Astro’s ARPUs may come under pressure from new lowered pricings

While Astro Malaysia Holdings Bhd’s (Astro) new plans with lower floor pricing takes into account the recent decline in average disposable incomes, its average revenue per user (ARPUs) may come under pressure from introduction of new plans with lower floor pricing.

On top of that, the research team at Kenanga Investment Bank Bhd (Kenanga Research) cautioned that Astro’s pay-TV is facing competitive headwinds on multiple fronts.

“Firstly, when it comes to provision of international programming, it is subject to intense competition from over-the-top (OTT) streaming platforms (Netflix, and Disney+ Hotstar).

“Whereas within the local vernacular space, it is fighting for market share with domestic Free-to-Air television (FTA TV).

“Meanwhile, younger audiences are leaning towards social media, mobile apps, and websites for news and sports content.

“To top it off, the internet has enabled illicit activities such as unauthorised digital downloads of TV series and movies, and proliferation of illegal TV boxes,” it said.

It also anticipate future weakness in Astro’s adex, given the sustained decline of its TV viewership.

“Moreover, both advertisers and customers may increasingly favour digital music streaming platforms such as Spotify and Apple Music.

“The latter leverages on artificial intelligence (AI) to offer personalized content and targeted commercials.

Hence, this enhances the overall customer experience, whilst ensuring effective advertising,” it said.

Nevertheless, Kenanga Research highlighted that Astro is optimistic that its new plans with ‘lower price floor’ of RM40 to RM60 per month will be well received.

“Moreover, these affordable new products will enable Astro to expand its market reach and broaden its addressable advertising market.

“The introduction of these plans takes into account the recent decline in average disposable incomes among Malaysians,” it said.