Mandiri Sekuritas XL Axiata increase frequency capacity to 2x10MHz 3G (EXCL, Buy, Rp5,550, Buy, TP: Rp5,900)

According to news released by EXCL’s investor relations, the company has received an approval from minister of communication and telecommunication for its second 3G carrier. With this approval, XL will obtained consecutive 2x10MHz 3G carrier (1960-1970 MHz /2150-2160 MHz), EXCL only had 2x5 MHz 3G previously. In accordance with Decree No. 322/KEP/M.KOMINFO/09/2010, XL should pay an upfront fee in the amount of Rp327.6bn while the annual fee will be Rp.160 billion. Under the payment scheme configured, the upfront fee will be charged on this year and will be amortize for 10 years, meanwhile annual fee for the first year only charged 20% or around Rp32bn.