Axiata Group Berhad - Annual Report 2016

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Axiata Group Berhad | Annual Report 2016 OPERATING COMPANIES BUSINESS REVIEW 044
Smart Axiata was recognized as Cambodia’s
Mobile Service Provider 2016 by Frost & Sullivan
following the Asia Pacific Emerging Market
Telecom Service Provider of the Year Award in
2015. Smart Axiata has also been awarded as the
Best Telecommunications Company Cambodia
and Best Corporate Social Responsibility (CSR)
Company Cambodia in 2015 and 2016 by Global
Banking & Finance Review.
The Company's workforce consists of more than
1,000 people including local and foreign experts.
Smart is committed to its customers, employees
and the people of Cambodia in delivering its
promise of improving their lives. “Live. Life. Be
Smart.”
Business Review 2016
In 2016, Smart continued to strengthen its
market position and performance, serving a
customer base of more than 8 million subscribers.
The Company invested USD75 million focused
on rolling out its 4G LTE network across all 25
provinces nationwide and on mobile Internet
infrastructure in general. In its drive to deliver the
fastest mobile Internet service at an affordable
price to all Cambodians, Smart upgraded parts
of its 4G LTE network to 4G+ in September
2016, where Carrier Aggregation is used to
increase the capacity of the base stations and
consequentially increases the speed of mobile
Internet available to customers. By the end
of the year, more than 60% of its 2100 base
stations across all 25 provinces were equipped
with 4G and 100% with 3G. An independent
study conducted and published under the Ookla
Net Index1 recognised Smart as Cambodia’s
Fastest Mobile Network Provider in 2016.
Smart continued on its evolutionary journey
towards being a digital lifestyle brand. SmartPay,
an award winning product at the Cambodia ICT
Awards 2016, was launched as a new payment
solution for app purchases via phone balance
while at the same time providing opportunities
for the App Developer Community to monetise
their work. SmartLuy is building on its unique
proposition of being mobile, innovative, simple
and better than cash, while Smart Music offers
streaming of more than a million songs. The
Company also released Apple iPhone 7 and
iPhone 7 Plus and continues to be the only
authorised operator distributing Apple iPhones
with attractive bundle plans in Cambodia.
Beyond its core business, the Company actively
contributes towards numerous initiatives and
partnerships structured around the corporate
social responsibility (CSR) pillars of Education,
1
Environment and Community Sports. Besides
the SmartEdu Scholarship Program in
partnership with the Ministry of Education,
Youth and Sport and the landmark long-term
partnership between Smart and UNESCO in
developing and implementing joint-initiatives
in the field of education in Cambodia, Smart
has also launched and sponsored many other
successful projects as key development partner
of various ministries of the Royal Government of
Cambodia. Throughout 2016, Smart continued
with its sustained focus in the areas of ICT
literacy, technopreneurship and digital start-ups.
Besides being recognised as Cambodia’s Mobile
Service Provider 2016 by market research firm
Frost & Sullivan and winning the Best Community
Project Award by TelecomAsia for its involvement
in Cambodia’s National Literacy Campaign in
collaboration with the Ministry of Education,
Youth and Sport as well as UNESCO, Smart has
also been lauded again by Global Banking and
Finance Review as both the Best Telco and the
Best CSR Company Cambodia 2016.
Financial Performance
Smart continued with yet another year of stellar
performance, recording double-digit Year on
Year (YoY) growth in 2016 fueled by excellent
data subscriber and revenue growth. Data
subscribers grew 25.4% to 3.8 million while data
revenue grew by 48.6% with data accounting for
42.3% of Smart’s total revenue.
Smart achieved 13% YoY growth of its overall
revenue, continuing with its strong growth
momentum of previous years. Strong focus on
cost management and capex efficiency has
enabled the Company to achieve 12% and 19%
YoY increase in EBITDA and PAT respectively.
Outlook for 2017
As the Cambodian mobile telecommunications
industry’s 4G leader, Smart continues with
its commitment of delivering high speed and
high quality mobile Internet service to all
Cambodians. Moving into 2017, the Company
has earmarked approximately USD80 million
capex for network expansions during the year.
Through the introduction of new digital services
and other digitisation initiatives both internally
and externally, Smart expects to strengthen its
data leadership and digital lifestyle position in
Cambodia further.
While several factors of uncertainty related to the
political, economic and regulatory environment
as well as an even further intensified competition
remain concerns for the Cambodian telco market,
Smart remains cautiously optimistic about the
Company’s revenue and profit development for
2017. As the year unfolds, Smart will press ahead
while it continues playing a key role in developing
Cambodia’s ICT sector and building a digital
Cambodia.
BLENDED ARPU
2.20 2.04
2015 2016
BLENDED MoU
(Per Sub Per Month)
237 202
2015 2016
USD Minutes of use/sub/month
PAT
56.5 67.2
2015 2016
SUBSCRIBERS
7.6 8.1
2015 2016
+6.5% +19%
USD Million Million
REVENUE
232.6 262.8
2015 2016
+13%
EBITDA & EBITDA
MARGIN (%)
49.7% 49.4%
115.6 129.8
2015 2016
+12%
USD Million USD Million
Smart
BUSINESS REVIEW