Maxis ‘won’ 2015, says CEO Morten Lundal
By Goh Thean Eu February 5, 2016
- Service revenue jumped 3.8%, backed by prepaid growth
- 4G LTE now covers 71% of population from 33% a year ago
MALAYSIA’S largest mobile operator Maxis Bhd reported a 38% jump in fourth quarter net profit, driven mainly by its growing prepaid and postpaid businesses.
For the fourth quarter ended Dec 31, 2015, Maxis registered a net profit of RM468 million. Revenue rose 2.5% to RM2.18 billion. [RM1 = US$0.23 at current rates]
For the full year, total revenue increased 2.5% to RM8.6 billion while service revenue (which excludes device sales) jumped 3.8% to RM8.54 billion. Full-year profit rose marginally (0.9%) to RM1.96 billion.
“2015 was a winning year for Maxis. We grew in revenue and profits, and we also won market share,” Maxis chief executive officer Morten Lundal (pic above) said in a video press release.
“Performance was driven by high growth in prepaid, and also very strong postpaid,” he added.
While the business grew, Maxis experienced a decline in both the postpaid and prepaid subscriber base.
The numbers delivered by Maxis were mainly within analysts’ expectations – most were expecting the company to post about RM1.92 billion in net profit, within the range of the RM1.96 billion it actually posted.
UOB Kay Hian Research estimated Maxis’ full-year net profit would hit RM1.98 billion, while MIDF Research and JF Apex Securities had slightly more conservative estimates of RM1.88 billion and RM1.72 billion, respectively.
For the full year, Maxis’ prepaid revenue jumped 6.2% to RM4.18 billion, despite its prepaid subscriber base falling by 57,000 to 9.57 million subscribers.
“The high services revenue growth of 3.8% was driven by very high growth on prepaid. That growth … was mainly driven by more people using data-related services, and also by our higher share of the migrant market,” said Lundal.
To view his video message, click below:
The year also saw its postpaid customer base decline by 162,000 subscribers. However, that did not deter its revenue growth momentum.
During the fourth quarter, postpaid mobile revenue jumped 2.6% to RM1.01 billion. For the full-year period, postpaid revenue rose 0.5% to RM3.93 billion.
Although its overall postpaid subscriber base declined, Maxis said it was encouraged to see that its MaxisOne Plan was gaining momentum.
During the fourth quarter, it added more than 100,000 MaxisOne Plan customers, bringing the total to over 623,000.
It is interesting to note that the MaxisOne Plan customer base is generating average revenue per user (ARPU) of approximately RM150.
The plan comes in four packages, with monthly fees of RM98, RM128, RM158 and RM188. The plan also allows customers to subscribe to a 10Mbps Home Fibre Internet package for RM128 a month, as opposed to the normal fee of RM148.
Since the MaxisOne Plan is generating ARPU of around RM150 a month, it would imply that most customers are either on the higher-end packages, or are subscribing to the Home Fibre Internet service.
As at December 2015, Maxis managed to grow its Home Fibre Internet customer base to over 118,000.
“While the number is not high, it is nevertheless a growing group of high-ARPU customers and a group which is likely to stay longer as customers,” said an analyst from a local bank-backed research house.
Claiming LTE leadership
In 2015, Maxis spent over RM1.3 billion on capital expenditure (2014 capex: RM1.08 billion), a significant portion of it going into widening its Fourth Generation Long-Term Evolution (4G LTE) network coverage.
As at end-2015, the company said its LTE network covered 71% of the population, while its 2G and 3G networks had 96% and 92% population coverage, respectively.
“We have an intense focus on providing the best data network,” Lundal said in his video message.
“Our 4G LTE network has doubled to over 70% population coverage. That’s making us No 1 in 4G LTE.
“We are happy to be rewarded with happier customers now. We have the highest customer satisfaction we have ever seen in various channels, and our customer complaint level is now at its lowest in a decade,” he claimed.
Voice making a comeback
Besides its declining prepaid and postpaid mobile subscriber base, Maxis also experienced a decline in wireless broadband subscribers (those with the wireless USB dongle) to 325,000. In the first quarter of 2013, it had more than 673,000 wireless broadband subscribers.
The fourth quarter also saw a decline of 200,000 mobile Internet users to 8.8 million, versus nine million in the third quarter.
Also, just when one thought voice is dead, its prepaid customer base indicates that voice still matters. In 2013, its prepaid customers spent 116-125 minutes a month on voice calls; in 2015, they spent 126-134 minutes on voice calls a month.
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