Public Preference toward Telecommunication Providers in Indonesia and Its Influence on Company Financial Performance

Abstract

Purpose – This study aims to analyze and compare the financial performance of two main competitors in the telecommunications industry in Indonesia, namely Indosat and XL Axiata. Financial performance is assessed based on profitability ratios (gross profit margin and net profit margin) and activity ratios (total assets turnover and fixed assets turnover). This study also aims to compare customer preferences for the two companies with their financial performance.

Method – This research uses a comparative descriptive method to compare the financial performance of Indosat and XL Axiata based on profitability and activity ratios. Secondary data was taken from the annual financial reports of both companies at www.idx.co.id.

Result – Even though the public prefers XL Axiata, financial data for 2019-2022 shows that Indosat has superior financial performance. It shows that consumers' choice of telecommunications providers does not always align with the company's financial performance.

Result – Even though the public prefers XL Axiata, financial data for 2019-2022 shows that Indosat has superior financial performance. It shows that consumers' choice of telecommunications providers does not always align with the company's financial performance.

Implication – The research results show that telecommunications companies' customer preferences and financial performance are not always comparable. Further research is needed to uncover the factors influencing this disproportionality, perhaps through qualitative methods such as in-depth interviews.