Analysts see minimal impact from new Celcom wireless broadband
KUCHING: Analysts are neutral about Axiata Group Bhd’s (Axiata) wholly- owned Celcom Axiata Bhd’s ( Celcom) new wireless broadband service given that there are still more attractive home fibre options.
Of note, Celcom had recently unveiled a new wireless broadband service which offers more than on terabyte ( TB) of Internet, with average broadband speeds of 30Mbps, for RM74.20 per month. Consumers can opt for either Home Wireless Gold at RM74.20 per month (25GB + 40 GB Walla), Home Wireless Gold Plus at RM106 per month (50GB + 100GB Walla), or Home Wireless Platinum at RM159 per month (150GB + 1TB Walla).
As a comparison, AmInvestment Bank Bhd’s research arm (AmInvestment) noted that Maxis offers 20GB of wireless broadband at RM88 per month while Digi offers options at RM45 for 8GB, RM65 per month for 20GB, RM105 per month for 40GB.
It pointed out that currently, U Mobile offers the most affordable option at RM26 per month for 2.6GB data and RM36 per month for 7.5GB data, with even the lowest price point offering unlimited Waze, Whatsapp and WeChat.
“At the RM60 to RM90 per month wireless broadband range, Celcom currently offers the best price per GB option at RM2.97 per GB compared with Digi’s 3.25 per GB and Maxis’ 4.4 per GB.
“However, although there’s no installation required, the wireless modem will only work at your registered address.
“Moreover, unlike fibre which offers unlimited data usage, the quota for most wireless broadband plans is usually fixed and may not be enough for video streaming.
“Hence, we do not expect these new wireless broadband plans to make a significant change in the sector’s subscriber trajectory given the more attractive home fibre options amid SIM consolidation as handheld devices can be turned into individual hotspots,” AmInvestment opined.
It also noted that Maxis’ wireless broadband subscibers have fallen by 14 per cent year- on-year ( y- o-y) or 27,000 to 161,000 as at March 31, 2018 while its fixed fibre broadband has risen by 20 per cent y- o-y or 31,000 to 184,000.
Meanwhile, the research team highlighted that there is still “no easing” in the mobile data pricing war.
“We expect further repackaging formulations by the industry against the backdrop of U Mobile’s Hero P78 plan, which offers unlimited data with speeds up to 5Mbps for RM78 per month and P99 for unlimited data with no speed caps at RM99 per month.
“In our view, near-to-mediumterm revenue growth outlook remains weak given the likelihood of further intensification in the mobile wars, with Digi and Celcom likely to raise the ante against both U Mobile’s plan and unifi mobile’s unlimited mobile data/ voice/SMS pricing plans, currently priced at RM79 per month for the first SIM, RM69 per month to RM49 per month for second to fourth SIM.
“As U Mobile and unifi mobile wrestle for new customers in the unlimited mobile data arena, prospects will deteriorate for incremental service revenue accretions in the sector,” it said.
It also believed that competition is now escalating in the fixed broadband segment.
It noted that for its existing customers, Maxis has recently lowered the price of its home fibre services by RM20 per month to RM119 per month for its 10Mbps option which offers unlimited voice calls to all mobile and landlines as one of its limited time offers.
As a comparison, it said, Telekom Malaysia Bhd’s ( TM) has reintroduced its UniFi 10Mbps at RM129 per month although Time dotCom still offers the best value for money with 100Mbps at RM149 per month.
It also noted that during the 2017 Budget announcement in 2016, Prime Minister Datuk Seri Najib Tun Razak had indicated the government’s intentions to double fixed broadband speed and halve its prices within two years.
“Hence, we expect further pricing revisions to this segment this year,” it opined.
All in, AmInvestment believed that there is a rising need for consolidation within the sector.
“As U Mobile and unifi mobile wrestle for new customers in the unlimited mobile data arena, we remain convinced that sector consolidation remains the logical route, which is likely to be spearheaded by the potential re-merger of Axiata and TM.”