Maxis lowers capex further

KUALA LUMPUR: Maxis Bhd, the country's largest mobile operator, has lowered its capital expenditure (capex) for the year as its "disciplined" cost-management programme has helped it save cost without jeopardising expansion plans.

The company, whose mobile voice network covers more than 95 per cent of the country, aims to expand the coverage and quality of its wireless broadband network, as well as other services.

Initially, Maxis had set aside RM1.5 billion capex for this year. However, during the announcement of the first quarter results three months ago, it shared that cost-saving measures had resulted in reduction in capex to RM1.3 billion.

"Last quarter, I scaled it down to RM1.3 billion and I stand corrected again as I am scaling it down further to RM1.2 billion now, resulting from a lot of savings going around and network fine-tuning," said chief executive officer Sandip Das during a press briefing yesterday.

For the first half this year, it spent RM482 million on capex.

Maxis, controlled by tycoon T. Ananda Krishnan, posted a second quarter net profit of RM552 million, a 3.8 per cent improvement against the same period last year.

For the first half, its net profit saw a 0.7 per cent gain to RM1.08 billion. Its subscriber base grew marginally to 12.78 million. During the first six months this year, its revenue declined 1.2 per cent to RM4.34 billion, mainly due to the scaling down of its international gateway services, or hubbing business.

However, if compared to the revenue without including hubbing business revenue, it would have posted a 1.5 per cent gain to RM4.15 billion.

Maxis' wireless broadband business continues to grow as it now has 625,000 wireless broadband customers, a 4 per cent rise from first quarter this year.

In the first half, the business contributed RM236 million in revenue.

"It has been satisfying to see that the hard work put in by the Maxis team in executing the plans is paying off with some good results," Sandip said.

The company, which expects its non-voice revenue to contribute 50 per cent of total revenue by end-2012, now has a non-voice revenue contribution of 42.4 per cent. Non-voice revenue includes text messages, music downloads, Internet and data services.

Its push on smart phone packages, tablet packages, and wireless broadband is showing results, as its Internet and data services now contributes 58 per cent of non-voice revenue.

Maxis declared a second interim single-tier tax-exempt dividend of 8 sen per share amounting to RM600 million to be paid on September 30 2011.

Shares of Maxis rose 0.37 per cent, or 2 sen, to RM5.42 yesterday.

By Goh Thean Eu, Business Times