Maxis 2020 Financial Results Reflects Challenges Facing The Industry

Maxis Is Ahead Of Schedule For 3G Sunset

Despite the stay at home order for the most part of 2020 and many Malaysians spending more time than usual on their mobile devices, Maxis’ latest financial report did not reflect this observation. In fact the telecommunication service provide saw a decline in revenue pointing to a larger concern facing the whole industry in terms of mobile revenue.

Maxis recorded RM8.9 billion in revenue compared to RM9.3 billion in 2019, its prepaid user base continue to decline from 6.2 million to 5.9million however to only bright spot will the growth of its fibre to home service. Indisputably last year was challenging for all industries when the country went into lockdown, but there was anticipation that network operators would benefit from increased usage, however this seems not to be the case.

During the period all telco’s were called in to assist Malaysians go through the difficult days in providing free 1GB per day offering so that people and businesses remained connected at home. Maxis also provided free use of businesses continuity tools, digitalisation support for SMEs, connectivity services for frontliners and food and PPE aid for impacted communities.

Its data traffic surged during the 4th quarter, on a blended basis, Maxis customers used an average of 20.75GB a month, an increase of 38.42% year-on-year. During this time Maxis invested RM504 million in network capacity to support data traffic growth, as well as investment in fibre and enterprise growth, bringing its total capex to RM1.25 billion for the year.

Overview of Q4 Financial highlights

  • Postpaid subscriber base expanded by 4.0% to 3.5 million customers however revenue posted a slight dip of 2.2% to RM967 million attributed to a decrease in Mobile Termination Rate (MTR) and lack of international roaming income due to MCO since March 2020. Monthly ARPU remained at RM83 but experienced a dip from RM90 in Q4 2019. Prepaid under pressure with contraction in subscription by 4.4% to 6.0 million customers and lower ARPU at RM39 due to the continued SIM consolidation, revenue declined 11.1% to RM696 million.
  • Home connectivity was the bright spot with 21.8% increase in fibre and wireless subscribers year-on-year, bringing its base total to 570k. Fibre connections continues to grow in subscriber base and revenue, adoption of MaxisONE Prime converged packages and ongoing conversion to higher speed packages of 300, 500 and 800 Mbps resulted in 20.3% increase in subscribers to 444k subscribers and an 18.0% increase in revenue to RM144 million.
  • The ARPU remained stable at RM107. Additionally, Maxis saw continued strengthening of wireless connection segment.  The new Fixed Wireless Broadband Access 4G/LTE home routers service which were initially introduced as a temporary solution during the initial MCO in 2020, when installations could not take place has since evolved as a solution to customers not in fibre coverage area and registered strong growth during the quarter. Subscriptions increased by 27.3% to 126k and revenue grew by 16.7% to RM35 million.

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