XL Axiata posts net loss as revenue growth stalls - Mobile World Live

XL Axiata posts net loss as revenue growth stalls

03 AUG 2018

XL Axiata, the fourth largest mobile operator in Indonesia, faced new headwinds in the first half of 2018, reporting a net loss for the period as ARPU fell and mobile revenue growth stalled.

The operator recorded a loss of IDR81.7 billion ($5.6 million), reversing a profit of IDR143 billion in H1 2017. It said the loss was mainly a result of higher depreciation and amortisation charges.

Total revenue inched up 1 per cent year-on-year to IDR11.1 trillion, with data revenue increasing 19 per cent. The company said data accounted for 79 per cent of turnover in Q2 compared with 67 per cent in the same quarter a year ago.

In a statement, XL said the data growth came despite a tough competitive environment in the first two quarters of the year coupled with the implementation of prepaid SIM registration.

“Competition this year has been intense, with aggressive product launches by competitors which saw very low data package offerings aimed at grabbing market share, which are both unsustainable and unhealthy for the industry. However, following the completion of the prepaid SIM registration process completed on 1 May, XL has made some positive moves and hopes for a better pricing environment for the industry going forward,” it said.

Mobile flat
Mobile service revenue was flat year-on-year in H1 at IDR10.5 trillion and contributed 95 per cent of total revenue. Other telecoms services revenue, which mainly covers tower leasing and leased lines, increased 23 per cent to IDR574 billion.

The operator added 2.4 million subscribers in the year to end-June, taking its total to 52.9 million. Smartphone users increased 21 per cent year-on-year to 40.8 million, with smartphone penetration rising 10 percentage points to 77 per cent. Blended ARPU fell 9 per cent to IDR34,000.

XL said its 4G network covers 380 cities with nearly 25,000 base stations, an increase of more than 11,000 since June 2017. It also added nearly 7,000 3G base stations to take its total to 49,000.

Given the continued investments needed to enhance its 3G and 4G networks, Moody’s expects XL Axiata’s capex in 2018 and 2019 to be around IDR7 trillion (the figure was IDR6.7 trillion in 2017) as it continues to increase its network capacity and coverage, especially outside of Java.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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