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KUALA LUMPUR — The Axiata Axis Capital Group, Asia’s leading telecommunications operator, is planning capital expenditures worth 4.8 billion ringgit ($1.3 billion) this year. The money will primarily be used to boost the group’s data services.
“We are going to live in data this year,” CEO Jamaludin Ibrahim told reporters Wednesday during the company’s 2014 financial report.
Axiata’s net profit contracted 8% to 2.3 billion ringgit on revenue of 18.7 billion ringgit. The group blamed the results on “system related issues” at its Malaysian operations.
Axiata’s other subsidiaries in the region posted healthy income growth, aided by a surge in data business and smartphone penetration.
At its Indonesian operation, XL Axiata, revenue increased 10%, to 6.5 billion ringgit, thanks to all the subscribers that came over as it absorbed Telekom Indonesia. Earnings from mobile data, which contributed 29% to XL’s total revenue, increased 42%.
In Cambodia, where the company operates under the Smart brand, data income surged 135%. Other subsidiaries in Sri Lanka and Bangladesh in which Axiata holds the controlling stakes also reported data-driven revenue growth.
Nearly half of its subscribers in Malaysia are smartphone users, but the figure is much lower at its other subsidiaries, which the company called “living rooms” for further growth.
A third of this year’s capital expenditures will be made in Indonesia to build LTE and other infrastructure. Long-Term Evolution is fast, fourth-generation cellphone service.
Axiata expects modest 4% revenue growth this year due to challenges such as slower industry growth in Malaysia and political risks in Bangladesh and Sri Lanka.