KUALA LUMPUR: Axiata Group Bhd's Indonesian subsidiary XL Axiata has seen its subscriber base growing by 900,000 quarter-on-quarter (QoQ) to 58.5 million, driven by an increase in prepaid subscribers.
Hong Leong Investment Bank Bhd (HLIB) said XL's postpaid base remained at 1.6 million subscribers.
"Both prepaid and postpaid average revenue per user (ARPUs) increased to 43,000 rupiah and 91,000 rupiah respectively.
"Enhanced coverage and more affordable device bundles led to a two per cent quarter-on-quarter (QoQ) and 8.0 per cent year-on-year (YoY) increase in data traffic to 2,660 petabytes (PB) in the second quarter of 2024 (2Q24)," it added.
XL, which is 61.5 per cent-owned by Axiata Group, continues to invest in high-quality internet services, particularly outside Java, by expanding its 4G coverage.
"It has added 12,000 4G nodes YoY in 2Q24 while shutting down 3G footprints. This brings total base stations to circa 164,000 with 62 per cent of sites being fiberised versus 59 per cent fiberisation in 2Q23," said HLIB.
XL saw its core net profit increasing 58 per cent YoY to one trillion rupiah for the first half of 2024 (1H24), driven by a more favourable cost structure.
HLIB noted that XL reported a 2Q24 core net profit of 490 billion rupiah which marked an 11 per cent fall QoQ but an increase of eight per cent YoY.
"The positive deviation was due to a stronger-than-expected earnings before interest, taxes, depreciation and amortisation (Ebitda) margin," it noted.
HLIB reiterated its "Hold" call on Axiata with an unchanged target price of RM2.71.
"We like its regional exposures with focus on emerging countries which may deliver great growth potentials.
"While we believe that the CelcomDigi merger will reward Axiata over the long term, regulatory and economic risks are major concerns," it said.