Maxis has 1.12 million Non Revenue Generating Subscribers in 3Q18

Maxis Bhd reported its Third Quarter 2018 (3Q18) financial result last Thursday. As of the end of September 2018, the Telco had 9.84 million revenue generating subscribers (vs 9.86 million in 2Q18). The Telco lost 28k mobile subscribers between July, August and September 2018.

Maxis revenue generating subscribers (RGS) are defined as active line subscriptions that excludes those without revenue generating activities for more than 30 days.

There are now 8.3 million Internet users (vs 8.2 million as of 2Q18) consuming an average 10.67GB a month. Prepaid users consumed an average 10.24GB while Postpaid users consumed 11.66GB of Internet data in 3Q18.

Prepaid RGS base are now at 6.64 million (vs 6.75 million as of 2Q18). Maxis lost 108k Hotlink RGS prepaid subscribers in 3Q18. It pointed that “SIM consolidation and migration to Postpaid continue to impact” its prepaid base. 75% o f its prepaid subscriber base are mobile Internet users and 82% have smartphones.

Postpaid RGS base stood at 3.06 million as of 3Q18 (vs 2.97 million as of 2Q18). It added 85k RGS postpaid subscribers in the quarter. The Telco did not disclose its MaxisONE plan subscriber base for 3Q18. 87% of its postpaid subscribers are smartphone users.

There are 141k Wireless Broadband customers.

Maxis RSG customers have the following APRU in 3Q18: RM42 for Prepaid (unchanged since 2Q18), RM93 for Postpaid (vs RM94 in 2Q18).

By market definition (in comparison with Digi, Celcom and U Mobile), Maxis has 10.96 million mobile subscribers in 3Q18 (vs 10.9 million as of 2Q18). There are 7.7 million prepaid (vs 7.72 million, 2Q18) with an APRU of RM36 and 3.11 million postpaid subscribers with an ARPU of RM93 (vs 3.02 million, 2Q18).

Some 1.12 million (1.06 million prepaid, 50k postpaid, 7k wireless broadband) Maxis mobile subscribers does not generate any revenue for the company.

Home Fibre subscribers stood at 202k in 3Q18 (vs 194k in 2Q18). Maxis added 8k new Home Fibre customers despite facing intense competition from Telekom Malaysia (Unifi) and Time dotCom.

The Telco claims that its human population 4G LTE coverage is now at 92%. It did not reveal any coverage statistic for its LTE-A network.

Maxis Quarter-on-Quarter (qoq) summary:

Highlights: Year on Year (yoy) – Q3 2018 vs Q3 2017, according to Maxis:

• Service revenue dipped 3.0% to RM2,027 million due to the decline in Prepaid, which offset the growth in Postpaid and Home Fibre business.
• Postpaid continued to perform well with revenue growing 2.8% to RM1,025 million, driven by continued subscription growth with stable and high ARPU of RM93. We added 250k new subscriptions supported by the strong demand for our innovative device and value-accretive propositions:
  • This largely reflected an increase in smartphone usage as data allowances expand, with customers now using 10.7 GB on average (blended) each month, an increase of 90.9% from the same quarter last year. Our sustained investments have created a strong platform to capture this demand, and we continue to have the leading 4G network performance.
  • Hotlink Postpaid Flex has shown steady growth and together with MaxisONE Share, continued to attract entry level Postpaid subscribers as well as those migrating from Prepaid to Postpaid.
• Prepaid revenue fell 10.1% to RM851 million yoy reflecting intense on-going price competition in the market. Additionally, the Prepaid segment was also impacted by SIM consolidation and migration to Postpaid. Well executed marketing initiatives have helped us narrow the decline in the customer base and maintain a stable ARPU at RM42. Our mobile internet continued to grow, contributing 58.3% of Prepaid revenue for the quarter.
• Home Fibre revenue improved 14.3% to RM80 million and subscriber base grew to 202k this quarter. Since our new access arrangements with Telekom Malaysia Berhad (TM) were announced in August, we have received over 40k sign ups for the new services from existing and new customers which will be fulfilled in the coming months by our differentiating service team Maxperts.
• Normalised EBITDA declined 6.4% to RM1,047 million due to a lower service revenue.
• EBITDA margin (on service revenue) remained high at 51.7%, reflecting positive results from cost optimisation initiatives.
• Normalised Profit after Tax declined by 7.7% to RM518 million due to lower EBITDA.
• Declared a third interim dividend of five sen per share.

In a media statement posted to Bursa Malaysia, Robert Nason, Chief Executive Officer, Maxis Berhad said, “We’ve had a good quarterly operating performance which was driven by data growth and demand for our innovative offerings from both consumers and businesses. We are pleased with our solid core performance and while it is tracking ahead of our expectations, we anticipate strong headwinds emerging with the tapering of our wholesale revenue, the impact of sales and services tax, investment in our new fibre offerings and continued intense price-focused competition.