Celcom commits RM1b capex for FY21

Celcom commits RM1b capex for FY21
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KUALA LUMPUR (March 1): Celcom Axiata Bhd is committing RM1 billion in capital expenditure (capex) for its financial year ending Dec 31, 2021 (FY21), which will go towards expanding its network capacity, reducing network traffic congestion and improving 4G coverage nationwide.

Celcom chief executive officer Idham Nawawi said the network operator saw a spike in traffic last year, as users consumed more data amid the Covid-19 pandemic.

“If you compare the usage in 4QFY20 (fourth quarter ended Dec 31, 2020) versus 4QFY19, there was more than 50% growth in traffic. And now, the traffic in February 2021 is almost 80% more than the total volume of traffic in February 2020.

“The growth that we are seeing is being driven by a significant increase in demand for good internet service,” he said during a virtual media briefing earlier today.

He added that the main use of its network was for video streaming, with Celcom seeing almost 150% growth in Facebook video traffic, as well as almost 70% growth in YouTube traffic.

Traffic from these two digital media platforms made up almost 60% of the total traffic in its network.

In view of the spike in data usage, Idham said Celcom will be using its capex for delivering consistent 720p high-definition video for its users, to uplift the LTE population coverage to near 96% from 93% currently, as well as to enhance its network capacity and throughput.

The network operator is also looking at improving its indoor coverage, given the mostly indoor activities of its users nowadays as opposed to outdoor, while also improving its voice-over-LTE (VoLTE) experience.

For 4QFY20, Celcom posted 2.7% growth in revenue to RM1.62 billion from the preceding quarter, while its pre-tax profit increased by 10.6% to RM785 million.

Its prepaid customer base grew by 3.7% or 203,000 subscribers to 5.64 million quarter-on-quarter, while the postpaid subscriber base increased by 2.5% or 75,000 subscribers to 3.04 million.

However, its net profit for the quarter fell 20% to RM193 million from the previous quarter, amid the accelerated depreciation as Celcom continues with its sunsetting of the 3G network.

As at end-2020, the group said it has successfully migrated half of its 1.7 million 3G-only subscribers to 4G.

Asked for his thoughts on the government’s plan to set up a special purpose vehicle to lead the 5G rollout, Idham said it was too early to comment on the matter as Celcom is awaiting more details from the government.

In general, he said it would be a good opportunity for Celcom, pointing out that the group has been managing networks since the time of 2G and therefore has the experience in hand.

Lam Jian Wyn