KUALA LUMPUR, June 7 ― Investors are more upbeat about 5G as monetisation opportunities emerge from selling managed solutions to enterprise clients that leverage 5G technology, Kenanga Research said.
Furthermore, as the adoption of generative artificial intelligence (Gen AI) gains momentum across enterprises, this could emerge as a future earnings growth driver via cloud offerings with integrated Gen AI tools, the research house said.
“On top of that, the looming announcement of the official 5G dual network policy directive will finally resolve the uncertainty that has dragged down sentiment on the sector,” it said in a note today, adding that it has an “Overweight” call on the telecommunication sector.
Meanwhile, it also said that the sector’s earnings delivery in the first quarter of the 2024 (1Q2024) reporting season was in line with expectations.
For the mobile players, service revenue inched up by one per cent year-on-year, driven by postpaid subscriber base expansion at Maxis Bhd forecasts.
This has more than offset the weakness in CelcomDigi Bhd’s mobile segment, which was dragged down by reductions in interconnect rates, bulk messaging traffic and usage.
For fixed player Telekom Malaysia, its revenue growth was propelled by the surge in demand for global and domestic wholesale bandwidth services.
Quarter-on-quarter trends for the postpaid segment remained encouraging in 1Q2024 on continued subscriber net adds traction.
“However, the steady deterioration of postpaid ARPUs prevailed, possibly due to the introduction of cheaper entry level plans. On the other hand, the prepaid market continues to be challenging in 1Q2024, as subscriber base and ARPUs declined in tandem,” it added. ― Bernama
