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Celcom to focus on Cost Optimisation in 2020, “Invest Smartly” on Network Infrastructure

For the year 2020, Celcom Axiata Berhad will further intensify its focus towards profitability and “operational excellence” with smart investments towards providing the “best digital infrastructure and services”. This includes its continuous pace on enhancing network infrastructure at lower operational costs, while exploring new areas for growth with exciting new innovative product packages and services within the first-half of 2020.

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Commenting on Celcom’s outlook for 2020, Idham Nawawi, Chief Executive Officer of Celcom Axiata Berhad said Celcom’s initiatives in FY19 have provided a great platform to a continued success in FY20, driving growth through innovation, digitisation and new business areas.

“Moving forward, Celcom will remain focused on operational excellence and cost optimisation. We will invest smartly to enhance our network infrastructure and increase efficiency. We look forward to maintaining our industry leadership position for the largest network in Malaysia and deliver the best experience and value to our customers”.

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The Celcom mobile network is currently serving around 13 million users comprising subscribers both from Celcom’s own brands and Mobile Virtual Network Operators (MVNO) such as Tune Talk, redONE, XOX and Merchantrade Mobile. In FY19, Celcom’s 4G human population coverage rose to 93% whilst 4G LTE-A coverage to 81% compared to 91% and 78% respectively. Celcom mobile subscribers consumed an average 14.9GB in 4Q19. About 77.1% of its customers are data/Internet users. 84% of the mobile subscriber base are smartphone users.

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The Telco claims that it has been leading the way with 5G trial services, with the aim to deliver end-to-end solutions using Internet-of-Things (IoT) and Artificial Intelligence (A.I) technologies. Recently, Celcom’s 5G journey in Langkawi was conducted with the exploration of seven real 5G use-cases using 5G technology and AI solutions, in collaboration with various local authority agencies such as Langkawi’s Royal Malaysian Police (PDRM) and Langkawi Municipal Council (MPLBP), with the aim of enhancing daily operations via 5G technology.

Celcom said it is also leading the industry on Customer Experience with an overall rNPS scores at 12 points which is 4 points higher than the second-best competitor (Nielson W219 NPS Report). The Telco is also proud of its Celcom Life App rating at 3.7 Points on Google Play Services and has recorded 224% YoY growth in App Transactions, 68% YoY growth in Consumer App Usage and 19.9 percentage point YoY growth in app penetration in subscriber base in FY19.

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In FY19, Celcom recorded more than 100% surge in PATAMI (Profit after Tax and Minority Interests) at RM813 million and FCF (Free cash flow) grew 21.9% lifted by EBITDA (earnings before interest, taxes, depreciation, and amortization) expansion whilst Capex (capital expenditure) scaled down by 3.6%. YoY EBITDA improved by 7.8%, whereas the YoY PATAMI improved by 14.1%. Celcom’s cost optimisation achieved a savings of RM283mil through the implementation across internal operations. A result from a strong focus on profitable products with the best value recorded a 7.8% increase year to date (YTD) in EBITDA to RM2.1 billion whilst margin improved 4.7 percentage point to 30.6%.

Celcom maintained a flat Total Revenue (-0.1% YoY) and Mobile Service Revenue (-0.5% YoY), when normalised for wholesale and interconnect impact. The Telco maintained its Average Revenue Per User (ARPU) in postpaid and prepaid with RM86 and RM36 as compared to the previous year. The postpaid segment revenues in FY19 stood at RM2,548mil, up by 6.3% YoY against a flat subscriber base. In FY19, Celcom also focused more on profitable segments rather than on device sales as smartphone penetration rose to 84% in FY19 due to a stronger device sales push in FY18 with 78%.

“We will drive growth from the Enterprise and Home segments with exciting new innovative products including gaming and virtual reality (VR) entertainment. For Enterprise, we will continue to pursue collaborations with the right technology partners and platform providers to deliver high-quality end-to-end IoT solutions and applications to SMEs, Corporations and Government customers in Malaysia

“Celcom’s continuous Digital Transformation Journey to become the Nation’s Most Inspiring Digital Organisation, will leverage on increased adoption of AI applications and Robotic process automation for both internal and customer facing processes. By enabling digitisation across industries in Malaysia, supported by cost-efficient rollout for 5G with new innovative services, we aim to create a ‘win-win-win’ situation that will benefit the rakyat, the government and the digital ecosystem,” Idham concluded.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy