Telecom Sector 1QCY25: Earnings In-Line, Axiata Lags, 5G and Jendela Phase 2 in Focus

In the 1QCY25 earnings review, the telecommunication sector performed largely as expected, with Axiata lagging due to pricing pressures at XL Axiata. Maxis and CDB drove postpaid and broadband growth, gaining subscribers despite intense competition. 5G adoption is set to rise in 2HFY25, but ARPU remains constrained. Jendela Phase 2 could boost sentiment. (50 words)

Earnings Performance: Axiata

– Earnings for 1QCY25 were broadly in line with expectations, except for Axiata, which underperformed due to pricing pressure at its subsidiary, XL Axiata.  
– Edotco’s monetisation prospects remain solid, though valuation and execution risks are key concerns.

Mobile Segment

Maxis and CDB saw year-on-year growth in postpaid revenue, driven by effective customer acquisition and convergence bundles, leading to strong subscriber additions.  
– Prepaid segment remained weak, and ARPU growth was limited due to intense competition and demand for low-cost, value-driven plans.

Fixed Broadband Segment:

– Maxis and CDB outperformed Telekom in subscriber growth, gaining market share through aggressive promotions and competitive pricing.  
– Telekom’s dominance in infrastructure is offset by premium pricing and limited mobile-fibre bundling, impacting its competitiveness.

Outlook:

– 5G adoption is expected to rise in 2HFY25, supported by a maturing ecosystem and better device penetration.  
– MNOs may face earnings pressure from higher 5G-related wholesale charges, though cost optimisation and network modernisation will help mitigate this.  
– Revenue growth in mobile and fibre segments will be volume-driven, but intense price competition will limit ARPU growth.  
– The potential announcement of Jendela Phase 2 could be a key catalyst for sector re-rating.

Business News