CelcomDigi 3Q2026 Profit May Rise 6% Despite Prepaid Weakness

CelcomDigi Berhad is expected to report a core net profit of between RM430 million and RM440 million for the third quarter of 2026 (3Q2026), an increase of up to 6% year-on-year, according to CIMB Securities.

The research house expects CelcomDigi’s core net profit to increase by 1% to 3% quarter-on-quarter and 4% to 6% year-on-year, supported by lower operating costs despite potentially weaker prepaid revenue.

However, CIMB Securities has reduced its core net profit forecasts for the financial years 2026 to 2028 by 1% to 4% following CelcomDigi’s recent RM381.75 million spectrum acquisition from the Malaysian Communications and Multimedia Commission (MCMC).

The revised forecasts account for higher spectrum amortisation costs, although the research house has maintained its Buy recommendation on CelcomDigi with an unchanged target price of RM3.65.

CelcomDigi is scheduled to announce its 3Q2026 financial results on 19 November 2026.

CelcomDigi Profit Growth Expected from RM470 Million Cost Savings Target

CIMB Securities expects CelcomDigi’s third-quarter earnings improvement to be driven mainly by operating cost reductions rather than higher service revenue.

The telecommunications group is targeting RM470 million in operating cost savings for the financial year ending 31 December 2026, as it continues integrating operations following the merger of Celcom and Digi in November 2022.

According to RHB Research in October 2026, CelcomDigi had achieved RM140 million in operating cost savings during the first half of the year and remained on track to meet its annual target.

The expected cost reductions are important because CelcomDigi’s service revenue may remain flat on both a quarterly and annual basis.

In its previous financial results for 2Q2026, CelcomDigi reported revenue of RM3.186 billion, compared with RM3.178 billion a year earlier.

Its statutory net profit attributable to shareholders was RM398 million, down from RM439 million in 2Q2025.

CIMB’s third-quarter forecast refers to core net profit, which excludes certain adjustments, and should not be directly compared with the company’s statutory net profit.

Stricter MCMC Prepaid SIM Registration Rules May Affect CelcomDigi Revenue

CIMB Securities expects CelcomDigi’s prepaid revenue to remain under pressure following the implementation of stricter prepaid SIM registration requirements on 26 August 2026.

The new MCMC requirements introduce mandatory identity verification procedures for new prepaid registrations, including biometric checks and MyDigital ID verification for eligible self-registration users.

Malaysian citizens, permanent residents and temporary residents are limited to five prepaid SIM cards per telecommunications provider, while non-Malaysians are limited to two.

The rules also require a parent or guardian to complete the registration process for subscribers aged 12 to 17. Children below 12 cannot register prepaid SIM cards in their own name.

Existing subscribers are not required to re-register their prepaid SIM cards solely because of the new requirements.

CIMB Securities expects any reduction in prepaid sales to be partly offset by lower dealer commissions and SIM card costs.

However, CelcomDigi’s prepaid business was already experiencing subscriber losses before the tighter registration requirements came into effect.

At the end of June 2026, CelcomDigi reported 11.874 million prepaid subscriptions, representing a decline of 113,000 from the previous quarter and 5.5% from a year earlier.

The earlier subscriber decline indicates that prepaid weakness cannot be attributed entirely to the new registration rules.

CelcomDigi’s upcoming results will provide more information about prepaid customer trends following the implementation of the stricter requirements, although the quarter includes only around five weeks under the new registration framework.

CIMB Cuts CelcomDigi Earnings Forecasts by Up to 4% Over Spectrum Costs

While CelcomDigi’s 3Q2026 profit is expected to improve, CIMB Securities has lowered its core net profit estimates for FY2026 to FY2028 by between 1% and 4%.

The revision follows CelcomDigi’s acquisition of additional spectrum in the 2600MHz and 900MHz frequency bands, for which it paid RM381.75 million upfront on 15 October 2026.

The assignments comprise 2×20MHz in the 2600MHz band for four years and 2×5MHz in the 900MHz band for five years.

MCMC formally issued the spectrum assignments on 30 October 2026, with both taking effect on 1 November 2026.

CelcomDigi paid RM366.75 million for the 2600MHz assignment and RM15 million for the 900MHz assignment.

The company is also required to pay an annual spectrum fee of RM42 million for the 2600MHz band, while the 900MHz band carries an annual fee of RM3,500 per apparatus.

These annual fees are separate from the upfront spectrum payments.

CIMB Securities expects the additional spectrum rights to increase amortisation expenses, affecting CelcomDigi’s future reported earnings.

However, its earnings before interest, tax, depreciation and amortisation (EBITDA) forecasts remain largely unchanged, as operational efficiencies associated with the additional spectrum are expected to offset the annual fees.

Because the new spectrum assignments only became effective on 1 November, the associated costs should be distinguished from CelcomDigi’s operating performance during the third quarter ended 30 September.

Additional Spectrum Expected to Improve CelcomDigi Network Capacity

The new spectrum assignments give CelcomDigi additional radio frequency resources to support its mobile network.

The 2600MHz band can provide additional capacity in areas with high mobile data demand, while the lower-frequency 900MHz band is useful for wider coverage and indoor signal penetration.

CelcomDigi has confirmed that the latest assignment gives it a contiguous 2×40MHz holding in the 2600MHz frequency band.

The additional allocations also increase its directly assigned paired spectrum holdings across the 900MHz, 1800MHz, 2100MHz and 2600MHz bands from 190MHz to 240MHz.

This follows CelcomDigi’s earlier surrender of 70MHz of spectrum under the regulatory undertakings imposed on the Celcom-Digi merger.

CIMB Securities expects the additional spectrum to help CelcomDigi meet MCMC’s stricter Mandatory Standards for Quality of Service while reducing the need for extensive network densification.

However, improvements in coverage and mobile Internet speeds will depend on how the company deploys the additional frequencies and upgrades its network infrastructure.

CIMB Revises DNB Funding Assumptions Following RM5.2 Billion Financing

CIMB Securities has also removed an earlier forecast assumption for an additional equity injection by CelcomDigi into Digital Nasional Berhad (DNB) in FY2027.

The change follows DNB’s completion of a RM5.2 billion syndicated Islamic term financing exercise, announced on 1 October 2026.

The financing replaces DNB’s previous government-guaranteed revolving credit facility and provides a new funding structure for its wholesale 5G network operations.

CelcomDigi, Maxis and YTL Power International are the three telecommunications groups involved in DNB’s planned transition to equal ownership by its mobile network operator shareholders.

Although the new financing reduces DNB’s dependence on government-backed borrowing, it does not eliminate the financial risks associated with its operations.

CelcomDigi could still recognise its share of DNB’s financial performance through equity accounting following the completion of the ownership restructuring.

CelcomDigi 3Q2026 Results Due on 19 November

CIMB Securities has maintained its Buy recommendation and RM3.65 target price for CelcomDigi despite reducing its longer-term earnings forecasts.

The research house expects continued operating cost savings to support profitability, while additional spectrum is expected to improve network capacity and coverage over the coming years.

CelcomDigi’s 19 November results will provide a clearer picture of its prepaid and postpaid service revenue, progress towards the RM470 million cost savings target, and underlying profitability.

The results will also establish whether its third-quarter core earnings meet CIMB Securities’ forecast of RM430 million to RM440 million.