Malaysia Telecommunications

With a fixed-line telephony sector seemingly in terminal decline and a wireless market that has passed its peak in terms of growth potential, one may be forgiven for viewing Malaysia's telecommunications industry as saturated. Not so - there is still plenty of potential, and all in the industry's so-called next generation services. Mobile 3G telephony has just taken off, although with barely 3% of Malaysian mobile subscribers with access to 3G services, take-up has been slow. Until 3G-enabled mobile devices are more affordable and operators can convince the consumers of the relevance of their content, growth will continue to be slow. High-speed internet broadband access seems to have taken the imagination more, and particularly within Malaysia's corporate community. The government has made it clear that it wants to support growth in the broadband sector, which until now has been sluggish. Incumbent operator Telekom Malaysia, which faces a stagnant fixed line telephony industry, has spent 70% more on its fixed services over the first six months of 200 6than the same period in 2005, and its focus has been its broadband business, as its subscriber base climbed to 640,000.

Our fixed line telephony forecasts remain unchanged as teledensity drops. We have, however, made extensive changes to our wireless forecasts. In the short-term, we estimate 18% y-o-y growth in 2006 so that by the end of the year, there should be about 23.2mn mobile subscribers overall. Although a larger number than we thought earlier in the year, this figure demonstrates that a slowdown in Malaysia's cellular market is starting to take shape. The enforced registration of all prepaid customers, well over 80% of all subscribers, will oblige operators to disconnect any non-registrants from the beginning of 2007. This will only serve to accelerate the decline in net additions to Malaysia's mobile market. Whilst not having any impact on the size of the overall market, the introduction of mobile number portability next year could also change the dynamics of the market, with some operators stealing market share away from others, dependent largely on forthcoming promotional campaigns. The regulator will have to monitor the situation closely as it will want to avoid price wars in Malaysia's wireless market. In the longer term, we forecast average annual growth of 3% as the domestic mobile market reaches saturation with the number of mobile subscribers reaching 26.5mn.

Malaysia is in sixth position in BMI's Telecommunications Business Environment Rankings, ahead of Hong Kong for the first time. Economic growth, a potentially strong broadband market and a decisive, liberal regulator have all helped Malaysia's climb up the rankings. We look forward to the launch of four WiMAX licences. It is likely that, having missed out surprisingly on a 3G licence, that DiGi will win one of these. The regulator is still deciding as to whether it should be able to award any operator with a 3G licence. If so, it will be interesting to see who wins the licences for the technology, which could offer a real challenge to 3G mobile telephony.

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• Chapter 1 - Executive Summary
• Chapter 2 - Business Environment
  • Asia
  • Malaysia
  • Table: Malaysia Business Environment SWOT
• Chapter 3 - Industry Forecast Scenario
  • Fixed-Line
  • Table: Malaysian Telecoms Sector - Fixed-Lines - Historical Data & Forecasts
  • Mobile
  • Table: Malaysian Telecoms Sector - Mobiles - Historical Data & Forecasts
  • Internet
  • Table: Malaysian Telecoms Sector - Internet - Historical Data & Forecasts
  • Multimedia
  • Table: Malaysian Telecoms Sector - Multimedia - Historical Data & Forecasts
• Chapter 4 - Macroeconomic Forecast Scenario
  • Moderate Slowdown Ahead
  • Table: GDP, Population & Output
• Chapter 5 - Country Snapshot: Malaysia Demographic Data
  • Section 1: Population:
  • Table: Demographic Indicators (2005)
  • Table: Rural/Urban Breakdown
  • Section 2: Education & Healthcare
  • Table: Education (all figures %)
  • Table: Healthcare: Vital Statistics
  • Table: Healthcare: Expenditure
  • Section 3: Labour Market/Spending Power
  • Table: Employment Indicators
  • Table: Consumption and Stratification
  • Table: Wages per year
• Chapter 6 - Competitive Landscape
  • Market Overview
  • Competitor Analysis
  • Table: Key Players - Malaysia Telecoms Sector
  • Table: Sales Data - Selected Operators Financial Indicators
  • Key Players
  • Fixed-Line
  • Table: Regional Fixed-Line Penetration Overview
  • Mobile
  • Table: Regional Mobile Penetration Overview
  • Internet
  • Table: Regional Internet Penetration Overview
  • Market Data Analysis
  • Fixed Line
  • Table: Telekom Malaysia Revenue Composition (MYRmn), June 2006
  • Table: Telekom Malaysia Domestic Capital Expenditure (MYRmn), H106
  • Internet & Broadband
  • Table: Telekom Malaysia Customer Base - Fixed & Internet Services, H106
  • Table: Telekom Malaysia Fixed & Internet Services ARPU (MYR) - H106
  • Mobile
  • Table: Malaysia Mobile Market (H106)
  • Table: Malaysia Net Additions - Mobile Market (Q206)
  • Table: Celcom Regional Customer Base (mn) - June 2006
  • Table: Malaysian Mobile ARPUs - H106
  • Table: Malaysia Mobile Data Revenues, 2005
  • 3G
  • Industry Developments
• Chapter 7 - Company Profiles
  • Regional Case Study - Motorola
  • Table: Motorola Net Sales by Region (US$mn)
  • Table: Motorola Market Sales by Locality of End Customer
  • Table: Leading Mobile Phone Handset Sales (mn) - Q306
  • Telekom Malaysia
  • SWOT
  • Maxis Communications
  • SWOT
  • Celcom
  • DiGi Telecommunications
  • SWOT
• Chapter 8 - BMI Forecast Modelling
  • How we generate our industry forecasts
  • Telecommunications Industry
  • Sources
• Chapter 9 - Appendix: Regional Demographic Data
  • Table- Manufacturing Wages (ave per annum), US$
  • Table - Population
  • Household Spending Per Capita, US$
  • Private Consumption Per Capita, US$ PPP
  • Market Size, GDP, US$bn