Indonesia’s XL Axiata is shifting to a new business model that focuses on long-term value creation, which it expects to have a negative near-term impact on its subscriber base as it transitions its customer acquisition strategy from volume to value.
The operator, which lost 17 million connections over the past year, has dropped from the country’s number two player to fourth over that period, according to GSMA Intelligence.
XL corporate communications VP Turina Farouk, responding to Mobile World Live’s article on its market share drop, said that the company had anticipated its new focus would impact its subscriber numbers and revenue in the first half of the year.
She noted that XL’s long-term focus is on revenue share, not market share based on subscriber numbers.
Farouk said XL, which is gearing up to launch 4G with the country’s other players, started the year with “a transformation agenda with a focus on long-term value creation.”
The agenda, she explained, is being implemented through its ‘3R strategy’: revamp, “to shift subscriber acquisition from largely ‘no value’ to ‘value’ subs and focus on distribution strategies that improve product profitability”; rise, “moving XL’s brand up the value ladder and via a dual-brand strategy with Axis to address different segments of the market”; and reinvent, “building on XL’s adjacency businesses.”