Encouraging Convergence Penetration XL Axiata – Link Net Collaborate to Build 1 Million of Homes Passed Networks

Press Release - June 30, 2023
Encouraging Convergence Penetration XL Axiata – Link Net Collaborate to Build 1 Million of Homes Passed Networks

PT XL Axiata Tbk (XL Axiata) and PT Link Net Tbk (Link Net) continue to strengthen their synergy to achieve accelerated market penetration of Fixed Broadband (FBB) and Fixed Mobile Convergence (FMC) services in Indonesia. The next stage of synergy between the two parties is implemented again through the signing of agreement for the Fiber to the Home Network Development and Operation Agreement on 28 June 2023, which arrange the construction cooperation and operation of 1 million of homes passed networks in several cities/regencies in Indonesia.

Through the development of this network, XL Axiata wish to be able to reach a wider convergence market, in line with the continued increase in market demand in a wider area.

President Director & CEO of XL Axiata, Dian Siswarini said, "This collaboration is part of the stages of cooperation between the two entities after the acquisition of Link Net by Axiata Group Bhd and XL Axiata in the early period of 2022. XL Axiata wish to take advantage of all the advantages which are owned by Link Net, which we all know, is the biggest company in Indonesia as a fixed-line internet service provider who is very experienced in building and managing a very wide fiber optic network.”

Dian added, the construction of the 1 million homes passed network is targeted to take place and be completed within one year, which will reach more than 10 cities/regencies in several provinces, including outside Java. By adding 1 million homes passed, XL Axiata hopes to be able to accelerate the achievement of 450 thousand home connections and the convergence penetration of XL SATU services to 150 thousand subscribers.

In this collaboration, XL Axiata has prepared planning and design of market targets that can serve the needs of convergence services, while Link Net will carry out network and capacity designs that can meet the needs of XL Axiata's target market. Regarding investment, until now several construction costs are still in the process of being calculated by the two companies. The investment for fiber deployment will be carried out by Link Net. Investment from XL Axiata is more focused on connecting last-mile and installing CPE (Customer Premises Equipment) tools to customer homes.

"After the acquisition, opportunities for cooperation continue to be explored by XL Axiata and Link Net. The common thread of the collaboration between the two parties is to realize XL Axiata's vision as the leading convergence service provider in Indonesia that combines fixed broadband internet and mobile internet services," added Dian.

President Director & CEO of Link Net, Marlo Budiman said, “Network development has begun and we are on track to build 1 million additional Fiber-To-The-Home (FTTH) homes passed over the coming year. This is the first step to adding an additional 5 million FTTH homes passed to our network in the coming 5 years. We are incredibly pleased to have a partnership with XL Axiata who have proven targeted customer acquisition capabilities through leveraging their large customer base and mobile data. This is in line with Link Net’s strategy of transforming its business into a pure infrastructure company that will operate an open access fiber network that can be utilized by multiple ISP’s across the country. Through Link Net’s network we will create a gateway where tens of millions of Indonesians will be able to have access to high speed internet and reap all of the benefits that this brings. The success of XL Axiata and Link Net’s partnership will provide significant opportunities for revenue and earnings growth for many years to come.”

After the acquisition, XL Axiata and Link Net continued to synergize, including launching service products. Last October 2022, XL Axiata and Link Net synergized to launch internet convergence services through the collaboration product of First Media and XL. This collaboration combines high-speed internet services without quota limits, streaming content, cable TV, and online storage belonging to First Media with XL Kuota Bersama Package, which is an internet data service with large quotas.

Currently, XL Axiata continues to work hard to introduce convergence services to the wider community, while increasing its benefits in line with the company's vision of becoming the leading convergence operator in Indonesia (#1 Converged Operator in Indonesia).

Until the end of the first quarter of 2023, the penetration rate of XL Axiata's convergence services has reached 44% where XL Home customers have switched to becoming XL SATU customers, which shows the strong demand for this convergence product. Currently, XL Axiata also has XL Home & XL SATU fiber coverage of more than 1.2 million homes passed in 53 cities and regencies in Indonesia, including Jabodetabek, Medan, Palembang, Bandung, Purwokerto, Surabaya, Yogyakarta, Denpasar, Makassar, Balikpapan, Cirebon, Banjarmasin, Banjarbaru, Semarang, Palangkaraya, Samarinda, and Palu.