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Telco Wars: Could Webe be Malaysia's next big thing?

Webe is also rumoured to be introducing a total unlimited plan: unlimited 4G Internet plan, unlimited calls and unlimited SMS, for a mere RM80 per month. Webe is also rumoured to be introducing a total unlimited plan: unlimited 4G Internet plan, unlimited calls and unlimited SMS, for a mere RM80 per month.

A mobile industry online portal reported that Telekom Malaysia Bhd (TM) and Packet One Networks (Malaysia) Sdn Bhd (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 for new subscribers without need of phone, which could possibly come with 20GB data, 1,000 voice minutes and 1,000 SMS.

The RM8 per month price tag will be offered to existing P1 customers who choose to pick up a phone plus the plan and RM9 per month if without the phone.

In terms of network coverage, it should mimic Celcom’s 3G coverage due to domestic roaming network agreement signed in January 2016 between Celcom Axiata Bhd and TM.

Over the past year, P1 and TM have been working together to launch its new 4G LTE network which operates at the frequency of 850Mhz and 2.6Ghz.

Part of the new 4G LTE network is already up and running and it is being offered as TMgo (850Mhz). The 2.6Ghz network is currently being configured and tested by P1.

In the future, P1 would migrate all its WiMAX customers to its new 4G LTE network.

According to The Star news report quoting an analyst at MIDF Research covering the telecommunication sector, it was believed 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 31 December 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 RM23.4 million. 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 RM17.1 million 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.

TM own about 55.3% of P1, and the remaining 44.7% is shared between Green Packet Bhd (31.1%) and South Korea's SK Telecom Co., Ltd (13.6%). Meanwhile, Celcom Axiata is a subsidiary of Axiata Group Bhd.

 

A comparison of selected telco plans.A comparison of selected telco plans. (Right click to open image in new tab for larger image)

 

 

Adapted from original news article: The StarBiz, 8 April 2016

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