XL Axiata to Invest US$500 Million on Joining Cable TV Business
Targeted to launch in the second quarter of 2018
Marsya Nabila - 6 February 2018
XL Axiata (XL) has prepared a long-term investment of US$500 million (or around Rp6.7 trillion) to join the TV cable business in the second quarter of 2018. For XL, it's interesting business given to its current penetration.
"Penetration is now 140%. Therefore, we reinvent a way to play. We went for cable TV and its content," Dian Siswarini, XL's President Director, quoted from Tempo.
In the process, XL will make an acquisition or merger with a cable TV company to go straight into the business. However, she is keeping the company's name a secret.
In his opinion, cable TV's development will be done gradually. The first step is to be launched in the second quarter of 2018. Budget is set around 10% of the total Rp7 trillion.
"We plan to launch on the second quarter, only partnering. We haven't made any merger or acquisition (M&A), because it'll take some time."
Furthermore, she explained that the long-term investment of US$500 million is for merger and acquisition process and its five-year development.
"Peak funding can reach US$500 million in five years."
Peak funding is total funding for M&A process, broadband networking, and all tools needed for content. The company will consider taking loan from overseas.
The team will create a new model in this business. It's going to be different with company's current partnership with MNC Vision. However, she did not shut down any opportunities for MNC support.
"The content can be from MNC and others. The difference is in its business model," Siswarini said.
Previously, XL Axiata shut down some of its digital business. Its e-commerce subsidiary, Elevenia is ended up sold to Salim Group in August 2017. Now it has several new business segments in digital entertainment (Yonder and Tribe), business innovation, digital payment (XL Tunai), mobile advertising (m-Ads), cloud computing (XCloud), and Internet of Things (XL IoT).
– Original article is in Indonesian, translated by Kristin Siagian