PETALING JAYA: Following the release of Celcom’s new postpaid plan with unlimited data, the remaining players in the market are expected to introduce similar products against the backdrop of the industry’s declining subscribers.
In a sector update note, AmInvestment Research said total mobile subscriber trajectory returned to its downward trajectory in Q3’19 after a brief uptick in the previous quarter, highlighting that cellular price war competition remains intense.
“Mobile subscribers decreased 46,000 quarter-on-quarter (q-o-q) as prepaid declines of 226,000 were only partially offset by postpaid additions of 180,000. Only Maxis registered a 141,000 increase while Celcom dropped by 153,000 and Digi by 34,000. In Q4’19, Digi resumed its decline in subscribers, falling 400,000 q-o-q to 10.9 million,” it said.
Celcom’s base Mega plan at RM80 a month comes with 30GB internet quota and unlimited calls to all networks, but also provides unlimited mobile internet or lightning mobile internet speed add-on options.
UMobile also launched a new GX38 prepaid plan, which offers unlimited data at a promotional price of RM35 a month with a speed cap of 6Mbps, compared with 3Mbps for its existing GX30 plan priced at RM30 per month.
By comparison, Digi has the Infinite online plan, which offers unlimited data and calls at RM100 a month while Unifi Mobile is priced at RM99 a month.
Maxis does not have an unlimited data plan, with the highest MaxisOne quota of 60GB priced at RM188 per month.
However, declining subscriber trends notwithstanding, cellular operator’s Q3 service revenues have largely stabilised q-o-q due to the higher value postpaid segment growth, further supported by average revenue per user (ARPU) rising slightly q-o-q to RM47.70 as average postpaid ARPU rose RM1/month to RM71/month.
AmResearch is maintaining its “neutral” call on the sector given the escalating capital expenditure requirements against the backdrop of government targeted fiberised ARPU reductions under the National Fiberisation and Connectivity Plan (NFCP).
“Our only buy currently is Axiata, given its low EV/EBITDA valuations and rising prospects for monetisation of its multiple businesses,” it said.
The research house noted that should revenues resume a downward decline, it would have to de-rate the sector against the backdrop of escalated mobile price war intensification and sharp drops in fixed broadband prices next year, driven by NFCP prerogatives.
“We are also cautious on possibilities of higher-than-expected increase in operating and capital cost requirements as operators need to further upgrade their network infrastructure for 5G rollouts,” it said.
On the other hand, AmResearch said it would upgrade the sector should consolidation prospects among the current six main cellular operators be renewed.
“(This) could lead to a moderation in mobile price competition, indefinite suspension of the MCMC’s plans to reduce broadband prices this year and significant contraction in operating costs from increased infrastructure-sharing arrangements amongst operators,” it added.
