19% YoY growth in data revenue, pushed by 51% growth in mobile Internet
Ongoing IT transformation exercise limited its ability to launch new services
CELCOM Axiata Bhd reported second-quarter 2014 (Q2 2014) revenue of RM1.95 billion, an increase of 2% from the previous quarter’s revenue of RM1.91 billion, with a year to date (YTD) revenue of RM3.86 billion.
[RM1 = US$0.31]
Service revenue grew 1% quarter-on-quarter, predominantly driven by mobile virtual network operators (MVNOs) servicing overseas foreign workers (OFW) customer segments, the company said in a statement.
Celcom’s data revenue, its fastest growing segment, cushioned the decline in basic voice and SMS revenue, growing 10% from the previous quarter, with a Year-on-Year (YoY) growth of 19% for its year to date.
Data revenue contributed 20% of the YTD total revenue from 16% in 2013, pushed by a 51% growth in mobile Internet revenues.
Celcom posted a 7% rise in mobile broadband revenue in Q2 2014, hitting RM326 million compared with RM265 million for the same period in 2013. It also reported a 21% increase in mobile broadband YTD revenue to RM630 million.
Celcom said its effective acquisition drive and retention initiatives contributed to the increase in its customer base to 13.4 million, which it claimed was the highest in the country.
Q2 2014 also saw sales of smart devices almost doubling from the previous quarter. Smartphone penetration rose to 37%, an increase it attributed to its efforts in coming up with attractive data bundle packages with advanced smartphones and applications to suit customers’ needs.
Overall, total non-voice revenue showed an improvement of 5% compared with the last quarter.
Celcom maintained a quarterly EBITDA (Earnings Before Interest, Tax, Depreciation And Amortisation) of RM846 million, and a stable EBITDA margin of 43.4%.
Its quarterly PATAMI (Profits After Tax, Amortisation and Minority Interests) increased 0.6% to RM518 million.
Celcom said it would continue with its smarter spend, focusing especially on discretionary expenditure.
Operationally, its ongoing IT and business transformation exercise aims to facilitate seamless integration across multiple channels to enhance customer experience. The exercise has limited the launching of new products, and will be addressed in a phased approach to be concluded in 2014, the company said.
During the period under review, Celcom continued to work with IT and business transformation experts to address matters surrounding its transformation agenda.
The efforts include implementing system fixes, enhancements and stability. Celcom said it will see overall improvements in the stability of the platforms and environments which would lead to greater confidence in its operating systems and enable it to roll out new products and services to the market.
“Celcom is undergoing a major transformation of business from people, process and technology perspectives,” said its chief executive officer Shazalli Ramly.
“As such, each aspect of the business is being revamped to create better customer experiences and establish platforms for growth. It is a major undertaking and it spans all our touch points – dealers, customer care and retail outlets.
“As part of any major transformation of this sort, some business interruption is expected because it takes some time to operationalise the new and improved processes and systems. We have completed the two-year project and are at the tail end of the stabilisation period,” he added.
This year, Celcom will be investing about RM250 million to improve its QoS (Quality of Service) and address industry issues including dropped calls, congestion and the quality of broadband services, the company claimed.
In addition, its LTE (Long-Term Evolution) rollout is progressing well and the steady progress in network optimisation and LTE expansion is in line with the growing demand for data, it added.
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