A New 4G LTE Mobile Service is Coming Soon

A mobile industry online portal reported that Telekom Malaysia (TM) and P1 are scheduled to launch a new 4G LTE mobile service called “webe”.

The plan is expected to offer a promotional postpaid plan at RM10 per month which could possibly come with 20GB data, 1000 voice minutes and 1000 sms. In terms of network coverage, it should mimic Celcom’s 3G coverage due to domestic roaming network agreement signed in January 2016 between Celcom and TM.

MIDF Research believes that the new mobile service would first be made available to TM’s existing broadband customers which stand at 2.34 million customers as at end of the fourth quarter ended Dec 31, 2015.

According to the management of TM, the rollout of the new mobile service is primarily to complement its ‘quad-play’ ambitions – the fourth offering being internet mobility. It currently offers ‘triple-play’ services with its UniFi high speed broadband service.

Subsequently, MIDF believes the plan would be extended to non-TM customers as well.

The potential offering of the RM10 postpaid plan would further intensified competition among the existing mobile network operators.

The research house views the potential RM10 postpaid plan as much more competitive compared with the incumbents’ offerings.

“The move would entice TM’s existing customers to port away from their existing mobile services. In addition, we believe that the offer is viable as TM is the provider of bandwidth connectivity via TM Next-Gen Backhaul services,” it said on Friday.

A rough estimate of the potential revenue contribution for P1 would be RM23.4mil. This is based on a few assumptions namely, postpaid plan of RM10; TM’s existing customer base of 2.34 million; and full take-up rate.

For TM, the potential topline contribution from P1 would amount to RM17.1mil as it currently owns 72.9% of the latter.

Although the contribution would be “negligible” at this stage, MIDF said the revenue contribution from the new mobile service would be more meaningful once the promotional postpaid plan price has been lifted; and the service is made available to non-TM customers.

It leaves its earnings estimates unchanged pending further information on the development. It revised its target price on TM to RM8.14 per share from RM7.01 per share previously. MIDF upgrades its call on TM to Buy as the offering of the new mobile service would complement its existing triple play proposition.

“We view that the ‘quad-play’ offering would further strengthen TM’s position in the telecommunication industry. Telecommunication users will be more inclined to subscribe to TM’s telecommunication services which are made available through the subscription of an umbrella package,” it added.

Source: The Star Online