XL Axiata

XL Axiata is one of Indonesia’s leading cellular service providers, offering various types of telecommunication products and services such as Voice, SMS, Data, and other value-added mobile telecommunication services with an extensive network around the country. Axiata was the first private company in Indonesia that started to provide cellular mobile telephony services.

Axiata is a major player in Asia’s telecommunications industry, having controlling stakes in mobile operators in Malaysia, Indonesia, Cambodia, Sri Lanka, Bangladesh, and Pakistan. It also holds strategic interests in India, Singapore, Iran, and Thailand. The Group, including its subsidiaries and associates is one of the largest mobile telecommunications providers in the Asian region.

Indonesia's telecommunication market has lost some of its glory as the country's mobile phone market has become saturated while competition is rife.

Profile

Industry Sector Infrastructure, Utilities & Transportation
Industry Sub Sector Telecommunication
Established 6 October 1989
Listed 29 September 2005
Listed Company Code EXCL
Listed Shares 8,526,276,611
Dividend Yes
Major Shareholders (>5%) Axiata Investments Sdn. Bhd. (66.70%)
Etisalat International Indonesia Ltd (13.28%)
Key Subsidiaries GSM One (L) Ltd
GSM Two (L) Ltd


Stock Quote XL Axiata - EXCL:

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Business Summary

XL Axiata has been focused on cellular telecommunication services since obtaining a GSM operating license in 1996. In addition to its cellular business, it utilizes its network to accommodate other telecommunication services, monetize the value of passive infrastructure, such as leasing space on the tower and transmission capacity in the fiber optic transmission network.

XL Axiata started its business with a focus on Voice and SMS products as these were the basic needs of communication media. Over time, communication technology advanced, the industry landscape evolved and consumer’s behavior in communicating changed, resulting in the need for more advanced telecommunication services. Customer communication behavior has started to shift towards Data, in line with the wider range of data-capable telecommunication platform available in the market. XL Axiata and the other leading Indonesian telecommunication companies thus have had to adapt to these trends.


XL Axiata's Operational Highlights:

    2008   2009   2010   2011
  2012
  2013
Number of Cellular Subscribers
  26.0   31.4   40.4   46.4   45.8   60.5
 – prepaid
  25.6   31.1   40.1   46.1   45.4   60.2
 – postpaid    0.4    0.4    0.3    0.3    0.4   0.4

in millions
Source: XL Axiata, Annual Report 2013

In September 2013 it was announced that XL Axiata will acquire Axis Telekom Indonesia, a national GSM mobile operator, for the price of USD $865 million. As the Indonesian telecommunication industry is crowded with many operators fighting over limited market and resources, the acquisition of another operator is one of the expansion strategies.


XL Axiata's Financial Highlights:

      2008     2009     2010     2011    2012    2013
Gross Revenue   12,156   13,880   17,236   18,468   21,278   21,350
Operating Expenses
   6,930    7,501    7,771    8,912   11,224   12,606
EBITDA    5,132    6,205    9,287    9,348    9,745    8,659
Income before Tax (loss)
    (69)    2,363    3,868    3,865    3,751    1,390
Net Profit (loss)
    (15)    1,709    2,891    2,830    2,744    1,056
Total Assets   28,393   27,380   27,251   31,171   35,456   40,278
Total Liabilities   24,085   18,577   15,536   17,478   20,086   24,978
Earnings per Share (loss)¹
     (2)      237      340      332      324      121
Dividend per Share¹        -        -       107   129.88      135  

in billion IDR rupiah, except stated otherwise
¹ in IDR rupiah
Source: XL Axiata, Annual Report 2013


Future Outlook of the Indonesian Telecommunication Sector

Indonesia is unique in the sense that mobile phones are the primary tool for telecommunication. Not only with regard to telephony but also in terms of internet usage. Mobile phones are used as main tool device to access the internet by Indonesians. Mobile phone penetration has surged from 20 percent in 2005 to - currently - over 80 percent (although about 30 percent of Indonesian subscribers hold more than one SIM card). This indicates that the mobile phone subscription market is heading towards saturation; growth in voice and SMS revenue is stagnating. Internet penetration, however, is relatively low, thus having ample room for growth in the near and middle term future. High-speed broadband services are now the new focus of telecommunication companies. However, profit from call services remains to be the primary source of income for Indonesian mobile operators.

Indonesia is also unique in the sense that the country is predominantly a voice market due to low voice tariffs set by operators. Over 60 percent of total revenue in the mobile service sector is derived from voice services, while the remainder comes from non-voice or data services. The growing popularity of smartphones, however, contributes heavily to the growing data revenues. According to data from Frost & Sullivan, a consulting firm, smartphone penetration in Indonesia will exceed 50 percent in 2015 from only nine percent in 2012. The firm believes that the Indonesian market is in the early to middle stage of data usage increase.

Due to the promising perspectives of the mobile phone sector in the last decade, a number of companies are in fierce competition for market shares. Out a total of 11 telecommunication operators, five companies control a combined market share of around 90 percent. These five are: Telekomunikasi Indonesia - and its subsidiary Telekomunikasi Seluler (Telkomsel) -, Indosat, XL Axiata and Bakrie Telecom. Competition has brought tariffs for mobile phone services down significantly, while a new group of subscribers (from the poorer segments of society) has limited spending capacity. Instead, companies now focus on data services (broadband services) and value added service to attract subscribers, both of which are estimated to grow by 35 percent up to 2014. In 2011, there were around 70 million mobile phone data services users. This is estimated to increase to 160 million by 2015.


Future Projection XL Axiata's Financial Highlights:

      2012     2013    2014F    2015F
Gross Revenue    21,278    21,350    23,877    25,526
EBIT     4,679     2,901     4,233     4,460
Net Profit
    2,744     1,056     2,474     2,661
Earnings per Share¹
      324       121       290       312
P/E Ratio (x)      13.5           15.1      14.0

in billion IDR rupiah, except stated otherwise
¹ in IDR rupiah
Source: Investor Daily

Contact Details

Jalan DR. Ide Anak Agung Gde Agung Lot E4-7, No. 1,
Kawasan Mega Kuningan, Jakarta 12950
Phone: +62 21 576 1881
Fax: +62 21 576 1880
Email: murni@xl.co.id
www.xl.co.id

Location