Postpaid: Big 3 enhanced offers to stay competitive
Despite already rich quotas, Maxis added 10GB (10-25%) of quota and removing base/YouTube quota splits to bring its offers in line with/slightly more attractive vs. peers. In response, Digi raised Postpaid 60/120/150 quotas by 5GB (6-20%) and Celcom raised Xpax Postpaid 40/60 base quotas by 2/4GB (25%; albeit with 3-5% price hikes), bringing their offers back on par to slightly more attractive vs. Maxis. Both Maxis/Celcom extended their attractive monthly rebates (over 4-6 months) for online sign-ups till Mar-May 22. On the positive side, U Mobile removed the RM10/month discount on its GX68 unlimited plan.
Prepaid: Maxis notches up offers, triggering a reaction from Digi
While Maxis dialled back slightly on the lower-usage segment by raising minimum reloads, it raised the attractiveness of Hotlink Prepaid Fast (now most attractive low-end plans in the market). In response, Digi raised NEXT 15/30 quotas by 3-5GB (33-100%) and added unlimited social quota plus 1-3GB of hotspot quota, bringing its offers back on par/slightly less attractive vs. Maxis. We are encouraged by U Mobile’s move to drive up ARPU via a new U35 (RM35/month) Unlimited plan and removing its GX30 offer (RM30/month).
Broadband: Astro TV-fibre bundles not a major concern
Astro is offering RM4-39/month (1-26%) rebates for its TV pack and Maxis’s/Allo’s fibre bundles. While this may slightly help with traction for Maxis’s and Allo’s fibre plans, it is unlikely to shake up competition in a major way as it may appeal to only a niche segment of subs, in our view. Meanwhile, ViewQwest’s new business fibre plans, while competitive vs. peers, should not pose a competitive threat in the near-term due to its limited coverage.
Mobile revenue fell 1% qoq, while fixed was up a good 13% qoq
4Q21 mobile industry service revenue eased 0.6% qoq (+1.9% yoy) mainly due to one-off ARPU dilution from Digi’s billing platform migration and Maxis’s 3G sunset. Celcom’s revenue market share (RMS) resumed its gains (+1.0% pt qoq), further narrowing its gap vs. Maxis. In the fixed-line business, TM’s revenue rose a robust 12.5% qoq (+5.1% yoy). Unifi net adds stayed robust, while ARPU surprised positively, rising 2.2% qoq.
Reiterate Underweight on Malaysian telco sector; top pick: TM
There is downside risk to our Malaysian telcos’ earnings forecasts if the government decides to proceed with its 5G single wholesale network (SWN) rollout plan via DNB, which is the key potential de-rating catalyst. We prefer the fixed to mobile segment due to better revenue growth prospects, more benign competition and less regulatory risk. TM remains our top Malaysian telco pick. Key upside risks: lower 5G wholesale fees, cancellation of SWN or MNOs offered equity stakes in DNB