Jakarta, 10 May 2023. The Fixed Broadband (FBB) and Fixed Mobile Convergence (FMC) services market in Indonesia presents huge business opportunities both now and in the future. In addition to the growing demand for services, the penetration rate of FBB is still very low, at under 15%, which is lower than the penetration rates in most Southeast Asian countries.
Responding to the high market demand opportunity for FBB and FMC services, over the next five years, Link Net aims to accelerate its rollout and have approximately 8 million home passes over the next five years. This will strongly fuel XL Axiata’s growth strategy in FBB and FMC services for its customers.
It is a manifestation of both entities' commitment to customers to provide a more diverse digital services and experiences with better quality, and of course, as an effort to realize XL Axiata's vision as the leading convergence operator in Indonesia.
President Director & CEO of XL Axiata, Dian Siswarini, said, "The closer collaboration between XL Axiata and Link Net will be able to accelerate the penetration of convergence services in Indonesia because, over the next five years, there will be an expansion of supply of 8 million home passes. In addition, XL Axiata is determined to increase its convergence customer base, while accelerating the achievement of XL Axiata's vision as the leading convergence operator in Indonesia. XL Axiata will capitalize on the opportunity of the FBB market, which is still under penetrated, and the trend of market demand that continues to strengthen."
"Since the last two years, XL Axiata has set a vision as the Leading Converged Operator in Indonesia. For this reason, XL Axiata also continues to work hard to introduce the XL SATU convergence service and its various benefits to the wider community while expanding its reach to communities in various regions," Dian continued.
President Director & CEO of Link Net, Marlo Budiman, said, “Link Net is transforming our residential broadband business into a Fiber Co and focusing on the core activity of Fixed Line network development. We will be lazer focused on minimizing the cost of network rollout, delivering rapid network growth and providing high quality internet connections for our end users. Economies of scale combined with expertise developed over 25 years of building fiber networks, will enable us to be a market leader in cost efficiency and network quality. We will provide our ISP & Telecommunication distribution partners with a high-quality network and operational support which will allow them to focus on strengthening their customer relationships and growing their customer base. XL Axiata is a company with deep expertise in mass market distribution and marketing, and partnering with them as an anchor tenant on our network will facilitate rapid take up of home pass capacity. The successful execution of Link Net’s Fiber Co will create one of the nation’s largest fiber networks and offer enormous potential for future financial performance. The network that we are building will be a core piece of Indonesian Internet infrastructure to be used by tens of millions of consumers for generations to come. There is a strong alignment in creating additional shareholder value and meeting the internet infrastructure and network demands of future generations.”
Vivek Sood, Group Chief Executive Officer of Axiata Group said, “By creating a strong FibreCo in Link Net and a flourishing ServeCo in XL Axiata, we are poised to accelerate scalability and leverage synergies to lead the telecommunications sector in both fixed broadband (FBB) and fixed mobile convergence (FMC) services. This focuses on the key strengths of Link Net as a fibre network specialist and the established comprehensive strengths of XL as a ServeCo that will handle the management of mobile, fixed broadband, fixed mobile convergence, and digital services for all customers, will drive value illumination for the Group as a whole, while enabling enhanced user experiences for the Indonesian consumers and enterprises. By delayering our infrastructure and service layers, we are well-positioned for diversified opportunities of growth with key players within the ecosystem, paving the way to be The Next Generation Digital Champion.”
This strategy will allow both entities to accelerate the scalability of their respective businesses, where XL Axiata will have access to larger fiber optic access with minimal investment while Link Net focuses on expanding its infrastructure to serve overall market demand. For Link Net, focusing more on becoming a Fiber Co will allow it to increase its value as an infrastructure company.
The implementation of the strategic intent will comply with applicable laws and regulations, including those from the Financial Services Authority (OJK) related to material transactions and affiliated transactions.