Business

Saturday April 4, 2009

Indonesian unit to be back on track this year


AXIATA Group Bhd’s subsidiary PT Excelcomindo Pratama TBK (Excel) which skidded off the track in its fourth quarter results is expected to be back on track again this year.

President and group chief executive officer Datuk Seri Jamaludin Ibrahim says Excel did extremely well in the first three quarters in 2008 and hopes to recover from the poor fourth quarter results this year.

He says the group understands that investors are disappointed with Excel’s performance. However, he says it’s rather unfair to judge Excel based on one weak quarter.

“We must give Excel some credit for the company’s whole year performance.

“Excel ended the year with a solid performance overall, with a revenue growth of 45% and earnings before interest, taxes, depreciation and amortisation growth of 46%,” Jamaludin says.

He adds that Excel’s financial results for the first quarter of 2009 “is ok”. “The first three months is ok but I wouldn’t jump for joy yet.”

Excel is currently the number three player in Indonesia with 26 million subscribers.

The Indonesian mobile telecommunications market is basically dominated by Excel, Indosat and Telkomsel.

Jamaludin says Excel is strong in Jakarta and it will take a while for the group to capture other areas. He says Excel had competed on price. It has played a pivotal role in leading the Indonesian mobile market’s transformation from being one of the highest to one of the lowest tariff groups in the world.

“We’ve competed on pricing. We were the trend-setter. Today, we are competing beyond price, basic coverage, branding and product innovations,” Jamaludin says.

Commenting on its plan to sell its communication towers in Indonesia, he says the plan has been called off as “no one has the money now” due to the current economic crisis.

“Managing towers is not our core competency. We are looking at smaller chunks to let out, maybe to two or three tenants,” Jamaludin says.

He says the tenants will help to improve its cost per minute and increase efficiency. Apart from renting its towers, he says the group is also looking at the possibility of setting up a team of people to manage the towers which it currently lacks.

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