Logo of Phnom Penh Post newspaper Phnom Penh Post - All eyes on Malaysian telcos as brokerages seek clarity on 5G rollout

All eyes on Malaysian telcos as brokerages seek clarity on 5G rollout

Content image - Phnom Penh Post
RHB Research lifted projections for Axiata Group Bhd and Time dotCom Bhd (TDC) and kept its estimates on OCK Group Bhd. The Star

All eyes on Malaysian telcos as brokerages seek clarity on 5G rollout

Malaysia's telecommunications sector seems to be on the radar of most research houses but for now, details are sketchy for any sector upgrades until there is clarity on the way the 5G infrastructure will be rolled out.

RHB Research said in a note that based on information disclosed so far, it appears that the industry/infrastructure providers would part-finance the network rollout via tenders to be called by Digital Nasional Bhd (DNB), the 5G special-purpose vehicle, soon.

However, it remains unclear as to the quantum that would come directly from the government and how mobile operators would play a role in deploying the network.

It said the key risk with DNB lies in its execution, given the tight timeline for the deployment of the 5G network with commercialisation of services slated by year-end.

The research house maintains its “neutral’’ stand on the sector. It also cited competition, weaker than-expected earnings and negative regulatory developments as key risks for the sector.

It has lowered its core earnings forecasts on Digi.com Bhd, Maxis Bhd and Telekom Malaysia Bhd (TM). It lifted projections for Axiata Group Bhd and TIME Dotcom Bhd (TDC) and kept its estimates on OCK Group Bhd.

Its target price for Axiata of 3.90 ringgit ($0.95) a share, Digi (4.15 ringgit) and Maxis (4.90 ringgit) have been cut while it raised that for TM (7.30 ringgit) and TDC (13.80 ringgit).

There are talks that some conversations are happening between Digi and Celcom Axiata Bhd for some collaboration or even merger in a single entity environment for 5G, though talks are said to be preliminary at this stage.

AmInvestment Research said as cellular companies will have access to the same 5G infrastructure, operators are considering consolidation for economies of scale and collaboration between different geographical locations amid an intensely competitive landscape to deliver on improved marketing, customer support and value-added services to the end users.

It added that if negotiations (between Digi and Celcom’s parents – Telenor and Axiata respectively) are successful, the merged entity would emerge as the largest cellular operator in Malaysia, Cambodia, Nepal, Myanmar, Sri Lanka and Bangladesh.

Separately, RHB Research said competition stays keen domestically as telcos jostle for wallet share on the back of the weaker consumer and economic sentiment. This should drive new customer acquisitions.

It said the enterprise segment was poised for further recovery. The pick-up in enterprise spending from earlier project deferments is positive for TM and TDC via the accelerated demand for cloud and connectivity services.

On the recent financial results by the telcos, it said Maxis and Celcom gained at Digi’s expense.

However, for 2020, industry mobile service revenue fell 6.5 per cent due the decline in roaming revenue (border closures), pre-to-post migration, lower mobile termination rates and the impact from the industry’s free 1GB data quota, which hampered monetisation opportunities.

THE STAR (MALAYSIA)/ASIA NEWS NETWORK

MOST VIEWED

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • General’s gun smuggling ring busted

    The Military Police sent six military officers to court on November 22 to face prosecution for possession of 105 illegal rifles and arms smuggling, while investigators say they are still hunting down additional accomplices. Sao Sokha, deputy commander of the Royal Cambodian Armed Forces and commander of

  • Is Cambodia’s travel sector in for another cheerless holiday season?

    The travel and tourism sector was heaving back to life as borders started to reopen, promising a festive vibe for the holidays and New Year. But Omicron and other Covid-related issues are threatening to close the year on a bleak note ‘Seems [like] Covid-19 won’

  • Cambodia, Thailand to discuss border reopening

    Cambodian authorities from provinces along the Cambodia-Thailand border will meet with Thai counterparts to discuss reopening border checkpoints to facilitate travel, transfer of products and cross-border trade between the two countries. Banteay Meanchey provincial deputy governor Ly Sary said on November 22 that the provincial administration

  • Hun Sen: Manet to be candidate for prime minister

    Prime Minister Hun Sen has reaffirmed that his oldest son Hun Manet will be his successor as Prime Minister if he is elected. Speaking during the inauguration of a new sewage treatment facility in Preah Sihanouk province on December 2, Hun Sen said Manet will be