20260824_EXCL_Laporan Hasil Pemeringkatan_32132205_lamp2.pdf

8/21126, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable
2.1x during 2026-2027 is higher than our previous expectation of 1.7x-2.0x (2025: 2.7x,
2024: 1.1x).

We expect net leverage to decline gradually to below 2.Ox in the medium term, as we think
the company will not sustain high capex after the major network-related investment is
completed. Revenue growth and margin recovery from merger synergies will support
deleveraging in the medium term.

Solid Market Position and Scale: XLSMART's improved market share and business scale
should boost free cash flow generation in the long term, despite some customer losses
initially due to subscriber consolidation and churn. The company held the third-largest
mobile subscriber share at around 23X at end-2025, and we expect it to maintain this level,
given the telecommunications industry consolidation. The merger has closed the market
share gap with its closest peer, PT Indosat Tbk (AAAf(idn)/Stable), which had a market share
of around 2944 at end-2025.

Consolidation Supports Pricing Discipline: We believe the sector's consolidation into three
operators will foster price discipline and profitable long-term growth. XLSMART reported
higher average revenue per user (ARPU) of IDR47,100 in 1H26 (2025: IDR39,500) after its
price adjustments offset lower ARPU from Smartfren customers. We expect the company
to sustain the higher ARPU as operators prioritize profitable growth over market share
gains. Mobile ARPU in Indonesia is still among the lowest in the Asia-Pacific region.

Larger Spectrum Holdings: XLSMART's expanded spectrum portfolio will benefit its
network guality, cost efficiency and overall competitiveness. It has 217MHz of spectrum in
total after acguiring 3OMHz and 5SOMHz in the 700MHz and 2.6GHz bands, respectively,
excluding 900MHz that it will return to the government by end-2026. This will allow
XLSMART to expand its 5G offering to more cities, supporting revenue growth. Mobile
market leader PT Telekomunikasi Indonesia Tbk (Telkom, BBB/Negative, Standalone Credit
Profile (SCP): a-) has 265MHz of spectrum holdings, while Indosat has 215MHz.

Increased Network Coverage: We believe XLSMART's increased mobile sites of around
56,000 after the merger will support its network coverage and guality. It has gradually
decommissioned some overlapping sites, which comprised 204-304 of the combined
entity's sites, and others will be relocated. We expect XLSMART's mobile sites to remain
comparable to those of Indosat, which had around 58,000 sites in 1H26.

No Further Spectrum Capex: We do not factor in any further spectrum acguisitions in the
medium term after the government concluded the auction for the 700MHz and 2.6GHz

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026

2/10

8/21126, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable
bands in July 2026. XLSMART's upfront payment for the additional spectrum in 2026
amounted to around IDR1.3 trillion, and we expect the company to spend around IDR1

trillion on additional annual license fees for the acguired spectrum.

Rated on Standalone Basis: Fitch rates XLSMART based on its SCP as we believe none of its
shareholders - Axiata Group Berhad and Smartfren's previous owner, Sinar Mas - have
sufficient control over XLSMART. Axiata and Sinar Mas jointly control XLSMART, with egual
ownership of 34.746 each, and have egual board nomination rights. The cross-default clause
in Axiata's long-term multi-currency sukuk and euro medium-term note program
documents will no longer apply to XLSMART, as it will be an associate rather than a
subsidiary of Axiata.

PEER ANALYSIS

Indosat's higher rating than XLSMART is mainly underpinned by Indosat's larger EBITDA
size and stronger financial profile, with lower forecast EBITDA net leverage of below 1.0x.
XLSMART has a lower market share in mobile business, but this is partly offset by its larger
fixed broadband business that has more than 900,000 subscribers. In comparison, Indosat's
fixed broadband subscriber base reached around 435,000 as of June 2026.

Incumbent Telkom has a stronger market position than XLSMART, with almost half of
subscriber market share in Indonesia's mobile market and a dominant position in fixed
broadband service through its 7096-owned subsidiary, PT Telekomunikasi Selular.
Moreover, Telkom has a wider EBITDA margin and significantly lower net leverage below
0.5x. Telkom's Issuer Default Ratings remain capped by Indonesia's sovereign rating
(BBB/Negative) due to close linkages with the state and the absence of restrictions that
limit cash and asset flow from Telkom to the government.

XLSMART's National Long-Term Rating is the same as that of Indonesian tower operator PT
Tower Bersama Infrastructure Tbk (TBI, BBB-/AA-(idn)/Stable). TBI is the third-largest
wireless tower operator in Indonesia with about 209 market share. It has stronger cash
flow visibility from long-term lease agreements and generally faces less competition. TBI
also faces lower capex risk as the deployment of new towers is typically on a precontracted
basis. However, TBI's higher EBITDA net leverage of around 5.0x offsets its lower business
risk.

XLSMART's National Long-Term Rating is one notch above the 'aalidn)' SCP of astate-
owned energy company, PT Perusahaan Gas Negara Tbk (PGN, BBB-/AA-(idn)/Stable).
PGN's SCP is constrained by the regulatory risks for its gas distribution and transmission

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026 3/10

8/21126, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable
business in Indonesia, which balance its dominant domestic market position. Any regulatory
changes could significantly affect PGN's profitability. However, PGN's capex plans can be
adjusted according to the price cap, and it maintains a net cash position.
FITCH'S KEY RATING-CASE ASSUMPTIONS
- Revenue to reach around IDR49 trillion in 2026-2027 (2025: IDR42 trillion, 1H26: IDR24

trillion).

- Fitch-defined EBITDA margin of 274 in 2026, gradually improving to 29X in 2027 (2025:
1996, 1H26: 2696).

- Capex of around IDR20 trillion in 2026 and IDR15 trillion in 2027 (2025: IDR9 trillion,
1H26: IDR8 trillion).

- No dividend distribution in 2026 due to net losses in 2025.

RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating
Action/Downgrade

- EBITDA net leverage above 2.1x for a sustained period,

- Deterioration of the business profile, such as from market share loss or increasing
competition.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

- EBITDA net leverage below 1.1x for a sustained period, while maintaining its market
position and delivering sustained EBITDA growth.

LIGUIDITY AND DEBT STRUCTURE

XLSMART is likely to depend on refinancing to meet debt maturities. We believe the
company has reasonable refinancing ability with access to capital markets and bank
facilities, supported by strong relationships with local and foreign lenders. All of its
outstanding debt at end-2025 was unsecured, reflecting solid banking access. XLSMART"'s
debt is denominated in Indonesian rupiah, in line with revenue and costs.

ISSUER PROFILE

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026

4110

8/21/26, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable

XLSMART is the surviving entity from the merger of PT XL Axiata Tbk and Smartfren. The

combined telco had more than 69 million mobile subscribers and over 950,000 fixed

broadband subscribers at end-June 2026.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF

RATING

The principal sources of information used in the analysis are described in the Applicable

Criteria.

MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS

Click here to access Fitch's latest guarterly Global Corporates Sector Forecasts Monitor

data file which aggregates key data points used in our credit analysis. Fitch's

macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key

performance indicators and sector-level forecasts are among the data items included.

RATING ACTIONS
ENTITY /DEBT £ RATING RATING £ RATING PRIOR $
TYPE ACTION $
PT XLSMART Telecom Natl LT AAt Affirmed AAt
Sejahtera Tbk (idn) Rating (idn) Rating
Outlook Outlook
Stable Stable
senior unsecured Natl LT AA-lidn) Affirmed AA-idn)

VIEW ADDITIONAL RATING DETAILS

FITCH RATINGS ANALYSTS

Guninta Surplusya

Associate Director

Primary Rating Analyst

National

462 214000 0759
guninta.surplusya@fitchratings.com

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026

510

8/21/26, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable

PT Fitch Ratings Indonesia
DBS Bank Tower 24th Floor, Suite 2403 Jl. Prof.Dr. Satrio Kav 3-5 Jakarta 12940

Steve Durose

Managing Director
Committee Chairperson

461 2 8256 0307
steve.durose@fitchratings.com

MEDIA CONTACTS

Leslie Tan

Singapore

465 6796 7234
leslie.tan@thefitchgroup.com

Peter Hoflich

Singapore

465 67967229
peter.hoflich@thefitchgroup.com

Additional information is available on www.fitchratings.com

PARTICIPATION STATUS

The rated entity (and/or its agents) or, in the case of structured finance, one or more of the
transaction parties participated in the rating process except that the following issuer/s), if
any, did not participate in the rating process, or provide additional information, beyond the
issuer's available public disclosure.

APPLICABLE CRITERIA

National Scale Rating Criteria (pub. 23 Dec 2020)
Corporates Recovery Ratings and Instrument Ratings Criteria (pub. 03 Aug 2024)

(including rating assumption sensitivity)

Sukuk Rating Criteria (pub. 14 Oct 2025)

Corporate Rating Criteria (pub. 10 Jan 2026) (including rating assumption sensitivity)
Sector Navigators - Addendum to the Corporate Rating Criteria (pub. 10 Jan 2026)
Country-Specific Treatment of Recovery Ratings Criteria (pub. 21 Feb 2026)

https://www.fitchratings.com/research/corporate-finance/fitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026 6/10

8/21/26, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable

APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria
providing description of models).

Corporate Monitoring & Forecasting Model (COMFORT Model), v8.2.0 (1)

ADDITIONAL DISCLOSURES

Solicitation Status

Endorsement Policy

ENDORSEMENT STATUS

PT XLSMART Telecom Sejahtera Tbk -

DISCLAIMER & DISCLOSURES

All Fitch Ratings (Fitch) credit ratings are subject to certain limitations and disclaimers.
Please read these limitations and disclaimers by following this link:
https://www.fitchratings.com/understandingereditratings. In addition, the following
https://www.fitchratings.com/rating-definitions-document details Fitch's rating definitions
for each rating scale and rating categories, including definitions relating to default. ESMA
and the FCA are reguired to publish historical default rates in a central repository in
accordance with Articles 11(2) of Regulation (EC) No 1060/2009 of the European
Parliament and of the Council of 16 September 2009 and The Credit Rating Agencies
(Amendment etc.) (EU Exit) Regulations 2019 respectively.

Published ratings, criteria, and methodologies are available from this site at all times. Fitch's
code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other
relevant policies and procedures are also available from the Code of Conduct section of this
site. Directors and shareholders' relevant interests are available at
https://www.fitchratings.com/site/regulatory. Fitch may have provided another permissible
or ancillary service to the rated entity or its related third parties. Details of permissible or
ancillary service(s) for which the lead analyst is based in an ESMA- or FCA-registered Fitch
Ratings company (or branch of such a company) can be found on the entity summary page
for this issuer on the Fitch Ratings website.

In issuing and maintaining its ratings and in making other reports (including forecast
information), Fitch relies on factual information it receives from issuers and underwriters
and from other sources Fitch believes to be credible. Fitch conducts a reasonable

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026

710

8/21126, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable
investigation of the factual information relied upon by it in accordance with its ratings
methodology, and obtains reasonable verification of that information from independent
sources, to the extent such sources are available for a given security or in a given
jurisdiction. The manner of Fitch's factual investigation and the scope of the third-party
verification it obtains will vary depending on the nature of the rated security and its issuer,
the reguirements and practices in the jurisdiction in which the rated security is offered and
sold and/or the issuer is located, the availability and nature of relevant public information,
access to the management of the issuer and its advisers, the availability of pre-existing
third-party verifications such as audit reports, agreed-upon procedures letters, appraisals,
actuarial reports, engineering reports, legal opinions and other reports provided by third
parties, the availability of independent and competent third- party verification sources with
respect to the particular security or in the particular jurisdiction of the issuer, and a variety
of other factors. Users of Fitch's ratings and reports should understand that neither an
enhanced factual investigation nor any third-party verification can ensure that all of the
information Fitch relies on in connection with a rating or a report will be accurate and
complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the
information they provide to Fitch and to the market in offering documents and other
reports. Inissuing its ratings and its reports, Fitch must rely on the work of experts,
including independent auditors with respect to financial statements and attorneys with
respect to legal and tax matters. Further, ratings and forecasts of financial and other
information are inherently forward-looking and embody assumptions and predictions
about future events that by their nature cannot be verified as facts. As a result, despite any
verification of current facts, ratings and forecasts can be affected by future events or
conditions that were not anticipated at the time a rating or forecast was issued or affirmed.
Fitch Ratings makes routine, commonly-accepted adjustments to reported financial data in
accordance with the relevant criteria and/or industry standards to provide financial metric
consistency for entities in the same sector or asset class.

The complete span of best- and worst-case scenario credit ratings for all rating categories
ranges from 'AAA' to 'D' Fitch also provides information on best-case rating upgrade
scenarios and worst-case rating downgrade scenarios (defined as the 99th percentile of
rating transitions, measured in each direction) for international credit ratings, based on
historical performance. A simple average across asset classes presents best-case upgrades
of 4 notches and worst-case downgrades of 8 notches at the 99th percentile. For more
details on sector-specific best- and worst-case scenario credit ratings, please see Best- and
Worst-Case Measures under the Rating Performance page on Fitch's website.

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026

8/10

8/21126, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable
The information in this report is provided “as is” without any representation or warranty of
any kind, and Fitch does not represent or warrant that the report or any of its contents will
meet any of the reguirements of a recipient of the report. A Fitch rating is an opinion as to
the creditworthiness of a security. This opinion and reports made by Fitch are based on
established criteria and methodologies that Fitch is continuously evaluating and updating.
Therefore, ratings and reports are the collective work product of Fitch and no individual, or
group of individuals, is solely responsible for a rating or a report. The rating does not
address the risk of loss due to risks other than credit risk, unless such risk is specifically
mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have
shared authorship. Individuals identified in a Fitch report were involved in, but are not
solely responsible for, the opinions stated therein. The individuals are named for contact
purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for
the information assembled, verified and presented to investors by the issuer and its agents
in connection with the sale of the securities. Ratings may be changed or withdrawn at any
time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice
of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do
not comment on the adeguacy of market price, the suitability of any security for a particular
investor, or the tax-exempt nature or taxability of payments made in respect to any security.
Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for
rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable
currency eguivalent) per issue. In certain cases, Fitch will rate all or a number of issues
issued by aparticular issuer, or insured or guaranteed by a particular insurer or guarantor,
for a single annual fee. Such fees are expected to vary from US$ 10,000 to US$ 1,500,000 (or
the applicable currency eguivalent). The assignment, publication, or dissemination of a
rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in
connection with any registration statement filed under the United States securities laws,
the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities
laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and
distribution, Fitch research may be available to electronic subscribers up to three days
earlier than to print subscribers.

For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an
Australian financial services license (AFS license no. 337123) which authorizes it to provide
credit ratings to wholesale clients only. Credit ratings information published by Fitch is not
intended to be used by persons who are retail clients within the meaning of the
Corporations Act 2001.Fitch Ratings, Inc. is registered with the U.S. Securities and
Exchange Commission as a Nationally Recognized Statistical Rating Organization (the
“NRSRO”). While certain of the NRSRO's credit rating subsidiaries are listed on Item 3of

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026

9/10

8/21126, 9:44 AM Fitch Affirms XLSmart at 'AA-(idn)', Outlook Stable
Form NRSRO and as such are authorized to issue credit ratings on behalf of the NRSRO (see
https://www.fitchratings.com/site/regulatory), other credit rating subsidiaries are not listed
on Form NRSRO (the “non-NRSROs”) and therefore credit ratings issued by those
subsidiaries are not issued on behalf of the NRSRO. However, non-NRSRO personnel may
participate in determining credit ratings issued by or on behalf of the NRSRO.

dvO1, a Fitch Solutions company, and an affiliate of Fitch Ratings, may from time to time
serve as loan data agent on certain structured finance transactions rated by Fitch Ratings.

Copyright O 2026 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall
Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Reproduction or
retransmission in whole or in part is prohibited except by permission. All rights reserved.

READ LESS

SOLICITATION STATUS

The ratings above were solicited and assigned or maintained by Fitch at the reguest of the
rated entity/issuer or a related third party. Any exceptions follow below.

Fitch's solicitation status policy can be found at www.fitchratings.com/ethics.

ENDORSEMENT POLICY

Fitch's international credit ratings produced outside the EU or the UK, as the case may be,
are endorsed for use by regulated entities within the EU or the UK, respectively, for
regulatory purposes, pursuant to the terms of the EU Regulation or the UK Regulation, as
the case may be. Fitch's approach to endorsement in the EU and the UK can be found on
Fitch's Regulatory Affairs page on Fitch's website. The endorsement status of international
credit ratings is provided within the entity summary page for each rated entity and in the
transaction detail pages for structured finance transactions on the Fitch website. These
disclosures are updated on a daily basis.

hittps://www.fitchratings.com/research/corporate-financeffitch-affirms-xIsmart-at-aa-idn-outlook-stable-20-08-2026

10/10