Celcom Axiata sets lower capex of RM1.3 billion this year

KUALA LUMPUR: Celcom Axiata Bhd, which saw a 19.57% jump in net profit in the fourth quarter (Q4) ended Dec 31, 2017 after three years of decline, has set a lower capital expenditure (capex) guidance of RM1.2 billion to RM1.3 billion for 2018, a bulk of which will be spent on network.

The telco’s net profit stood at RM336 million in Q4’17, against the RM281 million registered in the preceding year’s corresponding quarter, on the back of cost optimisation efforts and one-off adjustments.

Revenue for the quarter rose from RM1.65 billion to RM1.77 billion.

Full-year net profit was 1.3% higher at RM1.25 billion compared with RM1.23 billion a year ago, while full-year revenue expanded from RM6.62 billion to RM6.66 billion.

Service revenue for the quarter under review grew by 2.63% to RM1.56 billion from RM1.52 billion bringing the full year services revenue to RM6.06 billion from RM6.02 billion registered in 2016.

Average revenue per user (ARPU) for both postpaid and prepaid grew by RM3 from Q3’17 to Q4’17 to RM34 and RM87.

In Q4’17, Celcom saw a fall in postpaid subscriber numbers from 2.86 million in the preceding quarter to 2.82 million.

Prepaid on the other hand also saw a decline to 6.72 million from 6.8 million.

Speaking to reporters via a livestream from Nusajaya, Johor, it’s CFO Jennifer Wong said it will be a challenge going forward to maintain earnings performance, in acknowledging rising cost pressures.

However, she said the group will continue to approach the issue by optimising its cost structurally, which includes renegotiation of deals, as well as tactically, through the rationalisation of assets utilisation.

Besides network expansion, the group will also be spending its capex allocation on digitisation. Last year, it allocated RM1.5 billion for capex, of which it used RM1.28 billion.

In addition to that, Celcom is also looking to renovate at least 50% of its 60 blue cube outlets by the end of the year.

Meanwhile, as for the newly launched Yoodo service, CEO Michael Kuehner said the initial response has been promising and is expecting a higher transactional net promoter score for Yoodo than Celcom due to its seamless nature.

“We expect also to have possibly some learning for the mothership from Yoodo, which we can integrate into the mainstream and make our traditional business better from that perspective,” he explained.

Having conducted a 5G trial last year, the telco is currently in the midst of ramping up its network architecture. It is also open to more partners, in addition to Ericsson and Huawei.