Media & Events

Prepaid service tax may be imposed in July

16 Mar 2012, The Sun Daily
KUALA LUMPUR (March 16, 2012): Rumour has it that the government may have finally decided to allow telecommunication companies (telcos) to pass on the 6% service tax to prepaid subscribers, HLIB Research says. "It is understood that the Malaysian Communications and Multimedia Commission (MCMC) has issued a memo to all industry players instructing the telcos to be technically prepared for the launch on July 1," the research house said yesterday. "Coupled with the broadband tax incentive implemented last year, this will further enhance telcos' earnings in the longer term," it said, while maintaining a neutral rating on the telecommunication sector. The research division of Hong Leong Investment Bank (HLIB) said it expected DiGi to benefit the most if this rumour was to materialise, considering that it had the highest proportion (86.6%) of prepaid users to total subscriber base, compared to Maxis (74%) and Celcom (77.2%). Based on its estimation, DiGi, Maxis and Celcom would enjoy earnings uplift of 6%, 4% and 2% respectively, provided competition and usage remain status quo.
Share this article
Follow