CelcomDigi's Operational Mastery Fuels Q1 2025 Surge: A Buy Signal for Long-Term Gains

The telecommunications landscape in Malaysia is undergoing a transformative shift, and CelcomDigi Berhad has positioned itself as the vanguard of this evolution. The company’s Q1 2025 earnings report underscores a strategic execution that’s not just driving growth but redefining operational efficiency in a fiercely competitive market. With network integration nearing completion, subscriber momentum across postpaid and home & fibre segments, and a steadfast dividend policy, CelcomDigi is primed to dominate the next phase of growth.

Network Integration: The Backbone of Efficiency

CelcomDigi’s progress in network integration is a masterclass in operational foresight. With 80% of network modernization completed by Q1 2025, the company has fully integrated six Malaysian states, streamlining operations and enhancing service quality. The average monthly data consumption per user has surged to 35GB, a testament to the reliability of its upgraded infrastructure.

This initiative isn’t merely about infrastructure—it’s a profit lever. By FY2027, annual cost savings from integration are projected to hit RM700–800 million, creating a runway for margin expansion. The company’s IT consolidation efforts, with 28 out of 50 systems integrated, further illustrate its disciplined execution.

Subscriber Growth: A Tale of Two Segments

The real star of Q1 2025 is postpaid subscriber growth, which soared by 340,000 YoY to 5.84 million. This expansion, fueled by Convergence plans, device contracting, and prepaid-to-postpaid migrations, has driven postpaid revenue up 3.2% YoY to RM1.066 billion. The postpaid ARPU remains steady at RM64, reflecting the company’s focus on value retention amid competitive pricing.

Meanwhile, the Home & Fibre segment is a breakout success. Subscribers jumped 65% YoY to 205,000, with revenue surging 48.1% YoY to RM55 million. This growth, now spanning six consecutive quarters, is powered by CelcomDigi One™ Convergence plans and fixed wireless access (FWA) solutions. The segment’s QoQ dip of 1.9% is negligible against its YoY trajectory, and the company’s strategic pricing and product innovation ensure sustained demand.

Dividend Resilience Amid Tax Headwinds

CelcomDigi’s dividend policy is a cornerstone of its investor appeal. The declared first interim dividend of 3.7 sen per share aligns with its 80% PAT payout commitment, underscoring financial discipline. Despite FY2025 capital expenditures forecasted at RM1.8–2.0 billion, the company remains unshaken in its dividend pledge—a signal of confidence in its cash flow generation.

Tax-related challenges, however, warrant scrutiny. While CelcomDigi’s PAT rose 4.6% YoY to RM388 million, excluding non-recurring items, its parent entity Digi Communications NV faced a 66% YoY PAT drop due to elevated tax expenses. This divergence suggests that tax headwinds are localized to certain regions rather than systemic. For CelcomDigi, cost savings from integration and revenue diversification (e.g., Home & Fibre) are mitigating risks, ensuring profitability remains on track.

A Bullish Outlook for FY2025 and Beyond

Analysts at CIMB Securities project CelcomDigi will meet its FY2025 EBIT guidance of RM2.8–3.0 billion, despite integration costs. With 80% of network integration complete, the final phase will deliver compounding savings, while Home & Fibre’s scalability positions it as a high-margin growth engine.

The company’s strategic focus on data-centric customers—evident in prepaid stabilization and postpaid migrations—is a winning formula. Meanwhile, the dividend policy acts as a “gravity well” for income-seeking investors, especially in a market where yield opportunities are scarce.

Investment Thesis: Buy Now, Harvest Later

CelcomDigi’s Q1 2025 results are a clarion call for investors. The company’s execution on network integration, its dominance in high-growth segments, and its dividend resilience in the face of regional tax volatility create a compelling risk-reward profile.

Key Catalysts to Watch:
1. Final 20% of network integration—unlocking the full RM700–800 million savings.
2. Home & Fibre expansion—targeting 300,000+ subscribers by end-2025.
3. Dividend consistency—maintaining 3.7–4.0 sen per share through FY2025.

Final Verdict

CelcomDigi isn’t just surviving—it’s thriving. With operational execution that rivals its peers and a growth playbook that’s both aggressive and disciplined, this is a stock set to outperform. For investors seeking a telecom leader with visible margin upside, sustainable cash flows, and a yield anchor, CelcomDigi is a buy at current levels. The next 12 months will solidify its status as Malaysia’s digital infrastructure titan.

Action Item: Position for growth by acquiring shares ahead of FY2025’s final-phase efficiency gains. The rewards will compound—literally and figuratively.

This analysis is based on publicly available data as of May 2025. Past performance does not guarantee future results.