Telekom Malaysia stutters; Axiata holds steady

Telekom Malaysia stutters; Axiata holds steady

Among recent financial results from telecommunications service providers are two contrasting reports from Malaysia.

Telekom Malaysia, a leading service provider in Malaysia, with offerings across fixed and wireless, has reported an eight per cent year-on-year drop in group revenue for the quarter ended 31 March 2020. The fall – to some $588 million – is blamed on “lower revenue contribution from all lines of products”, including fixed voice and internet. 

Fixed broadband subscriber numbers have fallen slightly – to 2.184 million at the end of March, down from 2.195 million a year earlier.

By contrast, Axiata, which is headquartered in Malaysia but operates in a number of countries, has said its financial results for the first quarter of 2020 show “modest growth in revenue and EBITDA” despite what is called “the increasingly challenging operating environment”, not to mention coronavirus-related problems.

In fact, group revenue increased by 1.5 percent year-on-year to close to $1.4 billion (at present exchange rates), on a reported basis, up from $1.37 billion in the first quarter of 2019. Much of the growth is said to be down to Axiata’s operating companies such as XL in Indonesia and Robi in Bangladesh. By contrast, domestic unit Celcom and Ncell in Nepal saw declines.

Of course, both companies would have seen limited impact on their latest financial results from the coronavirus, whose effects will no doubt be clearer in the second quarter.

Interestingly, Axiata was quoted in a number of press reports as saying that “given the uncertainty surrounding the depth and duration of this pandemic and the difficulty in predicting the pace of recovery at this point”, it was opting to withdraw its guidance on 2020 headline KPIs. Obviously forecast revenue growth of between 3.5 percent and 4.5 percent and EBITDA growth of 4.0-5.5 percent came well before the effects of the pandemic could be known.