KUCHING: With Digi.com Bhd (Digi) and Maxis Bhd (Maxis) having reported decent second quarter of 2021 (2Q21) results, Celcom Axiata Bhd (Celcom) has been projected to follow suit.
According to the research arm of Maybank Investment Bank Bhd (Maybank IB Research), with stricter movement restrictions being in place (possibly affecting channel activities) since May 2021, concerns have emerged over possible earnings pressure for 2Q21.
“So far, both Digi and Maxis have reported decent results for 2Q21, underpinned by healthy postpaid subscriber momentum on the back of strong take-up for their respective Prihatin plans or bundles,” Maybank IB Research said.
“We expect Celcom, through Axiata Group Bhd (Axiata), to follow suit. Axiata is tentatively scheduled to report 2Q21 earnings on August 27.”
Maybank IB Research recalled the government launched the Jaringan Prihatin programme in May 2021 to assist the Bottom 40 per cent (B40) segment (circa 8.4 million eligible people) in bridging the digital divide.
The research arm gathered that eligible subscribers need to register with their telco of choice to claim either RM180 of bill rebates (RM15 per month for 12 months) or RM300 of device rebate (one-off).
It noted that the government would contribute RM2 billion (in the form of cash reimbursements to telcos) of the total stated RM3.5 billion value, while telcos would bear the remaining value mostly in the form of incremental free data.
Meanwhile, Maybank IB Research also recapped that there was no notable increase in bad debt provisions for both Maxis and Digi in 2Q21.
“In our view, with the strict movement restrictions having only started in May 2021, 2Q21 has probably ended too early for any bad debt issues to manifest.
“With Covid-19 cases still high and movement restrictions still in place today, we believe it is premature to dismiss the possibility of bad debt provisions flaring up in 3Q21.”