Maxis Berhad | Annual Report 2013

OVERVIEW OUR BUSINESS STRATEGIC REVIEW CORPORATE GOVERNANCE FINANCIAL STATEMENTS Maxis Berhad Annual Report 2013 OTHER INFORMATION 7 STEADY GROWTH IN A MATURING INDUSTRY 2013 was a challenging year for the mobile telecommunications industry, as voice and SMS revenues continued to come under pressure from the increasing uptake of over-the-top (OTT) applications, combined with more intense competition among existing players. We are also operating in an increasingly digital environment. New technologies are constantly evolving, rapidly reshaping the way we connect, communicate, do business and socialise. At Maxis, we are responding to this by continuously delivering outstanding network quality, providing wide coverage and fast and reliable Internet connection speeds. We stepped up efforts to strengthen our mobile network with an investment of over RM815 million in 2013. I am pleased to report that as a result, we have maintained our leadership in the network space by having the widest 4G coverage footprint and device offerings while continuously expanding and enhancing our 3G infrastructure. We have made steady progress in positioning ourselves for high performance and long-term sustainable growth. GROUP PERFORMANCE FOR THE YEAR Overall, the Group generated stable revenue of RM9.1 billion, up 1.3% over the previous year, on the back of growth in mobile Internet and data. Mobile revenue, however, continued to be affected by lower voice and SMS usage. Normalised EBITDA improved 3.7% to RM4.5 billion, while our EBITDA margin ended at 49.8%, reflecting our continued focus on cost efficiency. This excludes Career Transition Scheme (CTS) costs of RM143 million and RM65 million provision for contract obligations related to Home services. Normalised PAT also grew by 2.3% to RM2.1 billion after adjusting for one-off items. The Board of Directors is pleased to recommend a final dividend of eight sen per share for the financial year ended 31 December 2013 at the forthcoming Annual General Meeting. The four interim dividends paid and the recommended final dividend will bring the total to 40 sen per share, amounting to RM3 billion in total dividend payout to shareholders. WINNING IN A CHANGING ENVIRONMENT We have positioned ourselves strongly to leverage opportunities that will arise from increasing data consumption. This increase is being driven by smartphone adoption especially in the low-to-mid tier segment, digital entertainment becoming mainstream, and the availability of more data intensive applications. The demand for value-added business solutions is also growing. New mobility- based ways of working in areas like managed services, cloud computing, machine-to-machine, and security solutions are accelerating rapidly especially among small and medium enterprises. The current market is still nascent, offering exciting opportunities for profitable growth. At the same time, we expect to see competition intensifying in a fast, maturing industry. This means that we will need to be much more differentiated and creative, particularly in terms of strong branding and marketing initiatives, innovative value-for-money plans and solutions, improved distribution, and an enhanced network. A significant part of our network and IT capacity is already dedicated to data. We will continue to invest in rolling out 4G and improving our 3G quality. As more data-hungry devices and applications emerge in the mobile broadband space, our challenge is to have adequate spectrum to deliver seamless high-speed broadband connectivity with the best possible service quality. To this end, we are grateful to the Government for releasing the 2600MHz spectrum to Malaysian operators for 4G services. In line with global developments, it is crucial that in the near future, mobile operators have access to lower bands such as the 700MHz, 800MHz and 850MHz spectra to enable them to provide more efficient 4G services and beyond. In this respect, we welcome the recent Government announcement on the expected availability of 700MHz to mobile operators in 2018 and hope for allocation of the 800MHz band. We have refined and streamlined our organisational structure to make us more agile in anticipation of the constantly changing needs of our customers. Our operations now consist of four core areas – Consumer Business, Enterprise Solutions, Digital Services and Sales and Service. A CTS was initiated during the year, which has enabled us to better align skill-sets with business priorities.