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Introduction
NATIONAL
CONTRIBUTION REPORT
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Term Profits
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& Governance
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NATIONAL CONTRIBUTION REPORT 83
Axiata Group Berhad | Sustainability & National Contribution Report 2016
NATIONAL CONTRIBUTION
REPORT
Smart’s Gross Value Added (GVA)
in 2016 was estimated at USD313
million comprising direct operational
contributions of USD140 million, indirect
operational contributions of USD69 million,
Figure 3: Total capital investment:
2012-2016
Figure 1: GVA contribution to the
Cambodian economy 2016
USD33 million
USD140 million
USD69 million
USD71 million
GVA by capital
investment
Operational
direct GVA
Operational Indirect and
Induced GVA
GVA by
productivity
45%
22%
23%
10%
USD313
million
capital investment contributions of USD33
million and productivity gains of USD71
million (see Figure 1). Productivity gains
are defined as the improvement in national
productivity due to the rising mobile
penetration rate. The total GVA of USD313
million was derived from Smart’s total opex
and capex of USD133 million and USD75
million respectively, and the 8.3% increase
in the mobile penetration rate. Every USD1
spent by Smart in Cambodia through its
operations and capital investment added
USD1.4 in GVA to the Cambodian economy
in 2016.
Smart’s total GVA contribution increased
to USD313 million in 2016 from USD98
million in 2012, translating to a CAGR of
33.6% (see Figure 2). The improving trend
was due to higher operational profits and
significantly increased number of mobile
subscribers. Over the last five years,
total operational profits grew to USD130
million from USD25 million. With a total
number of mobile subscribers (as active
declared SIM cards by the operators) in
Cambodia at 19.9 million as reported to
the Telecommunications Regulator of
Cambodia, the mobile penetration rate
stands at 126% by end-2016.
Investing and Innovating for the Long
Term
Smart invested a total of USD269 million
between 2012 and 2016 to improve its
network infrastructure, including rolling
out its 4G LTE network and expanding
its range of products and services. The
company’s total capital investment of
USD75 million in 2016 represented a 25%
increase compared to the USD60 million
in 2015. Smart plans to continue investing
in the country to further enhance its 4G
LTE leadership and enhance its offerings
to stave off competitors in a saturating
mobile market. At the end of 2016, 60% of
its more than 2,100 base stations across all
25 provinces have been equipped with 4G
already while 100% of base stations feature
3.75G. Smart’s push to further improve 4G
customers’ experience is evident with the
introduction of 4G+ in September 2016
which increases the capacity of the base
stations and consequentially speed Smart’s
users can enjoy.
24
50
60 60
75
2012
USD million
2013 2014 2015
2016
Figure 2: GVA contribution to the
Cambodian economy, 2012-2016
as % of total GDP
2012
98
0.6%
0.8%
1.4%
139
237
275
USD million
2013 2014 2015
2016
313
1.5%
1.6%
Note: As a % of total GVA contribution; Numbers may not balance due to rounding
Cambodia remains one of Asia’s fastest
growing economies posting a GDP
growth of 7% in 2016. Economic growth
in the country is being largely driven by
infrastructure investments, tourism, real
estate development and growing exports.
While per capita income is still low
compared to neighbouring countries, it has
been rising rapidly, leading to increased
telecommunications consumption and
greater demand for technology. The
growing affluence of Cambodians coupled
with the proliferation of affordable
smartphones means that there is ample
room for the introduction of higher-value,
digital services.
Economic and Financial Contributions