U Mobile’s aggressive 5G network rollout weighed heavily on its FY2025 financial performance, with core net losses widening sharply and leverage rising, even as the telco continued to gain mobile revenue market share, according to CIMB Securities.
U Mobile’s headline net loss widened 124% year-on-year to RM1.62 billion, partly due to RM1.03 billion in accelerated depreciation associated with the deployment of its new 5G network, compared with RM489 million a year earlier.
Core net loss widened 163% to RM595 million. Excluding interest costs related to shareholders’ advances and redeemable convertible preference shares, the core loss stood at RM383 million, compared with RM19 million in FY2024.
The impact was also evident at operating level, with EBITDA falling 38% to RM773 million and EBITDA margin contracting 15.2 percentage points to 22.2%.
CIMB said the weaker performance was likely driven by higher network and device costs as well as possible one-off charges.
Despite the earnings pressure, U Mobile continued to gain commercial traction. Its mobile service revenue grew 5% year-on-year, outperforming CelcomDigi, which recorded a 1% decline, and Maxis, where revenue was broadly flat.
As a result, U Mobile’s mobile revenue market share increased 0.8 percentage point to 17.4% in FY2025, extending a longer-term increase from just 2.1% in FY2012.
CIMB said the growth may have been partly supported by U Mobile’s expansion in East Malaysia, where the company has invested in improving distribution and network coverage.
Sales of goods also climbed 41%, following a 38% increase in FY2024, indicating stronger traction for device-bundled postpaid and 5G broadband plans.
5G Investment Pushes Up Leverage
The expansion came with a substantial increase in investment.
U Mobile’s capitalised capital expenditure, excluding spectrum costs, jumped more than sixfold to RM1.23 billion in FY2025, driven primarily by its 5G network rollout since mid-2025.
The investment was funded through additional term loans, vendor financing and short-term trade credit.
Excluding shareholders’ advances and preference shares, net debt rose 25% to RM3.38 billion at end-FY2025.
Combined with weaker EBITDA, U Mobile’s net debt-to-EBITDA ratio doubled to 4.4 times, compared with 2.3 times for CelcomDigi and 1.9 times for Maxis, according to CIMB.
Free cash flow to equity also turned negative at RM251 million, compared with positive RM123 million in FY2024.
Mawar Setia Takes Control
U Mobile’s ownership structure also changed materially during 2026.
Mawar Setia became the company’s largest shareholder following the completion of its share purchase agreement with Singapore Technologies Telemedia on March 17.
Based on U Mobile’s register of members as at May 11, Mawar Setia held a 50.2% stake, while Singapore Technologies Telemedia’s interest through Straits Mobile Investment declined to 20.7%.
Mawar Setia is 70%-owned by Tan Sri Dato’ Seri Vincent Tan and 30%-owned by YAM Tunku Tun Aminah Binti Sultan Ibrahim Ismail.
Other substantial shareholders cited by CIMB include Yang di-Pertuan Agong Sultan Ibrahim with 11.7% and Magnum Bhd with 6%.
The key tension for U Mobile now is clear: its 5G expansion is helping it gain market share, but the investment required to build out the network is placing significant pressure on earnings, cash flow and leverage in the near term.
