Celcom’s new data plans a game changer for telcos

KUALA LUMPUR: Analysts believe Celcom Axiata Bhd’s (Celcom) introduction of a offering promotional 3GB data at RM38 per month will disrupt competitors within the domestic telco sector.

AllianceDBS Research Sdn Bhd (AllianceDBS Research) believed competition among the Big 3 telcos has intensified since late April when Celcom introduced a new entry level postpaid plan which significantly undercut all competitors’ plans, offering promotional 3GB data at RM38 per month as long as users subscribe within the promotion period and do not churn out.

Celcom also recently slashed its 1GB mobile internet plan to RM25 per month (from RM28 to RM30 per month in previous quarters) after refreshing its prepaid plan.

As Celcom has lost close to one million subscribers since mid2014, the company is aggressive on data pricing in order to regain subscribers.

“We believe Celcom intends to attract prepaid subscribers to convert to postpaid and retain them as well, as its RM38 entry-level postpaid plan is much cheaper than any plans in the market currently (whether prepaid or postpaid),” detailled AllianceDBS Research in a sector report yesterday.

In comparison, the research firm observed that DiGi.com Bhd (DiGi) and Maxis Bhd (Maxis) are not cutting data pricing yet.

Instead, both companies are running limited time promotions with several freebies such as 50 per cent extra data quota and free data during off peak hours.

“Nevertheless, we believe it is a matter of time before they adjust their plans to match Celcom’s pricing, especially since Celcom is a bigger competitor relative to U Mobile.

“In addition, this will also be in line with the government’s aim to promote affordable broadband packages and reduce cellular rates.” Celcom is putting the pressure on data pricing While data revenue per GB for the telcos has been declining.

AllianceDBS Research believed this largely reflected subscribers movingupthedifferentpricingtiers as their data usage increase.

Overall, it noted that data monetisation for the telcos has been healthy, with data average revenue per user (ARPU) per subscriber relatively stable at RM24 to RM26 in the past few quarters.

“Celcom’s new data plans are disruptive in a few ways. First, it is an outright reduction in pricing, in contrast to past practices of giving more value to subscribers (while maintaining ARPU) in response to competition.

“Second, the pricing of its new data plan is considerably lower, not only when compared to Maxis and DiGi, but also to U Mobile as well.

“And lastly, Celcom now allows unutilised data to be carried forward for all its prepaid and postpaid plans, the first telco in Malaysia to do that.”