Xl axiata growth strategy
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Transcript of Xl axiata growth strategy
Managing and Sustaining Profitable Growth
Growth Strategy and Value Creation of XL Axiata
Pramita Wardani | 1140003121
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• XL Axiata at glance • Macro Environment Analysis • Industry Granularity Analysis • XL Axiata Internal Environment • XL Axiata Financial Review • Conclusion and Recommendation
CONTENTS
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XL Axiata at Glance
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PT XL Axiata Tbk is one of Indonesia’s leading cellular service provider, offering various types of telecommunications products and services such as :
Voice | SMS | Data | Other value-added mobile products & services 4 Growth Strategy and Value Creation of XL Axiata |
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Macro Environment Analysis
Growth Strategy and Value Creation of XL Axiata |
PESTEL Analysis • There is no political events related to
telecommunications
Good economic growth, and Indonesia is having a raise in GDP.
The social networkers are also expanding as well
The technology changes is rapidly
Go green society
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Macro Environment Analysis
The telecommunication law prohibits monopolistic practices and unfair competition
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Industry Granularity Analysis
• Key Industry Players • Porter 5 Forces • Competitive Landscape • Telecommunication Trends
Key Industry Players
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Telecommunication Market Share (Indonesia, 2011)
Indonesia local telecommunication shares foreign ownership
Industry Granularity Analysis
Porter 5 Forces
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Potential New Entrants |
MODERATE
Buyers Bargaining
Power | HIGH
Substitute Products |
HIGH
Industry Rivalry | HIGH
Alcatel-Lucent is targeting Asia. Now they already have a strong relationship with Indosat and Telkom to expand their business in Indonesia.
Most people are not only price sensitive but also wants a good services and networks
The substitute of mobile phone is fixed line and also internet
connection through laptops using lan cable
Suppliers Bargaining
Power | HIGH
Ranging from the packaging, card production, BTS rental, headphones, IT provides, music label.
Telecommunication Industry in Indonesia Year 2012
Substitute Products | MODERATE
Industry Granularity Analysis
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The competitive landscape of Telecommunication industry in Indonesia year 2010
Competitive Landscape Year 2010
Growth Strategy and Value Creation of XL Axiata |
Industry Granularity Analysis
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• The buyers in the mobile phone market grew by 23,55 and the trend is increasing.
• In the 3G usage are also increasing 25% in year 2011.
• This is the impact of the increasing usage of Blackberry, Iphones, Ipad, and others smartphones or tablets.
Telecommunication Trends
Source : BMI, 2011
Growth Strategy and Value Creation of XL Axiata |
Mobile Phone Trend in 2009-2016
Industry Granularity Analysis
XL Axiata Internal Environment
12 Business Model Break out Strategy through Online Learning for Professionals |
• Growth Decomposition • Staircase • Capability Platforms • Business Model • The 3 Horizon and Growth Map
XL Axiata Internal Environment
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by product category YEAR 2007-2010
Segment Portfolio Momentum
M&A Share Gain
Revenue Growth
Voice
SMS
Data & Vas
Non-Voice
Revenue CAGR
874
4,569
5,615
874 9% 122%
100%
TOTAL
2,849 23%
Growth Strategy and Value Creation of XL Axiata |
GROWTH Decomposition
2007 2008 2009 2010 CAGR
Non Voice
SMS -1% 14% 34% -9% 9%
Data and Vas 142% 106% 84% 156% 122%
Voice 55% -13% 20% 16% 19%
Others 118% 166% 15% 0% 100%
total 45% 14% 27% 7% 23%
Others
13,907
XL Axiata Staircase
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1996
Obtained a GSM 900 operating licenses
Capability Platforms:
Develop an integrated microcell network in Jakarta’s SCBD Area
1997 Received a DCS 1800 and fiber optic backbone
2001 Telecom Malaaysia bought 23,1% XL shares
2005 TM Group demerger. Axiata acquired all XL shares
2008 Conducted Limited Public Offering 1 to the Shareholders Pirsiant to Right
2009 Majority shareholders of XL Axiata released 20% their shares to public
2010 Transformation business strategy and focus to affordable price an a new positioning
2011
Well-designed Product offerings
Capitalize on Data Opportunity
Brand Development
• Continued Cost Management • Focused and Selective Capex
• Network Utilization • Develop Non-Traditional
Revenue
Issued its 1st IDR Bonds worth 1,25T
XL go Public offering 20% of its shares
XL go Public offering 20% of its shares
XL Axiata Internal Environment
BRAND DEVELOPMENT
Capability Platform
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XL Axiata Internal Environment
The success of XL Axiata is depends on their competencies and technology-know-how and also the commitment of the management.
Business Model
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• Personal • Corporate
• Customer Care 24 hours/day
• Website • Branches
• Internet Services
• Customer Services
• Complicated promotions
• Packaging Vendors
• BTS Rentals • IT Providers
• Marketing • Sales • IT Services • Call Center
Services
• High Price with low volume
• Voice-Centric • Data-Centric • Domestic
Backbone • Various of
products category
Voice | SMS | Data | Other value-added mobile products & services |
BTS Rental | Network and infrastructure expand | Maintenance equipment's | promotions
XL Axiata Internal Environment
XL Axiata Business Model before year 2010
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Business Model
XL Axiata Internal Environment
• Personal • Corporate
• Customer Care 24 hours/day
• Website • Branches • Mobile
Applications • Dealerships
• Internet Services
• Customer Services
• Simple and attractive promotions
• Packaging Vendors
• BTS Rentals • IT Providers • Music Labels • Collaboration
with 3rd parties : Blackberry, Iphone, Ipad, Samsung
• Marketing • Sales • IT Services • Call Center
Services • Outsourcing
• Low Price-High Volume
• Single product • Voice-Centric • Data-Centric • Domestic
Backbone
Voice | SMS | Data | Other value-added mobile products & services | Ringtones | collaboration with 3rd parties
BTS Rental | Network and infrastructure expand | Maintenance equipment's | promotions
XL Axiata Business Model after year 2010
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Business Model
XL Axiata Internal Environment
Growth Strategy and Value Creation of XL Axiata |
Grand Strategy
Functional Strategy
• Price • Product • Place • Promotion
• High • Many Product Brands • Direct • Complicated
• Low • Single Product • Dealership • Simple & Attractive
High Price – Low Volume
Low Price – High Volume
The 3 Horizon and Growth Map
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XL Axiata Internal Environment
Expanding to communication from machine-to-machine
(M-to-M).
Expansion non-voice data traffic with the help
by Cisco Systems.
Expanding to m-commerce and m-
payment
High Price – Low Volume
Low Price – High Volume
Invest heavily on 3G/data Network
PORTOFOLIO MOMENTUM
MERGER & ACQUSITION (M&A)
SHARE GAIN
HORIZON 1 Extend and defend
core businesses
HORIZON 2 Build emerging
businesses
HORIZON 3 Create viable
option Strong Tailwind
Financial Analysis
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• Industry Financial Highlight • Average Revenue Per Usage
Financial Highlights
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Financial Review
Legend :
Source : Annual Report 2007-2011
6% 13% 2% -1% 5% 10% 2% -13% 23% 22% 29% -2883%
CAGR:
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Legend :
Source : Annual Report 2007-2011
Financial Ratio
Financial Review
No Ratio (%) 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
1 Margin EBITDA 65 60 61 58 57 51.65 48.52 46.47 48.46 45.74 41.9 42.2 44.7 52.7 49.4
2 Margin EBIT 35 28 30 27 26 12.1 9.78 7.96 3.27 4.06 21 14.4 17.8 29.3 24.7 3 ROA 33 24 24 21 22 4.51 3.63 2.72 1.23 1.6 1.6 -0.1 6.1 10.6 9.7 4 ROE 55 43 45 38 35 12.34 10.79 8.34 3.63 4.55 5.7 -0.3 26.1 28.2 22.3
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No Provider 2009 2010 2011 2012f 2013f 2014f 2015f
1 Telkomsel 48,000 40,000 32,065 28,440 25,672 23,571 22,249
2 Indosat 37,330 34,700 26,692 23,327 20,850 19,144 18,070
3 XL Axiata 38,000 32,000 28,761 26,260 23,704 21,549 20,341
4 Bakrie Telecom 29,000 24,000 17,879 14,925 13,076 11,768 10,888
Market Average 38,083 32,675 26,349 23,238 20,825 19,008 17,887
ARPU
Financial Review
Growth Strategy and Value Creation of XL Axiata |
• The revenue trend is increasing while the ARPU trend is declining.
• Telecommunication industry is a very competitive industry
Conclusion and Recommendation
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XL Axiata Internal Environment
Growth Performance Matrix In period 2007-2011
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Indonesia GDP 5,65%
Revenue Growth : 23% TRS : 116%
IHSG Growth 108%
Growth GIANTS High
High
Low
Low
Revenue Growth : 6% TRS : na
Revenue Growth : 5%
TRS : na
PERFORMERS
Conclusion
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Recommendations
Financial Review
Stars
Cash Cow
Question Marks
Dog
High Low
High Low
Low
H
igh
Voice – centric
• Cloud Computing • E-money
• 4G Technology • HSPA+ , • WIMAX • LTE
Maintain and Building a BTS by the outsource company
Managing and Sustaining Profitable Growth
Growth Strategy and Value Creation of XL Axiata
Pramita Wardani | 1140003121
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