KUALA LUMPUR: Axiata Group Bhd is expanding regionally, but not so much of its mobile service operation. The telecommunications company is switching the emphasis of its expansion path to telecommunication towers.
Axiata may make further acquisition of telecommunication tower operations in the “medium term” across Asia, according to its president and group chief executive officer (CEO) Tan Sri Jamaludin Ibrahim.
Speaking at the briefing on the group’s second-quarter financial results, Jamaludin said while Axiata does not foresee any major acquisition in the core mobile businesses, he does not rule out the possibility of further regional expansion by edotco Group Sdn Bhd, the group’s wholly-owned telecommunication tower company (towerco).
“For core mobile businesses, [there’s] nothing imminent, and we do not foresee in the near future there will be a major one. From a towerco perspective, maybe. We have acquired Myanmar (Digicel Myanmar Tower Company Ltd); probably I would say in the medium term we might do one or two more across the region,” he said.
Currently, edotco owns 16,800 towers, and Jamaludin said it aspires to grow another 10,000 towers in the next five years, aiming to be the fifth-largest towerco globally. The company is currently ranked No 12 across the globe.
Besides, Jamaludin highlighted that Axiata is ramping its financial year ending Dec 31, 2016 capital expenditure (capex) up to RM6 billion, from RM5.7 billion previously, mainly catering to expansion in Malaysia, Indonesia and Bangladesh.
“That is primarily for LTE roll-outs in these three big countries; we are ramping up our network quality, especially with regard to 4G,” he said.
For Malaysia alone, he said the group is allocating about RM1.5 billion this year, compared with RM850 million spent last year.
However, Jamaludin said the capex allocated does not include the upcoming fee for spectrum allocation by the Malaysian Communications and Multimedia Commission (MCMC).
The MCMC in February announced that the 900MHz and 1800MHz bands will be reassigned to the four biggest cellular service providers for a fee over a period of 15 years.
In a notice to Celcom Axiata Bhd, the MCMC said the company’s spectrum allocation, compared with the current allocation, will be lowered from 2x17MHz to 2x10MHz in the 900MHz band, and from 2x25MHz to 2x20MHz in the 1800MHz band.
The MCMC intends to issue the spectrum assignment to all four players by this month, for full implementation by July 1, 2017.
However, the MCMC has yet to reveal details. Jamaludin said Axiata is “extremely eager to find out” the pricing of the new spectrum allocation, but he declined to reveal the group’s budgeted expenditure for the upcoming fee.
On the lacklustre performance of Indonesia’s PT XL Axiata Tbk, Jamaludin said: “There is a big shift from voice to data. Although we have grown data quite significantly, there is not enough to compensate the reduction in voice.”
Jamaludin added that in terms of branding and pricing perspectives, XL Axiata is not doing good enough to capture the middle-class Indonesian market.
XL Axiata swung to a net profit of 55.5 billion rupiah (RM16.9 million) in the second quarter, from a net loss of 92.8 billion rupiah a year earlier, while revenue fell 6.8% to 5.25 trillion rupiah, from 5.63 trillion rupiah.