PETALING JAYA: Postpaid services are expected to remain the key growth driver for Malaysia’s mobile network operators (MNOs), supported by continued subscriber migration from prepaid plans as operators focus on higher-value, more stable customer segments.
In a report, Kenanga Research said this structural shift is being driven by ongoing upselling initiatives, the rollout of converged offerings, and rising consumer purchasing power as Malaysia’s economy matures.
“The trend is already evident,” the research house said.
“Over the financial year 2023 (FY23) to FY25, postpaid service revenue recorded a two-year compound annual growth rate of 3.7% for Maxis Bhd
and 3.3% for CelcomDigi Bhd.
“Prepaid service revenue, meanwhile, declined by 3.4% and 4%, respectively, over the same period,” the research house noted in a report.
The transition reflects MNOs’ strategic focus to lock in stickier postpaid subscribers to support average revenue per user growth and revenue stability.
“It also reduces exposure to the highly competitive prepaid segment, where low entry barriers result in intense price competition,” Kenanga Research said.
“Although Malaysia’s total mobile subscriber base remained broadly stable at approximately 49.7 million to 50.1 million between 2023 and 2025, the composition of subscribers has shifted steadily towards postpaid services.
“Postpaid subscribers increased from 14.8 million in 2023 to 16.9 million in 2025, raising their share of the total subscriber base from 29.6% to 33.8%.
“In contrast, the prepaid subscriber base declined by more than 2.4 million over the same period.”
However, Kenanga Research kept its “neutral” view on the sector.
This is as sentiment remains weighed down by lingering uncertainties over Digital Nasional Bhd’s (DNB) ownership transition to MNOs, which will cloud the outlook for earnings, capital expenditure and dividends.
The research house expects DNB’s privatisation to be completed soon.
It expects cumulative shareholder advances from each MNO to rise to RM552mil.
This is following a recent capital call.
According to one analyst, DNB’s financial impact should become clearer in the second half of FY26 following the Finance Ministry’s (MoF) planned exit from the company.
The analyst noted that after the government’s exit, MNOs are expected to incorporate their share of DNB’s financial performance into their earnings through associate accounting from the second half of FY26.
Meanwhile, CIMB Research sees the industry’s mobile service revenue growing by 2% to 3% year-on-year in 2026 and 2027.
This is supported by ongoing market repair, as operators adopt more disciplined pricing strategies and focus on higher-value plans rather than competing aggressively on prices.
It said while the projected growth may not be exceptional, it would mark the strongest expansion in mobile service revenue since 2013, with the positive momentum expected to continue into 2027.
CIMB Research estimated that every one percentage point increase in mobile revenue growth, driven by pricing optimisation, could lift the core net profit of CelcomDigi and Maxis by approximately 3% to 5%.
“The latter cushions the impact from equity accounting for DNB’s net loss, underpinning resilient FY26 to FY27 core net profit for Maxis and continued growth for CelcomDigi.
“The MoF may complete the DNB share transfer to the telecommunications companies (telcos) possibly in the third quarter of FY26.
“We are projecting DNB’s net loss at RM700mil, RM500mil and RM300mil in FY26, FY27 and FY28, respectively, with half-year earnings impact for each telco in FY26,” CIMB Research added.
The research house has maintained its “overweight” call on the sector.
Telekom Malaysia Bhd remains its top pick on expectations of capital structure optimisation.
It also favours CelcomDigi, citing its improving earnings outlook for FY26 to FY28 and attractive valuation.
