PT EXCELCOMINDO PRATAMA Tbk.

(XL)
Views on Industry
August 2008

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 Views on Industry

Indonesian Market
 Mobile penetration overstated
 Multiple SIM Cards
 Calling card users – high rotational
churn  Large incremental
 Lower MoU compared to other regional capacity
countries, mainly due to higher average requirement for
revenue per minute  not sustainable handling increase
 Intensifying competition in MoU
Impact  Passive Infrastructure
sharing amongst
Competitive Landscape
operators
Previous:
Focus on coverage
Today:
Shift to capacity

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 Indonesian Wireless Market:
Large and Poised for Growth
2007 Statistics Regional Ranking

Population • 249 million 3rd largest

Wireless Subscribers • 104.0 million 3rd largest

Year-End Wireless Penetration (%) • 41.8 %1 Third quartile

2007-2012 Wireless Subscriber CAGR (%) • 16.5% Top quartile

Monthly Average Revenue Per User (“ARPU”) • US$7.52 Bottom quartile

Monthly Minutes of Usage
(“MOU”) • 60.02 Third quartile

Revenue Per Minute • US$0.083 Second quartile

1. Wireless penetration based on number of SIM card subscriptions as a percentage of total population. Penetration rate based on real subscribers was
approximately 24% as of December 2007.
2. Outgoing minutes and ARPU, respectively.
3. Based on monthly voice ARPU’s of US$5.0.
Source: Company Estimates, Goldman Sachs Research, Pyramid Research 3
 Rapid Wireless Subscriber Growth

Indonesia’s wireless market will double in size over the next five years

Projected Wireless Subscribers

89% 92% 94% 96% 97% 99%

300 84% 100%
79%
Subscribers (mm)

72%
80%

Penetration (%)
63%
200 53%
42% 60%
258 266 273 279
223 237 248 40%
100 186 207
162
135 20%
104
0 0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Subscribers (mm) Penetration (%)

Source: Goldman Sachs Research

Key Trends

 Indonesia's wireless market is the third largest in the region, behind China and India
 Several factors will drive rapid projected subscriber growth
 Heightened competition contributing to lower tariffs and increasing wireless service affordability
 Falling handset prices and large handset re-sale market reducing barriers to entry for new subscribers
 Positive macroeconomic environment combining strong GDP growth with rising income levels
 Network expansion and rural rollouts catering to previously unmet demand
 Low fixed line capital investment levels further contributing to the need for wireless telephony services
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 From most expensive to the cheapest

Competition in the This has resulted in tariffs

Indonesian mobile business moving from being one of
has driven down prices Impact the most expensive in the
considerably in past 24 region to one of the
months cheapest

RPM Comparison in 2005 RPM Comparison today

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 Volume is the key
 The capacity will be the focus of the operators
 With RPM already at the lowest level, operators now aim for MoU
enhancement
 At current total MoU of approximately 200mins/subs/month, this is less
than half of India’s MoU/subs/month
 There is still ample room for MoUs to rise to 400mins, as over time,
disposable income should improve due to declining inflation
MoU/subs/month comparison (in minutes)

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 Margins are to remain high

 Despite of price competition, the margins are likely to remain

stable, due to cost per minute reduction. However, such cost
reductions would vary from one operator to another.

Revenue and cost per minute (Rp.) Operating profit per minute (Rp.) vs margin %

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 Capex is expected to remain high

 Capex spend in Indonesian telecommunication industry for the past 3

years show increasing trend. Capex is expected to remain high.
 Subscriber net adds will remain high and MoU per user will grow as
tariffs cut continue to spur penetration and usage.
Rp (bn)
18000
16000
14000
12000
10000
8000
`
6000
4000
2000
0
2005 2006 2007 2008E
TSEL ISAT XL

Source: Company’s estimate

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 Kebijakan & Regulasi Telekomunikasi

• Tujuan Pemerintah untuk mewujudkan masyarakat

berbasis informasi perlu didukung dengan kebijakan
dan regulasi yang tepat

• Prinsip pengaturan: Diusulkan Pemerintah hanya

perlu turun tangan jika mekanisme pasar gagal atau
tidak berfungsi

• Perlu merumuskan kembali Cetak Biru Kebijakan

Telekomunikasi Indonesia. Cetak Biru tahun 1999
sudah perlu diperbarui: dari basis Fixed line menjadi
kombinasi Fixed dan Seluler.

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 Kebijakan & Peraturan Telekomunikasi

• Perkembangan teknologi lebih cepat dari

regulasi.
– Regulasinya masih berdasarkan pada teknologi circuit
switch, sementara jaringan yang terbangun sebagian besar
beralih ke teknologi packet switch
– Mempercepat penetrasi internet menggunakan teknologi
wireless broadband

• Niat baik pemerintah memberi insentif bagi

operator yang aktif menggelar jaringan dan
menyediakan layanan kepada masyarakat &
sebaliknya perlu dituangkan secepatnya.

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 Kebijakan & Peraturan Telekomunikasi

• Perlu didukung upaya pemerintah menemukan

mekanisme pengalokasian frekuensi yang lebih baik,
agar penggunaan frekuensi dapat lebih efisien dan
lebih bermanfaat untuk masyarakat luas

• Masih terdapat perlakuan yang tidak sama (Unequal

level of playing field) antara operator, misalnya dalam
hal:
– Biaya interkoneksi
– Biaya BHP Frekuensi

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 Pengaturan Investasi

 Inkonsistensi, Peraturan yang berubah-ubah dan Multi

interpretasi dari UU dan Peraturan Pemerintah dapat
menimbulkan kebingungan pada investor

 Terdapat dualisme dalam memandang peran investor

asing: dibutuhkan tapi tidak disukai . Perlu kejelasan
agar tidak mengurangi minat calon investor baru karena
Industri Telekomunikasi merupakan bagian yang yang
tidak terpisahkan dari industri lainnya di Indonesia
hingga perlu kebijakan terpadu.

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 Dampak Dari Otonomi Daerah Terhadap Operator

 Beberapa Pemerintah Daerah Kabupaten/Kota

memandang pembangungan jaringan telekomunikasi
& penyediaan layanan telekomunikasi sebagai sumber
pendapatan daripada sebagai infrastruktur yang dapat
meningkatkan pertumbuhan ekonomi

• Beberapa Peraturan Daerah yang berakibat

kelambatan pembangunan & Pungutan yang
menimbulkan ‘high cost economy’. Perlu dipikirkan
realokasi sebagian BHP frekuensi ke daerah untuk
menutupi biaya tambahan yang muncul.

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