2014 in Review: The telco battleground: Page 2 of 2
By Goh Thean Eu December 31, 2014
Below is a recap of some the key moments in the telco space in 2014 (in no particular order):
TM buys P1
Just before the end of the first quarter, one of corporate Malaysia's worst-kept secrets was finally out as TM announced that it was buying a controlling stake in P1. It was the biggest corporate deal involving the Malaysian telco sector this year.
The deal saw TM buying a 57% stake in P1 for RM350 million. TM said it would also invest up to RM210 million into Green Packet via newly issued redeemable exchangeable bonds. These bonds can be exchanged for Green Packet’s stake in P1 in the future, possibly resulting in TM having a bigger stake in P1.
The deal, which received mixed reactions from analysts, was concluded on Sept 30, 2014.
Not long after the deal was finalised, TM announced P1’s new board members and key management line-up.
TM group chief executive officer (CEO) Zamzamzairani Mohd Isa is serving as P1’s chairman. Other TM executives on the board include chief strategy officer Dr Farid Mohamed Sani, consumer executive vice president Imri Mokhtar, and chief technology and innovation officer Giorgio Migliarina.
P1 board members also include SK Telecom executive vice president Park Jung Ho, Green Packet’s new CEO Tan Kay Yen, and P1 CEO Puan Chan Cheong.
Maxis regains prepaid momentum
Maxis CEO Morten Lundal’s plan to rejuvenate its prepaid business is starting to bear fruit. The company, which saw a few consecutive quarters of decline in both prepaid revenue and subscribers, registered quarter-on-quarter growth in both metrics in the third quarter of 2014.
For the third quarter ended Sept 30, 2014, prepaid revenue gained 2% to RM992 million, versus RM972 million in the second quarter 2014. Prepaid customer base also grew to 9.08 million, from 9.04 million in the second quarter.
While it appears that the decline in its prepaid customer base has been arrested, Maxis’ postpaid subscriber base did not experience similar joy.
As at the third quarter (Q3) of 2014, its postpaid subscriber base declined to 3.34 million, versus 3.36 million in Q3 2013. Q3 was also its sixth consecutive quarter of decline (since Q2 2013).
It will be interesting to see if Maxis can sustain its momentum in 2015.
Celcom CEO the new MAS head?
For a good few months, there was speculation that Celcom’s Shazalli (pic) would take on the role of CEO at loss-making Malaysia Airlines.
Not surprising, since he is the key person behind the revival of Celcom. When Shazalli joined Celcom in 2005, the company’s market share was at an all-time low – at one point, it was the third largest player behind Maxis and DiGi.
In less than 10 years, he managed to transform Celcom from a laggard into a leader – in some spaces, at least.
He also managed to drive Celcom to new heights, registering more than 30 consecutive quarters of growth.
This is worth shouting about, especially since Celcom is battling in a highly competitive space, as well as in a market that is already saturated.
The good news for Celcom employees was that the rumours of him taking on the Malaysia Airlines role turned out to be false, with Christoph R. Mueller finally being named – although Shazalli has been appointed one of the airline company’s non-executive directors.
DiGi appoints new CEO
DiGi, Malaysia’s third largest mobile operator, saw Lars-Ake Norling taking on the role of CEO on Aug 1. The former Telenor Sweden CEO replaced Henrik Clausen, who took on a new senior role in the Telenor Group.
All eyes are now on Norling and whether he can continue DiGi’s strong momentum in 2014, and more importantly, 2015 and beyond.
U Mobile profitability
U Mobile Sdn Bhd, the fourth largest mobile operator in Malaysia, made headlines when it said it believes it would soon be operationally profitable.
Although the company recorded a net loss of RM363.24 million in 2013, this was certainly an improvement over the RM444.44 million net loss it recorded in 2012. During the same period, revenue almost doubled to RM919.17 million, versus RM470.93 million in 2012.
Its CEO Wong Heang Tuck said that its loss before interest, tax, depreciation and amortisation was above RM200 million in 2013, and it is looking at “more than half of a reduction” this year.
“At this point in time, we are on the verge of becoming EBITDA positive,” he said.
Wong also said then that U Mobile had more than five million subscribers. MCMC data shows that U Mobile had 4.5 million subscribers in 2013.
redONE’s postpaid victory
Based on data provided by the top three mobile operators, they all experienced declines in their postpaid customer base in 2014.
As at Q3 2014, Maxis’ postpaid subscribers fell to 3.34 million versus 3.37 million at end-2013; Celcom’s numbers dropped marginally to 2.92 million versus 2.93 million in 2013; and DiGi remained unchanged with 1.70 million.
So where did their postpaid subscribers go to? One possible answer would be Red One Networks Sdn Bhd, the country’s first postpaid mobile virtual network operator (MVNO).
The company, operating under the brand redONE, claimed that it has been registering monthly postpaid net additions of more than 15,000.
“Early this year, we were achieving monthly net adds of about 15,000. In August, it passed the 40,000 mark,” redONE CEO Farid Yunus told Digital News Asia (DNA).
The company hopes to have more than 500,000 subscribers by the end of this year, and is aiming for one million subscribers by end-2015.
Axiata launches startup fund
Meanwhile, Axiata announced the establishment of the US$30-million Axiata Digital Innovation Fund (ADIF) with Malaysia Venture Capital Management Bhd (Mavcap).
Axiata’s move differs from those of other telcos which are looking into the startup space. SingTel created its own venture fund SingTel Innov8, while Telenor has been birthing startups from within its corporate structure through a separate entity, Telenor Digital, besides making investments in Internet companies.
ADIF, which is the largest digital corporate venture capital fund in Malaysia, will focus on companies offering enterprise and consumer services that can enhance and add value to Axiata’s 250 million customers across Asia, the company said.
Celcom CEO: 2014 will be the ‘Year of Battles’
Malaysia’s mobile space: No 1 position up for grabs
Telco Deep Dive: No clear winner in Malaysia’s LTE race
Telco Deep Dive: Q&A with the Big 3 (Part 1)
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