[RAM] RAM Ratings affirms Celcom Digi Telecommunications' AAA/Stable sukuk rating

RAM Ratings has affirmed the AAA/Stable rating on CelcomDigi Telecommunications Sdn Bhd’s (CelcomDigi Telecommunications) RM5 bil Islamic Medium-Term Notes Programme (2017/-). This affirmation reflects the dominant mobile market position and strong financial profile of its parent, CelcomDigi Berhad (CelcomDigi or the Group) following the merger of Celcom Berhad and Digi.Com Berhad.

The rating incorporates the strong financial and operational integration between CelcomDigi Telecommunications and its parent, CelcomDigi. For analytical purposes, both entities are assessed on a consolidated basis. Post-merger, CelcomDigi has made substantial progress towards achieving targeted synergies, with network and IT integration and modernisation over 90% complete as of end-September 2025. Distribution channels, app development and retail store upgrades are also advancing as scheduled. These initiatives are expected to deliver estimated annual steady-state cost savings of RM700 mil to RM800 mil post 2027.

The Group commands the largest market share in Malaysia’s mobile telecommunications sector, accounting for 41% of mobile subscribers (20.2 mil subscribers as at end-September 2025) and 48% of mobile sector revenue (approximately RM9.5 bil in 2024), respectively. CelcomDigi’s consolidated leverage and debt coverage metrics remain consistent with AAA rating thresholds. As the country’s largest telco operator, CelcomDigi’s strong profitability anchors its projected lease-adjusted funds from operations debt coverage, which is expected to remain above 0.40 times over the next two years. 

Looking ahead, the Group’s growth strategy centers on core business segments and the development of new platforms in artificial intelligence, data and technology. Non-5G capital expenditure (capex) is expected to be funded by internal cash flows, which remain strong. RAM’s assessment does not factor potential 5G-related capex or further sizeable investments in Digital Nasional Berhad (DNB) given the current lack of visibility. DNB is the entity tasked with rolling out Malaysia’s first 5G network and in which the Group holds a 19.44%-stake; this will increase to about 33.33% upon completion of the put option exercised by the Ministry of Finance on 1 December 2025 to fully divest its stake to DNB’s remaining shareholders including CelcomDigi. The latest acquisition outlay of RM327.9 mil will leave its financial metrics within the rating thresholds. However, further capital calls and funding support may be needed to refinance and/or repay DNB’s liabilities (of ~RM4.9 billion as at end-2024 consisting of loans, vendor financing and shareholder advances) as well as cover future operating deficits. Given the evolving nature of DNB’s capital requirements, we will re-evaluate financial implications for the Group upon greater clarity. Future dividend distributions will require prudent management, especially if capex or investment needs increase.

On the regulatory and policy front, the proposed implementation of mandatory MyDigital ID and limits on prepaid subscriber registrations are viewed as necessary measures to enhance privacy and security in the evolving digital economy. Recent management changes, although unforeseen, are not expected to affect the Group’s strategic direction or realisation of merger synergies. Monetisation and returns from 5G investments remain long-term considerations. 


Analytical contacts
Karin Koh, CFA
(603) 2708 8237
karin@ram.com.my

Davinder Kaur Gill
(603) 2708 8220
davinder@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my