Jakarta, February 20th 2023. 2022 was an extraordinary period for XL Axiata with consistent execution of its digital transformation strategy and convergence services. In general, throughout 2022, XL Axiata has managed to record business growth that is higher than the industry. XL Axiata's total revenue was IDR. 29.2 trillion, growing by 9% higher than the same period last year (YoY), supported by sustainable product supply and qualified network quality. Meanwhile, total data and digital service revenues reached IDR 26.6 trillion, or 91% of the company's total revenue.
All this growth had a positive impact on EBITDA which grew 7% from the same period the previous year (YoY) with a margin of 49%, to IDR. 14.2 trillion. Apart from that, XL Axiata also recorded growth in normalized net profit (NPAT) which increased by 1%, namely IDR 1.1trillion.
President Director & CEO of XL Axiata, Dian Siswarini said, "Throughout 2022, the Indonesian telecommunications industry was characterized by quite tight competition, especially in the fourth quarter period. Data consumption by XL Axiata customers remains strong mainly driven by video streaming, which we expect to continue in 2023. In addition, our massive investment in network infrastructure for both expansion and capacity building, digitization, service personalization and optimization of spectrum usage has been able to improve the customer experience so that it encouraged the increased service traffic.”
In 2022, XL Axiata has also succeeded in retaining customers by focusing on continuing to improve customer experience and better convenience, so in that period the company succeeded in increasing its blended ARPU (average revenue per user) to IDR. 39 thousand from IDR. 36 thousand in the previous year's period, with a total of 57.5 million subscribers.
Dian added, one of the keys to XL Axiata's growth is the personalization of offers and services. The results of the personalization strategy supported by digitization and network quality improvement have succeeded in significantly increasing the NPS (Net Promoter Score) value by up to 4.5x thereby encouraging service usage and ultimately also helping to increase revenue.
According to Dian, the results of implementing digital-based operations through the application of data analytics have also enabled XL Axiata to invest in areas of high value and build networks to meet the demands of all customer segments. Data analytics also allows XL Axiata to evaluate KPIs (key performance indicators) in all aspects related to customers, marketing campaigns, and customer loyalty so that the company can design the right strategy to face challenges and opportunities at the right time.
XL Axiata is also implementing a digital transformation 2.0 strategy to develop customer experience through the MyXL and MyAxisnet applications. Both applications yielded significant results in December 2022, where around 25 million customers have been actively using MyXL and MyAxisnet, with active user growth reaching 62%. These applications can sharpen predictions about future trends and customer behavior, and make it possible to provide the right offers to the right customers, at the right time.
In line with the company's vision of becoming the leading converged operator in Indonesia (#1 Converged Operator in Indonesia), XL Axiata also continues to work hard to introduce converged services to the wider community, while increasing its benefits. Until the end of 2022, 37% of XL Home customers have switched to becoming XL SATU customers, which shows the strong demand for this convergence product.
The acquisition of Linknet which was carried out in 2022 will also greatly support the development of this convergence product in the future. Apart from that, XL Axiata has also completed the acquisition of Hypernet. This step will further strengthen XL Axiata's portfolio of corporate services (B2B). Continuing the acquisition of Linknet, XL Axiata and Linknet have also launched collaboration products in the third quarter of 2022.
Network Performance Continues to Increase
On the network side, network quality improvement initiatives have succeeded in leading XL Axiata to close 2022 with wins in four independent Opensignal survey categories for the December 2022 period. For the second time in a row, XL Axiata is the best among all Indonesian operators in the speed experience category of download, video experience, game experience, and sound app experience. For download speed, XL Axiata recorded an average of 20.8 Mbps, an increase of around 11% compared to July 2022.
XL Axiata is serious about strengthening and expanding its network, especially outside Java, with total capital expenditure (capex) of IDR 9 trillion. Until the end of 2022, the total number of BTS (2G & 4G) of XL Axiata has reached 144,768 BTS, with 4G BTS of 91,632 units. The number of 4G BTS increased by 19% compared to the same period the previous year, with the level of connectivity to the fiber optic network reaching 54% (fiberized).
Meanwhile, the process of refarming 3G technology, which has been ongoing to date, only leaves less than 1,300 BTS. Investments and network strategies throughout 2022 have succeeded in improving the quality of the network experience so that it can increase higher usage. This is proven by the traffic which grew by 22% YoY.
To strengthen the company's financial structure, in 2022 XL Axiata managed to raise a total of IDR. 8 trillion, IDR. 3 trillion each through bonds and sukuk in September 2022 at very competitive prices, and around another IDR. 5 trillion through a rights issue.
“The funds we have managed to raise have strengthened our balance sheet and allowed us to maintain our current AAA rating on investment value. Apart from that, it has also balanced our debt profile so that we are better prepared to face potential interest rate hikes in the future," added Dian.
XL Axiata's financial position is healthy at the end of 2022, gross debt is recorded at IDR 12.1 trillion, with a gearing net debt to EBITDA ratio of 0.49x. Net debt was recorded at IDR 6.9 trillion.
XL Axiata does not have debt denominated in USD. 64% of the loans currently have floating interest rates and 36% have fixed interest rates. Free Cash Flow (FCF) is at a healthy level, with an increase of 54%, to IDR 5.2 trillion.
Opportunity in 2023
There are several positive opportunities in the Indonesian Telecommunications Industry in 2023 that can be utilized by XL Axiata to improve performance going forward. These opportunities are first, the demand for fixed data services, where penetration for this service is still quite low, which means that there is great potential for telecommunications operators to achieve high growth in both consumer services and the corporate segment.
Second, the demand for digital services will remain strong because people feel that they get many conveniences with a hybrid lifestyle, whether for work, study, recreation, or shopping. The CAGR for cellular service users' data consumption is projected to reach 16% by 2026. Third, customers want services that are simple yet complete. This is an opportunity for convergence products that can provide a complete experience for XL Axiata customers with a higher and qualified ARPU.
This year XL Axiata will double the convergence strategy by adding more features. In addition, by leveraging the family segment proposition to provide customers with a more comprehensive and relevant ecosystem, such as smart devices, building your own XL package to better suit their needs, the flexibility to add any XL number to their convergence package, and e-SIM which will soon be launched in the first half of 2023.
In addition, XL Axiata will also increase the synergy of digital operations by utilizing convergence and omnichannel touchpoints, unifying distribution channels, and taking advantage of the synergy of more than 130 thousand distribution of touch points. We hope that all of this will increase XL SATU's sales to the family market. Dynamic pricing will also fight for the relevance of XL Satu to each cluster in particular. We hope to be able to close 2023 with 450 thousand Home-connects and 150 thousand customers switching to using converged services.