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All five mobile service providers in Malaysia have expressed their support for the two Rahmah mobile packages announced by the government. However, industry analyst Prem Jearajasingam believes that these packages may have a negative or, at best, neutral impact on their profits.

One of the packages is designed to subsidize the postpaid bills of civil servants, which could potentially cost the telcos RM47 million per year. The other package offers a smartphone device and a 5G data bundle plan, which is expected to have a neutral effect on industry profits.

In a joint statement, CelcomDigi Bhd, Maxis Bhd, Telekom Malaysia Bhd (Unifi Mobile), U Mobile Sdn Bhd, and YTL Communications Sdn Bhd (Yes) expressed their support for the Civil Servants Rahmah Postpaid Incentive and the 5G Rahmah Package. These packages are set to be launched in August.

The 5G Rahmah Package includes a smartphone with a 5G data device bundle plan, offering Samsung A14 5G and Honor 90 Lite 5G phones for as low as RM240, along with a 60GB data plan worth RM60 per month. On the other hand, the Civil Servants Rahmah Postpaid Incentive provides a RM10 rebate for all civil servants in the country.

Despite the telcos’ support for these packages, Prem Jearajasingam cautioned that the subsidies may raise risk perception for the telcos. The RM10 monthly rebate for civil servants is expected to impact industry core profits by less than 2%. Additionally, the 5G Rahmah Package is seen as being not significantly different from existing plans.

Prem Jearajasingam also suggested that the introduction of these Rahmah packages may prompt questions about cheaper fiber broadband prices, which are set to be announced in September. It is speculated that broadband price points may be reduced, similar to the shift in prices announced earlier this year.

CGS-CIMB Research has maintained a neutral stance on the Malaysian telecommunication sector following the announcement of the Rahmah mobile packages.

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