TEMPO.CO, Jakarta - Tight competition in the cellular telecommunication business in 2016 has brought negative impacts to cellular services provider companies. PT XL Axiata (EXCL). XL admitted that it had carried out steps to improve efficiency by dismissing 100 of its employees through early retirement program, which will be applied in stages.
Turina Farouk, XL company secretary, said that the dismissed employees include area sales managers and regional sales managers. "Both positions' function is no longer relevant and [the early retirement program] has been agreed by all parties," Turina said to Tempo on Wednesday, February 17, 2016.
Turina explained that the early retirement program is not the same as layoffs. Turina argued that in line with the industrial dynamics in the digital telecommunication industry has forced the company to adjust its operational and distribution activities, including by removing functions considered to be no longer relevant. "That way, operational activities can run more effectively and efficient," Turina said.
Similar to XL, PT Indosat (ISAT) had also carried out efforts to save money by attempting to expand its 4G network while at the same time covering up outstanding debts. Alexander Rusli, Indosat President Director said that the company’s financial condition can still be controlled and well-maintained. "No layoffs over here, everything is good," Alex said.
Telecommunication observer from ICT Institute Heru Sutadi, said that PT Telkomsel Seluler (Telkomsel), a subsidiary of PT Telkom (TLKM), is the only cellular service provider company that could book profits up until Q3 of 2015. "Telkomsel even helped Telkom Group's consolidation," Heru said.
Heru explained that XL's business losses was the result of the company’s decision to acquire PT Axis Telekom Indonesia back in 2014 for Rp 10 trillion. "XL has been carrying out efficiency [measures] since three years ago, but there is this heavy [financial] burden from Axis' acquisition," Heru said.
Despite the apparent turndown, Heru believed that domestic telecommunication business will not stop improving.
KHAIRUL ANAM | ANDI IBNU
