PETALING JAYA: Analysts are mixed on the performance of telecommunications companies (telcos) for the second half of the year (2H26), with some being positive on the sector with a preference for the mobile number operators (MNOs), while others are “neutral”.
MBSB Research in a report to clients noted that MNOs like CelcomDigi Bhd
and Maxis Bhd are seeing sustained service revenue performance.
“Contribution from postpaid and prepaid segments are supported by more rational competition between the two, with potential price war risk from UMobile.”
However, the risk would be manageable, premised on the strong 4G proposition, it said, adding that CelcomDigi boasts the widest 4G availability and geographic reach, while Maxis provides the most reliable and consistent 4G speeds, especially in urban centres like Klang Valley.
An analyst concurred and told StarBiz that MNOs are the best positioned within the segment, riding on consistent demand.
Meanwhile, MBSB Research also anticipates no let-up from Telekom Malaysia Bhd’s (TM) Unifi segment.
Taking the cue from the recent first-quarter 2026 results, it said enterprise segments remain an important pillar of revenue growth.
For Maxis, the group saw higher subscription in Internet of things and other fixed network solutions while the higher momentum for CelcomDigi was supported by Internet of Things, cloud and cybersecurity services as well as a low base effect.
TM’s business-to-business segment saw a marginal 0.4% revenue expansion as the group maintained its leadership in the government segment as well as shift in focus for the enterprise segment on recurring and higher-value new core, it added.
MBSB Research is expecting capital spending on infrastructure to persist to deliver superior network performance and noted that TM’s capital expenditure will be on the fixed-line and national fibre infrastructure provider while the MNOs will focus its attention on the mobile network infrastructure.
On the operational aspect, telcos are striving to maintain a favourable cost structure to boost profitability.
It noted that CelcomDigi is going through a structural cost and operating expenditure transformation that will lead to savings of RM450mil while Maxis has also shown continuous operational efficiencies since 2023 in tandem with management and operational reboot. TM’s cost to revenue meanwhile has been stable at slightly above 80%.
Maybank Investment Bank Research (Maybank IB), meanwhile, remains “neutral” on the sector, with respective prospects of telcos partly priced-in following year-to-date share price performances.
It said in its report that heading into 2H26, it sees potential downside risks to mobile telcos’ earnings with both CelcomDigi and Maxis guiding for possible equity-accounting of Digital Nasional Bhd (DNB) losses from 2H26.
Depending on the speed of revenue step-up (5G access fees) and cost optimisation, DNB’s losses could remain sizeable, thus posing potential downside risk to earnings of CelcomDigi, Maxis and YTL Power International Bhd.
Maybank IB said with UMobile’s 5G network up and running, it does not rule out a potential increase in competitive intensity as it seeks to increase its network utilisation. TM could potentially begin to transition into UMobile’s 5G network in 2H26, it added.
