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XL Axiata Data Service Continues to Increase Significantly

www.simplyasep.com  The growth of data services continues to drive the achievement of PT XL Axiata Tbk (XL Axiata) revenue in the first half of 2018. Recorded data service revenue increased by 19% over the same period last year.

This achievement also shows the continued contribution of data services to total service revenue per second quarter 2018 to reach 79%, higher than last year's achievement in the same period of 67%. In addition, in the first half of 2018, EBITDA also increased by 2% YoY with a margin increase to 36.0% as a result of increased revenue and cost efficiency efforts.

XL Axiata President Director & CEO Dian Siswarini said, "XL Axiata's performance in the first semester of 2018 reflects the dynamics of an increasingly competitive industry, coupled with structural changes in the prepaid market in the form of prepaid SIM registration obligations.

Despite these challenging industrial conditions, we are still achieving revenue growth in this period. In addition, the obligation of SIM Prepaid registration also gives positive result for XL Axiata. From the first semester performance and the dynamics happening in the industry today, we are still convinced that there is a better chance in the second semester, including if later a more rational data rate becomes enforced. "


Photo courtesy XL Axiata
Photo courtesy XL Axiata

Dian reiterated that the success of this time can not be separated from the successful implementation of a transformation strategy that has been implemented in discipline. The transformation strategy implemented since 2015 has helped build a stronger business foundation, reflected in the achievement of positive performance this semester, despite tight competition on data rates, as well as the obligation of prepaid SIM registration. The revenue growth of 1% YoY in the first half was supported primarily by continued growth in Data services.


XL Axiata also continues to focus on Data services through its dual brand strategy, which is strengthened by investments for quality and sustainable networks, making it a strong foundation for XL Axiata to continue to capture opportunities from continuing to increase demand for data services in Indonesia.

XL Axiata's current performance also demonstrates the success of implementing a dual brand strategy in which XL and AXIS brands are able to meet the expectations of their respective market segments through innovative and attractive Data Product offerings. Offering innovative products such as smartphone bundle packages as well as special packages in the past Lebaran period, which also contributed to this quarter's performance.

The consistently performed transformation agenda has also succeeded in placing XL Axiata as the operator with the highest percentage among operators in terms of the number of customers who register prepaid SIM. Thus XL Axiata also managed to secure almost all income revenue base.

The transformation agenda run by XL Axiata is currently focused on actually obtaining real customers of data services using smartphone. In addition, XL Axiata fully supports the government's initiative to implement prepaid SIM registration as it will result in a healthier telecommunication and data industry in the future.

During this first semester, XL Axiata has launched a number of innovative products. Through XL brand has launched XL Xtream 4G smartphone bundle package which is accompanied by partnership with YouTube to further improve data service usage. This product is getting a great response because of its affordable price and attractive package content.

In addition, there are also Hajj and Umroh package products that offer flexibility in the use of roaming services while in the Holy Land. This service also achieved a positive response considering the number of customers who travel Umroh throughout the year. Meanwhile, XL Prio's postpaid service has also launched Shopping Point XL and Shopping Point Booster XL through 24 month Internet Shopping Point purchases that provide discounts on smartphone purchases.

AXIS cards are also being offered for the youth segment, through HITZ and Bronet internet packages. The offerings of these products are able to increase traffic using data services, including when people celebrate Idul Fitri and long vacations.

During Idul Fitri, customer consumption patterns increased as indicated by increased data traffic up to 95% over the previous year, with most of the increase being driven by 4G services. The main drivers of this increased traffic are mainly access to streaming services both video and music, followed by web browsing, instant message access, and social media.

Smartphone penetration in XL Axiata customers has increased 10 percentage points to 77% by the end of 1st semester of 2018 compared to last year. This means XL Axiata currently has 40.8 million subscribers using smartphones, up 21% YoY from the same period last year.

Continued increase in subscribers with smartphones is driving an increase in total traffic in XL Axiata network by 76% YoY in the first half of 2018 compared to the same period of the previous year. This achievement was mainly driven by increased data traffic, while in the same period traditional voice services (voice and SMS) continued to decline. The majority of XL Axiata's current data traffic is through the use of 4G services.

For network performance, investment in the development of quality data networks that XL Axiata do massively has been able to improve the quality of service and provide a good experience on the use of services by customers.

XL Axiata's 4G LTE network now covers 380 cities / districts in almost all provinces of Indonesia, supported by nearly 25,000 4G base stations and over 49,000 3G base stations. Investments in the Outer Islands also continue to increase traffic usage of data services while contributing to the company's strong performance. The total number of BTS owned by XL Axiata, including 2G, is more than 111,000 BTS.

The results of the company's operational activities in the first half of 2018, XL Axiata recorded gross revenue of Rp 11.1 trillion, an increase of 1% YoY driven by the growth of other telecommunications services which increased 23% YoY.

Meanwhile, revenues from cellular telecommunications services were flat compared to the same period last year of Rp 10.5 trillion and contributed 95% to total revenue. The revenue from services was also flat compared to Rp 9.6 trillion in the previous year, because despite the revenue growth of data services, there was a decrease in "legacy" service revenue (SMS and voice). Other services revenue, especially interconnection and roaming, increased 5% to Rp 900 billion.

XL Axiata recorded a loss of Rp 82 billion at 1H18 lower than the Rp 143 billion profit recorded in the previous year period. This is mainly due to lower EBIT as a result of the rising cost of Depreciation and Amortization.

The XL Axiata balance remains strong with net debt to EBITDA at 1.4x and the company continues to achieve positive free cash flow. In 1st Semester 2018, EBITDA increased 2% YoY to Rp 4 trillion due to revenue growth and cost efficiency as margins increased slightly by 0.2% YoY.

 During Semester 1 2018, XL Axiata repaid bank loans of Rp1.5 trillion through refinancing as well as loan repayments of USD50 million and Rp1,040 billion of sukuk through internal funds. Starting June 30, 2018, all XL Axiata external USD loans have been fully covered to maturity.
(Sumber XL AXIATA)

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