MAXIS Communications Bhd's immediate focus in its efforts to maintain the dominance it has just regained in the cellular market will be on new geographical areas and market segments, but its long-term goal is to become a regional leader by 2010, said chief executive officer Datuk Jamaludin Ibrahim.
He said the strategy to move into new areas and segments would be made as the company prepared its network for bigger capacities and faster speeds to operate in a third-generation (3G) environment.
New growth would come from outside the Klang Valley, suburban areas and the youth segment, he said.
About 40% of the Malaysian population comprises youths, who are said to be heavy data users.
“We have been strong in major urban centres and are now increasing our coverage in other towns, the east coast and east Malaysia,’’ Jamaludin said in Langkawi over the weekend.
Maxis will invest RM1bil in network expansion this year.
“Essentially, we are moving into new areas and offering new products so that we can build a customer base and interest, so that by the time we launch 3G we would have a reasonable number of savvy users (ready to subscribe to 3G-based applications),’’ he said.
The mobile penetration rate in the country is forecast to increase from the current 44% to close to 55% by end-2005, although earlier expectations had been of a slowdown.
This would mean an additional 2 to 3 million new subscribers each year. There were 11.1 million users at end-2003. At the end of last year, Maxis had 4.46 million subscribers or 40.55% of the cellular market share, ahead of rival Celcom (M) Bhd, which had 4.33 million or 39.40% share, with DiGi Telecommunications Sdn Bhd in third place with 2.20 million or 20.5% market share.
Jamaludin said there was “plenty of room to grow and there would still be healthy growth in the next one to two years.''
“What we did last year was to give value to customers by lowering prices – but not too far off from the rest – increasing network coverage by filling in blind spots and doing a lot of marketing.
“In fact, we increased our marketing programme by almost 60% in the fourth quarter last year,’’ Jamaludin said, adding that Maxis wanted to be the undisputed leader this year.
Although moving out of the Klang Valley to lower-end markets would mean lower average revenue per user (arpus), Jamaludin is, however, not unduly worried, saying that earnings could be maintained given that the celco had an efficient cost structure and economies of scale to offset the lower arpu, both in terms of opex operating expenditure (opex) and capital expenditure (capex).
Globally, arpu is falling but Maxis has managed to keep this at a healthy level. Its post-paid arpu for FY2003 was RM167 and that of prepaid, RM64.
The company almost doubled its net profit from a year ago to RM1.84bil on the back of RM4.68bil in revenue. To keep its subscribers, Maxis has a long list of products to launch this year, from its “push to talk’’ (a walkie-talkie where more than one person can talk at one time), Webcam (an alternative to CCTV), location finder and topping up of prepaid accounts by phone to catching one's favourite TV programme on the phone.
Currently, CNBC and hitz.TV via Astro are available real-time on Maxis Mobile.
At the recent 3GSM World Congress in Cannes, France, Maxis inked a deal with LogicaCMG for multimedia messaging (MMS) solutions to further enhance its MMS offering.
Jamaludin expects Maxis' mobile data revenue to hit RM1bil by the end of FY2005 after reporting RM549mil for FY2003.
The success of 3G will be also dependent on patterns of mobile data usage. The company expects to offer trials in selected areas in the Klang Valley by next month.