KUALA LUMPUR: Celcom Axiata Bhd may have delivered what its management termed a ?promising? first quarter, but the challenge remains in Curbing the outflow of subscribers amid intensifying competition in the telecommunications space. Celcom ? the largest profit contributor to Axiata Group Bhd for the year ended Dec 31, 2016 (FY16) ? saw its net profit for the first quarter of FY17 (1QFY17) slump 34.03% to RM194.47 million from RM294.79 million a year earlier. This came as revenue slid 3.42% to RM1.61 billion from RM1.66 billion in 1QFY16, added with higher interest, depreciation and amortisation costs. Quarter-on-quarter (q-o-q), revenue dipped 2.2% from RM1.64 billion in 4QFY16. Deputy chief executive ******r Azwan Khan said the decline was smaller than that of the industry. ?Total industry revenue [comprising the top three telcos] was down 3.4%. So from the total industry's point of view, we have actually grown market share by around 0.5%,? he told a media briefing yesterday. One of the contributors may be its decreasing subscriber base. Celcom has 10.2 million customers, down 15% year-on-year (y-o-y) from 12 million in 1QFY16. Compared with 4QFY16, the figure is 2.86% lower, mainly after Celcom terminated 400,000 prepaid numbers that had been inactive for more than two years, and partly from the 0.5% q-o-q decline in post-paid subscribers. ?There is a lot of intense competition in the post-paid space, even down to the RM48, RM38 [packages]. We do **t want to go down to that level, where we have to compromise on the customer experience,? Azwan said, but did **t discount the possibility of cutting down its prices eventually. Celcom?s post-paid plans, relaunched in 4QFY16, are priced at between RM80 and RM150. The new management, appointed in mid-2016, **ted that one of the objectives of the group was to stabilise market share decline in 1QFY17 and to grow it further by the end of FY17. However, as it refrains from providing lower prices and competitors ?releasing revised packages week in, week out?, Azwan said Celcom?s key selling point will be its consistent service quality. One way of keeping its market share seems to revolve around improving its network coverage this year. ?We believe our products have the best value for money. When we say it is 4G, it is good 4G,? said Azwan. The company is spending 70% of its RM1.5 billion capital expenditure for FY17 to expand its nationwide LTE network coverage to 85% population by end-2017. Its 4G coverage stands at 77% currently. Meanwhile, higher data revenue may leave Celcom with something to cheer about. Overall data revenue surged 29.8% y-o-y to RM661 million in the period, contributing 41% of Celcom?s total revenue. Amid difficulties in attracting new customers, Azwan said Celcom will also go back to current customers with more value-added service packages. ?It is **t about chasing numbers for numbers? sake. The focus will be on one-to-one margin, and monetising the existing base, and continue to provide new features in our products,? he said. Other efforts being undertaken as part of Celcom?s turnaround strategy include managing its operating expenses, improving its dealership networks, revamping and digitising its customer service experience, and streamlining its product line.
05-31-2017, 09:44 AM
Curbing subscriber outflow remains a challenge for Celcom
KUALA LUMPUR: Celcom Axiata Bhd may have delivered what its management termed a ?promising? first quarter, but the challenge remains in Curbing the outflow of subscribers amid intensifying competition in the telecommunications space. Celcom ? the largest profit contributor to Axiata Group Bhd for the year ended Dec 31, 2016 (FY16) ? saw its net profit for the first quarter of FY17 (1QFY17) slump 34.03% to RM194.47 million from RM294.79 million a year earlier. This came as revenue slid 3.42% to RM1.61 billion from RM1.66 billion in 1QFY16, added with higher interest, depreciation and amortisation costs. Quarter-on-quarter (q-o-q), revenue dipped 2.2% from RM1.64 billion in 4QFY16. Deputy chief executive ******r Azwan Khan said the decline was smaller than that of the industry. ?Total industry revenue [comprising the top three telcos] was down 3.4%. So from the total industry's point of view, we have actually grown market share by around 0.5%,? he told a media briefing yesterday. One of the contributors may be its decreasing subscriber base. Celcom has 10.2 million customers, down 15% year-on-year (y-o-y) from 12 million in 1QFY16. Compared with 4QFY16, the figure is 2.86% lower, mainly after Celcom terminated 400,000 prepaid numbers that had been inactive for more than two years, and partly from the 0.5% q-o-q decline in post-paid subscribers. ?There is a lot of intense competition in the post-paid space, even down to the RM48, RM38 [packages]. We do **t want to go down to that level, where we have to compromise on the customer experience,? Azwan said, but did **t discount the possibility of cutting down its prices eventually. Celcom?s post-paid plans, relaunched in 4QFY16, are priced at between RM80 and RM150. The new management, appointed in mid-2016, **ted that one of the objectives of the group was to stabilise market share decline in 1QFY17 and to grow it further by the end of FY17. However, as it refrains from providing lower prices and competitors ?releasing revised packages week in, week out?, Azwan said Celcom?s key selling point will be its consistent service quality. One way of keeping its market share seems to revolve around improving its network coverage this year. ?We believe our products have the best value for money. When we say it is 4G, it is good 4G,? said Azwan. The company is spending 70% of its RM1.5 billion capital expenditure for FY17 to expand its nationwide LTE network coverage to 85% population by end-2017. Its 4G coverage stands at 77% currently. Meanwhile, higher data revenue may leave Celcom with something to cheer about. Overall data revenue surged 29.8% y-o-y to RM661 million in the period, contributing 41% of Celcom?s total revenue. Amid difficulties in attracting new customers, Azwan said Celcom will also go back to current customers with more value-added service packages. ?It is **t about chasing numbers for numbers? sake. The focus will be on one-to-one margin, and monetising the existing base, and continue to provide new features in our products,? he said. Other efforts being undertaken as part of Celcom?s turnaround strategy include managing its operating expenses, improving its dealership networks, revamping and digitising its customer service experience, and streamlining its product line.
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