KUCHING: The two new higher-priced postpaid plans from Axiata Group Bhd’s wholly-owned telecommunications (telco) unit – Celcom Axiata Bhd (Celcom) – are unlikely to gain much traction from its telco peers.
AmInvestment Bank Bhd (AmInvestment Bank) yesterday said it does not expect the two new plans to gain much traction from peers due to a lack of product differentiation of what’s currently available in the market.
Being branded as premium plans, Celcom’s new postpaid plans are the First Gold Supreme coming in at RM128 per month for 25GB on weekdays and 25GB on weekends, 25GB free video walla and unlimited calls; and the First Platinum Plus at RM188 per month for 100GB data, 100GB free video walla and unlimited calls and SMS.
While the plans offer better value for money in terms of data quota when compared to Maxis Bhd’s RM128 per month plan for 15GB all-day and 15GB weekend quota and its RM188 per month for 25GB all-day and 25GB weekends, it still falls short when compared to the unlimited data products on the market.
For example, Digi is still offering unlimited internet quota for its RM158 per month plan while both U Mobile and Webe are offering unlimited data at RM78 and RM79 per month, respectively.
U Mobile’s RM78 unlimited data plan also includes free data roaming.
The bank went on to highlight that even the four newly launched internet-based prepaid plans from Celcom’s prepaid provider was unable to match up with the competitive offers from U Mobile and Webe.
“This offer comes hot on the heels of four recently launched internet-based prepaid plans, which include 2GB for RM5 per day, 500MB for RM6 per week and 5GB for RM19 per week and a monthly option at RM79 which offers 15GB of base data quota, 15GB Video Walla and Unlimited Music Walla,” said the bank.
Besides that, the bank also said Celcom’s new offers are also too expensive to excite their current customer base which comprises largely of mid-income and corporate segments.
“Celcom’s 1QFY17 average revenue per user (ARPU) for the postpaid segment is only RM80 per month, comparable to Digi’s RM79/month but significantly lower than Maxis’ RM102 per month,” explained the bank.
And combined with the fact that Celcom has lost 2.7 million subcribers or 21 per cent of its base since 4Q14 due to legacy IT infrastructure disruption and operation delays in introducing new plans to compete effectively, AmInvestment Bank has guided that they do not expect any significant recovery in Celcom’s earnings.
This is especially apparent given the intense pre-paid competition spearheaded by Maxis, Digi and U Mobile.
“Nevertheless, we view the group’s struggles in regaining forward momentum in subscribers and ARPUs in Malaysia and regionally as underpinning the need for the group’s re-merger catalyst with TM,” added the bank.
With that said, the bank is maintaining its ‘buy’ call on the Axiata Group with an unchanged sum-of-parts-based fair value of RM6.30 on the anticipating of the aforementioned potential re-merger with TM which could reduce the valuation differential with its peers, and the bargain it currently trades at.