Maxis Q4 profit climbs 21pc

Malaysian mobile phone operator Maxis Bhd reported a 21 per cent increase in quarterly profit driven by higher revenue from data services, and warned of further pressure on tariffs and operating margins from cut-throat competition.

Income from data services is expected to be the key growth driver for Malaysia’s telecom operators this year as the country’s broadband usage remained low at 55 percent of the population at end-2010.

“The driver of revenue growth for the foreseeable future is from the increasing demand for wireless broadband, internet access and other non-voice services,” said Maxis, Malaysia’s second biggest mobile phone operator by market capitalisation.

Maxis posted a net profit of RM610 million for October-December, up from RM503 million a year earlier and slightly above the RM609 million average forecast of three analysts tracked by Thomson Reuters I/B/E/S.

Net profit for the full year was 2.3 billion, matching the 2.3 billion ringgit consensus forecast of 25 analysts tracked by Thomson Reuters, led by higher income from data and wireless broadband services.

Regional telecommunication companies are facing a rapid decline in traditional fixed-line phone services and are having to spend more to win back customers.

Maxis’ mobile subscriptions rose by 14 per cent to 13.9 million in 2010, with prepaid and wireless broadband up by 1.4 million and 330,000 subscriptions respectively.

The company said it would pay a final dividend of eight sen per share.

Maxis said it would continue to invest in its networks to meet customers’ demand for smart data devices this year.

“The group will also continue its focus on cost management and operational efficiency initiatives to maintain operating margins,” it said in a statement.

Six out of 24 analysts tracked by Thomson Reuters I/B/E/S have a “buy” or “strong buy” rating on Maxis, with a median target price of 5.50 ringgit a share.

Maxis shares have risen by about two per cent since the start of the year but lagged rival DiGi’s eight percent gain. - Reuters