Analysis on 1Q15 figures:

• 7.56mil mobile subscribers used smartphones (calculated based on 13.26mil mobile subscribers and a blended smartphone penetration rate of 57%). 
• Since LTE devices could include 4G enabled tablets, I don't know how many of the 1.613mil LTE devices are 4G smartphones, but it’s my guess that the bulk of LTE devices are dominated by smartphones. 
• Assuming all LTE devices are 4G smartphones, it would imply 4G smartphones accounted for 21% of total smartphones on Maxis’ network in 1Q15, a figure which I see increasing rapidly as mobile users upgrade/replace their older non-4G phones with newer 4G phones. 

Potential fees from spectrum sharing (hypothetical)

Because details of the fee structure are not made public, I'm not able to gauge the potential fees Redtone could receive from Maxis.

So, for my own entertainment, I assumed some hypothetical fees and scenarios, to imagine what Redtone could potentially get. I created a table (Figure 3) showing how much Redtone could receive if it gets paid a certain fee each month for the number of LTE devices on Maxis' network.

Figure 3: Annual fees Redtone could potentially receive based on hypothetical fees and LTE devices

As a hypothetical and illustrative example, let's assume:

• Maxis' smartphone penetration rate hits 77% and it has 13mil mobile subscribers, implying 10mil smartphone users. 
• Out of that 10mil smartphone users, 50% are using 4G smartphones, so there’ll be 5mil 4G smartphones on the network. 
• The average fee is RM0.50/user/month or RM6/user/year.

Based on these assumptions, Redtone would receive fees of RM30mil straight to its bottomline (but of course this is assuming the numbers remain static, e.g. number of LTE devices remain the same from the start to the end of a given year). In this hypothetical scenario, the RM30mil may sound like a hefty sum, but it is less than 2% of Maxis' 2014 net profit of RM1.7bn. On the other hand, it is a relatively signifant sum to Redtone's FY14 (ended May 2014) net profit of RM22.2mil.

Some have said the 4G LTE spectrum could be worth a few hundred million ringgit, so it wouldn't surprise me if Redtone receives spectrum sharing fees in the tens of millions of ringgit in the future.

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“Beginning from FY15, REDtone’s network sharing and alliance agreement (NSA) with Maxis is also expected to contribute to group earnings. This will be over a 10-year period as per the agreement.” 
– Redtone Annual Report 2014

“Riding on our 10-year infrastructure and spectrum sharing deal with Maxis signed in 2012, we hope to launch mobile broadband services soon. We are also receiving income as a result of the Network Sharing and Alliance Agreement with Maxis based on its number of 4G subscribers.”
– Redtone Annual Report 2013