KUALA LUMPUR: Malaysia's mobile competition to remain stiff, driven by other mobile network operators (MNOs) and mobile virtual network operators (MVNOs) getting more spectrum as well as political desire for low-priced mobile connectivity for the Rakyat.
In the near term, Kenanga Research expects gradual recovery in the Big-3's ( Axiata Group Bhd, Digi.com Bhd and Maxis Bhd) postpaid market share.
This is given the entry-level postpaid plans continuing to gain traction in favour of the Big-3's reputable service quality, albeit to the detriment of their average revenue per user (ARPU).
It also expects prepaid ARPU to potentially decline on lower consumer spending in the second quarter (Q2) of financial year 2021, as tightened movement controls order (MCO) could once again bring up concerns on affordability.
"Moving forward, telcos will look to drive growth through the enterprise and fiber to the home (FTTH) segments.
"We foresee Celcom Digi Bhd to achieve revenue synergies in the financial year 2024 (FY24) at the earliest, as it needs to consolidate networks and operations, and devise an effective dual-brand strategy," it said.
According to Kenanga Research, Digi and Celcom were ramping up efforts to provide FTTH services to drive revenue growth.
This is reflected in Celcom's recent wholesale lease agreement with Allo Technology Sdn Bhd, and Celcom and Digi's greater push of their home bundle products.
It said although Maxis was ahead and Telekom Malaysia Bhd a clear leader, nationwide fixed broadband penetration remains less than 40 per cent, providing ample room for growth.
"We think both near and long-term prospects look bright, as working/learning from home and greater data consumption will drive FTTH adoption.
"That said, we expect FTTH ARPU to gradually decline as telcos expand into low/middle income markets to increase FTTH subs," it said.