Celcom confident of managing financial impact from 700Mhz spectrum bid

CFO’s statement in line with analyst predictions in October

No network quality deterioration from losing 5 Mhz of spectrum, says company

CELCOM Axiata Bhd is confident of managing the financial impact that could arise from the upcoming call for bids for the 700 megahertz (MHz) spectrum by the Malaysian Communications and Multimedia Commission (MCMC).

Applications have been open since Oct 31 and will continue until Jan 2, 2018. According to previous media reports, MCMC has said that the effective date of the 700 Mhz spectrum assignment shall be on Jan 1, 2019.

Commenting on the financial impact bound to arise from the bid, Celcom chief financial officer Jennifer Wong, said: “Of course there is some financial impact from the bid but we will try to manage it from our internally generated funds,” she said following a briefing on the company's third-quarter business update on Jan 27.

Wong’s statement appears to be in line with what analysts said in October about the 700 Mhz spectrum assignment.

Back then, MIDF Research had said that based on the rollout of mobile services on the 2,600Mhz spectrum, Maxis, Digi, Celcom, U Mobile and YTL Communications stand a better chance of getting a fair portion of the 700Mhz.

The research house had also noted that Celcom has sufficient cash reserves to fund the bidding.

Responding to a question on whether the local telco had suffered network quality issues since losing spectrum in the spectrum refarming exercise in June this year, Celcom deputy chief executive officer Azwan Khan Osman Khan shared that the company lost 5 Mhz of the 1800 Mhz that was reallocated in the end of June this year.

However, although they have had to increase the number of sites, they have not seen any deterioration in terms of network quality.

“We have been working on this since the reallocation was announced last year. Between then and the first batch which was allocated in March this year, and the second batch in June, we have been working day and night to increase the number of sites while making do with the reduced spectrum.”

Wong meanwhile, said that the company, which has to date spent RM670 million from its allocated capital expenditure of RM1.5 billion, may end up spending less (RM1.4 billion) than its initial full-year allocation. She added that funds are being deployed for network enhancement and business digitising efforts.

The company also said that it had started the rollout of its LTE Advanced network in August as planned and that plans are underway to cover the whole Klang Valley area and progress to all major towns in the country. Celcom plans to complete the rollout by the end of the second quarter in 2018.

For more information on Celcom’s third quarter results, click here.

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Axiata 3Q net profit falls 7% to RM238.53mil, revenue rises to RM6.2bil

Telco battleground: Can Maxis claim the crown in 2017?

Minimal financial impact on telcos from 700Mhz spectrum

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