Digi’s 50% 4G LTE coverage claim (October 12th)
It all began when Digi announced on October 12th, out of the blue, that it now has Malaysia’s widest 4G LTE network, with a 50% population coverage. Normally, that would have been just one of those claims made by our telecommunications carriers that is akin to an advertisement. But Maxis is too proud to have any of this. It then launches a campaign with multiple successions of responses, beginning with its quarterly earnings report.
October 28th
Morten Lundal, Maxis’ CEO.
Before we talk about Maxis’ 4G LTE coverage, let’s quickly run through its earnings, as we’ll be mentioning some of the numbers later. In Maxis’ Q3 2015 earnings report, its service revenue grew 3.1% from Q2 to RM2.158 billion, led by 6% growth in prepaid and 0.7% in postpaid. Year-on-year (YoY), or when compared to Q3 of 2014, it’s a 5.3% service revenue growth. There are now 9 million mobile internet users on Maxis. The telco added 1.5 million 4G LTE users in the last 12 months with an average usage of 2.3GB a month. Maxis anticipates a capital expenditure (CAPEX) range of RM1.2 billion to RM1.3 billion in 2015. For Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA), Maxis registered RM1.111 billion for Q3 2015 and a service revenue EBITDA margin of 51.6% against RM1.110 billion and 54.3% in Q2. Compared to Q3 2014, EBITDA was RM1.079 billion and service revenue EBITDA margin is 53.1%. Profit After Tax (PAT) for Q3 2015 grew 3.5% to RM509 million, compared to RM492 million in Q2 2015 and RM500 million in Q3 2014 (1.8% growth year-on-year). Maxis also announced a third interim dividend of five sen per share.
Morten Lundal, Maxis CEO, said, “It was a strong quarter for Maxis. It’s amazing to see how Malaysians just love the internet and we are working hard to ensure a superior “Always On” data experience. Maxis keeps investing more than anybody in order to provide our customers the best data network with a particular focus on LTE leadership.”
In the same quarter (Q3 2015), Maxis said it has spent RM359 million to further improve its 4G LTE coverage. This is where Maxis dropped the first response, stating that its 4G LTE coverage now covers 55% of the population, making its network “the market leader with the fastest and widest” 4G LTE coverage in Malaysia. In key market centers, Maxis’ 4G LTE coverage is at 95% while in all state capitals, 60%. Remember at this point, Digi only said it has 50% population coverage, 80% in key market centers.
November 3rd
Just a few days later, on a short notice, Maxis invited members of the media for a briefing to talk about this matter further. This time it meant business. One of the reasons that drove Maxis to this extent was how it’s irked by the claims Celcom and Digi made, especially in their advertisements. You see, Maxis always prides itself to have the “fastest and widest 4G network”, as shown in its iPhone 6s ad, but Celcom’s version reads, “iPhone 6s on the fastest network. Incredible,” and Digi’s is, “Experience iPhone 6s on Malaysia’s widest 4G LTE network.” One could be the fastest and the other the widest, but since Maxis is claiming both, therefore its competitors are not honest about their claims, right?
What Maxis is calling for — it wants the competition to reveal their exact metrics of their coverage and speeds, as well as for the media to test everyone’s claims. To make the first move, Maxis prepared a table showing a lot of its numbers previously not known, or unclear. Here, we know that there are 2.2 million Maxis 4G LTE users, with a nationwide coverage of 55%, 90% in key market centers, and 60% in 12 state capitals, with a total of 142 4G towns, all measured with the -98 dBm requirement. In the quarterly earnings report, Maxis said 95% 4G LTE coverage in key market centers, so there’s already a bit of a discrepancy here, but we’ll let it pass. To define its speeds, Maxis said that its 4G LTE for streaming SD and HD videos have zero buffering 98% and 96% of the time, respectively. Webpages load less than 8 seconds, with an average speed of 15Mbps. Maxis also claims to have a 99.7% 4G and 3G uptimes.
From the table above, we also finally got a clear idea of where exactly Maxis’ LTE Advanced (LTE-A, or Carrier Aggregation) is being rolled out: Bangsar, Hartamas, Kota Damansara, Bandar Utama, TTDI, Damansara Utama, SS2, Bandar Sunway (including Sunway Pyramid), Puchong, Cyberjaya, and Mid Valley Gardens Mall. We’ve first heard about Maxis’ LTE-A endeavors during its ‘Blind Drifting’ event in June, but now we have actual locations you can test it out yourself (if you’re on Maxis, and have an LTE-A-capable device). The company said there are actually way more Maxis LTE-A locations nationwide, but it can only disclose the ones you see above. We’ll talk more about this in another piece.
There are two things Maxis missed out here when they challenged its competitors to reveal their metrics, and challenged the media to test out their speeds. The first is Maxis did not take into account that most of the reporters and tech writers, do not own and maintain four telcos — Celcom, Digi, Maxis, and U Mobile — to be able to test their speeds. Even if we do, how accurate can a single person measure the telco’s coverage, compared to, say, a dedicated team of engineers at Malaysian Communications and Multimedia Commission (MCMC)? The second, Maxis completely omits U Mobile here, thinking that their miniscule 4G LTE coverage is not a threat, not noticing (or not acknowledging) that U Mobile has been expanding its reach to cover more areas in the Klang Valley and other areas.
November 10th
Not satisfied with the first two (since none of the telcos responded the way it wanted), Maxis sent out a third response just a week later, this time officially inviting the competition to show theirs, since Maxis already shown its. Here it didn’t reveal any new information, just reinforcing that its claims are backed by “detailed technical measurements” of the said -98 dBm signal strength, to get a 55% population coverage nationwide, 60% in all 12 state capitals, and 90% in key market centers like Klang Valley, Penang, and Johor Bahru, for Maxis’ 4G LTE. Same ol’, same ol’ (so far). Maxis also said that in order to claim the “No. 1 for 4G” title, one has to back it up with “tangible, measurable, and truthful results,” which it said it did.
Morten Bangsgaard, Maxis CTO, said, “When you’re on a 4G network, you should expect buffer-free video streaming, quicker page loading, and consistently high speeds both indoors and outdoors. We have defined in technical terms exactly what Maxis aims for in terms of a great 4G experience. We are doing that because Malaysians who want the best 4G internet experience should have a fair basis for choosing.”
Bangsgaard also invited chief engineers from both Celcom and Digi to join him at an “open forum on 4G” on November 23rd. I wonder what happened to that forum.
Digi’s 60% 4G LTE coverage “comeback” claim (November 16th)
Not to be outdone by Maxis in just a month, Digi organized a follow up “Tea with the Chief” event, where the chief in this case, is Digi’s Chief Network Officer, Kesavan Sivabalan. Here, Digi announced that its 4G LTE network now magically covers 60% of the population, up from 50% just a month ago. It also covers 80 major cities and towns compared to 28 in October, not to mention an increase in population coverage in key market centers, from 80% to 95% in just a month. Digi also claims a 99.9% “accessibility”, compared to Maxis’ 99.7% claim from November 3rd.
However, it is during this event too, that we finally know Digi’s measurement threshold — -110 dBm, compared to Maxis’ more stringent -98 dBm.
November 19th
Photo (left to right): Dushyan Vaithiyanathan, Maxis’ Head of Consumer Business; Morten Lundal, Maxis’ Chief Executive Officer; and Morten Bangsgaard, Maxis’ Chief Technology Officer, at the kick-off of the 24-hour Maxis 4G Challenge on November 19th 2015.
Maxis is royally annoyed this time around, especially since Digi’s November 16th event. Just three days later, it organized a final response event (so far) called the 24-hour Maxis 4G Challenge. Here, you have some of the same numbers we already know, like Maxis’ 2.2 million 4G LTE users, zero YouTube buffering 96% of the time, 8 seconds or less to load webpages, et cetera.
But wait, there’s more! Maxis’ 4G LTE network, measured by the -98 dBm threshold, has now magically increased to a 62% population coverage. Wasn’t it just 55% less than a month ago? Its key market centers coverage is now 96% (compared to Digi’s 95%), while coverage in state capitals is 66%. Maxis said -98 dBm is equivalent to around three to four bars of signal on the smartphone, which will give around 20Mbps downloads outdoors, and 10Mbps downloads indoors (if you’re on Maxis, of course). The telco added that even if it were to use the -110 dBm requirement, equivalent of around two bars, Maxis’ 4G LTE network would have crossed the 70% population coverage mark, higher than Digi’s 60% under the same measurement. In other words, Maxis said no matter how you slice it, it still has the fastest and widest 4G LTE network.
Morten Bangsgaard, Maxis CTO, said at this event, “When it comes to network performance, we take our customers’ high expectations seriously. By using stringent definitions for 4G, we are simply being more realistic. We are also investing more than RM1 billion this year in our network, more than anyone else, to ensure that Malaysians have a great internet experience that they deserve.”
Oh right, almost forgot about the “challenge”. After the press conference, Maxis took its 2,400 employees on a field trip nationwide to perform “24,000 engagements” in total, and test Maxis’ own 4G LTE network while they’re at it. The company also urged its customers to do network tests on their own (preferably comparing with friends’ speeds who’re on other networks).
Closing thoughts
Again, the problem I find with these tests, is that they’re only testing their own networks. I suppose if Digi or Maxis were to run their tests against the competition, they each will emerge victorious. You’ll need a third party to run these tests to get unbiased results, and I believe so far the governing body that is the MCMC, have yet to run such tests. Maxis did challenge us, the folks from the media, to run our own tests to determine who’s the best, but ultimately we lack the time and perhaps the expertise, that dedicated network engineers have.
If you were to look at the claims alone, Maxis seems to be winning at this point. It has been three weeks since Maxis’ last 4G event, and Digi has yet to respond, that is, until their -110 dBm coverage is more than 70%. But even then, Maxis’ -110 dBm 4G coverage may have grown even wider by that time. If you were to believe the claims from Maxis, it does seem to have a wider 4G LTE network coverage than Digi and U Mobile. Not too sure about the comparison with Celcom though.
Maxis responding to Digi’s claims may have done more harm than good to itself. Forget the tests; if you were to do your own poll among your family and friends, I believe even today, most will still say Maxis has the “best network”, whatever that may mean. Except for the loud fringes who complain about Maxis’ occasional network outages or its “slower” speeds, not many users are complaining about Maxis’ network. With Maxis coming out and claim to be number one in terms of network coverage and also speed, it may irk many users who wouldn’t otherwise think about these things.
I think deep down, Maxis knows it’s the best, and it doesn’t shy away from charging customers for such quality service. It’s current challenge is not to defend its Number One title, but to stop existing subscribers from defecting to competing carriers. As shown in its quarterly earnings report earlier, Maxis has a 6% growth in prepaid and 0.7% in postpaid, which is great for prepaid, but the postpaid growth seems to be plateauing. I can’t confirm this for a fact, but prepaid folks usually use their lines for calls and text, with data usages only for messaging apps, which #Hotlink and its unlimited 64kbps connection has got these users covered. Even then, competing telcos are now offering the same unlimited “basic” internet, plus free data, not to mention cheaper high-speed data plans. Postpaid subscribers tend to be heavy users but is MaxisONE alone sufficient? The competition have since copied Maxis to offer limitless calls and text, plus offer more data, some for lower prices. Again, Maxis may have a better network, but do subscribers care for a wider coverage, or a more competitive price? Maxis is definitely betting on the former.
We’ve covered this back-and-forth from Digi’s perspective in another piece here. You can find out more about Maxis’ 4G LTE endeavors here: https://www.maxis.com.my/4GLTE.
P.S.: Meanwhile, during a Q&A session in an unrelated event, someone asked what was Celcom’s answer to the 4G LTE claims made by Digi and Maxis, to which the Zalman Aefendy Zainal Abidin, Chief Marketing Officer of Celcom Axiata Berhad, said that Celcom already is “the best network” and they don’t need anyone to question their strengths. He did say that they now have more than 50% of 4G LTE population coverage, but did not specify the exact numbers. U Mobile, while being the last to roll out its 4G LTE network and has a relatively smaller coverage area, has been rapidly expanding its reach. It has also been awarded by Speedtest.net’s Ookla to be Malaysia’s fastest mobile network, because, why be the widest when you can be the fastest?
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