Monday, September 3, 2012

Maxis, Celcom, Digi: Who is grabbing whose market share?

At the stage where revenue from mobile business is growing at a snail pace, it is important for each of the big three telcos continue to chip away market share from its competitors. As such, a simple statistics - "revenue" is much important to have a view of what each mobile represents and has managed to build on.

Why as simple as "revenue" number is important
Much of mobile players investments are fixed investments i.e. the equipment investments and staffs costs (except for the subscriber's acquisition costs). As a result, it is very important for these guys to build on revenue. This is the stage where we are able to view on who is able to build on its brand better, and who potentially has lost market share via higher churn rate.

These mobile players (except for Axiata) have become largely a dividend stock with dividend per share just as high as earnings per share. Why Axiata is not a full dividend stock is due to its regional presence than just Malaysia.

As a result, it is important for investors to still have a view on who is growing faster.

"Click the picture for larger view" - basically it tells of Digi has better revenue growth compared to Celcom and Maxis which came in last.
As you can see above, the one that is able to produce bigger revenue growth is Digi with a 3-year Compounded Quarterly Growth Rate ("CQGR") of 2.05% against Celcom's 1.44% and Maxis' 0.23%. Among the three mobile players, CQGR over the last 3 years was a mere 1.10%.

Produce the market share on a pie chart, it looks like below.

"Click the picture for larger view"
Now, as you can see, Digi's market share among the 3 was about 24.79% 12 quarters ago and it has now grown to 27.73% in its latest quarter numbers. The increase in market share for Digi is at the expense of Maxis with Celcom registering growth from 32.06% to 33.37% revenue market share among the 3 mobile players.

In fact, the numbers that I took includes some revenue (although minimal) from fixed broadband for Maxis, as now Maxis is more actively into fiber broadband than Digi and Celcom. I have not heard of the two players dwelling into fixed broadband actually. Over the last 12 quarters, I can in fact go on to say that for the mobile business alone, Maxis may not achieve any revenue growth perhaps. If that is that case, things does not look good for Maxis in terms of its competitiveness as it is losing market share to its other 2 competitors.


Bannee said...

Does the idea of slowing growth for telcos also apply for industry that is mature, eg banking?

felicity said...

Hi Bannee

I would think Banks are a different animal. It will continue to do well as long as the opportunity to grow persists.