PETALING JAYA: The additional 4G spectrum Maxis Bhd
has been awarded should enhance efficiency, driving capital expenditure (capex) and operational savings from lower capacity requirements.
It should lead to fewer tower leases and reduced investments in 4G network equipment, said Kenanga Research.
Based on an estimated 12-year assignment period, the cumulative annual payments of RM300mil translates to RM25mil per annum, which is a modest 10% increase in financial year 2024 (FY24) spectrum licence fees.
Kenanga Research believes Maxis is likely to maintain its 2025 capex guidance of about RM1bil following the spectrum acquisition, suggesting the RM100mil upfront fee is comfortably within budget.
BIMB Research assumed a seven-year validity until 2032. The implied cost impact is estimated at RM57mil per annum, or 4% of its FY25-FY27 earnings estimates.
For comparison, the existing 30MHz spectrum costs Maxis a total of RM918.4mil (RM118.4mil in upfront cost and RM50mil per annum for 16 years until April 2034).
BIMB Research said, financially, the RM400mil commitment represents defensive capex, preserving competitiveness rather than driving near-term growth.
Maxis accepted the industry regulator’s offer for a 2×10MHz in the 2,100MHz band, with a total cost of RM400mil recently.
Despite Malaysia’s accelerating 5G rollout, 4G remains the dominant network layer carrying most mobile data traffic, particularly for voice and rural coverage.
Hence, the spectrum ensures continuity of Maxis’s 4G capacity by helping to boost network capacity, especially in dense urban areas.
Kenanga Research maintains its “market perform” call and target price (TP) of RM3.56 a share, based on an unchanged eight-times FY25 enterprise value over earnings before interest, tax, depreciation and amortisation.
BIMB Research maintains its trading “buy” on Maxis with a TP of RM4.05 a share. The valuation is based on a discounted cash flow model, applying a weighted average cost of capital of 8% and long-term growth rate of 1%.
It said the additional spectrum payment is manageable, since the company has tightened its disciplined cost management, driving its second-quarter 2025 (2Q25) earnings to their highest quarterly performance since 2Q19.
