EXCL - Gears up ex-Java expansion

XL Axiata (EXCL) is to continue to deploy 4G network in ex-Java this year amidst higher demands in those markets. On that strategy, the company needs to be more capex efficient in order to expand its network capacity in ex-Java. EXCL eyes to allocate IDR8 tn in capex this year, where in 1H23 the company has established close to 8,700 4G BTS. (Source : Bisnis Indonesia) Comment : Ex-Java areas have become source of growth for mobile segment due to lower penetration compared to more matured market in Java areas, which is deemed to be a od move. For EXCL, it may need to carefully consider its expansion strategy to maintain its network quality in Java to retain market share, while managing its balance sheet, since it could take significant capex ing forward. Despite that, we still maintain our positive view EXCL especially on the back of improvement in pricing in the industry.