Celcom plans to shut 3G services by end-2021


THE shutting down of its 3G network by the end of this year is on the cards for Celcom Axiata Bhd to make way for full 4G network utilisation in the country.

Celcom CEO Mohamad Idham Nawawi said the company has migrated significant numbers of its 3G users to upgrade in the last 18 months.

“We had it down to about 2.7 million subscribers on 3G two years ago and by the beginning of 2020, we have about 1.7 million.

“By the end of 2020, we only have about 800,000 customers who are still on the 3G network,” he said at a press briefing yesterday.

He said the process is still ongoing as some part of the 3G devices being used right now are also machine-to-machine (M2M) devices, such as smart meters that are operated by companies like Tenaga Nasional Bhd and Pengurusan Air Selangor Sdn Bhd, among others, that are using M2M on 3G. Celcom has about 200 3G sites without 4G which the group is constantly upgrading, he said.

The group’s sunsetting of 3G plans would have financial implications on Celcom due to the accelerated depreciation on 3G equipment.

“We always had a plan to shut down 3G and how we can use the resources of the spectrum to go into 4G.

“Among the impacts include spending a little bit more in terms of communications, but at the same time, we can use the 3G spectrum which can help us save on 4G capital expenditure,” he said.

Group CFO Jennifer Wong said the first part of the accelerated depreciation took place in the fourth quarter (4Q) of 2020, which will roll into the 1Q and 2Q of this year.

“After that, we should see the majority of the 3G assets leave as planned and we would be able to see the end of accelerated depreciation by maybe the 2Q or 3Q this year and thereafter, it should be business as usual for us,” she said.

Commenting on its performance for its 4Q and the whole financial year, Mohamad Idham said the group is accelerating its network investments to further enhance and optimise network and service experience throughout 2021.

On a yearly basis, Celcom’s revenue fell 7.3% year-on-year (YoY) to RM6.22 billion in 2020 from RM6.71 billion in 2019.

Ebitda and profit after tax and minority interests came in at RM2.68 billion, up 2.4% YoY from RM2.62 billion in 2019.

In 4Q, Celcom recorded an improved quarter-on-quarter profitability combined with revenue growth of RM42 million, up 2.7%, while its Ebitda improved by RM75 million, up by 10.6%.

Prepaid customer base registered 203,000 new customers in the quarter from its Truly Unlimited Plan, recording eight consecutive months of positive net advertisements since May last year.

“Our growth trajectory in the second half of 2020 has been the result of our continuous innovative efforts and supportive initiatives throughout 3Q and 4Q.

“As more consumers are digitally engaged for business, working from home, education and entertainment, we are working tirelessly to raise the quality of our 4G network coverage and speed up more network investments to ensure a consistent network experience,” Mohamad Idham said.

The group recorded more than 50% data traffic growth with 431 million gigabyte (GB), compared to 4Q19 with 287 million GB.

Data per usage per month also rose by 40% YoY with 20.8GB per month per user compared to 14.6GB per month per user.

“Celcom’s accelerated network investment of more than RM250 million is in its final stages of completion.

“This has resulted in a reduction of network traffic congestion, delivering consistent network service and experience,” he said.

As for this year, Mohamad Idham said the group had allocated up to RM1 billion for capital expenditure to enhance its network.

It will focus on uplifting 4G LTE population coverage to 95.6%, deliver a consistent HD video experience and improve indoor coverage and seamless VoLTE (voice over LTE) experience.

“Celcom will continue to invest in deploying the latest end-to-end technology, such as 4T4R MIMO (multiple-input and multiple-output), Carrier Aggregation, 256 QAM (quadrature amplitude modulation) and many more.

“To date, Celcom’s network remains the nation’s widest network with over 11,500 sites nationwide, serving over 13 million users,” Mohamad Idham added.