizes the Universal Service Obligation (USO) program. XL Axiata has won the tender for USO network development in 250 spots in 51 regencies, most of them are located in central and eastern regions of Indonesia, including East Nusa Tenggara, Maluku and Papua. The development, in the form of 4G network, will start to be realized this year until next year. XL Axiata will also utilize the availability of fiber optic backbone of Palapa Ring’s west, central, and east regions for network expansion outside Java.
In line with the development of infrastructure for data, XL Axiata continues to optimize benefits of the service to meet customer need. XL Axiata is optimizing its dual brand strategy, which proved reliable. XL Axiata has two brands for its prepaid services: XL for blue collar customers and AXIS for youth customers. As for postpaid service, XL Axiata has XL Prioritas which targets high-end customers.
The optimization efforts aim to expand market reach. To that end, XL Axiata will also strengthen its distribution channels to new areas in accordance with the network expansion. XL Axiata also utilizes data analytic to boost monetization and retention of customers with various demands.
XL Axiata reported a strong performance in 1H 2019 as revenue grew 11% YoY in the back of an increase in service revenue at 15% YoY. Meanwhile, revenue from data service grew 29% YoY, making its contribution increase to 87% of total service revenue during the period. The positive performance was also supported by cost efficiency which increased EBITDA by 19% YoY and EBITDA margin by 3% YoY. During 1H 2019, XL Axiata successfully posted Rp282 billion net profit.