Telcos expected to keep growing despite high mobile-phone penetration rate

  • Business
  • Monday, 29 Oct 2012

Mobile world: MCMC stated in its latest publicly available statistics that a 133.3% penetration rate equals almost 38.5 million mobile-phone subscribers in the country as of the second quarter this year.

PETALING JAYA: Continued growth in the telco industry is expected despite it already registering a mobile telephone penetration rate of 133.3% per 100 inhabitants and having passed the critical mass' stage.

MIDF Research's telecommunications analyst Imran Yassin Md Yusof said growth was expected due to several factors, including the possible growth of the prepaid segment at the expense of postpaid, growth in the international direct dialling segment and the increase use of mobile phones by migrant workers in the country.

Regulator Malaysian Communications & Multimedia Commission (MCMC) stated in their latest publicly available statistics that a 133.3% penetration rate equals to almost 38.5 million mobile phone subscribers in the country as of the second quarter of this year.

Year-on-year (y-o-y) pretax profit growth in latest reported financial quarter was still seen in Bhd (with 2% in the third quarter ended Sept 30), Axiata Group Bhd's performance was almost flat for the second quarter in the financial year ending Dec 31 while Maxis recorded a fall of 16.77% in pretax profit in its second quarter for the financial year ending Dec 31. registered an almost 8% growth in its y-o-y net profit for the latest third quarter for the financial year ending Dec 31.

Axiata recorded its second quarter net profit RM666.64mil from RM663.05mil in the corresponding period a year ago while Maxis saw a dip of 16% in second quarter net profit to RM464mil.

It is to be noted that apart from, both Axiata and Maxis have not yet reported their third quarter financial results.

Fund managers and analysts say that the pending third quarter results for both Maxis and Axiata will be keenly watched by the market for a hint on how the industry is really performing.

Despite the mixed pretax and net profit performances seen, y-o-y revenue growth meanwhile was still seen in all three telcos in their latest reported quarterly financial results indicating that the industry was still registering solid growth performance despite operating in a saturated industry market space.

Data services, which has seen formidable growth so far with all three telco players are touted to be the next driver of revenue on the backdrop of declining voice usage as people demand more privacy and less intrusion in today's modern urbanised society.

On this matter, chief executive officer Henrik Clausen earlier told StarBiz that he foresaw that all of its mobile customers would soon be Internet users moving forward from about 50% of its customers today.

DiGi, in which Norwegian telephone operator Telenor has a controlling stake, is gearing up to be the first of the latter's Asian operations to launch the much awaited LTE (long term evolution or also known as 4G) which will provide the much needed bandwidth and infrastructure to support future smartphones and tablet devices such as the iPhone 5.

Industry representatives from all three telcos spoke to StarBiz and said that despite the Government not yet awarding the final licence to commercially operate LTE, they are hoping that the matter would be decided by the government as soon as possible.

“Countries in the developed west are already able to provide LTE services to cater for the modern mobile internet smartphones today, what happened to us here in Malaysia?

“We seem to be lagging behind,” said a representative from one of the two biggest mobile phone operators by subscribers in Malaysia.

Earlier reports had stated that the MCMC had named several companies including all the three telcos as recipients of the 2.6GHz spectrum band.

Operating services on this spectrum requires a licence from the government for the telcos to utilise and provide LTE services (2.6GHz) to its customers at large.

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