PETALING JAYA: Three listed telecommunication companies (telcos) have been impacted by “earnings distortions” in the second quarter of 2025 (2Q25).
They were Axiata Group Bhd
, Telekom Malaysia Bhd (TM) and CelcomDigi Bhd, according to Hong Leong Investment Bank (HLIB) Research.
HLIB Research pointed out that CelcomDigi, TM and TIME Dotcom Bhd required stronger earnings delivery in the second half of 2025 (2H25) to meet full-year expectations.
“Maxis Bhd stood out as the cleanest print, comfortably tracking full-year estimates and even trending slightly ahead.
“This divergence has been reflected in post-results price action – Maxis has ‘outperformed’, while peers remained range-bound to softer, as investors await clearer execution in 2H25,” it said.
HLIB Research added that telcos’ mobile service revenue trends were slightly below guidance due to prepaid erosion, but postpaid momentum and cost optimisation cushioned earnings.
It pointed out that CelcomDigi’s 2Q25 service revenue was broadly flat at negative 0.1% year-on-year (y-o-y), as continued prepaid contraction offset steady postpaid momentum. For 1H25, service revenue slipped 0.7% y-o-y, falling short of its low single-digit growth guidance.
Maxis showed a similar trajectory, with service revenue down 0.5% y-o-y in 2Q25 and 0.7% y-o-y in 1H25, primarily reflecting changes in device insurance revenue recognition and lower regulated interconnect rates (the underlying trend was stable).
Despite muted top line performance, disciplined cost management and efficiency gains continued to support earnings resilience at both operators.
“Prepaid net adds for both mobile operators remained in negative territory during 2Q25, although the revenue impact was minimal, as churn mainly reflected clean-up exercises, particularly at CelcomDigi (down 407,000) and to a lesser extent, Maxis (down 21,000).
“In contrast, postpaid growth stayed healthy, with CelcomDigi adding 92,000 and Maxis 58,000 subscribers, reinforcing the ongoing prepaid to postpaid migration trend.
“Average revenue per user (Arpu) trends held steady, with postpaid broadly stable, while prepaid recorded a modest RM1 increase quarter-on-quarter uplift at both operators, driven by migration to higher-value plans and targeted product bundles.”
HLIB Research stated that fibre competition remained intense, with CelcomDigi leading net added at the expense of Arpu, slightly impacting TM while Maxis and Time maintained pricing discipline.
It also said sector headwinds persist from the pending sales and service tax decision on tower leasing and the ongoing overhang surrounding Digital Nasional Bhd and the transition to a dual 5G wholesale network.
