Page 26 - XL Axiata Integrated Anual Report 2020 ENG

24
2020 Integrated Annual Report
MANAGEMENT REPORTS
37% growth in the
number of new
consumers
of services available via internet connections in Indonesia.
A remarkably high demand stimulated the information and telecommunications market, as evidenced by
a 10.58% growth,
in the ICT sector
appreciation. On behalf of the Board of Commissioners, please allow us to walk you through the Company’s journey during the year.
Performance
Assessment
The COVID-19 pandemic has brought the global economy into deep contraction. In Indonesia, economic contraction began in the second and third quarters of 2020, with growth recorded at –5.32% and –3.49%, respectively, compared to the same period last year (yoy). Nevertheless, the growth rate in the third quarter showed some improvement. This suggested
a potential recovery, although we still need to be cautious considering that the pandemic is not yet over and the level of uncertainty is still high.
It is immediately evident, however, that the pandemic has accelerated digitalization across all segments of the population. The adoption of applications and internet connections
are increasing rapidly, not
only for tertiary needs and entertainment but also for primary needs such as food and education, and even the need to have social connections. A report prepared by Google, Temasek, and Bain & Company showed 37% growth in the number of new consumers of services available via internet connections in Indonesia. Of these new consumers, 93% will continue to use at least one digital service post-COVID-19. The report also revealed that growth in the e-commerce
and media sectors offset the contraction experienced by
the transportation, food, and travel sectors—the three sectors with sharp declines. From the
geographic perspective, the report stated that 56% of the total number of new internet users in Indonesia are from non- metropolitan cities.
These situations provided
both opportunities and challenges for players in
the telecommunications industry like XL Axiata. A remarkably high demand stimulated the information and telecommunications market,
as evidenced by a 10.58%% growth in the ICT sector—one of a few sectors that recorded positive growth in 2020. On
the other hand, this critical time has put infrastructure readiness, network quality, and customer service quality to the test.
In our view, the Board of Directors successfully led
and managed the Company during this time. Internally, the Company mitigated impacts of the pandemic by immediately applying the work from home policy. In doing so, employees were facilitated with proper work equipment and health packages. Externally, the Company focused on enhancing its digital services and designing data packages to support the people’s need to work and study from home.
The Company’s success in mitigating the pandemic
also reflected the sound digital transformation that
it had started. Business process digitalization, such as automated finance and human capital management systems, sales, and customer service are especially impactful for the Company’s operations during the pandemic. There are other aspects included in the Company’s digitalization journey, such as branding,
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