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. (66.50%)
Key Subsidiaries GSM One (L) Ltd
GSM Two (L) Ltd

Stock Quote XL Axiata - EXCL:

Business Summary

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.

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:

  2009 2010 2011
2012
2013 2014 2015 2016
Number of Cellular Subscribers
31.4 40.4 46.4 45.8 60.5 59.6 42.1 46.5
 – prepaid
31.1 40.1 46.1 45.4 60.2 59.2 41.5 45.9
 – postpaid  0.4  0.3  0.3  0.4  0.4  0.4  0.4  0.5

in millions
Source: XL Axiata, Annual Report 2016

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:

    2009   2010   2011   2012  2013  2014  2015  2016
Gross Revenue 13,880 17,236 18,468 21,278 21,350 23,569 22,960 21,341
Operating
Expenses
 7,501  7,771  8,912 11,224 12,606 14,837 14,483 13,283
EBITDA  6,205  9,287  9,348  9,745  8,659  8,623  8,393  8,058
Income before
Tax (loss)
 2,363  3,868  3,865  3,733  1,375 (1,003)  (630)   186
Net Profit (loss)
 1,709  2,891  2,830  2,744  1,056  (830)   (25)   376
Total Assets 27,380 27,251 31,171 35,456 40,278 63,706 58,844 54,896
Total Liabilities 18,577 15,536 17,478 20,086 24,977 49,583 44,752 33,687
Earnings per
Share (loss)¹
   237    340    332    324    121   (95)    (3)    38
Dividend per
Share¹
     -    107 129.88    135     64     0     0     0

in billion IDR rupiah, except stated otherwise
¹ in IDR rupiah
Source: XL Axiata, Annual Report 2016

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 Forecast XL Axiata's Financial Highlights:

    2015   2016  2017F  2018F
Gross Revenue  22,960  21,341  23,064  24,845
EBITDA   8,393   8,058   8,949   9,896
EV/EBITDA (x)
   5.5    5.7    5.2
P/BV (x)
   1.8    1.3    1.2

in billion IDR rupiah, except stated otherwise
Source: Macquarie Capital Securities Indonesia (01/02/2017)

Location

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