Celcom second quarter net profit up marginally
> Telco to ramp up capex spending, to invest RM1b on network coverage expansion
KUALA LUMPUR: Celcom Axiata Bhd, which saw a 3.44% increase in profit after tax, amortisation and minority interest (patami) for the second quarter (Q2) ended June 30 due to the rationalisation of its portfolio, will be ramping up capital expenditure spending in the coming quarters.
“We did some rationalisation in terms of portfolio, which we are still improving significantly in terms of patami,” Celcom CFO Jennifer Wong told reporters after presenting its Q2 business update.
Celcom registered a patami of RM331 million in the quarter under review against RM320 million a year ago.
Total revenue fell by 3.63% to RM1.62 billion from RM1.68 billion due to fewer mobile device launches in the quarter under review compared with last year.
Service revenue on the other hand inched slightly higher by 0.81% to RM1.49 billion from RM1.48 billion, driven by the postpaid segment.
Wong said that its cost optimisation measures are beginning to stabilise and will yield results in the coming quarters.
“(In the) previous few quarters, we were actually catching up on some of the expenses incurred before,” she added.
The telco, which had earlier earmarked about RM1.4 billion-RM1.5 billion for capex, has only utilised about RM400 million in the first half of the year on its spectrum refarming exercise.
It will deploy the balance of its yearly capital expenditure (capex) allocation to expand its network coverage, which is expected to cost about RM1 billion.
In addition to that, the telco is working towards rolling out the 4.5G network, with trials beginning next year.
“We are doing some preparation work. So hopefully, we are keeping our fingers crossed, that we could be ahead of our plan for the 4.5G. We actually did the equipment rationalisation mid of last year … we have already started to prepare for the 4.5G ever since,” Wong said. Once that is in place it plans to roll out the 5G network by 2020.
She added that Celcom will be spending more than it did in the first half of the year, in the coming quarters.
Meanwhile, Celcom also saw a decline in subscribers from the first quarter of 2017, from 10.25 million to 9.93 million.
“From a postpaid point of view we saw a slight decline in terms of low-end postpaid subscribers, a lot of our focus is on the higher-end subscribers. We are taking active measures to address that by introducing retention benefits for customers to stay on,” Celcom deputy CEO Azwan Khan Osman Khan said.
As for the decline in prepaid subscribers, Khan said Celcom has not been actively “fighting the price war”, by providing packages at a lower price.
Besides that, Celcom is also looking towards increasing its 4G Long-Term Evolution mobile population from 77% to 85% by the year-end.