Telecommunications companies in Malaysia face stronger competition as U Mobile prepares to expand its 5G network, expected to reach a larger scale by 2028 [1, 2, 3, 4, 5]. This expansion could allow U Mobile to operate at lower costs and offer more competitive prices, challenging dominant players like Maxis and CelcomDigi [1, 2, 3, 4, 5].
CGS International and 银河国际证券 issued a joint analysis on May 14 warning that intensifying competition in Malaysia’s 5G market resembles the Singapore experience after 2019, where established operators’ earnings fell due to aggressive strategies and market share battles [1, 2, 3, 4, 5]. “Our analysis of the Singapore mobile market post-2019 points to underlying risks for Malaysian mobile operators, which the market may be ignoring,” said CGS International [1]. 银河国际证券 analysts echoed this concern in Chinese, stressing the risks for Malaysia’s mobile sector remain underpriced by investors [2, 3].
In response to U Mobile’s 5G push, larger telcos may adopt more aggressive defensive moves, including expanding mobile virtual network operators (MVNOs), to protect their market shares [1, 2, 3, 4, 5]. Such strategies could pressure profitability and heighten price competition.
Since late February 2026, the combined market capitalization of Maxis and CelcomDigi has dropped about 6% as investors adjust earnings expectations downward [1, 2]. Earnings forecasts for fiscal years 2026 to 2028 have been cut, though some impacts may ease from 2027 when Digital Nasional Bhd (DNB) shifts to equity accounting and assumes more 5G investment, increasing network leasing income for the telcos [1, 2]. However, valuation multiples remain near historical lows with Maxis trading at PER 18x and CelcomDigi at 23x, suggesting limited upside amid uncertainty over pricing and market share [2].
CGS International recently lowered target prices for Maxis to RM3.72 and CelcomDigi to RM3.10, each down by 28 sen, while maintaining "hold" ratings for both stocks [1, 2]. Market sentiment has also been affected by concerns over DNB’s accounting changes expected in the second half of 2026 [1, 2].
U Mobile’s 5G scaling by 2028 is the main catalyst increasing competition and placing pricing pressure on Malaysia’s established telecom operators [1, 2, 3, 4, 5].
