Surge in data traffic for telcos during MCO

“It is still too early to make an accurate assessment of the impact of Covid-19 on revenue or cost at this stage. We have seen a surge in data traffic since the MCO started on March 18, ’’ Maxis Bhd CEO Gokhan Ogut told StarBiz.

PETALING JAYA: Some telecoms players have seen an upsurge in data traffic since the movement control order (MCO) but they can’t say if that will translate to higher earnings for this year.

Kenanga Research has also upgraded the telecoms sector to “overweight” from “neutral’’ amid the coronavirus (Covid-19) pandemic as it believes the “telecoms stocks have mostly fared better than the FBM KLCI”.

This surge in data traffic usage is on top of the 1GB data that is given free by the players from 8am to 6pm daily throughout the extended MCO period.

“It is still too early to make an accurate assessment of the impact of Covid-19 on revenue or cost at this stage. We have seen a surge in data traffic since the MCO started on March 18, ’’ Maxis Bhd CEO Gokhan Ogut told StarBiz.

“As such, we have put in place measures to ensure that our fixed and mobile networks remain uninterrupted while maintaining a high quality of service for everyone, ’’ Ogut adds.

Telekom Malaysia Bhd (TM) said it is seeing more than a 30% increase in usage trending, and of this, the increase of international link traffic was 5%.

“Our existing partnerships with the world’s technology giants and social networks in localising Internet content has resulted in 20% of our Internet traffic going truly international mainly for streaming, online games and teleconferencing, ’’ TM told StarBiz.

All the players are committed to ensuring that connectivity and customer support levels are kept consistent as a lot of people are working from home due to the MCO.

Maxis has over 550 employees, TM 6,000, Digi 700 and Celcom several hundred people working around the clock for critical functions which include network operations/maintenance and customer support to ensure there is seamless connectivity for consumers.“We are committed to doing our part to help our customers and the nation to stay connected safely at home, ’’ Ogut said. Bhd said that to ensure continuous connectivity and customer support, alternative locations for technology operations and customer service teams have been activated and were now fully functional.

Celcom Axiata Bhd added that its priority is that everyone remains connected during the challenging times.

Kenanga Research’s rationale for upgrading the sector is that with the ongoing slump in the stock market, it sees telecoms as a resilient industry.

“We stand by the notion that telcos are favoured picks during an economic downturn as the nature of its services is fundamental to society needs, be it fixed for mobile. It is also deemed to be immune to economic slowdown and it operates in a matured industry.

“Therefore any disruption in capital expenditure plans would not be detrimental to its overall performance, ’’ the research house said

It added that year-to-date the prices of the major stocks, Digi, Maxis and Telekom have declined but performed better than the benchmark bourse index.

The house maintains its earnings and target prices for all the stocks and anticipates near-term sustainability of the sector to be relatively unaffected by recent events.

It added that listed players are facing intensifying competition to cater to the growing demand needs of consumers, with unlimited data plans slowly becoming a staple offering between celcos.

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