Celco Slugfest

There are some primary school going children being spoilt by their parents; I am saying this because they use a more expensive mobile phone than I do. I saw a 10 year old showing off his brand new iPhone 3GS to his classmates which is worth more than my Nokia E-71. I just hope that the kid doesn’t get mugged by his classmates….I wonder if he does, will the kid blame it on his parents or the celco’s marketing efforts? Just a wild thought…

Source: http://www.skmm.gov.my/facts_figures/stats/ViewStatistic.asp?cc=62290598&srid=9247989

According to the above table prepared by The Malaysian Communications and Multimedia Commission, there are 29.6 million mobile phone subscribers as of end of 30th September 2009……in a country with a population of slightly more than 28 million.

Wars are waged for a reason, whether it is for:
• Love
• Vengeance
• Greed
• Pride
• Injustice
• Something else
• or all of the above

Similarly, marketing campaigns are waged for a variety of objectives, whether it is:
• to win new customers (acquisition)
• getting existing customers to buy more (usage)
• or maintaining the customers to stay loyal (retention)
• awareness and visibility (branding)
• introduce a new product
• other possibilities
• or a combination of one or more of the above

After many hours of searching on the Internet, I found some reliable data:

The above table clearly illustrates that Maxis had been the market leader in terms of number of subscribers for 6 consecutive years from 2003 onwards.

Source:
Maxis:
2003 http://www.maxis.com.my/mmc/index.asp?fuseaction=press.view&recID=224
2004 http://www.maxis.com.my/mmc/index.asp?fuseaction=press.view&recID=224
2005 http://74.125.153.132/search?q=cache:AcQ5vCDRLiwJ:www.maxis.com.my/personal/about_us/investor/financial/Q405.pdf+malaysia+maxis+2005+results&cd=1&hl=en&ct=clnk&gl=my
2006 http://www.marketing-interactive.com/news/5338
2007 http://www.marketing-interactive.com/news/5338
2008 http://www.theedgemalaysia.com/features/147822-maxis-msia-could-refloat-by-year-end.html



Celcom:
2003 http://tmi.listedcompany.com/misc/AR2007.pdf
2004 http://tmi.listedcompany.com/misc/AR2007.pdf
2005 http://tmi.listedcompany.com/misc/AR2007.pdf
2006 http://tmi.listedcompany.com/misc/AR2007.pdf
2007 http://tmi.listedcompany.com/misc/AR2007.pdf
2008 http://biz.thestar.com.my/news/story.asp?file=/2009/2/28/business/3367612&sec=business

DiGi:
2003 http://www.digi.com.my/aboutdigi/media/mr_press_det.do?id=780&pgPoint=5&year=2004
2004 http://www.digi.com.my/aboutdigi/media/mr_press_det.do?id=1781&pgPoint=4&year=2005
2005 http://www.digi.com.my/aboutdigi/media/mr_press_det.do?id=2500&pgPoint=5&year=2006
2006 http://www.digi.com.my/aboutdigi/media/mr_press_det.do?id=3240&pgPoint=3&year=2007
2007 http://www.digi.com.my/aboutdigi/media/mr_press_det.do?id=3800&pgPoint=3&year=2008
2008 http://www.digi.com.my/aboutdigi/media/mr_press_det.do?id=4340&pgPoint=5&year=2009

But what really impressed me was DiGi’s ability to grow their subscriber base at Celcom’s expense. This can be illustrated with the table below

In terms of growth during 2003-2008 duration, DiGi grew their subscriber base the most! Intrigued with this discovery, I was eager to find out HOW did the smallest telco in Malaysia managed to achieve this feat.

I downloaded their annual reports and studied them; I must comment that DiGi’s annual reports is more marketer friendly compared to Celcom’s; Celcom’s annual report does not state their sales and marketing expenses at all. Nevertheless, let’s take a look at DiGi’s figures.

DiGi’s marketing expenditure is pretty much within the general rule of thumb between 8-12% of the gross revenue. But what is their ROMI (return on marketing investment)?

Generally, the ROMI is above 100%, meaning if you spend RM1 in marketing, you should expect to increase your sales by RM1, which is synonymous to the adage ‘you reap what you sow’.

However, based on the above table, DiGi doesn’t seem to be reaping what they are sowing….their ROMI is diminishing since 2003 till 2008. 82.5%??? DiGi definitely need to revisit their marketing KPIs.

What about Maxis? Since they were de-listed, ALL their previous years’ annual reports were removed from their website but AFTER much searching, I found 2005 annual report in Google’s cache :

http://74.125.153.132/search?q=cache:AcQ5vCDRLiwJ:www.maxis.com.my/personal/about_us/investor/financial/Q405.pdf+malaysia+maxis+2005+results&cd=1&hl=en&ct=clnk&gl=my

DiGi’s ROMI in 2005 was 165.4% compared to Maxis’ ROMI in 2005 of 259.4%, needless to say, Maxis is more ROMI-savvy.

Maxis’ latest Q3 report (http://www.maxis.com.my/personal/about_us/investor/Maxis%20Berhad%20Analyst%20Presentation%203Q09.pdf) released on 1st December 2009 showed that the sales and marketing expenses for Q3 2009 is 3.8% of their revenue. I can’t wait for their annual report next year to study their ROMI.

Summary:

Based on the above table, Maxis is the undisputed winner in the celco war, without taking into consideration of other factors. 1 point for Maxis!

Source:
http://biz.thestar.com.my/news/story.asp?file=/2009/9/26/business/4785352&sec=business
http://www.theedgemalaysia.com/business-news/14663-mobile-phone-operators-see-arpu-slipping.html

Based on the blended ARPUs for 2009, it seems that DiGi won. 1 point for DiGi!

Then again, DiGi recorded the highest % of growth from 2003 till 2008, 321% compared to Maxis’ 256% and Celcom’s 204%. DiGi won again. Another point for DiGi!

However, DiGi’s 2005 ROMI of 165.4% is lagging behind Maxis’ 2005 ROMI of 259.4%. Another point for Maxis!

The score so far is Maxis 2, DiGi 2, Celcom 0….

This war is far from over I will be following up on this once the respective companies post their latest annual reports.

Up next, MVNOs (mobile virtual network operators)……