Staff Reporters
Jun 23, 2016

Stopping the downward spiral at Maxis

BRAND HEALTH CHECK: The Malaysian telco’s users are leaving it in droves and writing songs about it. Is it too late?

Malaysian YouTubers weighed in
Malaysian YouTubers weighed in

Maxis has long enjoyed supremacy in the Malaysian mobile ecosystem, but it looks like its time might be up.

Recent results and industry surveys show competitor Digi beating Maxis in total number of subscribers. This can be attributed to Digi’s 8.2 per cent y-o-y growth and picking-up of 450,000 new subscribers in the first quarter of 2016.

Maxis lost over a million subscribers in the last year, with 377,000 subscribers leaving in the first quarter of 2016 alone. This is in large part due to a brand crisis stemming from the telco’s decision to offer select customers in East Malaysia a low-price deal.

The company mishandled its response to the viral incident in April with what many consumers called an arrogant and tone-deaf statement. 

The telco has launched new plans in a bid to win customers back, but is it too late?

Fact file

  • 377,000 subscribers left Maxis in 1Q2016
  • Rival Digi benefitted, growing subscribers by 8.2 per cent y-o-y
  • In February, Maxis had 11.6 million users versus Digi’s 12.3 million 

DIAGNOSIS 1
Stuart Rosman Tan
Executive director
Core Pro PR Services

Analysts agree that Maxis either leads outright or co-leads the industry in terms of coverage, strength and bandwidth. So why are they losing subscribers and their top spot?

The answer is simple—the loss of consumer trust in a social media environment is a recipe for disaster. When there is a cause for distrust, that distrust gets amplified.

You can’t single out their recent ‘crisis’ as the issue, as that doesn’t account for the over one million subscribers that left the telco before it happened. You can, however, look at the cause of that storm: a subscriber wanted to leave the service, and when they voiced this, a better, more affordable plan with greater connectivity was offered. The problem was that consumers want to be treated fairly and equally. If there were better packages available, why were their existing subscribers not informed and given the option? Transparency, doing what’s right and ethical compliance took a hit again, as it has done for Maxis repeatedly over the past 12 to 24 months.

For Maxis, their issues cannot be solved by giving free data—that smacks of desperation. Maxis needs to look at regaining trust over the long term. Be human, understand the needs and show, every single day, what the humans of Maxis are doing to enrich the lives of their current and would-be users.  


DIAGNOSIS 2
Roberto Cumaraswamy
Founder
RobertoCumaraswamy.com

Postpaid is where loyalty is built and consistent revenues are made for a telco. Maxis eventually recognised the error of its ways and launched new improved data plans. But due to its “margins first, volumes second” policy, they still refuse to erode their ARPU by dropping prices, which still leaves their entry-level plans at 25 per cent more expensive than the competition. 

Maxis claims that this is justified by the superior service they can provide. Unfortunately, that is a subjective issue, which is hard to clearly and consistently demonstrate in an increasingly commoditised service. 

Maxis should have created a more affordable entry plan to put it on par or just slightly above the competition. They will have to work hard to demonstrate why a customer should pay more (per plan) to stay with them.  

An idea would be to issue a ‘personalised usage report’ to each of their postpaid customers, which highlights value, flexibility, network usage and speed. For example, with the unique ‘data pool’ service that they provide, demonstrating the value that the service provides for a family may be a win. 

Also, if they could start showing users how they could save money by switching plans or using data, this would go a long way towards earning back trust. 

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