KUCHING: Maxis Bhd (Maxis) aims to grow its enterprise business in the home segment although the detailed roadmap is yet to be finalised.
According to analyst Cheow Ming Liang from the research arm of Kenanga Investment Bank Bhd (Kenanga Research), Maxis plans to focus on providing pure fibre services (by riding on Telekom Malaysia Bhd’s backhaul) to the enterprise segment while awaiting for the commercial negotiation with Astro Malaysia Holdings Bhd to be finalised by year-end.
“Although the detailed strategy roadmap is yet to be ironed out, we understand that the group plans to tackle its one million corporate customers and provide total customised solution services for both the fixed as well as mobile users,” Cheow explained after a corporate visit to the group, adding that such services include cloud computing, managed services capabilities and others.
Moving on to the group’s smartphone penetration rate, the analyst highlighted certain areas with room for improvement.
The group’s blended smartphone penetration rate stood at 48 per cent as at end-second quarter of 2014 (end-2Q14) versus 43 per cent in 1Q14.
“Its penetration rate in the prepaid segment, meanwhile, was merely 43 per cent compared to 64 per cent in the postpaid division, thus suggesting room for growth underpinned by more affordable smartphones being introduced by phone makers,” the analyst affirmed.
He noted that Maxis’ device sales will remain low moving forward after the group outsourced this operation to Brightstar.
In regards to spurring data usage, Cheow highlighted Maxis introducing various entry level data plans as well as embarking on aggressive market campaigns to encourage smartphone users to switch on their data plan.
“By introducing more worry-free data packages, Maxis believes it could drive mobile Internet usage higher, where the group has merely recorded 64 per cent in the prepaid and 60 per cent in the postpaid segments as at end-2Q14.
“With these efforts, management expects data revenue to mitigate the deteriorating voice and SMS revenues in coming years.
“We expect the group’s data revenue to exceed its voice and SMS revenues by early financial year 2017 (FY17),” the analyst projected.
Although management has yet to finalise the capex plan for FY15, Maxis is targeting to spend a similar quantum, Cheow said, maintaining at the RM1 billion mark as the current financial year.
“Key capex spend in FY15 will be continued focus on network modernization and coverage expansion while the balance or circa 25 per cent is expected to be allocated for IT as well as the billing system,” the analyst added.
Overall, Kenanga Research observed that Maxis is still sailing the transformation wave where the group is working to regain its leadership in the prepaid segment by repositioning and as re-pricing its products.
“This is to ensure its products remain attractive and more relevant to the youth and urban segments. Meanwhile, the group is also taking various approaches to reassess its sales and distribution network,” Cheow explained.
The research arm reiterated its ‘market perform’ call on Maxis with unchanged target price of RM6.87 per share.