Telcos see rising fibre broadband competition in response to government’s agenda to cut prices
KUALA LUMPUR: The telco sector will see rising fibre broadband competition as the Pakatan Harapan government plans to cut prices by the end of 2018, analysts observe in the latest sector report.
According to AmInvestment Bank Bhd (AmInvestment Bank), the telco sector will see rising fibre broadband competition in response to the Pakatan government’s agenda to cut broadband prices by 25 per cent by year-end.
AmInvestment Bank highlighted that Maxis Bhd (Maxis) recently re-priced its fibre broadband plans for both consumers and businesses with unlimited data quotas and offering speeds of up to 100 megabits per second (Mbps) at prices 36 per cent to 65 per cent lower than previous similar plans beginning from 13 this month.
“For Maxis’ residential consumers, the price of the 100Mbps plan will be lowered from RM299 per month to RM129 per month at RM1.29 per Mbps, and 30Mbps plan from RM139 per month to RM89 per month at RM2.97 per Mbps.
“For business customers, Maxis will lower the price of the 100Mbps plan from RM398 per month to RM139 per month at RM1.39 per Mbps, and 30Mbps for RM99 per month at RM3.30 per Mbps,” it said.
The research firm further highlighted that as a comparison, Telekom Malaysia Bhd’s (TM) Unifi aims to raise the speed of its RM139 per month package from 30Mbps to 300Mbps at RM0.46 per Mbps while the more affordable proposition at RM79 per month, with a quota of 60 gigabytes (GB), at 30Mbps for all households.
“Unifi meanwhile is raising its RM329 per month plan from 100Mbps to 800Mbps at RM0.41 per Mbps. At this stage, it appears that Unifi offers more attractive packages when its new plans come into effect.”
As for Time dotCom Bhd, the research firm said that the group has not changed its 100Mbps package at RM149 per month or RM1.49 per Mbps for high-rise, commercial and dense populations.
AmInvestment Bank also noted that the sector can be derated on resumption of revenue declines given the tight competition amid a decreasing subscriber base.
“Besides the existing mobile wars, the fixed broadband segment under TM’s unifi, Maxis’ Home Fibre and Time dotCom faces daunting prospects of declining average revenue per user (ARPUs) amid the government’s plans to develop a data-intensive socioeconomy.”
All in, AmInvestment Bank maintained its ‘neutral’ call on the sector given the continued intense competition in both the mobile and fixed broadband markets.
Looking ahead, the research firm projected that there will be sector upgrades only if prospects for stronger topline momentum materialise.
It pointed out that a sector re-rating requires catalysts for stronger revenue growth prospects demonstrated in subscriber, ARPU and margin expansions.
“As the global landscape for rapid data trajectory is driven by lower price plans and increasingly expensive capital expenditure rollouts to provide wider fixed broadband and 4G capabilities, coverage and service quality, any significant organic revenue or margin growth improvement is unlikely over the next 12 months.”