Telco battleground 2016: Good year for Maxis and Digi, not so for Celcom: Page 2 of 3

Probably the only good news for Celcom is...

To give Celcom some credit, its aggressive push on its postpaid front seemed to show some positive results -- as it managed to grow its postpaid subscriber base and market share during the year.

In fact, if it continues to execute well in the postpaid segment, and if Maxis' overall declining postpaid base continues, the industry could see Celcom having the largest postpaid subscriber market share in 2017.

Biggest gainer in the postpaid space is none other than Digi. It rose from the 23.7% market share in 2015 to 26.2% in 2016. It managed to grow its postpaid subscriber base by some 260,000.

While Maxis suffered a 160,000 decline in postpaid subscribers, good news is that it managed to grow its MaxisONE subscriber base by about 1 million in 2016. In end 2015, it has about 623,000 MaxisONE subscribers and in the third quarter 2016 it has close to 1.5 million subscribers. 

Growing the MaxisONE subscriber base is key to Maxis' financial performance -- as this group of customers tend to be more loyal and to spend more on their phone bills. In fact, MaxisONE subscribers have an average revenue per user (ARPU) of RM127-153. In contrast, Maxis' average ARPU for its postpaid customers (comprising both MaxisONE and other postpaid plans) is only about RM100. 

Growing data appetite

Although Digi did not reveal its subscribers' data consumption, (could be due to competitive reasons, or, they just don't have the data)  it is safe to conclude that Malaysians' appetite for data is growing. 

In fact, the growth has more than doubled across the board. 

In terms of smartphone penetration, Maxis seems to be registering the higher growth -- by 7 percentage points for its prepaid segment, and by 6 percentage points in the postpaid segment. In contrast, a 5 percentage point growth for both Digi and Celcom. 

The higher penetration growth by Maxis may be partly driven by its lower overall postpaid subscriber base. (For example: Company ABC has 10 customers, and 6 of them are using a smartphone, giving it a smartphone penetration of 60%. However, when Company ABC's total customers declined to 8, and of which, 6 are using a smart phone -- the smartphone penetration is now at 75%)

Maxis extend dominance in service revenue

Although it lost out the leadership position in terms of subscriber base, Maxis managed to remain as market leader when comes to service revenue market share. 

In fact, not only it managed to retain its leadership position, it also managed to grow its lead by another 1.4 percentage points. This was achieved despite its 2016 service revenue declined by RM60 million or 0.7%. 

It was a challenging year for all the incumbent telcos -- as their revenue, collectively, declined by over 4% (Digi's service revenue fell 1.8% and Celcom's declined by over 10%.)

Next page: Maxis and Digi grew prepaid revenue market share, while Celcom took a big hit