CelcomDigi to save up to RM90mil from VSS exercise
PETALING JAYA: CelcomDigi Bhd is expected to save RM80mil to RM90mil from its voluntary separation scheme (VSS), according to Kenanga Research.

One of the key takeaways from the recent briefing with the management is that the scheme had received about 600 applications, and would be implemented progressively through financial year 2024 (FY24).

Hence, the research house said CelcomDigi expects to recognise cost savings starting from the second quarter of FY24 (2Q24) until end-FY24.

Following its completion, the brokerage added the group is expected to have a total workforce of 3,500 to 3,700 employees.

According to the management, it is ahead of schedule on its network integration and modernisation programme, with over 7,200 sites modernised and 2,716 sites phased out as at end April 2024. This programme is expected to exceed 50% completion in seven states by end-June 2024.

“CelcomDigi also expects uplift in its postpaid average revenue per user and customer retention following the introduction of converged offerings. This emanates from options offered to customers that enable them to right-size their respective mobile plans.

“Recent new projects secured by its enterprise business division include partnership with Petroliam Nasional Bhd to deploy 5G and a private 4G network on Kasawari offshore platform, implementation of smart city solutions powered by 5G in Ampang Jaya, and collaboration with 10 universities to enable digital learning via the Metaverse, artificial intelligence, robotics and 5G,” Kenanga Research pointed out.

However, the research house said risks to its call include slower-than-expected realisation of merger synergies, unfavourable financial outcome on the new 5G dual network model, and competition between mobile players turned irrational.

CGS International Research said according to the company’s management, some 90% of its network is 5G ready and a standalone 5G service can be turned on rapidly, if needed. No specific costs or timelines were provided by management.

“We have, in our estimates, assumed that the company will roll out one 5G network, and incur total capital expenditure (capex) of RM5.3bil over FY24 to FY26.

“The timing of the final decision pertaining to the 5G network rollout in Malaysia will, in our view, impact the ultimate spending patterns of this projected capex,” it said.
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CelcomDigi Bhd is expected to save RM80mil to RM90mil from its voluntary separation scheme (VSS), according to Kenanga Research.