Sustainability & National Contribution Report 2016

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Key Highlights

  • 1st Cambodian telco offering 4G+ & 4G in all provinces

  • 1st Cambodian telco to launch SmartPay, a payment solution via virtual MasterCard

  • 100% of base stations deployed with 3.75G; 60% of base stations deployed with 4G LTE

  • Double-digit growth of Revenue, PAT, EBITDA, ROIC

About Smart

Smart Axiata Co., Ltd., a leading mobile telecommunications company of Cambodia, currently serves over 8 million subscribers under the 'Smart' brand.

In January 2014, Smart launched its 4G LTE network and became the first mobile operator in Cambodia to provide true 4G services. 4G LTE powered by Smart, the fastest mobile Internet in Cambodia, is now available across all 25 provinces widely. Smart also provides 2G, 2.5G, 3G and 3.75G mobile services, supporting the very latest in multimedia and mobile Internet services as well as international roaming across more than 190 countries. Its extensive nationwide network coverage covers more than 98% of the Cambodian population. In September 2016, Smart launched 4G+ also known as LTE Advanced using Carrier Aggregation, fostering its data leadership position in Cambodia.

Through its partnership with Apple, Smart is the first and only telecom operator partner of Apple in Cambodia able to offer iPhones and iPads. Smart, moreover, is the exclusive partner of Universal Music in Cambodia. Being a strong advocate of digital innovation, Smart has launched various ranges of value added services and digital services such as SmartLuy, Smart Life Insurance, SmartPay and Smart Music.

Smart Axiata was recognized as Cambodia’s Mobile Service Provider 2016 by Frost & Sullivan following the Asia Pacific Emerging Market Telecom Service Provider of the Year Award in 2015. Smart Axiata has also been awarded as the Best Telecommunications Company Cambodia and Best Corporate Social Responsibility (CSR) Company Cambodia in 2015 and 2016 by Global Banking & Finance Review.

The Company's workforce consists of more than 1,000 people including local and foreign experts. Smart is committed to its customers, employees and the people of Cambodia in delivering its promise of improving their lives. “Live. Life. Be Smart.”

Business Review 2016

In 2016, Smart continued to strengthen its market position and performance, serving a customer base of more than 8 million subscribers.

The Company invested USD75 million focused on rolling out its 4G LTE network across all 25 provinces nationwide and on mobile Internet infrastructure in general. In its drive to deliver the fastest mobile Internet service at an affordable price to all Cambodians, Smart upgraded parts of its 4G LTE network to 4G+ in September 2016, where Carrier Aggregation is used to increase the capacity of the base stations and consequentially increases the speed of mobile Internet available to customers. By the end of the year, more than 60% of its 2100 base stations across all 25 provinces were equipped with 4G and 100% with 3G. An independent study conducted and published under the Ookla Net Index1 recognised Smart as Cambodia’s Fastest Mobile Network Provider in 2016.

Smart continued on its evolutionary journey towards being a digital lifestyle brand. SmartPay, an award winning product at the Cambodia ICT Awards 2016, was launched as a new payment solution for app purchases via phone balance while at the same time providing opportunities for the App Developer Community to monetise their work. SmartLuy is building on its unique proposition of being mobile, innovative, simple and better than cash, while Smart Music offers streaming of more than a million songs. The Company also released Apple iPhone 7 and iPhone 7 Plus and continues to be the only authorised operator distributing Apple iPhones with attractive bundle plans in Cambodia.

Beyond its core business, the Company actively contributes towards numerous initiatives and partnerships structured around the corporate social responsibility (CSR) pillars of Education, Environment and Community Sports. Besides the SmartEdu Scholarship Program in partnership with the Ministry of Education, Youth and Sport and the landmark long-term partnership between Smart and UNESCO in developing and implementing joint-initiatives in the field of education in Cambodia, Smart has also launched and sponsored many other successful projects as key development partner of various ministries of the Royal Government of Cambodia. Throughout 2016, Smart continued with its sustained focus in the areas of ICT literacy, technopreneurship and digital start-ups.

Besides being recognised as Cambodia’s Mobile Service Provider 2016 by market research firm Frost & Sullivan and winning the Best Community Project Award by Telecom Asia for its involvement in Cambodia’s National Literacy Campaign in collaboration with the Ministry of Education, Youth and Sport as well as UNESCO, Smart has also been lauded again by Global Banking and Finance Review as both the Best Telco and the Best CSR Company Cambodia 2016.

Financial Performance

Smart continued with yet another year of stellar performance, recording double-digit Year on Year (YoY) growth in 2016 fueled by excellent data subscriber and revenue growth. Data subscribers grew 25.4% to 3.8 million while data revenue grew by 48.6% with data accounting for 42.3% of Smart’s total revenue.

Smart achieved 13% YoY growth of its overall revenue, continuing with its strong growth momentum of previous years. Strong focus on cost management and capex efficiency has enabled the Company to achieve 12% and 19% YoY increase in EBITDA and PAT respectively.

  • Revenue

    +13%

    • 232.6


      2015

    • 262.8


      2016

    USD Million

  • EBITDA & EBITDA Margin (%)

    +12%

    • 115.6

      49.7%

      2015

    • 129.8

      49.4%

      2016

    USD Million

  • PAT

    +19%

    • 56.5


      2015

    • 67.2


      2016

    USD Million

  • Subscribers

    +6.5%

    • 7.6


      2015

    • 8.1


      2016

    Million

  • Blended ARPU

    • 2.20


      2015

    • 2.04


      2016

    USD

  • Blended MoU (Per Sub Per Month)

    • 237


      2015

    • 202


      2016

    Minutes of use/sub/month

Outlook for 2017

As the Cambodian mobile telecommunications industry’s 4G leader, Smart continues with its commitment of delivering high speed and high quality mobile Internet service to all Cambodians. Moving into 2017, the Company has earmarked approximately USD80 million capex for network expansions during the year. Through the introduction of new digital services and other digitisation initiatives both internally and externally, Smart expects to strengthen its data leadership and digital lifestyle position in Cambodia further.

While several factors of uncertainty related to the political, economic and regulatory environment as well as an even further intensified competition remain concerns for the Cambodian telco market, Smart remains cautiously optimistic about the Company’s revenue and profit development for 2017. As the year unfolds, Smart will press ahead while it continues playing a key role in developing Cambodia’s ICT sector and building a digital Cambodia.