Maxis' shares fell 11 sen or 1.69 per cent to RM6.39 as at 10.46 am after posting disappointing financial results yesterday.

Alliance Research said the telco giant's core operational net profit of RM1.57 billion came in below expectations mainly due to lower margins as a result of higher device expenses and start-up losses for its home services.

It added that the company is also undertaking a network modernisation programme, which will result in accelerated depreciation of RM124 million and RM55 million in financial years 2012 and 2013.

"We lower our financial year 2012-2014 earnings forecasts by 7.4-12.3 per cent to reflect the lower margins and accelerated depreciation," it said in a research note today.

Hong Leong Investment Bank Research said going forward, the catalyst for Maxis' earnings would be the higher smartphone penetration rate which will boost data average revenue per user as well as stronger than expected home fibre internet take-up rate.

It said synergistic product bundling with paid satellite channel Astro, network infrastructure outsourcing and workforce rationalisation were also among the contributors to the company's bottom line.

However, the research house said Maxis' initially low-margin fixed services would depress profitability with a weak average revenue per user. -- Bernama