Malaysia’s telecommunications sector is positioned for service revenue growth in the coming months, with domestic operators benefiting from demand in both consumer and enterprise segments while maintaining cost discipline, according to a recent analysis by MBSB Research.
The research firm reaffirmed a positive outlook on telco stocks, noting that the impending inclusion of stakes in 5G network operator Digital Nasional Bhd (DNB) is not expected to affect the financial results of major players for the fourth quarter of 2026. Dividend yields remain attractive, with an estimated payout of around 5%.
MBSB Research maintained “buy” recommendations on CelcomDigi Bhd and Maxis Bhd, setting target prices at RM3.54 and RM4.05, respectively. CelcomDigi was highlighted as a preferred pick, driven by its cost transformation program, which is expected to offset the financial impact of integrating DNB’s assets. Maxis, meanwhile, was praised for its operational consistency and steady profit margin improvements over the past three years. The upcoming merger and acquisition exercise within Maxis’ enterprise segment is also seen as a potential catalyst for further earnings growth.
The consumer mobile segment continues to be the primary revenue source for both companies. As of the second quarter of 2026, it accounted for 76.9% of CelcomDigi’s service revenue and 70.2% of Maxis’. Notably, Maxis has a larger postpaid revenue share—61.4% compared to CelcomDigi’s 49.9%. Both operators reported increases in their postpaid customer bases during the quarter, with Maxis growing by 4.9% year-on-year and CelcomDigi by 3.8%.
Analysts expect a gradual rise in postpaid revenues as telcos promote pre-to-postpaid migration through attractive plans and incentives aimed at prepaid and potential subscribers. This shift may have contributed to a slight decline in average revenue per user (ARPU) for postpaid customers, with Maxis’s ARPU down 1.1% to RM70.50 per month and CelcomDigi’s down 4.5% to RM60 per month. However, the research notes that this trend is not immediately concerning, given ongoing efforts to bundle services and encourage convergence, which could improve average revenue per account over time.
Customer retention remains a challenge. In the second quarter, CelcomDigi’s prepaid revenue contracted by 4.2%, accompanied by a 5.5% decline in prepaid subscription numbers. Maxis saw a modest increase of 0.3% in prepaid revenue but experienced a 0.5% drop in active prepaid customers. MBSB Research suggested that both companies might be losing market share to smaller competitors. To counteract this, they are implementing portfolio refreshes, upselling strategies, and targeted marketing campaigns.
The fibre broadband business shows resilience, with CelcomDigi reporting a 33.8% revenue increase driven by subscriber growth and higher ARPU, while Maxis maintained steady performance despite a slight 0.8% decline in revenue due to a marginal dip in ARPU from RM110.20 to RM109.10. The ongoing push for service bundling is expected to underpin future fibre growth.
Looking ahead, enterprise segment growth will hinge on the range of connectivity and digital solutions offered, with mobile enterprise services expected to provide a solid foundation for revenue expansion. Both telcos are focusing on connectivity-driven services as key drivers for their enterprise income in the medium term.