Axiata resubmits 2.6G proposal to MCMC

KUALA LUMPUR: Axiata Group Bhd has resubmitted its business plan to the Malaysian Communications and Multimedia Commission (MCMC) to secure a block of the 2.6G long term evolution (LTE) spectrum or 4G spectrum.

Analysts said Axiata had confirmed that it had resubmitted the business plan at a luncheon hosted by the telco to share some latest corporate updates with analysts.

On Tuesday, StarBiz reported, citing sources, that the regulator had met up with telecom companies on a one-on-one basis in early June and that the companies were told to revise their plans and submit them before noon on June 13.

“Should Axiata fail to secure the award of the 2.6G spectrum, the company will collaborate with other spectrum owners to roll out its 4G services,” Kenanga Research said.

It is believed that the final number of spectrum operators may be less than nine players, according to the research house.

The nine that are slated to get a 20Mhz block of the 2.6G spectrum are the four 3G players (Celcom Axiata Bhd, DiGi.Com Bhd, Maxis Bhd, U Mobile Sdn Bhd) and the five WiMAX players (Asiaspace Sdn Bhd, Packet One Network (M) Sdn Bhd, REDtone Int Bhd, YTL Communications and Puncak Semangat Sdn Bhd).

OSK Research said Axiata's management echoed the views of the industry in that nine operators were just too many. It sees “those with weak financial muscle dropping out of the race for the spectrum” as scale is paramount.

“On the re-farming of the 900/1800MHz spectrum, Celcom Axiata Bhd is in talks with Maxis Bhd, a solution that would be less intrusive for both companies in the event that they would have to vacate some blocks of the spectrum,” the research house said.

OSK Research said the discussion during the luncheon involved cost management and data potential within the operating companies. “Management, was however elusive on the dividend upside potential, a key share price-rerating catalyst for the stock,” it said.

Both Kenanga and OSK concurred with Axiata's management view that data was the key area to focus on going forward.

“Acknowledging that the group is playing catch-up with its competitors on data, Axiata believes its data capabilities will outshine the competition by second half of 2012, citing innovative data measures already in place,” OSK said.

On key performance indicators (KPI), Kenanga said the management believed it was on track to meet 2011 KPI of 10% year-on-year revenue growth and 10.3% growth in earnings before interest, tax, depreciation and amortisation (Ebitda). It said the telco admitted that meeting the KPI revenue growth would be a “greater challenge” than meeting the KPI for Ebitda growth, following a seasonally slow 3.3% year-on-year revenue growth.

“Axiata sees its revenue growth of 10% as challenging and Ebitda growth of 10.3% as tough and is not resting on its laurels,” OSK said.

The research house said the telco hoped to emulate the success of PT XL Axiata Tbk (XL) in sharing its towers by increasing their tenancies.

While Celcom has been sharing more than half of its old sites, the tenancy ratio of over one time remains sub-optimal versus the industry average of 2.2 to 2.3 times. On its operating expenditure (opex), Axiata believed there was still room to lower its opex but this was likely to come from structural rather than operational adjustments, OSK said.

hlk, thanks for the update.

sun wrote:hlk, thanks for the update.

tks sun, hope tat nxt time axiata bb can b bullish again

hlk wrote:

sun wrote:hlk, thanks for the update.

tks sun, hope tat nxt time axiata bb can b bullish again [You must be registered and logged in to see this image.]

sure will... [You must be registered and logged in to see this image.]