Celcom Announces Q! Results For 2017

Images: Veronica Ng

Celcom had embarked on a cost transformation programme in Q4 last year, and will continue to invest significantly in network expansion despite stiff competition in the saturated telecommunications market. The telco expects to spend RM1.5bil in 2017 for network expansion, up from about RM1.2bil last year.

Their strategy include increasing one-on-one marketing and providing new features on products that Celcom launched in the last quarter..

Kuehner took up the CEO position in September last year. He believes the initiatives put in place six months ago will produce results and help the network provider gain back market share lost over the past three years.

He said Celcom’s turnaround initiatives were well underway, with digital at its core. Whether this will translate into growth may be too soon to say as the market is still shrinking. He expects an upturn in three to four years, stressing that any cost transformation efforts to be carried out would not be at the expense of customer experience.

Chief financial officer Jennifer Wong shared that Celcom’s cost transformational programme - Accelerated Cost Efficiency (ACE) would be driven by three strategic themes of simplification, digitisation and collaboration.

Celcom’s overall data revenue rose 29.8% year-on-year to RM661mil. This made up 41% of its total revenue. During the first quarter of 2017, total revenue stood at RM1.609bil, down 2.2% from the fourth quarter of 2016. Service revenue during the period experienced a seasonal dip of 3.1% quarter-on-quarter at RM1.475bil due to intense competition and flat growth in the industry.

The network provider delivered normalised earnings before interest, tax, depreciation and amortisation of RM587mil and normalised profit after tax, amortisation and minority interest of RM269mil.

Celcom’s total revenue was down 2.2% overall, versus the industry (including Celcom) that was lower by 3.4%. Due to the positive take-up on postpaid offerings, Celcom’s postpaid revenue was up 1.2.

Celcom posted a marginal decrease in the number of subscribers from 10.5 million at the last quarter of 2016 to 10.2 million customers to-date.

While Celcom is optimistic on postpaid products, the prepaid segment is still under pressure due to intense competition.. However Celcom will not reduce the pricing of their plans or compromise on customer experience and quality, assured Kuehner.