Friday 29 Mar 2024
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KUALA LUMPUR (Feb 2): Three of Malaysia's largest cellular telecommunications companies (telcos) saw their share prices rebound at mid-morning trade today after the Malaysian Communications and Multimedia Commission (MCMC) offered more clarification on spectrum reallocation yesterday.

At 11:35am, Maxis Bhd was rose 18 sen or 3.15% to RM5.90, DiGi.Com Bhd was up three sen or 0.61% at RM4.91, while Axiata Group Bhd climbed 21 sen or 3.74% to RM5.82.

In its statement yesterday, the MCMC announced that spectrum in the 900MHz and 1800MHz bands will be reallocated among four players — namely Maxis, DiGi, Celcom Axiata Bhd (a wholly owned subsidiary of Axiata), and U Mobile Sdn Bhd — by August this year for full implementation by July 1, 2017.

MCMC's chairman Datuk Seri Halim Shafie said these two bands of spectrum will be assigned for a fee, and for a period of 15 years.

The announcement came after Prime Minister Datuk Seri Najib Razak said, during the presentation of the revised Budget 2016, that the telecommunication spectrum will be re-distributed through a bidding process.

Subsequent to the presentation last week, telcos' share prices tumbled as worries of highly expensive cash outflows for spectrum bidding could impact the telco's rollout of 4G services and dividend payments.

"While this reallocation development is still a negative for the sector, we view the telco selldown last week as an over-reaction as the impact may be lower than feared," AmInvestment Bank research analyst Alex Goh noted in his note today.

Public Investment Bank Research analyst Eltricia Foong concurred and reckoned that there will be greater competition for the telco industry.

"With Telekom Malaysia's plan to re-enter the mobile market and U Mobile to be given additional spectrum, we should only expect stiffer competition for the industry," she said in a note to investors today.

 

 

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