4th quarter results – win some, lose some

The end of results season in February uncovered an interesting trend for telecommunication (telco) players: different strategies gave way to different results.

Overall, the telco sector recorded a mixed bag of mixed fourth quarter of financial year 2016 (4QFY16) results, with Maxis Bhd (Maxis) emerging as the stronger player over its competitor Celcom Axiata Bhd (Celcom) and Digi.Com Bhd (Digi).

While Celcom’s parent company, Axiata Group Bhd (Axiata), ended the year with disappointing 4Q16 earnings, Affin Hwang Investment Bank Bhd (AffinHwang Capital) highlighted that Maxis held up pretty well operationally amidst shrinking sector revenue.

According to AffinHwang Capital, Maxis’ revenue market share – amongst the three celcos – ended at 39 per cent as at end 2016, the group’s second year of gain.

The growth in Maxis’ market share was, however, at the expense of Celcom and Digi’s shrinking revenue base.

“Combined revenue for the three celcos amounted to RM21.8 billion, down five per cent from 2015 and represents the third consecutive year of decline,” it said in its report earlier this week.

This can be largely attributed to non-listed fourth player, U Mobile Sdn Bhd (U Mobile), grabbing a recognisable chunk of market share.

Results round-up

Looking at the sector’s cellular subscriber base, AmInvestment Bank Bhd (AmInvestment Bank) said in a separate report that Digi remains the leading mobile subscriber.

“Since edging out Maxis with the largest mobile subscriber base in 2QFY16, Digi has retained the group’s pole position with 12.3 million users,” it said, adding that this translates to a market share of 34.8 per cent versus Maxis’ 33.7 per cent and Celcom’s 31.5 per cent.

“Its revenue has also grown to overtake Celcom by two per cent in 4QFY16; now the second largest after Maxis,” the research firm said.

Digi had in fact gained prepaid customers at Maxis and Celcom’s expense, it said.

Although mobile subscribers declined by 150,000 to 35.4 million in 4Q current year 2016 (4QCY16), Digi gained 50,000 subscribers in 4QCY16 while Maxis lost 120,000 and Celcom 80,000, largely in the prepaid segment which experienced a net attrition of 869,000 to 26.8 million.

Digi’s prepaid subscribers instead climbed 211,000, as both Maxis and Celcom removed inactive users from their database.

“This drove prepaid average revenue per user (ARPU) by RM0.67 per month quarter on quarter (q-o-q) to RM35.70 per month,” the research firm said.

“Amidst increasingly larger data quotas and improved features offered to customers, the postpaid segment rose at a faster pace by 201,000 q-o-q and 255,000 y-o-y to eight million while ARPU increased RM3 per month to RM88 per month.”

Prepping up on prepaid, postpaid

On the other hand, AllianceDBS Research Sdn Bhd (AllianceDBS Research) opined that Maxis was the better performer in the prepaid segment for 2016.

The research house explained that despite losing 574,000 subscribers, prepaid revenue did not fall much as Maxis managed to offset it with higher ARPU (from RM39 to RM42).

“DiGi defended its prepaid subscriber base well but it came at the expense of lower ARPU, which we think was also largely due to the weak migrant workers sub-segment.

“Celcom suffered a whopping 1.85 million subscriber loss while ARPU had remained stagnant,” the research house said.

As for the postpaid segment, AllianceDBS Research noted that Digi gained market share in the postpaid segment in 2016 albeit from a lower base, with a 10.6 per cent revenue growth versus flattish growth for peers.

This was mainly achieved through subscriber gains, which AllianceDBS Research believed was reflective of improving customers’ perception of Digi’s network quality from the group’s aggressive rollout of 4G LTE network.

“To our surprise, Maxis defended its premium subscribers of the postpaid market quite well in 2016 (ARPU of RM104 vs RM80 for DiGi and Celcom), despite the more aggressive and attractive pricing by peers,” the research house said.

Affin Hwang reckoned that the growth in the sector’s postpaid subscribers vis-à-vis the prepaid segment is being underpinned by growth in demand for data and hence better demand for packages that offer a larger data plan.

https://www.theborneopost.com/2017/03/12/mixed-bag-of-results-for-telcos/

 

Summary: Digi and Maxis are fighting it out to be the number one telco in Malaysia while Celcom performance is not that great compared to both market leaders. Oh dear, pity Celcom!

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Possible Big Retrenchment in Celcom?!

Just heard this latest news from Celcom which happened about a month ago.

Thought things would have been calmer in Celcom, however we were informed today about another shocker, that they are planning to do a little bit of downsizing, where dozens of upper management staff will be laid off soon!

Somebody did a checking and it’s true, they have checked in Jobstreet several positions have already been advertised, some with the incumbent still working in the current position!

For example, the position of Chief Corporate Officer…

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Sedih tak?

The current Chief Corporate Officer is a lady known as Zuraidah. She also didn’t know her position was being advertised in Jobstreet. What a cheeky way to push people out, Celcom.

Must be some German culture being imported into this GLC.

She is not the only victim… it is confirmed that approximately 30 senior positions have also been posted. Why is this happening? Celcom is trapped in a sinkhole ever since they appointed the German as its CEO. It is incumbent upon the board and the Chairman to take the blame.

It is learned that the staff are not happy, especially after they had their last town hall meeting in December.

Rumours has it that Salleh Keruak was also not happy and shocked after the decision to retrench about 30+ senior staff was made known to him. The job postings in Jobstreet were immediately removed. People have said before that the appointment of Kuehner will not be good for Celcom and the introduction of his M7 gang into the foray will only spell disaster.

So what’s next?
Stay tune!
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Celcom, Maxis, Digi, etc cheating state governments?

Perak and Penang to dismantle thousands of telco towers

IPOH: The Perak government is to dismantle all illegally erected telecommunications towers and those for which the annual permits have not been paid.

Menteri Besar Zambry Abdul Kadir said today there were more than 2,800 such towers belonging to various telcos in the state.

“So far, we have only 1,400 legal telecommunications towers; the number of illegal towers is more than double that,” he told reporters after opening a telco infrastructure development workshop and seminar here.

Zambry said the reluctance of the telcos to pay the annual RM2,000 permit for every tower cost the state government RM20 million in revenue.

“All the states are imposing the same rule on permits but in Perak the telcos have cited all kinds of reasons, including operational costs, to refrain from paying up,” he said.

GEORGE TOWN: Penang has taken down “dozens” of illegal telco towers. State Local Government Committee chairman Chow Kon Yeow said this when commenting on a report that Perak had demolished 300 illegal towers.

Perak Menteri Besar Zambry Abdul Kadir had said there were more than 2,800 illegally built towers belonging to various telcos in the state. He said each tower must pay permit fees of RM2,000 a year, meaning the state was losing RM20 million in revenue every year.

Chow said out of the 930 telco towers in Penang, 137 had been found to be illegally built.

He said the owners of the illegal towers had been served 30-day notices, ordering them to dismantle their towers.

Chow said several dozen towers were removed upon requests by non-governmental organisations and residents.

“Before 2008, most telco structures in the state were illegal. They were not paying any sort of fees.

“When we took over the government, we conducted a legalisation exercise to ensure all were legal.

“The errant telco providers or owners of towers were dealt with swiftly. We have taken down dozens of telco towers for building illegal structures. Some owners have not paid up. They are operating against state guidelines for telco towers, which came into effect on Nov 20, 2009,” he told FMT.

What can we assume here? Telco companies in Malaysia are just snakes who would suck up their consumers dry and at the same time circumvent state laws by not paying their dues.

How many times have they disconnected your mobile line when you are late one day in paying your bills? Well, some of these telcos are several years late in paying their own bills!

Profiteering from your poor customers is one thing, but profiteering and cheating state governments is another whole new level.

http://www.freemalaysiatoday.com/category/nation/2017/01/23/perak-to-dismantle-2800-telco-towers/

http://www.freemalaysiatoday.com/category/nation/2017/01/25/nearly-150-illegal-telco-towers-in-penang-demolished/

Lessons to be learned from the Digi episode

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Last Friday, an irate telco customer threw eggs at his telco service provider – Digi. Perhaps this could be a warning to all telcos, that customers are no longer afraid to take matters into their own hands. They will not shy away in recording their grievances and upload them in the social media.

Tough times ahead for customer service departments across the industry. You guys better buck up and be on your toes. We are watching.

Here was the news:

We all had our moments when we make a complaint to a company and all our efforts get drained to the sewage port. So, how do you get these big companies to actually hear you out?

Do what Mohd Al Iman Zakaria did! He threw eggs at Digi’s HQ in Subang!

Not that we are encouraging such act, cause it may seem a little uncivilised but hey at least it get’s the job done, right?

Probably because they refused to listen to his previous complaints, Iman decided to do was most people won’t, throwing eggs at the source of the problem like they were hand grenades.

The whole incident was even recorded and posted by the man himself. In the short clip, you can hear him shouting out loud while throwing a few eggs and at the same time scaring off some of Digi’s customers that were at the site.

Do read it more at: https://thecoverage.my/news/furious-digi-customer-throws-egg-bombs-subang-hq/

Happy new year to Digi! How inspiring…

Who should buy up Digi and Maxis?

Last post for 2016.

Big telco stake sale in Malaysia

PETALING JAYA: Two foreign shareholders of large stakes in leading Malaysian telecommunications companies (telcos) are exploring the possibility of divesting their stakes, indicating that the industry could be maturing here.

Reports also indicated that these parties might be more keen on investing in higher-growth markets such as Indonesia and Vietnam.

In other parts of Asia, investments by foreign cellular companies (celcos) into Asian telcos had dried up.

Over the past few days, reports had emerged that Norwegian telco, Telenor ASA, might be considering a sale of its stake in Digi.Com Bhd, and Saudi Telecom Co was said to be exploring options to dispose of its indirect stake in Maxis Bhd.

CIMB Research pointed out recently that in the second quarter of the year, the telco industry mobile revenue fell 2.4% quarter-on-quarter due to competition.

However, while these parties may be exploring a divestment of their stakes in Malaysian telcos, the big question is whether there will be takers for the stakes, considering the state of the industry in Malaysia.

Digi is trading at a price earnings (PE) multiple of 23.39 times and offers a yield of 4.26% at its current price of RM4.81, while Maxis’ PE is at 24.40 times, with a yield of 3.25% at its current price of RM6.15, Bloomberg data revealed.

In comparison, Singapore Telecom-munications Ltd is trading at a less demanding PE of 16.3 times and offers a decent yield of 4.41% too.

An added complication is the concern investors would have if an owner like Telenor decides to sell down.

“Without Telenor’s insights, Digi may no longer look as attractive,” pointed out an industry player.

http://www.thestar.com.my/business/business-news/2016/09/20/big-telco-stake-sale/

Maybe EPF should buy it after they have dropped FGV from their portfolio? Any other suggestions?
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Live Chat di Celcom

Antara banyak perkara yang staff Celcom tak suka pasal CEO baru Michael Kuehner dan management team baru dia (Azwan + Azmi etc), ada satu benda yang staff Celcom paling meluat:

Live Chat.

Berikut adalah feedback yang kami terima dari staff Celcom baru-baru ini:

Live chat ialah satu platform di mana semua peringkat masyarakat dalam Celcom boleh berinteraksi sama sendiri dan meluah apa yang disimpan dalam hati. Chat boleh dibuat secara anonymous, dan perbualan boleh dilihat oleh semua orang.

Benda ni diperkenalkan oleh Michael Kuehner. Ramai rasakan yang benda ni tak berfaedah. Ramai yang meluat pun. Kenapa M7 tak boleh dapatkan constructive criticism through private channels? Tak berapa lama benda ni berjalan, we already have several serious complaints from employees about being defamed in the live chat.

How can M7 allow employees to be humiliated?

Staff-staff Celcom rasa amat sakit hati dan bengang sebab live chat sekarang jadi medan menganiaya staff sendiri. Tapi mereka takut nak highlight pasal ni in the open. Nanti ada witch hunt.

Enough is enough lah. Sekarang Michael Kuehner sendiri takde kat Celcom. Balik kampung cuti Krismas. Siapa yang nak handle kalau ada krisis nanti?

Idea siapa pandai sangat nak buat live chat ni?

Kita hentikan dulu cerita setakat ini. Ada banyak lagi feedback kita dapat tapi kita simpan for another day.

Bawah ni adalah Live Chat yang kita ada terima:

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Merry Christmas untuk semua warga Celcom! Aud Wiedersehen!

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