Info Memo - XL Axiata
Q3 2006
CONTINUED GROWTH MOMENTUM IN Q3 2006
TABLE OF FACTS
US$/ Rp - ending rate
US$/ Rp - average rate
Penetration rate cellular (%)**
Cellular industry # subscribers (million)***
Industry growth (%)****
XL market share (%)
Total # subscribers (000)
- Prepaid
- Postpaid
ARPU average (Rp 000)
- Prepaid
- Postpaid
Capex (Rp billion)
- # BTS
Debt (Rp billion)
- Banks
- Bonds
US$ Bond (USD 350 mn & USD 250 mn)
Bond unamortised discount
- Floating Rate Notes (USD 70 million)
Gross Revenue (Rp billion)
- GSM telecommunication service
- GSM interconnection service
- Other telecommunication services
Cost of Service (Rp billion)
- Other GSM telecommunication charges
- Interconnection charges
- Other telecommunication services cost
Net Revenue (Rp billion)
Opex (Rp billion)
EBITDA (Rp billion)
EBITDA Margin (%)
Depreciation & Amortization (Rp billion)
EBIT (Rp billion)
Financial Charges (Rp billion)
- Net Interest Income/(Expense)
Interest expense
Interest income
- Forex Gain/ (Loss)
- Others
Income/ (Loss) Before Tax (Rp billion)
Tax (Rp billion)
Income/ (Loss) After Tax (Rp billion)
* Audited
** Excluding PSTN; Source: company estimate
*** Source: various published reports
****Annual growth; Source: company estimate
Q3-05
YTD Sept 05*
10,310
10,310
9,924
9,559
22
22
48
48
70
70
12
12
5,865
5,865
5,732
5,732
133
133
65
60
335
892
1,952
3,620
3,620
4,436
4,436
148
148
3,566
3,566
3,609
3,609
(42)
(42)
722
722
972
2,690
698
1,932
245
676
29
82
207
525
47
138
156
378
4
9
765
2,165
312
858
453
1,307
47
49
298
833
155
474
(559)
(955)
(95)
(306)
(97)
(317)
2
11
(335)
(504)
(129)
(145)
(404)
(481)
118
142
(286)
(339)
Q4-05
9,830
10,145
24
52
62
14
6,979
6,802
176
1,417
4,324
4,089
3,401
3,441
(39)
688
1,099
828
238
33
205
34
168
3
894
466
428
39
332
96
72
(72)
(83)
11
142
2
168
(53)
115
Page 1 of 11
Q1-06
9,075
9,485
25
56
63
15
8,221
7,973
248
1,012
4,886
5,362
5,362
5,445
(83)
1,206
901
258
47
235
52
178
5
971
399
572
47
338
234
268
(82)
(103)
21
356
(6)
502
(147)
355
Q2-06
9,300
9,023
26
57
29
15
8,388
8,058
331
1,322
5,606
5,503
5,503
5,580
(77)
1,365
1,016
282
67
257
52
201
4
1,108
472
636
47
369
267
(247)
(92)
(103)
11
(149)
(6)
20
(16)
4
Q3-06
YTD Sept 06
9,235
9,235
9,157
9,222
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
8,369
8,369
8,004
8,004
365
365
50
44
212
988
3,322
6,052
6,052
5,469
5,469
5,469
5,469
5,541
5,541
(72)
(72)
1,547
4,118
1,161
3,078
319
859
67
181
292
784
49
153
233
612
10
19
1,255
3,334
543
1,414
712
1,920
46
47
416
1,123
296
797
(75)
(54)
(95)
(269)
(105)
(311)
10
42
25
232
(5)
(17)
221
743
(79)
(242)
142
501
Q3 2006
RATINGS
Moody's
Foreign Currency
Ba3
Outlook
Stable
Standard & Poor's
BB-
Stable
FINANCIAL MEASURES
In Q3 2006, PT Excelcomindo Prat ama Tbk (“ XL") recorded gross revenue of Rp. 1, 547 billion,
represent ing 59% increase YoY f rom Rp. 972 billion in Q3 2005 or 13% increase QoQ f rom Rp. 1, 365
billion in Q2 2006. YTD Sept ember 2006 gross revenue increased by 53% YoY t o Rp. 4, 118 billion f rom
Rp. 2, 690 bill ion in YTD Sept ember 2005.
Q3 2006 net revenue was Rp. 1, 255 billion, 64% higher YoY
t han Q3 2005 f igure of Rp. 765 billion or 13% higher t han Q2 2006 f igure of Rp. 1, 108 billion. YTD
Sept ember 2006 net revenue amount ed t o Rp. 3, 334 billion, increasing by 54% YoY compared t o YTD
Sept ember 2005 f igure of Rp. 2, 165 billion. The revenue increase was in line wit h t he increase in t he
number of subscriber t o 8. 4 million as at t he end of Q3 2006 f rom 5. 9 million as at t he end of Q3
2005. On a quart erly basis, Q3 2006 subscriber base was st able at 8. 4 million due t o subscriber cleanup caused by prepaid regist rat ion regulat ion.
Alt hough t he prepaid regist rat ion had caused t he
clean-up in t he number of subscribers in Q3 2006, t he impact t o t he revenue is minimal as t hose
subscribers were most ly inact ive subscribers.
Revenue and EBITDA are growing (in Rp billion)
4,118
3,334
2,690
2,165
1,920
1,307
YTD Sept 05
Gross Revenue
YTD Sept 06
Net Revenue
EBITDA
Q3 2006 EBIT was Rp. 296 billion, represent ing a 91% increase f rom Q3 2005 f igure of Rp. 155 billion
or an 11% increase QoQ f rom Q2 2006 f igure of Rp. 267 billion. YTD Sept ember 2006 EBIT increased
by 68% YoY t o Rp. 797 billion f rom Rp. 474 billion in YTD Sept ember 2005. EBITDA was Rp. 712 billion
Page 2 of 11
Q3 2006
in Q3 2006, 57% higher YoY t han t hat of Q3 2005 of Rp. 453 billion or 12% higher QoQ t han t hat of Q2
2006 of Rp. 636 billion.
YTD Sept ember 2006 EBITDA was Rp. 1, 920 billion, represent ing a 47%
increase YoY compared t o YTD Sept ember 2005 f igure of Rp. 1, 307 billion. EBITDA Margin was 46% in
Q3 2006 compared t o 47% in Q3 2005 or 47% in Q2 2006. YTD Sept ember 2006 EBITDA Margin was 47%
compared t o YTD Sept ember 2005 f igure of 49%.
Forex gain in Q3 2006 were Rp. 25 billion due t o Rupiah currency appreciat ion t o Rp. 9, 235/ USD as at
t he end of Q3 2006 f rom Rp. 9, 300/ USD as at t he end of Q2 2006. YTD Sept ember 2006 f orex gains
were Rp. 232 billion due t o t he st rengt hening of Rupiah currency against US Dollar f rom Rp. 9, 830/
USD as at t he end of December 2005 t o Rp. 9, 235/ USD as at t he end of YTD Sept ember 2006. Net
prof it in Q3 2006 was Rp. 142 billion compared t o a net loss of Rp. 286 billion in Q3 2005 and a net
prof it of Rp. 4 billion in Q2 2006.
YTD Sept ember 2006 net prof it was Rp. 501 billion versus YTD
Sept ember 2005 net loss of Rp. 339 billion.
End of Q3 2006 out st anding debt s consist of USD 350 million Not es due in January 2009 and USD 250
million Not es due in January 2013.
Cash balance was Rp. 499 billion as at t he end of Q3 2006
compared t o Rp. 1, 703 billion as at t he end of Q3 2005 or Rp. 739 billion as at t he end of Q2 2006. As
of 30 Sept ember 2006, our Debt / LTM EBITDA rat io st ood at 2. 3x (covenant of 5. 0x), while our Net
Debt / LTM EBITDA rat io st ood at 2. 1x and our EBITDA/ Int erest Expense rat io st ood at 6. 2x.
Total Debt/LTM EBITDA (x)
EBITDA/Interest Expense (x)
6.2
2.6
2.3
4.1
YTD Sept 05
YTD Sept 05
YTD Sept 06
YTD Sept 06
EBITDA/Interest Exp
Debt/LTM EBITDA
OPERATING MEASURES
Subscribers
The subscriber base increased t o 8. 4 million as at t he end of Q3 2006 f rom 5. 9 million as at t he end
of Q3 2005 and remains st able compared t o Q2 2006. The number of our prepaid subscribers was 8. 0
Page 3 of 11
Q3 2006
million in Q3 2006, represent ing a 40% increase f rom 5. 7 million in Q3 2005 and a 1% decrease f rom
8. 1 million in Q2 2006.
The decline in QoQ prepaid subscriber number was due t o clean-up of
unregist ered subscribers in Q3 2006. The deadline f or t he prepaid regist rat ion was on 27 Sept ember
2006.
Our Q3 2006 post paid subscriber base was 365 t housand, represent ing a 174% increase f rom
133 t housand in Q3 2005 and a 10% increase f rom 331 t housand in Q2 2006.
The increase in t he
number of subscribers was cont ribut ed by cont inuously improved coverage, qualit y and brand
awareness as well as t he promot ion of various new product s and benef it s during Q3 2006, such as
‘ Tarif Ngirit Sampe 60% - Senin sampe Jumat ’ (Economical / of f -peak t arif f up t o 60% saving during
Monday t o Friday) f or bebas cust omers, launch of j imat and 3G service, and many ot her at t ract ive
programs.
Investment
We cont inued t o invest aggressively in our net work development .
In Q3
2006, we spent capex of Rp. 988 billion compared t o Q3 2005 capex of Rp.
892 billion.
YTD Sept ember 2006 capex t ot aled at Rp. 3, 322 billion
compared t o YTD Sept ember 2005 f igure of Rp. 1, 952 billion. The increase
in capex spent was result ed f rom t he aggressive development of base
t ransceiver st at ions (BTS) in Q3 2006.
As at t he end of Q3 2006, our
number of BTS increased by 67% YoY t o 6, 052 f rom 3, 620 BTS as at t he end
of Q3 2005 or 8% increase QoQ f rom 5, 606 BTS as at t he end of Q2 2006.
This massive expansion of BTS net work will improve our net work coverage
and qualit y and f urt her deliver bet t er service t o cust omers.
Network build up on track
Number of BTS
Capex spent & breakdown (Rp bn)
78
6,052
5,606
4,886
4,324
55
3,620
3,244
1,897
YTD Sept 05
Netw ork equipment
Q3-05
YTD Sept 06
Others
Page 4 of 11
Q4-05
Q1-06
Q2-06
Q3-06
Q3 2006
Sales and Distribution
XL expanded it s sales and dist ribut ion net work by est ablishing more XL Cent ers and cooperat ing wit h
more XL Kit as. As of t he end of Q3 2006, t here were 156 XL Cent ers and 32, 542 XL Kit as compared t o
118 XL Cent ers and 14, 867 XL Kit as as of t he end of Q3 2005 or 150 XL Cent ers and 30, 253 XL Kit as as
of t he end of Q2 2006.
The regionalizat ion of our organizat ion has been implement ed in order t o
react f ast er t o t he cust omers needs.
Products & Services
During Q3 2006, XL launched 3G services, launched “ j imat ” as a
separat e brand, and int roduced various at t ract ive programs and
services.
Commit t ed as a leading t elecommunicat ion services
provider in Indonesia, on 21 Sept ember 2006, XL launched 3G
services wit h mot t o of “ The First Widest and Fast est 3G Provider” .
As of t he end of Q3 2006, XL is t he f irst and t he only 3G service
provider
wit h
nat ionwide
(Jakart a,
Medan,
Bat am,
Bandung,
Surabaya, and Denpasar) and int ernat ional (Singapore, Malaysia,
Hong Kong, and Aust ralia) coverage.
XL is also t he f ast est dat a
service provider wit h up t o 2. 6 Mbps dat a speed using HSDPA (High
Speed Dat a Packet Access) t echnology. At t he launch of 3G services, XL has 284 Node B in Jakart a,
25 sit es in Surabaya, 24 sit es in Bandung, 22 sit es in Denpasar, 24 sit es in Medan, and 18 sit es in
Bat am.
On 20 May 2006, XL init ially launched “ j empol j imat ” (an acronym
f rom “ Jalur Int ernasional Hemat ”
or “ Economical Int ernat ional
Line” ) as a variant of j empol f or int ernat ional saving on calls and
SMS. Jempol j imat provided economical t arif f of Rp 500 per 30
seconds t hrough VOIP services.
Jempol j imat subscribers can also
make l ocal calls wit h t arif f similar t o j empol’ s t arif f . In July 2006,
due t o increasing cust omers need and demand, XL added several
ot her dest inat ion count ries i. e. Singapore, Taiwan, Hong Kong, and
China. On 29 August 2006, XL launched j imat as a separat e brand.
Jimat subscribers can use XL net work nat ionwide and st ill enj oy t he
economical int ernat ional t arif f . The available reload denominat ion f or j imat is Rp 10, 000 and Rp
Page 5 of 11
Q3 2006
50, 000 elect ronically wit h act ive period of 30 days. Jimat st art er pack is current ly available in
Java, Bali, Lombok, and Kalimant an.
On 15 August 06, XL launched “ Bagi Pulsa” (Airt ime Credit Transf er) program f or XL prepaid
subscribers. Under t his program, XL prepaid subscribers can t ransf er some of t heir credit balance t o
t heir f ellow XL prepaid cust omers and do t he cross credit t ransf er, e. g.
j empol subscriber can t ransf er credit t o bebas subscriber and vice versa.
There are 2 denominat ions available f or t he Bagi Pulsa program: Rp
1, 500 (wit h act ive period of one day) and Rp 3, 000 (wit h act ive period
of 3 days). Each t ransact ion of Bagi Pulsa via plain SMS or SIM Tool Kit
will include a surcharge f ee of Rp 350 t hat will deduct ed f rom t he
t ransf erred amount . If t he denominat ion t o be t ransf erred is Rp 1, 500,
t hen t he recipient will receive Rp 1, 150 and if it is Rp 3, 000, t he
recipient will receive Rp 2, 650.
To provide the best service to the customers, XL presents another
innovation: Nada Tungguku Jukebox (The Jukebox Ring Back Tone). XL customers who love
good music can have up to 5 songs to be their ring back tone, using the innovative Nada Tungguku
Jukebox. These 5 songs will be played randomly for every incoming call. The tariff for Jukebox Ring
Back Tone is the same as the current Nada Tungguku tariff of Rp 7,000/ downloaded song and will
be charged for monthly subscription fee Rp 5,000/month.
Promotions
XL of f ered a number of promot ions during Q3 2006. On 16 August 2006,
XL launched “ XL Vaganza” .
Under t his promot ion program, af t er 2
t imes reloads (wit h minimum reload of Rp 10, 000 each), regist ered
bebas & j empol subscribers will get addit ional Rp 10, 000 bonus pulsa.
To ensure t he cust omers t o have t he best value f or t heir money, in
addit ion t o ‘ Tarif Ngirit Malam’ (Night economical/ of f -peak t arif f ) of
Rp. 149 per 30 seconds f or on-net calls, bebas of f ered ‘ Tarif Ngirit
Sampe 60% - Senin sampe Jumat ’ (Economical/ of f -peak t arif f up t o 60
% saving during Monday t o Friday) which is applicable f or on-net calls
during peak hours. Under t his promot ion program, bebas cust omers are
charged Rp 2, 000 f or t he f irst 120 seconds and Rp 250 per 30 seconds.
The program will be valid unt il 30 November 2006.
Page 6 of 11
Q3 2006
As part of t he loyalt y program, Klub VIBE cont inuously delivered it s
promot ions act ivit ies, such as cooperat ion wit h new benef it part ners,
launch of Tuesday movie night s and movie sponsorship (“ Pirat es of
Caribbean 2” ).
In an ef f ort t o at t ract new subscribers and increase usage, XL sponsored
Disney Lant ern Fant asy where XL subscribers will obt ain up t o 50%
discount f rom normal t icket price.
XL of f ered an MMS and GPRS promot ion program f or j empol subscribers.
St art ing f rom 28 Sept ember 2006, j empol subscribers can send MMS and
GPRS. This program is valid unt il 31 July 2007.
ARPU
YTD Sept ember 2006 prepaid, post paid and blended ARPUs were Rp. 44k, Rp. 212k and Rp. 50k
respect ively. These ARPUs are lower t han YTD Sept ember 2005 f igures of Rp. 60k, Rp. 335k and Rp.
65k. In line wit h t he increasing market penet rat ion, t he indust ry generally experiences a declining
ARPU t rend.
Business Solutions revenues (Rp bn)
ARPU (Rp thousand)
335
17
6
212
14
50
44
YTD Sept 05
Prepaid
158
1
65
60
67
YTD Sept 06
Postpaid
YTD Sept 05
Lease Line
Blended
Page 7 of 11
YTD Sept 06
Others
Internet Service Provider
Q3 2006
Business Solutions
XL Business Solut ions has shown a solid achievement .
One indicat ors of
t he achievement was number of companies which had been acquired t o
enj oy dat a communicat ions as well as corporat e GSM mobile services. The
cust omers come f rom various indust ries, such as manuf act uring, banking
and f inance, oil, gas and mining, t elecommunicat ions, modern t rade and
dist ribut ion, public service, Government and SME.
XL is t he only Indonesian t elecommunicat ions provider able t o provide a
bundled service of bot h dat a and mobile communicat ions as a one st op
shopping experience.
t elecommunicat ion
services
t hat
ensure
XL Business Solut ions are developed t o provide
a
more
ef f icient
and
ef f ect ive
company’ s
t elecommunicat ions syst em management which delivers opt imum savings t o t he cust omers.
In Q3 2006, numerous event s were conduct ed in an ef f ort t o int roduce XL Business Solut ions services
while increasing market awareness of XL Business Solut ions exist ence in t he market .
One of t he
event s is Seminar of ‘ The Business Development on Shipping, Logist ic and Courier t hrough t he
Implement at ion of Modern and Convergence Inf ormat ion & Technology’ held in Four Season Hot el in
August 06.
Japanese corporat ions are pot ent ial t arget market f or XL Business Solut ions. In order t o cult ivat e t his
market , XL part icipat ed in an exhibit ion held by PT NEC Indonesia and provided a seminar about XL
Business Solut ions services. During t hat event , Business Solut ions demonst rat ed it s services such as
GSM PBX Int egrat ion, Int ernet Access, Host ed PBX, Xpand, XLocat e and Inst ant Of f ice.
In order t o f ulf ill t he ever increasing demand f or reliable t elecommunicat ions inf rast ruct ures f rom
companies in Indonesia, in July 2006, XL Business Solut ions also launched a new product of Xpoint
which can provide Int ernet WiFi service using GSM picocell. This program was launched wit h a series
of exhibit ions in several buildings in Jakart a.
IMPORTANT EVENTS
Extraordinary General Meeting of Shareholders (EGMS)
On 1 Sept ember 2006, XL held EGMS and made t he f ollowing decision:
1.
Accept t he resignat ion of Jaf f a Sany Arif f in and Rudiant ara as Direct or of XL
Page 8 of 11
Q3 2006
2.
To appoint Hasnul Suhaimi as t he President Direct or of XL and Joy Wahj udi as Direct or of XL
3.
There is no changes t o t he exist ing Board of Commissioner
4.
To approve t he changes in XL’ s BoD t o be as f ollows:
Board of Director
President Director
Director
Director
Director
Director
Director
Director
Hasnul Suhaimi
Joris de Fretes
Md Nasir Ahmad
Muhammad Buldansyah
P. Nicanor V. Santiago III
Hilmi bin Mohd. Yunus
Joy Wahjudi
Products & Services and Promotions (Please also see page 5-7)
XL launched 3G services wit h mot t o of “ The First Widest and Fast est
3G Provider” .
XL launched j imat as a separat e brand. Previously j imat was a
variant of j empol and known as j empol j imat . Jimat subscribers can
use
XL
net work
nat ionwide
and
st ill
enj oy
t he
economical
int ernat ional t arif f .
XL launched “ Bagi Pulsa” (Airt ime Credit Transf er) program f or XL
prepaid subscribers.
XL offered Jukebox Ringback Tone for XL customers who love good
music. They can have up to 5 songs to be their ring back tone. These 5 songs will be played
randomly for every incoming call
XL launched “ XL Vaganza” where af t er 2 t imes reloads
(wit h minimum reload of Rp 10, 000 each), regist ered
bebas & j empol subscribers will get addit ional Rp 10, 000
bonus pulsa
bebas of f ered ‘ Tarif Ngirit Sampe 60% - Senin sampe
Jumat ’ (Economical/ of f -peak t arif f up t o 60 % saving
during Monday t o Friday) which is applicable f or on-net
calls.
St art ing f rom 28 Sept ember 2006, j empol subscribers can
send MMS and GPRS.
Page 9 of 11
Q3 2006
XL Business Solutions (Please also see page 8)
XL Business Solut ions signed an agreement wit h Muhammadiyah t o provide int ernet access,
of f ice zone and MPLS.
The seminar of ‘ The Business Development on Shipping, Logist ic and Courier Through t he
Implement at ion of Modern and Convergence Inf ormat ion & Technology’ was conduct ed in
Four Season Hot el Jakart a.
XL launched Xpoint which provide high speed access of Int ernet WiFi using GSM Picocell.
Corporate Social Responsibility
In July 2006, t o support t he vict ims of Tsunami and eart hquake in t he sout hern seaboard of
West Java, XL est ablished a f ree t elecommunicat ion post at t he Pangandaran Great Mosque.
Ot her t han providing f ree t elecommunicat ion service, t his post will also act as a public
service cent er and XL’ s dist ribut ion point .
Awards
XL received award as t he Best GSM Operat or in t he Indonesia Cellular
Award 2006. The award was organized by t he Associat ion of t he
Indonesian Cellular Telecommunicat ion (ATSI), Dyandra Promosindo,
and Sinyal Magazine. The crit eria f or t he Best GSM Operat or award
included company’ s growt h f or t he last one year, innovat ive product s,
cust omer service, and t arif f s.
XL received award as Winner of Indonesian MAKE (Most Admired
Knowledge Ent erprise) St udy. The award was organized by Dunamis Organizat ion Services,
Teleos –UK, and Jakart a St ock Exchange
XL received Market ing Award 2006 in t he cat egories of “ The Best Innovat ion in Market ing”
and “ The Best in Market ing Campaign” . The award was present ed by Market ing Magazine, a
not able business publicat ion in Indonesia.
Page 10 of 11
Q3 2006
ABOUT XL
XL is one of t he largest cellular providers in Indonesia and is
cont rolled by Telekom Malaysia Berhad t hrough Indocel Holding Sdn
Bhd (59. 7%) and Khazanah Nasional Berhad (16. 8%).
XL is also t he
only cellular company in Indonesia which owns an ext ensive f iber
opt ic backbone net work, mainly on Java island. St art ed commercial
operat ion in Oct ober 1996, XL’ s business consist s of Consumer
Solut ions as dual band (GSM 900/ 1800) cellular net work provider
t hrough j empol, j imat and bebas prepaid and Xplor post paid cards
wit h addit ion of 3G services f or bebas and Xplor and Business
Solut ions as corporat e service provider based on leased line and IP
(Int ernet Prot ocol).
Dat e: 31 Oct ober 2006
Page 11 of 11
CONTINUED GROWTH MOMENTUM IN Q3 2006
TABLE OF FACTS
US$/ Rp - ending rate
US$/ Rp - average rate
Penetration rate cellular (%)**
Cellular industry # subscribers (million)***
Industry growth (%)****
XL market share (%)
Total # subscribers (000)
- Prepaid
- Postpaid
ARPU average (Rp 000)
- Prepaid
- Postpaid
Capex (Rp billion)
- # BTS
Debt (Rp billion)
- Banks
- Bonds
US$ Bond (USD 350 mn & USD 250 mn)
Bond unamortised discount
- Floating Rate Notes (USD 70 million)
Gross Revenue (Rp billion)
- GSM telecommunication service
- GSM interconnection service
- Other telecommunication services
Cost of Service (Rp billion)
- Other GSM telecommunication charges
- Interconnection charges
- Other telecommunication services cost
Net Revenue (Rp billion)
Opex (Rp billion)
EBITDA (Rp billion)
EBITDA Margin (%)
Depreciation & Amortization (Rp billion)
EBIT (Rp billion)
Financial Charges (Rp billion)
- Net Interest Income/(Expense)
Interest expense
Interest income
- Forex Gain/ (Loss)
- Others
Income/ (Loss) Before Tax (Rp billion)
Tax (Rp billion)
Income/ (Loss) After Tax (Rp billion)
* Audited
** Excluding PSTN; Source: company estimate
*** Source: various published reports
****Annual growth; Source: company estimate
Q3-05
YTD Sept 05*
10,310
10,310
9,924
9,559
22
22
48
48
70
70
12
12
5,865
5,865
5,732
5,732
133
133
65
60
335
892
1,952
3,620
3,620
4,436
4,436
148
148
3,566
3,566
3,609
3,609
(42)
(42)
722
722
972
2,690
698
1,932
245
676
29
82
207
525
47
138
156
378
4
9
765
2,165
312
858
453
1,307
47
49
298
833
155
474
(559)
(955)
(95)
(306)
(97)
(317)
2
11
(335)
(504)
(129)
(145)
(404)
(481)
118
142
(286)
(339)
Q4-05
9,830
10,145
24
52
62
14
6,979
6,802
176
1,417
4,324
4,089
3,401
3,441
(39)
688
1,099
828
238
33
205
34
168
3
894
466
428
39
332
96
72
(72)
(83)
11
142
2
168
(53)
115
Page 1 of 11
Q1-06
9,075
9,485
25
56
63
15
8,221
7,973
248
1,012
4,886
5,362
5,362
5,445
(83)
1,206
901
258
47
235
52
178
5
971
399
572
47
338
234
268
(82)
(103)
21
356
(6)
502
(147)
355
Q2-06
9,300
9,023
26
57
29
15
8,388
8,058
331
1,322
5,606
5,503
5,503
5,580
(77)
1,365
1,016
282
67
257
52
201
4
1,108
472
636
47
369
267
(247)
(92)
(103)
11
(149)
(6)
20
(16)
4
Q3-06
YTD Sept 06
9,235
9,235
9,157
9,222
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
8,369
8,369
8,004
8,004
365
365
50
44
212
988
3,322
6,052
6,052
5,469
5,469
5,469
5,469
5,541
5,541
(72)
(72)
1,547
4,118
1,161
3,078
319
859
67
181
292
784
49
153
233
612
10
19
1,255
3,334
543
1,414
712
1,920
46
47
416
1,123
296
797
(75)
(54)
(95)
(269)
(105)
(311)
10
42
25
232
(5)
(17)
221
743
(79)
(242)
142
501
Q3 2006
RATINGS
Moody's
Foreign Currency
Ba3
Outlook
Stable
Standard & Poor's
BB-
Stable
FINANCIAL MEASURES
In Q3 2006, PT Excelcomindo Prat ama Tbk (“ XL") recorded gross revenue of Rp. 1, 547 billion,
represent ing 59% increase YoY f rom Rp. 972 billion in Q3 2005 or 13% increase QoQ f rom Rp. 1, 365
billion in Q2 2006. YTD Sept ember 2006 gross revenue increased by 53% YoY t o Rp. 4, 118 billion f rom
Rp. 2, 690 bill ion in YTD Sept ember 2005.
Q3 2006 net revenue was Rp. 1, 255 billion, 64% higher YoY
t han Q3 2005 f igure of Rp. 765 billion or 13% higher t han Q2 2006 f igure of Rp. 1, 108 billion. YTD
Sept ember 2006 net revenue amount ed t o Rp. 3, 334 billion, increasing by 54% YoY compared t o YTD
Sept ember 2005 f igure of Rp. 2, 165 billion. The revenue increase was in line wit h t he increase in t he
number of subscriber t o 8. 4 million as at t he end of Q3 2006 f rom 5. 9 million as at t he end of Q3
2005. On a quart erly basis, Q3 2006 subscriber base was st able at 8. 4 million due t o subscriber cleanup caused by prepaid regist rat ion regulat ion.
Alt hough t he prepaid regist rat ion had caused t he
clean-up in t he number of subscribers in Q3 2006, t he impact t o t he revenue is minimal as t hose
subscribers were most ly inact ive subscribers.
Revenue and EBITDA are growing (in Rp billion)
4,118
3,334
2,690
2,165
1,920
1,307
YTD Sept 05
Gross Revenue
YTD Sept 06
Net Revenue
EBITDA
Q3 2006 EBIT was Rp. 296 billion, represent ing a 91% increase f rom Q3 2005 f igure of Rp. 155 billion
or an 11% increase QoQ f rom Q2 2006 f igure of Rp. 267 billion. YTD Sept ember 2006 EBIT increased
by 68% YoY t o Rp. 797 billion f rom Rp. 474 billion in YTD Sept ember 2005. EBITDA was Rp. 712 billion
Page 2 of 11
Q3 2006
in Q3 2006, 57% higher YoY t han t hat of Q3 2005 of Rp. 453 billion or 12% higher QoQ t han t hat of Q2
2006 of Rp. 636 billion.
YTD Sept ember 2006 EBITDA was Rp. 1, 920 billion, represent ing a 47%
increase YoY compared t o YTD Sept ember 2005 f igure of Rp. 1, 307 billion. EBITDA Margin was 46% in
Q3 2006 compared t o 47% in Q3 2005 or 47% in Q2 2006. YTD Sept ember 2006 EBITDA Margin was 47%
compared t o YTD Sept ember 2005 f igure of 49%.
Forex gain in Q3 2006 were Rp. 25 billion due t o Rupiah currency appreciat ion t o Rp. 9, 235/ USD as at
t he end of Q3 2006 f rom Rp. 9, 300/ USD as at t he end of Q2 2006. YTD Sept ember 2006 f orex gains
were Rp. 232 billion due t o t he st rengt hening of Rupiah currency against US Dollar f rom Rp. 9, 830/
USD as at t he end of December 2005 t o Rp. 9, 235/ USD as at t he end of YTD Sept ember 2006. Net
prof it in Q3 2006 was Rp. 142 billion compared t o a net loss of Rp. 286 billion in Q3 2005 and a net
prof it of Rp. 4 billion in Q2 2006.
YTD Sept ember 2006 net prof it was Rp. 501 billion versus YTD
Sept ember 2005 net loss of Rp. 339 billion.
End of Q3 2006 out st anding debt s consist of USD 350 million Not es due in January 2009 and USD 250
million Not es due in January 2013.
Cash balance was Rp. 499 billion as at t he end of Q3 2006
compared t o Rp. 1, 703 billion as at t he end of Q3 2005 or Rp. 739 billion as at t he end of Q2 2006. As
of 30 Sept ember 2006, our Debt / LTM EBITDA rat io st ood at 2. 3x (covenant of 5. 0x), while our Net
Debt / LTM EBITDA rat io st ood at 2. 1x and our EBITDA/ Int erest Expense rat io st ood at 6. 2x.
Total Debt/LTM EBITDA (x)
EBITDA/Interest Expense (x)
6.2
2.6
2.3
4.1
YTD Sept 05
YTD Sept 05
YTD Sept 06
YTD Sept 06
EBITDA/Interest Exp
Debt/LTM EBITDA
OPERATING MEASURES
Subscribers
The subscriber base increased t o 8. 4 million as at t he end of Q3 2006 f rom 5. 9 million as at t he end
of Q3 2005 and remains st able compared t o Q2 2006. The number of our prepaid subscribers was 8. 0
Page 3 of 11
Q3 2006
million in Q3 2006, represent ing a 40% increase f rom 5. 7 million in Q3 2005 and a 1% decrease f rom
8. 1 million in Q2 2006.
The decline in QoQ prepaid subscriber number was due t o clean-up of
unregist ered subscribers in Q3 2006. The deadline f or t he prepaid regist rat ion was on 27 Sept ember
2006.
Our Q3 2006 post paid subscriber base was 365 t housand, represent ing a 174% increase f rom
133 t housand in Q3 2005 and a 10% increase f rom 331 t housand in Q2 2006.
The increase in t he
number of subscribers was cont ribut ed by cont inuously improved coverage, qualit y and brand
awareness as well as t he promot ion of various new product s and benef it s during Q3 2006, such as
‘ Tarif Ngirit Sampe 60% - Senin sampe Jumat ’ (Economical / of f -peak t arif f up t o 60% saving during
Monday t o Friday) f or bebas cust omers, launch of j imat and 3G service, and many ot her at t ract ive
programs.
Investment
We cont inued t o invest aggressively in our net work development .
In Q3
2006, we spent capex of Rp. 988 billion compared t o Q3 2005 capex of Rp.
892 billion.
YTD Sept ember 2006 capex t ot aled at Rp. 3, 322 billion
compared t o YTD Sept ember 2005 f igure of Rp. 1, 952 billion. The increase
in capex spent was result ed f rom t he aggressive development of base
t ransceiver st at ions (BTS) in Q3 2006.
As at t he end of Q3 2006, our
number of BTS increased by 67% YoY t o 6, 052 f rom 3, 620 BTS as at t he end
of Q3 2005 or 8% increase QoQ f rom 5, 606 BTS as at t he end of Q2 2006.
This massive expansion of BTS net work will improve our net work coverage
and qualit y and f urt her deliver bet t er service t o cust omers.
Network build up on track
Number of BTS
Capex spent & breakdown (Rp bn)
78
6,052
5,606
4,886
4,324
55
3,620
3,244
1,897
YTD Sept 05
Netw ork equipment
Q3-05
YTD Sept 06
Others
Page 4 of 11
Q4-05
Q1-06
Q2-06
Q3-06
Q3 2006
Sales and Distribution
XL expanded it s sales and dist ribut ion net work by est ablishing more XL Cent ers and cooperat ing wit h
more XL Kit as. As of t he end of Q3 2006, t here were 156 XL Cent ers and 32, 542 XL Kit as compared t o
118 XL Cent ers and 14, 867 XL Kit as as of t he end of Q3 2005 or 150 XL Cent ers and 30, 253 XL Kit as as
of t he end of Q2 2006.
The regionalizat ion of our organizat ion has been implement ed in order t o
react f ast er t o t he cust omers needs.
Products & Services
During Q3 2006, XL launched 3G services, launched “ j imat ” as a
separat e brand, and int roduced various at t ract ive programs and
services.
Commit t ed as a leading t elecommunicat ion services
provider in Indonesia, on 21 Sept ember 2006, XL launched 3G
services wit h mot t o of “ The First Widest and Fast est 3G Provider” .
As of t he end of Q3 2006, XL is t he f irst and t he only 3G service
provider
wit h
nat ionwide
(Jakart a,
Medan,
Bat am,
Bandung,
Surabaya, and Denpasar) and int ernat ional (Singapore, Malaysia,
Hong Kong, and Aust ralia) coverage.
XL is also t he f ast est dat a
service provider wit h up t o 2. 6 Mbps dat a speed using HSDPA (High
Speed Dat a Packet Access) t echnology. At t he launch of 3G services, XL has 284 Node B in Jakart a,
25 sit es in Surabaya, 24 sit es in Bandung, 22 sit es in Denpasar, 24 sit es in Medan, and 18 sit es in
Bat am.
On 20 May 2006, XL init ially launched “ j empol j imat ” (an acronym
f rom “ Jalur Int ernasional Hemat ”
or “ Economical Int ernat ional
Line” ) as a variant of j empol f or int ernat ional saving on calls and
SMS. Jempol j imat provided economical t arif f of Rp 500 per 30
seconds t hrough VOIP services.
Jempol j imat subscribers can also
make l ocal calls wit h t arif f similar t o j empol’ s t arif f . In July 2006,
due t o increasing cust omers need and demand, XL added several
ot her dest inat ion count ries i. e. Singapore, Taiwan, Hong Kong, and
China. On 29 August 2006, XL launched j imat as a separat e brand.
Jimat subscribers can use XL net work nat ionwide and st ill enj oy t he
economical int ernat ional t arif f . The available reload denominat ion f or j imat is Rp 10, 000 and Rp
Page 5 of 11
Q3 2006
50, 000 elect ronically wit h act ive period of 30 days. Jimat st art er pack is current ly available in
Java, Bali, Lombok, and Kalimant an.
On 15 August 06, XL launched “ Bagi Pulsa” (Airt ime Credit Transf er) program f or XL prepaid
subscribers. Under t his program, XL prepaid subscribers can t ransf er some of t heir credit balance t o
t heir f ellow XL prepaid cust omers and do t he cross credit t ransf er, e. g.
j empol subscriber can t ransf er credit t o bebas subscriber and vice versa.
There are 2 denominat ions available f or t he Bagi Pulsa program: Rp
1, 500 (wit h act ive period of one day) and Rp 3, 000 (wit h act ive period
of 3 days). Each t ransact ion of Bagi Pulsa via plain SMS or SIM Tool Kit
will include a surcharge f ee of Rp 350 t hat will deduct ed f rom t he
t ransf erred amount . If t he denominat ion t o be t ransf erred is Rp 1, 500,
t hen t he recipient will receive Rp 1, 150 and if it is Rp 3, 000, t he
recipient will receive Rp 2, 650.
To provide the best service to the customers, XL presents another
innovation: Nada Tungguku Jukebox (The Jukebox Ring Back Tone). XL customers who love
good music can have up to 5 songs to be their ring back tone, using the innovative Nada Tungguku
Jukebox. These 5 songs will be played randomly for every incoming call. The tariff for Jukebox Ring
Back Tone is the same as the current Nada Tungguku tariff of Rp 7,000/ downloaded song and will
be charged for monthly subscription fee Rp 5,000/month.
Promotions
XL of f ered a number of promot ions during Q3 2006. On 16 August 2006,
XL launched “ XL Vaganza” .
Under t his promot ion program, af t er 2
t imes reloads (wit h minimum reload of Rp 10, 000 each), regist ered
bebas & j empol subscribers will get addit ional Rp 10, 000 bonus pulsa.
To ensure t he cust omers t o have t he best value f or t heir money, in
addit ion t o ‘ Tarif Ngirit Malam’ (Night economical/ of f -peak t arif f ) of
Rp. 149 per 30 seconds f or on-net calls, bebas of f ered ‘ Tarif Ngirit
Sampe 60% - Senin sampe Jumat ’ (Economical/ of f -peak t arif f up t o 60
% saving during Monday t o Friday) which is applicable f or on-net calls
during peak hours. Under t his promot ion program, bebas cust omers are
charged Rp 2, 000 f or t he f irst 120 seconds and Rp 250 per 30 seconds.
The program will be valid unt il 30 November 2006.
Page 6 of 11
Q3 2006
As part of t he loyalt y program, Klub VIBE cont inuously delivered it s
promot ions act ivit ies, such as cooperat ion wit h new benef it part ners,
launch of Tuesday movie night s and movie sponsorship (“ Pirat es of
Caribbean 2” ).
In an ef f ort t o at t ract new subscribers and increase usage, XL sponsored
Disney Lant ern Fant asy where XL subscribers will obt ain up t o 50%
discount f rom normal t icket price.
XL of f ered an MMS and GPRS promot ion program f or j empol subscribers.
St art ing f rom 28 Sept ember 2006, j empol subscribers can send MMS and
GPRS. This program is valid unt il 31 July 2007.
ARPU
YTD Sept ember 2006 prepaid, post paid and blended ARPUs were Rp. 44k, Rp. 212k and Rp. 50k
respect ively. These ARPUs are lower t han YTD Sept ember 2005 f igures of Rp. 60k, Rp. 335k and Rp.
65k. In line wit h t he increasing market penet rat ion, t he indust ry generally experiences a declining
ARPU t rend.
Business Solutions revenues (Rp bn)
ARPU (Rp thousand)
335
17
6
212
14
50
44
YTD Sept 05
Prepaid
158
1
65
60
67
YTD Sept 06
Postpaid
YTD Sept 05
Lease Line
Blended
Page 7 of 11
YTD Sept 06
Others
Internet Service Provider
Q3 2006
Business Solutions
XL Business Solut ions has shown a solid achievement .
One indicat ors of
t he achievement was number of companies which had been acquired t o
enj oy dat a communicat ions as well as corporat e GSM mobile services. The
cust omers come f rom various indust ries, such as manuf act uring, banking
and f inance, oil, gas and mining, t elecommunicat ions, modern t rade and
dist ribut ion, public service, Government and SME.
XL is t he only Indonesian t elecommunicat ions provider able t o provide a
bundled service of bot h dat a and mobile communicat ions as a one st op
shopping experience.
t elecommunicat ion
services
t hat
ensure
XL Business Solut ions are developed t o provide
a
more
ef f icient
and
ef f ect ive
company’ s
t elecommunicat ions syst em management which delivers opt imum savings t o t he cust omers.
In Q3 2006, numerous event s were conduct ed in an ef f ort t o int roduce XL Business Solut ions services
while increasing market awareness of XL Business Solut ions exist ence in t he market .
One of t he
event s is Seminar of ‘ The Business Development on Shipping, Logist ic and Courier t hrough t he
Implement at ion of Modern and Convergence Inf ormat ion & Technology’ held in Four Season Hot el in
August 06.
Japanese corporat ions are pot ent ial t arget market f or XL Business Solut ions. In order t o cult ivat e t his
market , XL part icipat ed in an exhibit ion held by PT NEC Indonesia and provided a seminar about XL
Business Solut ions services. During t hat event , Business Solut ions demonst rat ed it s services such as
GSM PBX Int egrat ion, Int ernet Access, Host ed PBX, Xpand, XLocat e and Inst ant Of f ice.
In order t o f ulf ill t he ever increasing demand f or reliable t elecommunicat ions inf rast ruct ures f rom
companies in Indonesia, in July 2006, XL Business Solut ions also launched a new product of Xpoint
which can provide Int ernet WiFi service using GSM picocell. This program was launched wit h a series
of exhibit ions in several buildings in Jakart a.
IMPORTANT EVENTS
Extraordinary General Meeting of Shareholders (EGMS)
On 1 Sept ember 2006, XL held EGMS and made t he f ollowing decision:
1.
Accept t he resignat ion of Jaf f a Sany Arif f in and Rudiant ara as Direct or of XL
Page 8 of 11
Q3 2006
2.
To appoint Hasnul Suhaimi as t he President Direct or of XL and Joy Wahj udi as Direct or of XL
3.
There is no changes t o t he exist ing Board of Commissioner
4.
To approve t he changes in XL’ s BoD t o be as f ollows:
Board of Director
President Director
Director
Director
Director
Director
Director
Director
Hasnul Suhaimi
Joris de Fretes
Md Nasir Ahmad
Muhammad Buldansyah
P. Nicanor V. Santiago III
Hilmi bin Mohd. Yunus
Joy Wahjudi
Products & Services and Promotions (Please also see page 5-7)
XL launched 3G services wit h mot t o of “ The First Widest and Fast est
3G Provider” .
XL launched j imat as a separat e brand. Previously j imat was a
variant of j empol and known as j empol j imat . Jimat subscribers can
use
XL
net work
nat ionwide
and
st ill
enj oy
t he
economical
int ernat ional t arif f .
XL launched “ Bagi Pulsa” (Airt ime Credit Transf er) program f or XL
prepaid subscribers.
XL offered Jukebox Ringback Tone for XL customers who love good
music. They can have up to 5 songs to be their ring back tone. These 5 songs will be played
randomly for every incoming call
XL launched “ XL Vaganza” where af t er 2 t imes reloads
(wit h minimum reload of Rp 10, 000 each), regist ered
bebas & j empol subscribers will get addit ional Rp 10, 000
bonus pulsa
bebas of f ered ‘ Tarif Ngirit Sampe 60% - Senin sampe
Jumat ’ (Economical/ of f -peak t arif f up t o 60 % saving
during Monday t o Friday) which is applicable f or on-net
calls.
St art ing f rom 28 Sept ember 2006, j empol subscribers can
send MMS and GPRS.
Page 9 of 11
Q3 2006
XL Business Solutions (Please also see page 8)
XL Business Solut ions signed an agreement wit h Muhammadiyah t o provide int ernet access,
of f ice zone and MPLS.
The seminar of ‘ The Business Development on Shipping, Logist ic and Courier Through t he
Implement at ion of Modern and Convergence Inf ormat ion & Technology’ was conduct ed in
Four Season Hot el Jakart a.
XL launched Xpoint which provide high speed access of Int ernet WiFi using GSM Picocell.
Corporate Social Responsibility
In July 2006, t o support t he vict ims of Tsunami and eart hquake in t he sout hern seaboard of
West Java, XL est ablished a f ree t elecommunicat ion post at t he Pangandaran Great Mosque.
Ot her t han providing f ree t elecommunicat ion service, t his post will also act as a public
service cent er and XL’ s dist ribut ion point .
Awards
XL received award as t he Best GSM Operat or in t he Indonesia Cellular
Award 2006. The award was organized by t he Associat ion of t he
Indonesian Cellular Telecommunicat ion (ATSI), Dyandra Promosindo,
and Sinyal Magazine. The crit eria f or t he Best GSM Operat or award
included company’ s growt h f or t he last one year, innovat ive product s,
cust omer service, and t arif f s.
XL received award as Winner of Indonesian MAKE (Most Admired
Knowledge Ent erprise) St udy. The award was organized by Dunamis Organizat ion Services,
Teleos –UK, and Jakart a St ock Exchange
XL received Market ing Award 2006 in t he cat egories of “ The Best Innovat ion in Market ing”
and “ The Best in Market ing Campaign” . The award was present ed by Market ing Magazine, a
not able business publicat ion in Indonesia.
Page 10 of 11
Q3 2006
ABOUT XL
XL is one of t he largest cellular providers in Indonesia and is
cont rolled by Telekom Malaysia Berhad t hrough Indocel Holding Sdn
Bhd (59. 7%) and Khazanah Nasional Berhad (16. 8%).
XL is also t he
only cellular company in Indonesia which owns an ext ensive f iber
opt ic backbone net work, mainly on Java island. St art ed commercial
operat ion in Oct ober 1996, XL’ s business consist s of Consumer
Solut ions as dual band (GSM 900/ 1800) cellular net work provider
t hrough j empol, j imat and bebas prepaid and Xplor post paid cards
wit h addit ion of 3G services f or bebas and Xplor and Business
Solut ions as corporat e service provider based on leased line and IP
(Int ernet Prot ocol).
Dat e: 31 Oct ober 2006
Page 11 of 11