Celcom Axiata eyes single-digit revenue growth

By SHAZNI ONG / Pic By MUHD AMIN NAHARUL

Celcom Axiata Bhd is aiming for a single-digit growth for its total revenue this year, despite having been through a tough and flattish period for the telecommunications industry in 2018.

Its CEO Mohamad Idham Nawawi said the company is actively looking at new sources of revenue, apart from focusing on improving its customer experience which include preparations for the Industry 4.0 and the upcoming 5G era.

“So far, we have done quite well in terms of going against the market trend. Despite the flattish year, we were able to (see a) small growth percentage using our traditional postpaid and prepaid market,” he told reporters after a media briefing on the Guna Celcom campaign last Friday.

Celcom posted a 1.1% growth in total revenue to RM6.66 billion in 2018 compared to RM6.59 billion in 2017. Its service revenue also grew 1% to RM6.12 billion last year compared to RM6.05 billion in 2017.

On capital expenditure (capex), Mohamad Idham said the company has allocated about RM1 billion this year — a reduction from RM1.05 billion in 2018, RM1.28 billion (2017) and RM1.33 billion (2016).

“In 2016 and 2017, it was almost a turbo-charged investment to build the additional capacity. Even (when) it is going down, it’s actually higher than most (compared to the) average of the industry,” he said.

Meanwhile, Celcom CFO Jennifer Wong said the company is anticipating a slower growth in revenue this year, based on the current landscape.

“We’re still looking to grow the revenue, but not the kind of double-digit growth that we have experienced like maybe even 10 years ago. We’re hoping for a single (digit growth),” she said.

Commenting on the decrease of capex, Wong said the reason it was higher in the previous years was because Celcom was trying to catch up on 4G competency.

“It was mainly to leverage on the capabilities and the capacity that we have already invested in the last two years. That’s why we would be spending approximately RM1 billion in 2019,” she said.

Going forward, Wong said Celcom may spend slightly less than RM1 billion in the next two or three years.

As of February this year, Celcom’s network investments had led to the deployment of over 9,000 LTE sites nationwide, delivering more data on a larger network capacity.

When asked to comment on the impairments which have much been subjected by government-linked companies and government-linked investment companies, Wong said Celcom would conduct a normal impairment process on an annual basis.

Celcom’s parent company, Axiata Group Bhd, which has Khazanah Nasional Bhd as a major shareholder, posted a net loss of RM5.03 billion for the January-December 2018 period after impairments and amortisation of RM7.64 billion.

Its shares also took a beating from a 52-week high, erasing billions in market capitalisation.

“We do the impairment analysis every year because you need to have a look at the assets that we have and which part of the assets are not in used anymore.

“We had a more significant impairment in 2018 mainly because when we did the upgrading in terms of 4G two years ago, the completion of 4G only happened in 2018. That’s when we actually start to have a closer look at the assets base that we already have and retire the assets that were not in use.

“On a yearly basis, we have continuously been doing our impairment. So, it’s not something that is exceptional, but last year was because we have completed the 4G rollout. That’s why we actually had a view again at the end of 2018,” she said.