Celcom touts operational excellence as driver for growth into 2020
By Digital News Asia March 16, 2020
- Intensify focus on profitability & operational excellence with smart investments
- Accelerate IoT, 5G adoption across industries to transform into digital entities
Celcom Axiata Bhd (Celcom), highlighs its ongoing pursuit of operational excellence as paving the way for the telco to venture into new potential areas of growth in 2020.
For 2020, the operator says it will further intensify its focus towards profitability and operational excellence with smart investments towards providing the best digital infrastructure and services.
Tangible results from this operational excellence and profitability focus saw Celcom enjoying savings of US$66.1 million (RM283 milion) across internal operations in FY19 while recording a 7.8% increase year to date (YTD) in EBITDA to US$490 million (RM2.1 billion) whilst margin improved 4.7 percentage point to 30.6%.
Idham Nawawi, Chief Executive Officer of Celcom said its initiatives in FY19 have provided a great platform to continued success in FY20, driving growth through innovation, digitisation and new business areas.
“Moving forward, Celcom will remain focused on Operational Excellence and cost optimisation. We will invest smartly to enhance our network infrastructure and increase efficiency. We look forward to maintaining our industry leadership position for the largest network in Malaysia and deliver the best experience and value to our customers.”
Both enterprise and home segments will see continued strong focus. “We will drive growth from the Enterprise and Home segments with exciting new innovative products including gaming and virtual reality (VR) entertainment. For Enterprise, we will continue to pursue collaborations with technology partners and platform providers to deliver high-quality end-to-end IoT solutions and applications to SMEs, corporations and Government customers in Malaysia,” says Idham.
Celcom has been leading the way in 5G trial services with the aim to deliver end-to-end solutions using Internet-of-Things (IoT) and Artificial Intelligence (AI) technologies. Its 5G journey in Langkawi was conducted with the exploration of seven real 5G use-cases using 5G technology and AI solutions, in collaboration with various local authority agencies such as Langkawi’s Royal Malaysian Police and Langkawi Municipal Council, with the aim of enhancing daily operations via 5G technology.
Furthermore, in support of Petaling Jaya City Council’s (MBPJ) ambition in creating a smart, sustainable, conducive, and resilient city for its urban communities, Celcom brings the adoption of 5G technology with its 5G Intelligent City and Public Safety solution use-cases. Celcom’s collaboration with MBPJ using 5G technology, aims to pave the way for a revolution in daily operations concerning traffic management and public safety by other local councils.
More recently, in an effort to offer consumers the best value, Celcom introduced an innovative offering that allows both prepaid and postpaid consumers to enjoy cashback and savings, via Boost e-wallet. Celcom MEGA™ offers postpaid consumers to trade in unused Internet Quota for cashback, while Celcom Xpax prepaid consumers will enjoy 10% cashback for reloads purchases RM10 and above, via the Celcom Life App.
Celcom’s network is currently serving around 13 million users comprising subscribers both from Celcom’s own brands and Mobile Virtual Network Operators (MVNO). In FY19, Celcom’s 4G population coverage rose to 93% whilst 4G LTE-A coverage to 81% compared to 91% and 78% respectively.
HIGHLIGHTS OF CELCOM’S FY19 RESULTS:
In FY19, Celcom recorded more than 100% surge in PATAMI at RM813 million and FCF grew 21.9% lifted by EBITDA expansion whilst Capex scaled down by 3.6%. YoY EBITDA improved by 7.8%, whereas the YoY PATAMI improved by 14.1%. Celcom’s cost optimisation achieved a savings of RM283mil through the implementation across internal operations.
A result from a strong focus on profitable products with the best value recorded a 7.8% increase year to date (YTD) in EBITDA to RM2.1 billion whilst margin improved 4.7 percentage point to 30.6%.
[RM1 = US$0.23]
Celcom maintained a flat Total Revenue (-0.1% YoY) and Mobile Service Revenue (-0.5% YoY), when normalised for wholesale and interconnect impact. The telco’s focus on products that offer the best value for customers maintained its Average Revenue Per User (ARPU) in postpaid and prepaid with RM86 and RM36 as compared to the previous year. The postpaid segment revenues in FY19 stood at RM2.548 billion, up by 6.3% YoY against a flat subscriber base. In FY19, Celcom also focused more on profitable segments rather than on device sales as smartphone penetration rose to 84% in FY19 due to a stronger device sales push in FY18 with 78%.
Celcom continues to maintain its leadership position in Network and was ranked No.1 for 4G Availability in Malaysia, in Open Signal’s ‘Mobile Network Experience: Malaysia’ report, in September 2019 (nationwide at 87.7%). Celcom’s strong network recorded a 31.7% YoY increase in average data usage to 13.7GB per month per sub in FY19.
Celcom is also leading the industry on Customer Experience with an overall rNPS (relationship Net Promoter Score) scores at 12 points which is 4 points higher than the second-best competitor (according to Nielsen W219 NPS Report). The company has been focussing in providing end-to-end digital experiences to customers, resulting with high growths in all digital customer engagement metrices. Celcom Life App ratings stand at 3.7 Points on Google Play Services and has recorded 224% YoY growth in App Transactions, 68% YoY growth in Consumer App Usage and 19.9 percentage point YoY growth in app penetration in subscriber base in FY19.
“Celcom’s continuous digital transformation journey to become the nation’s ‘Most Inspiring Digital Organisation’, will leverage on increased adoption of AI applications and robotic process automation for both internal and customer facing processes. By enabling digitisation across industries in Malaysia, supported by cost-efficient rollout for 5G with new innovative services, we aim to create a ‘win-win-win’ situation that will benefit the rakyat, the government and the digital ecosystem,” Idham concluded.