KUALA LUMPUR (July 20): Maxis Bhd saw its net profit for the second quarter ended June 30, 2016 (2QFY16) climb 10.7% to RM488 million or 6.5 sen per share.

Reviewing its performance for the quarter, Maxis said the earnings came on the back of momentum, in terms of 4G long term evolution (LTE) adoption.

Maxis said 4G LTE users stood at 3.5 million and were consuming an average of 3.7GB/month. It said this represented an increase from 1.9 million and 2.2GB/month respectively, from a year ago.

It had posted a net profit of RM441 million or 5.9 sen a share a year ago.

Quarterly revenue fell 0.4% to RM2.102 billion, from RM2.11 billion in 2QFY15, as both prepaid and postpaid service revenue declined by 5.3% and 1.7% to RM959 million and RM975 million respectively, on heightened price competition which resulted in a lower subscription base.

The country's largest mobile telecom company by service revenue, announced an interim dividend of five sen per share, payable on Sept 29. This brings its year-to-date (y-t-d) dividend to 10 sen per share.

For the six months period ended June 30, 2016 (1HFY16), its net profit gained 18.2% to RM1 billion or 13.4 sen per share, as compared to RM851 million a year ago; while revenue fell 0.4% to RM4.24 billion, from RM4.26 million in 1HFY15.

Y-t-d, Maxis' total subscribers fell by 10% to 11.015 million, comprising of 2.66 million postpaid subscribers and 8.108 million prepaid subscribers. Its total subscribers stood at 12.214 million in 1HFY15, with 2.796 million and 9.068 million of postpaid and prepaid subscribers respectively.

For the cumulative period, Maxis' prepaid subscription momentum was impacted by price competition and as a result, prepaid service revenue declined 4.3% to RM1.972 billion, from RM2.061 billion a year earlier.

"Prepaid average revenue per user (ARPU), however, increased to RM39 from RM37 in 1HFY15, from continued traction on mobile internet usage, compensating for voice and SMS decline," it added.

Postpaid service revenue grew 1.3% to RM1.967 billion, from RM1.942 billion, supported by a solid base of 1.292 million Maxis One Plan subscriptions.

In total, Maxis added 480,000 new One Plan subscriptions during the quarter. Postpaid monthly ARPU also remained relatively stable at RM145.

"This wasn't our easiest quarter, where competition tried to improve subscriber market share by lowering prices," Maxis chief executive officer Morten Lundal said in a statement.

"After some initial market turbulence, we saw at the closing of the quarter [that] our result improved and we managed to keep our revenue and profit at similar levels, compared to last year," he added.

He noted that the average mobile internet usage in the last three months has grown to 2.5GB, from 1.7GB.

"For our internet hungry prepaid customers, we offered a very attractive proposition in Hotlink FAST that gives customers Free 2GB of 4G Internet every weekend for life," Lundal said.

Aside from that, he said Maxis had invested over RM1.3 billion last year and will invest the same amount to improve its operational efficiency to strengthen long-term competitiveness.

Maxis said it was the leading LTE or 4G network, which has reached 80% of the population, covering more than 220 cities and towns.

During the quarter, Maxis caught itself in the middle of a fierce row with consumers over its offering of significantly cheaper mobile price plans to certain users but not others. This sparked users to switch to rivals Axiata Bhd (operator of Celcom) or DiGi.com Bhd, which offer more competitive price plans.

In response to that, Maxis in a news release then, had described the allegation as "exaggerated", saying the price plan being mentioned "does not exist in the way it was described".

Following the social media outcry, Maxis had upgraded over a million customers to plans with a lot more data, which it described as the "largest auto-upgrade it has ever done" and largest ever in the country.

Shares of Maxis dropped 10 sen or 1.61% to settle at RM6.11 as at midday break today, after 779,400 shares exchanged hands. The stock has lost 58 sen or 8.7% so far this year, underperforming the KLCI's 1.66% year-to-date decline.