The healthy data traffic growth for the 3 telcos despite the tariff hikes suggests that down-trading to packs with lower data allowances was limited. The other common observation was the double-digit QoQ increase in S&D expenses as the industry has stepped up competitive intensity on channel payouts and customer acquisition. Capex remains elevated except for Vi that continues to grapple with a stretched balance sheet.
The near-term headwinds are: 1) a slowdown in smartphone uptake due to chip shortage and rising prices; and 2) higher diesel costs
(every 10% increase in diesel cost results in a 25-40bps mobile Ebitda margin hit). Another round of tariff hikes later this year could happen, providing a fillip.
