Indonesian mobile operator XL Axiata, a majority owned subsidiary of Malaysia’s Axiata Group, has reported a net loss of IDR891.06 billion (USD70 million) for full year 2014, reversing a net profit of IDR1.03 trillion in the previous financial year. In a filing to the Indonesian Stock Exchange last Friday, the country’s second largest mobile operator by subscribers said revenue last year reached IDR23.46 trillion, up 10.3% year-on-year, but operating expenses surged 17.5% to IDR23.03 trillion to offset any gains in the top line. The operator also noted that the acquisition of fellow Indonesian cellco Axis Telekom Indonesia last year, contributed to the net loss, adding that the weakening of the rupiah against the US dollar had a significant impact. XL Axiata deputy CEO Dian Siswarini reported that the firm’s foreign exchange loss in 2014 spiralled to IDR1.29 trillion last year, from IDR1.04 trillion in FY 2013. She pointed out that while turnover from traditional core services such as voice call and SMS only grew slowly, the contribution from internet data and value added services (VAS) continues to rise. Voice and text services revenue increased by 3% y-o-y to IDR7.94 trillion and IDR4.70 trillion respectively, as turnover derived from data and VAS climbed 42.6% to IDR6.27 trillion. The carrier noted that last year, it increased the number of smartphones on its network by 58% to 16.1 million – aided in part by the takeover of Axis, which boosted the carrier’s total assets by 58% to IDR63.7 trillion. On the downside however, buying Axis also increased total liabilities by 99%, mainly related to additional borrowings of IDR29.6 trillion to buy its one-time rival.
In related news, NEC Corp has announced the signing of a global framework agreement with XL’s Malaysian parent Axiata Group, concerning the provision, installation and related maintenance services for the vendor’s iPASOLINK Series of ultra-compact microwave communication systems. The global agreement covers Axiata-owned operations in a number of countries including Malaysia, Sri Lanka, Cambodia, Bangladesh and XL in Indonesia. Until now, NEC has provided iPASOLINK Series under individual arrangements to the Indonesian unit as well as to sister company Dialog in Sri Lanka.