Maxis Communications – the closest thing Telekom Malaysia has to a competitor in the one-sided Malaysian telecoms market – has posted its highest ever quarterly profit thanks to continued strong growth at its mobile unit. Net profit for the three months ending 30 June 2004 was MYR462 million (USD122 million), up 102% over the previous quarter, on the back of a 2% rise in revenues to MYR1.38 billion. Profit for the first six months of the year was up 52% over the corresponding period of 2003, with sales rising 27%.
Whilst Maxis operates a limited portfolio of fixed line services, it is its wholly owned wireless subsidiary Maxis Mobile that is responsible for the lion’s share of revenue. An increase in the use of data services fuelled much of the increase in turnover, with the number of GPRS users growing seventeen-fold to 393,000 and an 80% increase in the volume of billable SMS year-on-year. The operator hopes that the launch of commercial 3G services, due before the end of the year, will continue the trend and it has also announced a strong focus on customer retention through loyalty bonuses and reward schemes.
Maxis claimed to have gained the majority share of net new customers signing up for mobile services in the three month period, passing the five million subscriber mark in the quarter and continuing to stretch its lead in the market. At the end of June Maxis Mobile had 452,000 more customers than nearest rival Celcom, a fact made all the more impressive given that the second placed operator boasts the combined might of three merged cellcos under its wing.
Since August 2003 Celcom has been the company under which fixed line incumbent Telekom Malaysia has gathered its wireless assets. By the end of October 2004 it plans to have fully integrated the assets of Telekom’s wholly owned subsidiaries Mobikom – which launched in 1993 but remained a relatively minor player who’s analogue-only network limited its market impact – and TM Cellular, which was the market’s oldest and second-largest player pre-merger, and one of only two UMTS licensee in the country, alongside Maxis.
Telekom Malaysia posted its own first half financial results on Tuesday, boasting a 50% year-on-year increase in profits, boosted by its consolidated cellular assets and strong growth abroad. Net profit for the six months to 30 June was MYR836.9 million, on the back of a 23% rise in revenues to MYR6.5 billion. Celcom and its new subsidiaries accounted for 37.1% of group turnover, whilst fixed line telephony brought in 46.9%. Though the Malaysian wireline market was opened up to competition in 1994, Telekom still controls approximately 97% of the country’s fixed lines. It also has a stranglehold on the country’s internet access market, with 1.8 million dial-up and 175,000 broadband customers at the end of the period. Overseas investments – including Sri Lanka Telecom, TM International Bangladesh and Telekom South Africa – reported a combined 124% rise in net profit to MYR292.9 million.