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In for a Shakeup? Malaysia's Mobile Communications Market and the Impact of 3G

October 19, 2006 / Hsiao-Yun Lee

18 Page, Topical Report

US$1,520 (Single User License)

Abstract

After Southeast Asian countries liberalized their telecom markets, governments in this region have been encouraging foreign investment to accelerate development of infrastructure, thereby boosting growth in the Southeast Asian mobile communications market. As mobile phone penetration in Malaysia has soared in recent years, and the Malaysian government has started to promote 3G services, the country entered into the 3G era in 2005. This report will analyze the current status and future outlook of Malaysia's mobile communications market.

List of Topics
The Malaysian government's ICT policies, including the CMA and CMCA acts and the MyICMS 886 strategy; current status of the Malaysian mobile communications market; leading mobile operators' developments in the 3G sector; developments of major Malaysian telecoms, including Celcom, Maxis Mobile, and Digi Communications, and their price strategies.

Aircel, Celcom, Dialog Telekom, Digi Communications, Ericsson, Malaysia Communications & Multimedia Commission, Maxis Communications, Maxis Mobile, Minister of Energy, Water and Communications, MiTV, PT Excelcomindo, PT Excelcomindo Pratama, PT Natrindo Telepon Seluler, Telekom Malaysia, Telenor, TimeCel, TIMECOM, TM International (Bangladesh), TM Touch, TT Dotcom

List of Figures
Figure 1 Malaysian Mobile Phone Subscribers, 2001 - 1Q 2006

Figure 2 Malaysian Mobile Operators' Subscriber Base and Market Share, 1Q 2004 - 1Q 2006

Figure 3 Malaysian Mobile Operators' Revenue and ARPU, 4Q 2003 - 1Q 2006

List of Tables
Table 1 Malaysia's MyICMS886 Strategy

Table 2 Malaysia's MyICMS 886 Goals and Timetable

Table 3 Leading Malaysian Mobile Operators' Business Models

Table 4 TM's Investment in Overseas Companies

The increasingly stiff price competition between Malaysian service provides in recent years has brought about higher subscriber rates, with prepaid and postpaid subscribers accounting for 80% and 50% respectively. The market is also showing signs of saturation.

Prepaid subscribers are the main impetus behind growth in the mobile communications market. As of the first quarter of 2006, prepaid subscribers accounted for 85-90% of all mobile subscribers. Due to the fact that the market is becoming increasingly saturated, and ARPU from postpaid subscribers is much higher than that of prepaid subscribers, mobile operators are focusing on the postpaid subscriber market. Various postpaid initiatives have been rolled out such as monthly rate waivers, postpaid initiatives for home and business subscribers, unlimited calls for within the same network, free text messages, and mobile phone discounts. These are carried out with the goal of shifting subscribers from prepaid basis to postpaid basis. In addition, as competition among mobile operators has moved from prepaid to postpaid initiatives, service provider ARPU is likely to continue to plummet in the years ahead. Therefore, mobile operators including Celcom and Maxis began WCDMA services for enterprise customers in 2005 and 2006 in the hope to stimulate subscriber demand and guard against rapid drops in ARPU with the provision of 3G services.

Text messages are an extremely popular value-added service in Malaysia as Malaysian mobile operators provide a fixed number of free text messages to subscribers for promotional purposes, some even offer unlimited text messages. Text messages are the most popular mobile value-added service apart from voice services in Malaysia, and Malaysian mobile operators have therefore introduced customized text messaging applications. For example, Malaysia has many different ethnic groups, each with their own unique demand. To meet the demand, mobile operators began to offer text message services and chat rooms in various languages such as English, Chinese, and Arabic.

Appendix

List of Companies

Aircel
Celcom
Dialog Telekom
Digi Communications
Ericsson
Malaysia Communications & Multimedia Commission
Maxis Communications
Maxis Mobile
Minister of Energy, Water and Communications
MiTV
PT Excelcomindo
PT Excelcomindo Pratama
PT Natrindo Telepon Seluler
Telekom Malaysia
Telenor
TimeCel
TIMECOM
TM International (Bangladesh)
TM Touch
TT Dotcom

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