MALAYSIA: Strong debut for country's leading mobile provider Maxis Bhd in early trading

Record ID: 767345

  • Title: MALAYSIA: Strong debut for country's leading mobile provider Maxis Bhd in early trading
  • Date: 20th November 2009
  • Summary: KUALA LUMPUR, MALAYSIA (NOVEMBER 19, 2009) (REUTERS) MALAYSIA STOCK EXCHANGE, BURSA MALAYSIA BURSA MALAYSIA SIGNAGE VARIOUS OF GUESTS AT THE LAUNCH MALAYSIAN SECOND FINANCE MINISTER AHMAD HUSNI HANADZLAH MORE OF GUESTS (*** FLASH PHOTOGRAPHY ***) MAXIS BERHAD CHIEF EXECUTIVE OFFICER SANDIP DAS SECOND FINANCE MINISTER AHMAD HUSNI HANADZLAH AND MAXIS BERHAD CHAIRMAN RAJA ARSHAD TUN UDA LAUNCHING THE INITIAL PUBLIC OFFERING VARIOUS OF MAXIS BERHAD SHARE PRICE ON GIANT SCREEN SHARE PRICE GRAPH VARIOUS OF VIPS LOOKING AT SCREEN JOURNALISTS CROWDING AROUND VIPS JOURNALISTS KUALA LUMPUR, MALAYSIA (NOVEMBER 18, 2009) (REUTERS) VARIOUS OF MAXIS BERHAD CEO SANDIP DAS SEATED (SOUNDBITE) (English) MAXIS BERHAD CEO SANDIP DAS SAYING: "We have spent close to 3 billion ringgit which is probably the largest expenditure done by any Telco and Telecom mobile operators in the country. This year we will spend another 1.2, 1.3 billion. Next year we will spend another 1.2, 1.3 billion, so you're seeing us continuously building almost five and a half billion over the last five years in building an infrastructure that is moving towards getting the data capability and broadband capability." HANDS OF MAXIS BERHAD CEO SANDIP DAS GESTURING (SOUNDBITE) (English) MAXIS BERHAD CEO SANDIP DAS SAYING: "So there is a long, long way for wireless broadband to go, and this is still very early days. But eventually I think the battle will be won. In about two to three years time, you will see a clear emergence of leadership where you would see the footprint will be very important, the throughputs will be very very important, the quality of network will be important. The continuous investment in growing your network will be very important. The whole content, your alliances, all that differentiation will be very very key." HANDS OF MAXIS BERHAD CEO SANDIP DAS GESTURING AND SPECTACLES ON TABLE (SOUNDBITE) (English) MAXIS BERHAD CEO SANDIP DAS SAYING: "Prices are a natural fall-out of intense competition because when everybody's network etcetera is matched, you would have, in the short term, people fighting on price." HANDS OF MAXIS BERHAD CEO SANDIP DAS HOLDING SPECTACLES (SOUNDBITE) (English) MAXIS BERHAD CEO SANDIP DAS SAYING: "Next year will be more on 3G broadband because we would have done a lot of the building out already. But thereafter I see that our capex will come down because we would have done most of the broad areas of the network." LARGE 3G MODEL PHONE RECEPTIONIST AT MAXIS OFFICE MAXIS RECEPTION AREA
  • Embargoed: 5th December 2009 12:00
  • Keywords:
  • Location: Malaysia
  • Country: Malaysia
  • Topics: Communications,Economic News
  • Reuters ID: LVA1H2H9048UA1CF1NPYVH99BNWU
  • Story Text: Malaysia's top mobile services provider, Maxis Berhad, made a strong debut at the Malaysian Bourse on Thursday (November 19), returning two years after the company was privatised and delisted.
    Shares of Malaysia's Maxis Bhd jumped on the company's trading debut, reflecting pent-up demand for the stock from local institutions squeezed out of its IPO allocations.
    The shares opened at 5.46 ringgit a share, 9.2 percent above its IPO price of 5.00 ringgit ($1.49). It traded 50 million shares by 0102 GMT.
    Maxis Berhad raised $3.3 billion dollars from Southeast Asia's biggest IPO, and the sixth biggest IPO in the world so far this year, as firms rush to take advantage of recovering markets.
    It plans to pay 75 percent of earnings as dividends, said Sandip Das, chief executive officer of Maxis.
    Das told Reuters in an exclusive interview that spending in 2010 would focus on third-generation broadband, a major growth driver for Maxis which focuses solely on the domestic market.
    "We have spent close to 3 billion ringgit which is probably the largest expenditure done by any Telco and Telecom mobile operators in the country. This year we will spend another 1.2, 1.3 billion. Next year we will spend another 1.2, 1.3 billion, so you're seeing us continuously building almost five and a half billion over the last five years in building an infrastructure that is moving towards getting the data capability and broadband capability," Das said.
    Maxis has a 40 percent share of the local mobile phone market, of which penetration is at more than 100 percent, and nearing saturation point.
    Competition in the broadband segment is heating up, with the number of players doubling over the past two years after the government gave out new permits.
    Malaysia's broadband penetration rate, slightly over 20 percent, is among the lowest in Asia, compared to Singapore's 79 percent, Hong Kong's 85 percent and South Korea's 93 percent, according to Frost & Sullivan.
    "So there is a long, long way for wireless broadband to go, and this is still very early days. But eventually I think the battle will be won. In about two to three years time, you will see a clear emergence of leadership where you would see the footprint will be very important, the throughputs will be very very important, the quality of network will be important. The continuous investment in growing your network will be very important. The whole content, your alliances, all that differentiation will be very very key," Das said.
    He added that he expected rising competition to drive down prices in the broadband market over the next few years, forcing out weaker players, but said that there is potential for the market to grow.
    "Prices are a natural fall-out of intense competition because when everybody's network etcetera is matched, you would have, in the short term, people fighting on price.", said Das.
    In Malaysia, Maxis had priced its stock at 5 ringgit a share for institutional investors and 4.75 ringgit for the retail sector, at the mid-to-lower end of an indicative range.
    Malaysian billionaire Ananda Krishnan controls Maxis Bhd via unlisted Maxis Communications Bhd which also owns telecom assets in India and Indonesia. Maxis Communications owns 74 percent of Aircel, India's seventh-ranked mobile operator.
    Maxis Communications has said part of the IPO proceeds would be used to fund its overseas expansion.
    The re-listed company is a stripped-down version, housing just the Malaysian business and leaving the fast-growing Indian and Indonesian operations with unlisted parent Maxis Communications Bhd.
    Das foresees that capital expenditure will likely dip in the following year, as most of the infrastructure would have been built.
    "Next year will be more on 3G broadband because we would have done a lot of the building out already. But thereafter I see that our capex will come down because we would have done most of the broad areas of the network" he said.
    Das said he expects capex requirements in India and Indonesia to remain high. The two markets "are still capital intensive in terms of rollout and that will continue," he said, adding an ongoing price war in India's mobile market was expected to lead to an industry consolidation and it is unlikely to stabilise anytime soon.
    With a market capitalisation of $11 billion, Maxis is the fourth-biggest stock by market value on the Kuala Lumpur Stock Exchange, and will replace flag carrier Malaysia Airlines in the 30-stock FTSE Bursa Malaysia KLCI Index from Friday (November 20).
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