Indonesia’s third largest mobile operator by subscribers XL Axiata has reported a 53% fall in net profit for the three months ended 31 March 2013 to IDR316 billion (USD32.5 million), down from IDR667 billion in the corresponding year-earlier period, due to a sharp rise in operating costs. The carrier said that first-quarter revenue edged up to IDR5.047 trillion from IDR4.925 trillion in 1Q12, although operating costs leapt 21% year-on-year to IDR2.996 trillion. Dow Jones Newswires quotes XL Axiata chief executive Hasnul Suhaimi as saying that higher costs are attributable in part to efforts to expand the number of base transceiver stations on its network, which resulted in a rise in mobile tower leasing costs in the first three months of this year.
Earlier this month, XL Axiata revealed it is looking to spend up to IDR9 trillion in 2013 to improve its mobile broadband data business. The company is setting aside between IDR8 trillion and IDR9 trillion to support the business expansion of data – specifically for 3G – following its recent award of a new block of 2100MHz spectrum from the Ministry for Communications and Information Technology (MoCI) in March. The development of the new block of UMTS spectrum is ‘already included in [XL’s] budget for capital expenditure’ Hasnul said at the time, adding that the cellco has paid IDR512 billion and the first annual fee for the right to use it. ‘This will increase the quality [of XL’s HotRod-branded mobile broadband service] and HotRod can have better performance,’ the CEO added. Prior to the MoCI’s frequency award, XL Axiata had two 3G blocks.