PETALING JAYA: Telecommunications companies (telcos) remained relatively quiet during the October to December period, compared with the June-to-September period, but overall competition stayed intense in the postpaid segment with new offers mainly in the form of short-term, tactical promotions.
During these campaigns, Celcom and Digi offered plan discounts for three to 12 months, mainly to acquire subscribers or upsell them to higher-quota packages. Celcom also raised the speed cap and hotspot quotas for MEGA Unlimited passes to become competitive with Digi’s and a notch more attractive against Maxis’ comparable plans.
In a note, CGS-CIMB Research said while Digi’s promotion of plan discounts may help drive the acquisition of new postpaid subs and the upgrade of its existing prepaid subs to mid- to higher-end postpaid plans, for the overall mobile market, the RM10 monthly discount is fairly substantial (5-17% across eligible postpaid plans).
“[This] may add to the overall competitive pressure though it, by itself, is unlikely to spark off a fresh round of price cuts in the market,” it said.
In addition, Digi’s special offers under its Jendela Youth packages will not have any substantial impact on the competitive landscape as it is only confined to Sabah and ran for a short period of one month.
It also views Celcom’’s move to raise its speed cap as unlikely to shake up competition in a material way, but does indicate a persistently heightened level of competition.
As for the prepaid segment, the research house noted that competition stayed intense in October to December as Maxis/Celcom continued to push unlimited offers, while mobile virtual network operators (MVNOs) entered the space.
“While Digi kept away from unlimited, it launched ‘limitedtime’ 20/40GB prepaid plans aggressively priced at RM30/35. If this attractive offer is prolonged, it could lead to some subs downtrading from higher-end plans, slow down prepaid-to-postpaid migration and trigger a response from Maxis/Celcom,” it noted.
In terms of fibre offerings, CGS-CIMB said Digi’s home fibre plans that are priced more attractively versus Maxis’s and TM’s may not overly shake up competition as it is aimed at the lower- and upper-end of the market, while its offer to bundle in its unlimited postpaid plan for a discounted price involves the hassle for non-Digi subscribers to switch providers.
“Digi also released business fibre plans targeted at SMEs that are cheaper vs. unifi/Maxis but offer fewer enterprise features. Celcom launched 300/500Mbps fibre plans with 11-15% introductory rebates for the first 3 months, which we believe should be a short-term promotion to generate some market traction, given its relatively late entry.”
Overall, it said it prefers the fixed to mobile segment, given its multiple growth drivers and more benign competition. It is retaining its neutral call on the sector with its top pick being TM.
