CONTINUED GROWTH MOMENTUM IN Q3 2006
TABLE OF FACTS
Q3-05 YTD Sept 05* Q4-05 Q1-06 Q2-06 Q3-06 YTD Sept 06
RATINGS
Foreign Currency Outlook
Moody's Ba3 Stable
Standard & Poor's BB- Stable
FINANCIAL MEASURES
In Q3 2006, PT Excelcomindo Prat ama Tbk (“ XL") recorded gross revenue of Rp. 1, 547 bill ion, 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 bil lion. 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 bill ion. 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 mill ion 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 clean-up 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)
2,690
4,118
2,165
3,334
1,307
1,920
YTD Sept 05 YTD Sept 06
Gross Revenue Net Revenue EBITDA
in Q3 2006, 57% higher YoY t han t hat of Q3 2005 of Rp. 453 bill ion or 12% higher QoQ t han t hat of Q2 2006 of Rp. 636 bil lion. 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 Doll ar 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 bill ion.
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 bill ion 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)
2.6
2.3
YTD Sept 05 YTD Sept 06
Debt/LTM EBITDA
EBITDA/Interest Expense (x)
4.1
6.2
YTD Sept 05 YTD Sept 06 EBITDA/Interest Exp
OPERATING MEASURES
Subscribers
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
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 impl ement 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 onl y 3G service provider wit h nat ionwide (Jakart a, Medan, Bat am, Bandung, Surabaya, and Denpasar) and int ernat ional (Singapore, Mal aysia, 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 l aunched j imat as a separat e brand. Jimat subscribers can use XL net work nat ionwide and st ill enj oy t he
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 l aunched “ 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 rel oad of Rp 10, 000 each), regist ered bebas & j empol subscribers will get addit ional Rp 10, 000 bonus pulsa.
As part of t he loyalt y program, Klub VIBE cont inuousl y 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 Jul y 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.
ARPU (Rp thousand)
60 44
335
212
65 50
YTD Sept 05 YTD Sept 06
Prepaid Postpaid Blended
Business Solutions revenues (Rp bn)
67
158 6
1
17
14
YTD Sept 05 YTD Sept 06
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. XL Business Solut ions are developed t o provide t elecommunicat ion services t hat ensure 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 cul t 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:
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 Hasnul Suhaimi
Director Joris de Fretes
Director Md Nasir Ahmad
Director Muhammad Buldansyah
Director P. Nicanor V. Santiago III
Director Hilmi bin Mohd. Yunus
Director 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 l aunched “ 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.
XL Business Solutions (Please also see page 8)
XL Business Solut ions signed an agreement wi t h Muhammadiyah t o provide int ernet access, of f ice zone and MPLS.
The seminar of ‘ The Business Devel opment 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 Jul y 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 publ ic 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, Tel eos –UK, and Jakart a St ock Exchange
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 Xpl or and Business Solut ions as corporat e service provider based on leased line and IP (Int ernet Prot ocol).
