XL Axiata targets data revenue growth in Lombok

26 Feb 2015

Indonesia’s second largest mobile carrier by subscribers, XL Axiata, is looking to boost data revenue contributions in the Lombok market – as it looks to drive sales in the saturated market in West Nusa Tenggara. Axiata has a strong presence in Lombok – the other major island in West Nusa Tenggara besides Sumbawa; its deputy chief marketing officer Kencono Wibowo claims the firm controls 93% of the two million or so mobile subscribers in Lombok. However, the official notes that data contributions in the local market are low – at just 17% – providing ample room for growth.

In an effort to bolster returns from data-based services, XL Axiata is upgrading as many as 690 base transceiver stations (BTS) in the area, enabling it to provide good quality data services to attract more people to use its mobile broadband network.

XL Axiata, a majority owned subsidiary of Malaysia’s Axiata Group, 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. The cellco 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 last year’s acquisition of fellow Indonesian cellco Axis Telekom Indonesia 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 climbed to IDR1.29 trillion, 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.

Indonesia, XL Axiata