On 5G, RHB Research said the elephant in the room continued to be the execution of the share subscription agreements for Digital Nasional Bhd.
PETALING JAYA: Fixed broadband (FBB) rates, after the implementation of the new Mandatory Standard on Access Pricing (MSAP), appear controlled and non-disruptive for now.
This is despite the new MSAP resulting in wholesale prices for Layer 3 High Speed Broadband falling by 51% to 65% for 2023-2025, said RHB Research.
The research firm expects telecommunication companies to mitigate the impact with bundled offerings, additional devices and/or speed upgrades for customers, with average revenue per user dilution likely offset by the higher take up and demand for FBB/FBB-mobile bundles.
It said CelcomDigi Bhd has unveiled new FBB packages with a slight reduction in rates. Other providers are expected to do so in the coming days or weeks.
For CelcomDigi, existing FBB customers would enjoy 6% to 27% lower monthly commitments with the entry level 50Mbps plan now retailing for RM85, from RM90 previously.
Subscribers on FBB-mobile postpaid bundles (except for the 800Mbps plan) stand to gain RM10 to RM20 in monthly rebates or total savings of 3% to 7% per month (1% to 16% savings per month versus pre-adjusted bundles).
RHB said, as a tactical response and in a bid to upsell, CelcomDigi is waiving a six-month commitment on its 300Mbps plan.
This lowers the average commitment to RM97 per month (24-month contract), below the price of a 100Mbps plan.
Overall in RHB’s view, the price adjustments are not overly disruptive and it matches the price-downs by the incumbent access provider (Telekom Malaysia Bhd
) which had earlier offered complementary speed upgrades.
Based on this, RHB Research believed the FBB competition should remain rational despite the implementation of the new MSAP.
The research firm maintains its “neutral’’ outlook on the sector with a preference for fixed-line plays.
On 5G, it said the elephant in the room continued to be the execution of the share subscription agreements (SSAs) for Digital Nasional Bhd (DNB), the owner and operator of the single wholesale 5G network in the country.
The SSAs are expected to be signed by five mobile operators this month.
Assuming the government retains a 30% stake in DNB, RHB Research said each telco would have a 14% stake.
The government had stated that discussions on the second 5G network will commence after the SSAs are inked.
The equity participation has raised questions over the merits of a second 5G network, the research house said.
