XLSmart’s Bold Post-Merger Play: Revenue Hits $2.67 Billion Amid Aggressive 5G Push

The landscape of Indonesian telecommunications is undergoing a massive shift, and at the center of this transformation is XLSmart. Following the high-profile merger between XL Axiata and Smartfren, the newly formed entity is proving that integration isn't just about survival—it's about scaling fast. In its latest financial disclosure, XLSmart revealed a robust revenue of Rp42.49 trillion ($2.67 billion) for 2025, marking a significant 23% jump from the previous year. While the headlines might point to a statutory loss, the underlying numbers suggest a company successfully navigating the complexities of a multi-billion dollar marriage.

Navigating the Numbers: Growth vs. Accounting Realities

When you dig into the balance sheet, the story of XLSmart is one of operational strength masked by the necessary costs of consolidation. While the company reported a statutory loss, its normalized figures—which strip away one-off merger impacts—tell a much more optimistic story. Normalized EBITDA rose by 13% to Rp20.14 trillion ($1.27 billion), and more impressively, normalized net profit surged by a staggering 63% to reach Rp3 trillion ($189 million).

CEO Rajeev Sethi described 2025 as a critical transition year. Speaking during a public expose in Jakarta, Sethi emphasized that the period was less about immediate dividends and more about laying a rock-solid foundation for the future. The integration is moving at a pace that has caught many industry analysts by surprise, positioning XLSmart as a formidable challenger in a market historically dominated by a few major players.

The Synergy Engine: Exceeding Expectations

One of the most impressive takeaways from the 2025 report is the speed of merger synergies. By the end of the year, XLSmart had already realized $252 million in synergies, a figure that exceeded the company's initial projections. This efficiency is largely driven by a rapid network integration process; roughly 70% of network sites have already been unified. Management is confident that the entire process will be finalized by 2027, creating a leaner, more powerful infrastructure.

However, this aggressive integration comes with a price tag. CFO Anthony Susilo explained that the company recorded a non-cash accounting loss of nearly Rp5 trillion ($314 million). This was primarily due to the accelerated depreciation of legacy assets and infrastructure that no longer fit the merged company’s future-ready profile. As a direct result of this accounting loss, XLSmart confirmed it will not be distributing dividends in 2026, choosing instead to reinvest in its long-term health.

The Race for 5G and Spectrum Dominance

XLSmart isn't just looking at its current footprint; it’s looking at the airwaves. The company significantly boosted its capital expenditure (CAPEX) to Rp11.2 trillion ($704 million) in 2025, up from Rp7.3 trillion the year before. This capital is being funneled directly into network modernization and the high-stakes rollout of 5G services across the archipelago.

To fuel this expansion, the company has its sights set on upcoming spectrum auctions. Chief Regulatory Officer Merza Fachys confirmed that XLSmart is highly interested in the 700 MHz and 2.6 GHz bands. These frequencies are the crown jewels for any operator looking to provide deep indoor coverage and high-capacity 5G. Fachys also took the opportunity to call for a more streamlined auction process, noting that with only three major players left in the market, the regulatory hurdles should be more straightforward.

Quality Over Quantity: A New Commercial Strategy

As the Indonesian rupiah fluctuates and consumer spending patterns shift, XLSmart is pivoting its commercial strategy. Gone are the days of chasing volume at any cost. Chief Commercial Officer David Arcelus Oses made it clear that the company is now prioritizing "quality subscribers." This means moving away from aggressive promotional freebies and focusing on lifting the Average Revenue Per User (ARPU).

By raising prices per gigabyte and focusing on premium service delivery, XLSmart aims to stabilize its margins despite macroeconomic headwinds. "Strategy cannot change only because of short-term rupiah movements," David noted, signaling a commitment to a long-term value-driven approach. Beyond mobile services, the company is also aggressively expanding its reach into fixed broadband and enterprise solutions, leveraging its combined base of over 69 million subscribers to build a truly integrated digital ecosystem.