Celcom CEO: 2014 will be the ‘Year of Battles’
By Goh Thean Eu March 5, 2014
- Plans to almost triple its LTE presence in 2014
- Breaches RM8-billion revenue mark for first time
CELCOM Axiata Bhd, a wholly-owned unit of Axiata Group Bhd, expects 2014 to be the ‘Year of Battles’ for mobile operators, according to its chief executive officer Shazalli Ramly (pic).
“When the gap amongst the players is closing down, competition will be intense.
“We believe this will be the year of battles, where all of us (mobile operators) will be fighting for a share of customers' emotions and … customers' wallets," he said during a media briefing on the company’s financial results on March 4.
The mobile telecommunications landscape has seen drastic changes over the past few years. There have been an increasing focus on growing the data business, changes in the top management of telcos, as well as changes in market leadership in certain segments.
Celcom, which at one point was a laggard in the local mobile industry, now has the largest slice in terms of subscriber base, and is creeping up on long-time market leader Maxis Bhd in terms of revenue.
As at end 2013, Celcom has some over 13.1 million subscribers, versus the 10.99 million subscribers with DiGi.Com Bhd and 12.9 million subscribers with Maxis.
Nevertheless, Shazalli played down Celcom’s achievements and said there was still plenty of room for improvement behind these numbers.
“Yes, we have the largest subscriber base now, but if you look at the average revenue per user (ARPU), there are areas in which we are still behind,” he said.
For 2013, Celcom has a blended ARPU of RM47, comprising a postpaid ARPU of RM88 and prepaid ARPU of RM36.
In contrast, Maxis has a blended ARPU of RM47 (comprising a postpaid ARPU of RM101 and prepaid ARPU of RM31), while DiGi has a blended ARPU of RM48 (comprising RM83 in postpaid ARPU and RM41 in prepaid ARPU).
Aggressive LTE plans
This year, Celcom will also be expanding its LTE (Long-Term Evolution) sites aggressively. So far, it has over 700 LTE sites up and running, and aims to have 2,014 LTE sites by the end of the year.
Expanding LTE coverage is part of the company’s RM1-billion capital expenditure (capex) plans for 2014.
“Our capex for this year will be not more than RM1 billion. From the amount, about 20% will be allocated for LTE,” said deputy chief financial officer Jennifer Chui Fen Wong (pic).
About 65-70% of Celcom’s total capex will be allocated for improving its network, while another 20% will be used to improve quality of services. This includes its IT transformation programme, which is now at its tail-end.
The company invested RM923 million in capex in 2013, a slight decrease compared with the RM949 million it spent in 2012.
In 2013, Celcom registered a 3.7% growth in revenue to RM8.02 billion, the first time it breached the RM8-billion revenue mark.
[RM1 = US$0.30]
In terms of earnings, the company’s normalised net profit rose to RM2.28 billion, representing a 10.4% growth. Normalised net profit means that the earnings exclude holding company charges, interest/ charges on its Islamic bonds, additional accelerated depreciation for modernisation, and other charges.
Not surprising, the main growth driver for revenue and earnings was its data business. Revenue for its broadband rose 18% to RM1.09 billion against RM927 million in 2012, while the number of broadband subscribers rose 17% to 1.22 million.
Meanwhile non-voice revenue, which includes data and SMS revenue, rose by 3% to RM2.74 billion.
Although there was a year-on-year growth in its subscriber base, Celcom revealed that there was a slight dip in its subscriber base in the fourth quarter compared with the third quarter of 2013.
“The decline was mainly due to rotational churners, who are mainly foreign workers. But the good news is, in terms of domestic customers, the numbers are stable,” claimed Chui.
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