KUALA LUMPUR: Telecommunications companies are not expected to earn significantly from the special data offer they are promoting during the nationwide Movement Control Order (MCO) period from March 18-31, 2020.
In a statement today, AmBank Research noted that the offer is only valid for a fortnight.
“We do not expect substantive customers to switch to better alternatives during the MCO when most mobile service centres are closed.
“As such, we do not expect any significant impact to the cellular operators’ forecasts even though these initiatives promote corporate social responsibility while reinforcing positive brand perceptions,” it said.
AmBank Research asserted that given the pricing structures of fibre and 4G packages, the sales revenue of these operators would only increase if significant numbers of existing or new subscribers switch to higher value packages.
“In our view, this is less probable as mobile users would more likely deploy home/office WiFi connected to much faster fibre broadband which are mostly based on unlimited data plans.
“Hence, we maintain the forecasts of the telco stocks under our coverage,” it said.
In conjunction with the MCO, Celcom is offering additional privileges such as free unlimited WhatsApp (chat, voice and video call) access and free unlimited access to Microsoft Office 365 applications, for all postpaid and Xpax prepaid customers, from 8am-6pm daily.
It has also extended the bill payment period for all Celcom postpaid customers for seven days from their current due date and offers cashback for unused internet quota of Celcom MEGA postpaid users, among others.
Meanwhile, U Mobile’s postpaid GX50, GX68, Unlimited HERO P99 and Unlimited HERO P139 plans together with the prepaid GX38 package are enjoying double hotspot data quota for free.
Unlimited HERO P139 and P99 customers may also add an S20 data-only share line for RM20 monthly to share the double hotspot quota on their devices, while prepaid customers can renew or activate their GX38 plan to double hotspot data for 30 days.
“We maintain our overweight recommendation on the sector given the attractive valuations of Maxis and Digi, following the recent selldown over the past week.
“We also retain our buy on Axiata, given its low enterprise value to the earnings before interest, tax, depreciation, and amortisation (EV/Ebitda) valuations and rising prospects for monetisation of its multiple businesses,” AmBank Research said.
It said Telekom Malaysia remains a hold against the backdrop of government- targeted fiberised average revenue per user reductions under the National Fiberisation and Connectivity Plan (NFCP).
The sector, it said, could be de-rated on the resumption of revenue declines against the backdrop of escalated mobile price war and looming sharp drops in fixed broadband prices this year, driven by NFCP prerogatives.
“We are also cautious on possibilities of higher-than-expected increase in operating and capital cost requirements as operators need to further upgrade their network infrastructure for 5G rollouts,” said the research house. – March 20, 2020, Bernama
