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1. Q1 2013 www.businessmonitor.comMALAYSIATELECOMMUNICATIONS REPORTINCLUDES 5-YEAR FORECASTS TO 2017ISSN 17484677Published by:Business Monitor International 2. Malaysia Telecommunications Report Q1 2013 INCLUDES 5-YEAR FORECASTS TO 2017Part of BMI’s Industry Report & Forecasts SeriesPublished by: Business Monitor InternationalCopy deadline: January 2013Business Monitor International © 2013 Business Monitor InternationalSenator House All rights reserved.85 Queen Victoria StreetLondon All information contained in this publication isEC4V 4AB copyrighted in the name of Business MonitorUnited Kingdom International, and as such no part of thisTel: +44 (0) 20 7248 0468 publication may be reproduced, repackaged,Fax: +44 (0) 20 7248 0467 redistributed, resold in whole or in any part, or usedEmail: in any form or by any means graphic, electronic orWeb: mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher.DISCLAIMERAll information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time ofpublishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business MonitorInternational accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of thepublication. All information is provided without warranty, and Business Monitor International makes no representation of warranty of any kind asto the accuracy or completeness of any information hereto contained. 3. Malaysia Telecommunications Report Q1 2013CONTENTSBMI Industry View ............................................................................................................... 7 BMI Industry View .......................................................................................................................... ........... 7SWOT Analysis ..................................................................................................................... 9 Mobile SWOT ....................................................................................................................... .................... 9 Wireline SWOT ....................................................................................................................... ................ 10Industry Forecast .............................................................................................................. 11 Mobile ....................................................................................................................... ............................ 11 Table: Telecoms Sector - Mobile - Historical Data And Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARPU ........................................................................................................................ ............................ 13 Table: Telecoms Sector - Mobile ARPU - Historical Data & Forecasts (MYR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 FixedLine ........................................................................................................................... ................... 15 Table: Telecoms Sector - Fixed Line - Historical Data And

Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Broadband ................................................................................................................. ............................ 16 Table: Telecoms Sector - Internet - Historical Data And Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Industry Business Environment Overview ...................................................................... 18 Industry Business Environment Overview ..................................................................................................... 18 Table: Asia Pacific Telecoms Risk/Reward Ratings Q113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Malaysia .................................................................................................................... ............................ 23Market Overview ............................................................................................................... 25 Mobile ....................................................................................................................... ............................ 25 Table: Malaysian Mobile Market Regional Comparisons, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Key Developments ........................................................................................................... ....................... 26 Mobile Growth ...................................................................................................................... ................ 26 Table: Malaysia Wireless Market, Q212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Market Shares ........................................................................................................................ ............... 28 Usage (MOU/ARPU) ........................................................................................................... ................... 31 3G/4G ........................................................................................................................ .......................... 33 MVNOs ..................................................................................................................... ........................... 37 Mobile Content/Value-Added Services ........................................................................................................ 37 Table: Malaysia Mobile Non-Voice Service Revenue Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Mobile Broadband ................................................................................................................. ................ 39 Table: Mobile Market Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Table: Maxis Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................................................................. . . . . . . . . . . . . . . 41 Table: Celcom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

.................................................................. . . . . . . . . . . . . . . 42 Table: DiGi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................................................................. . . . . . . . . . . . . . . 43 Mobile Regional Content ...................................................................................................................... .... 46 Table: Selected NFC Developments, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . .................................................................. . . . . . . . . . . . . . . . . . 48 FixedLine ........................................................................................................................... ................... 53© Business Monitor International Page 4 4. Malaysia Telecommunications Report Q1 2013 Broadband ................................................................................................................. ............................ 54 National High-Speed Broadband (HSBB) Project ......................................................................................... 57 IPTV .......................................................................................................................... .......................... 59 WiMAX .................................................................................................................... ............................ 61 LTE ........................................................................................................................... .......................... 64 Table: Wireline Developments, 20102012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Industry Trends & Developments .................................................................................... 67 Industry Trends & Developments ........................................................................................................... ..... 67 Mobile Consolidation Imminent? .............................................................................................................. 67 TIME Invests In Regional Data Centre ....................................................................................................... 69 Entrants To Spur IPTV Growth ................................................................................................................. 70 Maxis And Astro Choose Collaboration Over Competition ............................................................................. 71 Fiberail Gets Active ........................................................................................................................ ........ 71Regulatory Development .................................................................................................. 73 Regulatory Development ............................................................................................................. .............. 73 Table: Malaysia: Regulatory Bodies And Their Responsibilities . . . . . .................................................................. . . . . . . . . . . . . . . . 74 Regulatory Developments ........................................................................................................... ............ 75Competitive Landscape .................................................................................................... 77 Competitive

.. .. ... ..... .. .... ....... ..... .. .... ...... .. ... ..... ... ............ .. ... ... .... ........ . . . ......... . .... 2005-2011 (US$mn) .. .. . .. .. .... .. ........ 101 Table: Malaysias Population By Age Group. . .... ... .... .......... . . .. ... . ... ......... ............ .... . .. ....... . ...... ... .... . ..... . ......... ...... ........ .......... .... .. .. ......... .......... .... . ... ..... ....... .. .... .... . ........ ....... 1990-2020 (% of total) ..... . .. .. ..... ........ .............. .... . . .... ... . . .. ......... ...... ... ......... .. 94 Restructuring Efforts . . . ... .. . ..... 94 Nokia Siemens Networks .. ......... .... . . ....... ... ... . 82 Celcom . .... ........ . .. . ..... .... . ..... ....... .. ........... . ... . ..... .... ... .......... .Malaysia Telecoms Sector .. .... ... .... ... .... . ..... .............. ............ ............ .... . ....... .... .. ..... ......... .. ... .. . ... .. ... . .... . .. .... .. ...... ...... 96 Table: NSN Selected Asia Activities ... .. .... . ................ . ... . . ..... ... .. . ... . . .. ..... ........... . ...... . ...... .... ... .. ...... ........ .. ... .... ...... .. . ... ....... ....... ...... . .. .. . . ..... ....... .. .... ..... ......... ...... ... . .............. ...... . .. ... ....... ... .. ..... .. ... ... ......... .. . .. .... ................... .. .. ....... .. ... ....... . .. . ......... ..... .. .... ... . ........ ........ .. ....... ..... ....... ..... . ....... 97Demographic Forecast .... .. ...... .. ... .. ........... .... ... . ....... ...... .......... . ...... 1990-2020 (000) . ... ...... . ... .... ......... .......... . ............ ............. 94 Financial Performance .......... ... ... ... ....... .... ........ ........ ................... ........ ... .. .. ... ........ . ........... ... .................. ...... ... ... .... ...... .. . ... . ... .......... ............. . .... .... .. . ..... .. 19902020 ... .. ... . . 100 Demographic Forecast ... ......... .. 95 Asia Pacific Is The Place To Be . 100 Table: Malaysias Population By Age Group.. . ... 95 Table: Net Sales By Geography (EURmn) . ....... . . ..... .. ... .. 77 Table: Selected Operators .. .... . ... 77 Table: Key Players .... . 94 Table: Vendor Revenues (US$mn) .... .............. ...... ....... . ....... . .... .. ... . .. .... .. ............................. ........ ..... .. . . .. ..... .... ..... ....... . ........ .. . . ......... ......... ...... .... . ..... ....................... ... ... ........... .. .. .... ......... .. .. .. ...... . .... . . ... .. .... . ........ . . ............. . 77Company Profiles . ... . . . ... ..... ... . .... . .... ............... .. .. .. .. ... ........ . ... ........... . ... 95 Geographical Breakdown .... ..... ... ...... .. .... ........... .. . .............. .... .. ............ .. ..... . ............. . . .. ....... 90Regional Overview ..... ...... .......... .... . 86 DiGi Telecommunications ...... ...... ...... ... ......... .. .. ......... ............... .... .... . ....... ....... 78 Telekom Malaysia .. ... . .. ......... . . .. ....Financial Indicators. ... 78 Maxis Communications . . . . .. ...... ..................... .. . .. .... .. ..... .. ... . .... .. ...... ... .. .. ........... . ... ....... . ...... .... ..... ....... ... ............ ... . ............ ..... . .... .... ..... .. .. . . ... .. ........... ......... .. .......... . ... ... .. ... .... .......... ........ .. .. . .... ... ... ........... .... ....... . ....... ... ... . .... .... ......... . .. . ...... .. ..... . . . . . . . ... .... ... . .... . ..Landscape .......... . . .. ... . ......... .... 101 Table: Malaysias Key Population Ratios.... . . ........

...... Key Data ■ Our telecoms forecasts have been extended to 2017. .. .. . . ...... .. ..... . ...... .... 108 Table: Weighting Of Indicators .. . . . ... .... .. .. . .. ..... . ... ..... .. .. . ■ Mobile subscriber growth rebounded in Q212 (latest available data for analysis). .. .. . .. ........ non-voice service revenues are still growing. ... ...... .. 104 Glossary .. ..... ....... Malaysia Telecommunications Report Q1 2013BMI Industry ViewBMI Industry View BMI View: Although the Malaysian mobile market still offers opportunities for organic growth . ... .. .. .. ...... ... .. .... ..... . . the firm signed strategic partnerships with 14 content providers... .. .. . .. .. . . .. ... .. . . .value SMS services remain a large part of non-voice revenue...... ........... ..... ... . .. although the momentum could taper in Q312 after weaker figures from DiGi..... .6mn fixed-line subscribers and 7.... . . .... . ..... .. .. MVNOs continue to enter the market... . . . . ...... ..... ........... . ..... 103© Business Monitor International Page 5 5.... ... ...... .. .. .. ........ .... .. ... ..... .... ...... . .. ... . . . ..... . ... although we believe that the trend of long-term decline remains due to strong competition and price promotions... . . .... ... .... A solo venture into the IPTV market would have pitted Maxis against experienced ...... ....... .. .. ..... . as reported in this quarters update .. .. . . .... .... ...... ... ....... . ............. ...... .. ... ... ... ............... . ...... ........ ... .. .. . . 1990-2020 . .... . .. . .. .... .... .. .....• • ....... . . .. . 3.... ... .... ......... ... .............. mobile and fixed broadband services... . ...... .network operators face considerable challenges as voice usage declines and customers prove reluctant to upgrade to postpaid services. .. ....... .... .. In Q212.... .......... . ... . ... .. .... .... 102 Table: Malaysias Rural And Urban Population. .. ......... low. .......... ....... ... ... .. ... . .. .... .... ... 106 Telecoms Business Environment Ratings ..... . ....... ... . .. .... .... .. ... . 109© Business Monitor International Page 6 6....... .. .. .... . . 106 Table: Key Indicators For Telecommunications Industry Forecasts . .... .... .. . . . . . ... ■ ARPUs have exhibited stability. ........ .. .. ........ .. .. .. .......... ...... . .. ... .. .. .... ........ . .. .... . ........ ... ..... . ... .. .. .....2mn broadband subscribers......... which is encouraging for those operators starting to build 4G LTE networks... . . . ... . . ..... .... .. ... . . . Subscriber numbers growth and mobile broadband usage were weaker than expected as operators tried to encourage greater voice consumption. 106 Methodology .. .... . .. so operators need to contain costs wherever possible. ... Maxis has been open about its intention to venture into the pay-TV market through the IPTV route. 104 Table: Glossary Of Terms . . .. ... .. . ... . ......... . ...... ....... .. . . .. ...... ...... . . ... . . .. ... . Key Trends & Developments Astro and Maxis have signed an agreement to jointly develop and market unique telecoms product bundles. That said.. .. .... ..... ..... .. ..... .. We envisage 41.... .9mn mobile subscribers..... ... .. ..... . .. . ...... ... including pay-TV. ...... ...... ... ... although.. . . .. . . . ... ... . ......... ..... ... ..... .. . ...... ... . ... ..... ......... ..... .. . ... ... .. . . 104Methodology . .. ..... . ..... .. In the background... ... .. .... ........ ......... 107 Table: Ratings Indicators ... Malaysia Telecommunications Report Q1 2013Glossary . .... ......... ....... with the aim of launching commercial IPTV services in Q312. .... .. ... .... ... . ........ ........ ... .

which are being passed on to the endcustomer. despite operators witnessing the beginnings of prepaid to postpaid migration. ■ Possibility that Malaysia could be displaced as a regional foreign direct investment (FDI) hub by China. increased public spending has helped to boost domestic demand. digital subscriber line (DSL) and voice over internet protocol (VoIP) substitution. ■ Upgraded networks have led to strong demand for mobile broadband services.• • • players and industry leaders Telekom Malaysia. creating a mature market with penetration in excess of 100%. Recent data continue to indicate that the Malaysian economy is in the midst of rebalancing. Malaysia Telecommunications Report Q1 2013SWOT AnalysisMobile SWOT SWOT AnalysisStrengths ■ Three well-established mobile operators and five additional operators licensed to provide 3/4G services.Weaknesses ■ Telekom Malaysia continues to exercise effective monopoly of domestic telephony and domestic/international leased line markets.8% for 2012 before witnessing a mild pickup towards 4.Weaknesses ■ Little room for further growth in an overly competitive and increasingly saturated mobile market. ■ Continued decline of fixed-line sector at hands of mobile.Opportunities ■ 3G services providing numerous business opportunities for content providers and a new market for handset vendors. ■ Strong regulator supportive of competition in the mobile sector.6% in 2013. ■ Broadband tariffs remain high. ■ Government initiative to improve state of high-speed internet infrastructure. Malaysia Telecommunications Report Q1 2013Wireline SWOT SWOT AnalysisStrengths ■ Several operators (mobile and WiMAX) are licensed to offer broadband services. aside from Telenor and SingTel.© Business Monitor International Page 9 9.1 in BMIs latest Asia Pacific Telecoms Risk/Reward Ratings. While a threat. DiGi and WhatsApp have teamed up to offer unlimited access to WhatsApp messenger services. with vendors opting to locate/relocate to neighbouring countries. However.Threats ■ Maturity of market could lead to a saturated domestic market. The collaboration demonstrates that mobile network operators and over-the-top (OTT) content providers are able to coexist and develop a revenue-sharing business model. helping to create greater broadband access. Vassetti Datatech and REDtone. Astro. Malaysia Telecommunications Report Q1 2013 Malaysia had a Telecoms Rating score of 59. which could help close the digital divide gap emerging between urban and rural markets. as in Singapore. as do wholesale broadband costs. little progress has been made. OTT providers could also lead to consumers upgrading their services with telecoms operators. ■ Lack of key strategic regional investors.© Business Monitor International Page 8 8. ■ Despite WiMAX licences being awarded in 2005. and this suggests that economic growth is poised to remain relatively subdued at 3.Opportunities ■ WiMAX licensing helping rapid growth of wireless . ■ ARPU rates continue to decline. Deteriorating global economic conditions have become a major drag on manufacturing exports. we see limited room for additional fiscal stimulus by the government going forward. Meanwhile. ■ Launch of mobile number portability (MNP) has helped to bolster competition.© Business Monitor International Page 7 7. ■ Sophisticated consumer profile eager to use mobile data and value-added services (VAS).

5 54.202 10.859 36. The figures used for our forecasts come from the national regulatory authority.112 1. down to 33.1mn in 2012. MCMC.857No.© Business Monitor International Page 10 10. Maxis has since recovered 175.4f = BMI forecast.070 1.000 prepaid subscribers in Q311. we also believe that the operators will maintain efforts to increase the number of postpaid subscribers and will focus on migrating low-value prepaid subscribers to the more expensive contract price plans. so it is unclear whether the 2009 figure presented here is totally accurate. Source: BMI. We continue to see 3G growth gaining traction given that data service accounts for only about 31% of the total mobile market. up by 3.108 40.5% y-o-y. It has not provided previous year data for comparison. . the Malaysian f = BMI forecast.141 1.4 51. the prepaid segment is largely responsible for the momentum.446mn mobile subscribers in the country.301mn in June 2011. the operator has provided its subscriber base under the old definition. up from 6.2 28.326 22.859mn. We expect prepaid subscribers and the growing number of MVNOs should continue to help fuel growth in Malaysias mobile sector.022mn 3G subscribers in Malaysia at the end of June 2012. with BMI forecasting more than 7. After reporting a net loss of 129. The strong growth trajectory is due to the increasing affordability of smartphones and data services. Malaysia Telecommunications Report Q1 2013Industry ForecastMobile Table: Telecoms Sector . The MCMC has recently restated its yearend 2010 mobile subscriber figure. the MCMC reported 38.4mn.• • broadband technologies. of 3G phone subscribers (000) 9. Source: BMI.© Business Monitor International Page 11 11.000 in the subsequent three quarters.1 47.7723G market as % of entire mobile market 27.170No. there would have been 36. Malaysia Telecommunications Report Q1 2013 At the end of June 2012.Threats ■ Award of governments high-speed broadband (HSBB) project to Telekom Malaysia has compounded the operators dominance of the fixed broadband market.2 36. up from 35. ■ Broadband market set to experience growth.Historical Data And Forecasts 2010 2011 2012f 2013f 2014f 2015f 2016f 2017fNo. MCMC.442 41. Using this figure.661 38.732 41. of mobile phone subscribers (000) 33.756mn in June 2011. operators Communications and Multimedia Commission (MCMC).2% from 9. operators According to the latest figures published by Industry Trends . up by 23. of mobile phone subscribers/100 fixed-linesubscribers 769 896 1. Data from the MCMC showed that there were 12. the other three licence holders face the loss of their licences.161 1.952 16.956mn mobile subscribers in total at the end of June 2012. ■ Only P1 has made any substantial developments with regard to WiMAX. However. Maxis Communications changed its definition regarding active subscribers in Q111. That said. Like the broader mobile market.1 53. there were 2010-2017 34.882 19. and should also help Maxis recover some of its lost subscriber base.2mn subscribers by the end of 2017.162 22.1 42.Mobile Sector Malaysias three mobile operators. which offers a more complete assessment as it draws in customer numbers from 3G operator/2G reseller U Mobile as well as MVNOs. of mobile phone subscribers/100 inhabitants 119 127 132 135 135 135 134 132No.060mn mobile subscribers in Malaysia at the end of June 2012.677 40.335 13.000 1.991 41.Mobile .415 21. reducing its reported customer base by around 1. However.

the rate of decline would be faster still were it not for the mitigating effects of© Business Monitor International Page 13 13. Celcom Axiata and Maxis (MYR) had offered up data through to the end of Q212 only. In general. Although there were continued slow improvements in subscriber mixes and increased usage of premium non-voice services. Malaysia Telecommunications Report Q1 2013 mobile broadband as such services become increasingly popular and help to keep prepaid ARPU rates buoyant. we continue to note that there are upside risks to our forecasts given the increasing number of 3G subscribers in the country and the impending launch of LTE services in the next few years. That said. the market average ARPU fell slightly in Q212. operators have already started trialling the technology and are in the midst of forming network sharing agreements to reduce capital expenditure and accelerate service roll-out times.0 41.631 3.7 47.© Business Monitor International Page 14 14.© Business Monitor International Page 12 12.404 4.750 3.9 45. With the three operators reporting flat ARPU from the previous quarter. While LTE is likely to become commercially available in Malaysia in 2013. we expect to see Malaysian blended mobile ARPUs continue to fall as operators continue to engage in price promotions.0 54.0Maxis 49. representing 54.4 45. these were not enough to offset declining voice service revenues and promotions to counter strong competition.091 3. up from 13.7 in 2012 before declining to MYR42.4 44.952mn in 2012.857mn.Mobile ARPU .6 46.1 42.7 49. We expect consolidation among those players and . Malaysia Telecommunications Report Q1 2013ARPU Table: Telecoms Sector . Market average adjusted based on operators markets shares.577No. Malaysian operators continue to push for the launch of next generation LTE services. The expansion in rural regions to boost market shares also applies further downward pressure on ARPU. Consequently. The operators continued reliance on prepaid services does not bode well for continued ARPU growth in the years ahead.5 42. Meanwhile.686 3. for both the prepaid f = BMI forecast. we have retained our forecasts.possibly .866 3.0 50. of main telephone lines/100 inhabitants 15. 2010-2017 while 3G-only U Mobile had not disclosed any data at all.8 44.Historical Data & Forecasts (MYR) 2010 2011 2012f 2013f 2014f 2015f 2016f 2017fCelcom 50. Source: BMI.3 42.4 47. to attract subscribers.5 .772mn 3G subscribers by 2017. operators At the time of writing.0 48.Mobile ARPU ARPU data for Q312.1DiGi 52. e expect to see 22. the five newcomers will struggle to finance their network roll-outs as the existing mobile operators will win most of the new customers attracted to LTE.• • • along with consumers relatively strong purchasing power and the availability of low-cost devices.6 44.0 49. having gained the requisite spectrum and operating licences in Q411. However.U Mobile in 2012.0 51.Historical Data And Forecasts 2010 2011 2012f 2013f 2014f 2015f 2016f 2017fNo. only DiGi had reported Industry Trends .7 44. We forecast Malaysias market average blended ARPU will decline to MYR49. Source: BMI.0 47.Fixed Line .7 43.8 45.0 51. However.5 43.595 3. of main telephone lines in service (000) 4. operators and postpaid segments.8 46.2 40.1 52.2 in 2017.3 43.8Market Average 50.4% of a total mobile market of 41. Malaysia Telecommunications Report Q1 2013Fixed-Line Table: Telecoms Sector .2f = BMI forecast.

962 18.610 17.Internet Sector Union.722 5. fixed-line incumbent Telekom Malaysia bundles a traditional fixed-line service in its fibre broadband package.691No. of broadband internet subscribers (000) 4.Internet . operators The Malaysia Communications and Multimedia Industry Trends Fixed-Line Commission reports that there were 3. and this is borne out by the latest data from the MCMC.506 18. down from 3. in our opinion.5% in Q311 and 66.3 61. MCMC.397mn.687 6.© Business Monitor International Page 16 .4% in Q411. the sector is one of decline.5 11. operators According to the International Telecommunication Industry Trends . Source: BMI.142 6.7 20. MCMC.958mn fixed Sector lines at the end of June 2012. reaching 18. Source: BMI. Meanwhile.268mn in 2010-2017 June 2011.414 18. The growth momentum in the sector is clearly declining.0 22.1% y-o-y f = BMI forecast.866mn in 2012.994mn in 2010. This represented a y-o-y increase of 8. ITU.1No.9% in Q211. and the growing adoption of fibre broadband will benefit the fixed. of internet users (000) 15.8f = BMI forecast.7 22. more recent data indicate another period of decline and we believe that this will be the trend given the growing demand for mobile services. and have been relatively successful in mitigating the decline in demand for fixedline services. While this could help the number of fixed lines in Malaysia to grow. This is a common tactic adopted by multi-play operators in other countries. The market experienced a gradual contraction between Q105 and Q309 before witnessing a resurgence from Q409 to Q410. there were 17.2% from 5.9 60. The government-backed High Speed Broadband project is a double-edged sword as it could apply further downward pressure on Malaysias fixed-line industry if operators offer VoIP services via the fibre optic© Business Monitor International Page 15 15. operators for fixed-line service even though they might not use it.404mn subscribers. We foresee the fixed-to-mobile migration to gain traction based on the increasing number of 3G subscribers in Malaysia.840mn broadband subscribers in the country at the end of June 2012. The Malaysian broadband market grew by 17.1%.• 14.3 59. Source: BMI.2 60.6 12.577mn in 2017. 20. of internet users/100 inhabitants 56.8 11.Broadband Table: Telecoms Sector . operators in Q112.691mn by the close of our forecast period in 2017.6 19.994 17. MCMC.7 59.2 12. We expect the number of internet users in Malaysia to increase gradually over the next few years.231 18.541 6.3 61.3f = BMI forecast. up from 15.0 61.2 13.219No.. resulting in a peak of 4.610mn internet users in 2010-2017 Malaysia at the end of 2011. However. Fluctuations in the market have made predicting the fixed-line market difficult. Source: BMI.9 22.line market.803 6.5 22. We believe that the recent uptrend was largely due to a telecoms service bundling strategy by Malaysian operators in order to encourage consumers to sign up f = BMI forecast.126 7. For example. down from 4. Consequently. 30.9 22.Historical Data And Forecasts 2010 2011 2012f 2013f 2014f 2015f 2016f 2017fNo. of broadband internet subscribers/100inhabitants 16.986 7. there were 5. ITU. MCMC.2 11.598 18. according to the MCMC. The regulators data include both fixed and mobile technologies with the latter (not inclusive of the 1Malaysia netbook programme) accounting for the majority at 59. we expect the number of fixed lines in Malaysia to fall to 3. Malaysia Telecommunications Report Q1 2013 network.

operators have already turned their focus to extracting greater value from their existing subscriber bases via upgraded and add. Japan remained the most attractive market in Asia Pacific with a telecoms rating score of 74. the majority of markets are now looking at encouraging existing subscribers to increase their spending on services.9 on a risk/ reward basis. Maxis and Celcom Axiata as retail and wholesale providers to boost the number of highspeed broadband subscribers in the country. other developments aimed at developing the spread of broadband relate to the governments national High Speed Broadband (HSBB) network project. making factors such as the economic outlook an increasingly important determinant in ranking market opportunities. we highlight that past ratings are not perfectly comparable as we have tweaked our methodology.© Business Monitor International Page 17 17.219mn by 2017. up from 6. Malaysia Telecommunications Report Q1 2013 The slowing momentum is a combination of higher base effects and the market approaching saturation.9% in 2012. responsible for deploying the HSBB together with the government. and has signed up operators such as Packet One Networks. Besides an ageing population.6% and create 100. Additionally.8% from 20. the network will boost GDP by 0. businesses have become increasingly bearish towards current and future business conditions. While mature. At the end of 2017.• • 16. Tethering could eliminate the need for consumers to subscribe to an additional dedicated mobile broadband solution. the outlook for Japan is looking increasingly vulnerable. The country was one of the first in the Source: BMI region to launch commercial LTE services. Malaysia Telecommunications Report Q1 2013Industry Business Environment OverviewIndustry Business Environment Overview This quarter BMI has adjusted the methodology for our proprietary Risk/Reward Ratings. The improvement was driven by a broad base increase in the various reward and risk scores. based on the September 2012 Tankan survey by the . Telekom Malaysia is on track to meet its network coverage target of 1. BMI forecasts the number of broadband subscribers in Malaysia to reach 7. given the increasing adoption of smartphones.142mn in 2012. up from 55.2.000 jobs by 2017. We have also introduced a more nuanced assessment of market dynamics as one contributing score for the industry rewards. which bodes poorly for long-term spending on new telecoms products and services. While the fundamental principles are unchanged.on services. fixed broadband services tend to be shared among several users. Asia Pacifics telecoms industry registered a Varying Opportunities telecoms rating score of 56. the broadband penetration rate will increase to 22.3mn premises by 2012. However. According to Telekom Malaysia. As subscriber growth is no longer the key driving force behind market value growth. Meanwhile. The countries rankings have also changed in light of the fine-tuning.6 the Asia Pacific Telecoms Risk/Reward Ratings previous quarter. while we believe that demand for mobile broadband would slow. Furthermore. operators are gearing towards for the commercial launch of LTE services. Future spending ability and our long-term economic views are therefore integral to our adjusted ratings. and operators have seen positive responses from consumers. we have expanded the data used to assess the potential and challenges of investing in telecoms markets. too. However.

The countrys significant land mass means that achieving complete telecoms coverage is a daunting task. However. This could eventually filter down to consumers. this abstinence may not last for long as economic growth continues to slide on the back of slower private consumption growth and a deteriorating trade picture. Data from the regulator have shown that mobile data consumption remains on a strong growth trajectory. The territory was ranked fourth due to weaker country rewards and country risks. to a point where we now believe they have reached a peak. we highlight that. Although Hong Kong is also vulnerable to external shocks and we are adopting a cautious take on consumer spending going forward. Malaysia Telecommunications Report Q1 2013 Australia was ranked second with a telecoms rating score of 73.© Business Monitor International Page 18 18. as with many countries in the region. which bodes well for the mobile content industry. leading to reduced discretionary spending. The effective and forward-looking Singaporean regulator ensures that the country has a long-term plan and that various stakeholders collaborate on vital developments. Among the top five countries in the region. we expect private consumption to remain the main outperformer. the opposition Coalition party has announced that it would revamp the entire project to reduce immediate cost. Hong Kong is similar to Singapore in many ways.1. The coming years should see rebalancing take place. Asia Pacific Telecoms Risk/Reward Ratings which is reflected in the countrys industry rewards score of 68. among other growth components. The trade-off comes in the form of businesses and consumers receiving slower connectivity that requires another upgrade in the future. Singapores strong macroeconomic position has helped it to rank third in Asia Pacific. Singapore has the highest industry risks score in the region. Chinas economic imbalances have grown consistently over the past decade. and we see room for further downside. At present. However. However.8. BMI previously highlighted that South Korea could overtake Hong Kong in our ratings table. the telecoms market is dominated by state-owned firms and there is no indication from the government that it is looking to liberalise the industry. South Koreas nascent LTE market is one of the most vibrant in the region as all three mobile operators have launched nationwide commercial services. particularly consumer services. is still progressing well.© Business Monitor International Page 19 19. although this view has yet to play out. Taiwan was ranked joint sixth with a . Consequently. continued global economic weakness would have a negative effect on export-dependent Singapore. However. South Korea has the lowest country rewards score. The country also has the support of device manufacturers such as Samsung Electronics and LG Electronics.• • Bank of Japan. although this presents an opportunity for companies to fill in the gaps. The government has so far been able to put off fiscal stimulus to boost a faltering economy. which include its industry rewards and industry risks scores. with the current economic structure giving way to a more sustainable and consumerdriven economy. which in part aims to bridge the digital divide. Malaysia Telecommunications Report Q1 2013 China is the highest-ranking emerging market in the Asias Big Three Asia Pacific region due to its sheer growth potential. While the countrys comparatively small population size places a limit on its industry rewards score. the National Broadband Network.

the competitive landscape is overcrowded and operators had resorted to an aggressive price war to sustain subscriber growth. Meanwhile.7% in 2012. which involves a multitude of stakeholders ranging from the government to foreign companies. The allocation of 3G services is expected to take place in the near future. the government has the Economic Transformation Programme (ETP). Thailand is about to issue 3G licences. we believe that the Indonesian consumer has hit its cyclical peak. Malaysia Telecommunications Report Q1 2013 Although the merger between the Philippine Long Distance Telephone Company and Digital Telecommunications Philippines has been completed.4bn in August 2012.• telecoms rating Source: BMI score of 61.8. The ETP has identified 12 key economic areas. Bangladesh had a telecoms rating score of 50. having recorded two straight months of positive y-o-y growth in July and August 2012. operators tend to focus on the more lucrative urban cities instead of pursuing low-value opportunities in rural regions.5% from 5. Although its market potential is comparable to that of China. Indonesia is the third most populous country in the world. partially due to a more developed economy. This process has been in the making for a number of years but failed to materialise previously due to a myriad of factors. Additionally. although the regulator has been evaluating ways to level the playing field. legal and regulatory uncertainties continue to plague the sector.© Business Monitor International Page 20 20. we do not expect a resolution in the near . Initiatives such as launching e-government. The National Telecommunications Commission is looking to award a 3G licence in the near future and this could herald the introduction of a new player.4 with its country rewards component holding the country back. which would provide a much-needed revenue stream for mobile operators. which aims to turn Malaysia into a high-income nation by 2020. While the governments bet on WiMAX is increasingly unlikely to generate a significant return on investment. A successful 3G auction and prolonged stability in the telecoms industry should see Thailands telecoms scores improve in the medium term. e-healthcare and ubiquitous broadband connectivity are expected to play key roles. although its fragmented geography has placed a dampener on the growth potential. However. which include the telecoms industry. The country registered record export earnings of US$2. and now see growth in the space slowing modestly in 2013 to 5. the new regulator. Given the convoluted situation. However. the industry has started to transition to TDLTE technology. the private consumption outlook for Indonesia was robust in H112. The country remains one of the most attractive emerging markets in the region. Malaysia came in eighth position after registering a telecoms rating score of 59. but the market is now struggling with a host of issues. Like Bangladesh. Further.1. the National Broadcasting and Telecommunications Commission. The competitive landscape is slightly skewed. Further. supported by strong income growth and increasing access to credit. Not too long ago. As expanding network coverage is a challenging task. a recent slew of export data suggests that growth is looking set to embark on a sustained recovery. Indias telecoms industry was experiencing robust growth. has been so far performing well. which have significantly hampered companies ability to make long-term investment decisions. the telecoms market is still in a transitional phase.

In addition to market saturation in Source: BMI the mobile industry in light of aggressive price competition by operators. The creation of an independent telecoms regulator. there is no independent regulator with the Ministry of Information and Communications responsible for regulating the industry.1 2 3Singapore 55. Foreign operators from countries such as South Korea and Russia have left the market due to a lack of meaningful growth opportunities.8 =6 8Taiwan 52.8 61.0 76.0 69. the largest determinant is the dominance of state-owned companies.8 =6 . should bring stability into the market by ensuring that policies are free from government influence and agenda. although. However.7 64.8 80.0 80.3 90. like Thailand. Malaysia Telecommunications Report Q1 2013 funds to enhance the countrys IT infrastructure.9 1 1Australia 68.7 90. recovery is a long-term process and this is reflected in Sri Lankas country rewards score of 26.0 68. Malaysia Telecommunications Report Q1 2013 After tweaking our methodology. the Ministry of Planning and Investment Office has announced the approval of© Business Monitor International Page 22 22.0 80. the process has been repeatedly delayed.7 70. we believe that depressed ARPU rates will persist in the near term.4 73. The Asia Pacific Telecoms Risk/Reward Ratings market is gradually expanding following the end of the civil war. Sri Lanka has The Laggards moved up the ratings table to 15th position. At present.0 81.8 31. The Laotian telecoms market has exhibited some signs of stability after all the operators agreed to adhere to a minimum tariff rate of LAK800.• • future.9 3 2Hong Kong 55. Further delays would leave Pakistan trailing behind its regional peers as consumers and businesses would not have access to mobile broadband connectivity. and provide for more efficiency within the business environment. especially when the government continues to adopt a liberal approach in the issuance of licences.0 86. There are a number of factors that have resulted in Vietnam ranking near the bottom of our Risk/ Reward Ratings.7 80. However. Sri Lankas export growth came in at a new multiyear low of -17.0 65.0 83.9 5 5China 68. However.7.9 74.1 4 4South Korea 62. which limits its growth potential. Table: Asia Pacific Telecoms Risk/Reward Ratings Q113 Rewards Risks Industry Country Industry Country Telecoms PreviousCountry Rewards Rewards Risks Risks Rating Rank RankJapan 80. The country is also one of the smallest in our Risk/Reward Ratings.4% y-o-y in July 2012.0 67.5 71.0 66.0 61. with the public and private sectors engaging in network expansions and new product launches. but the regulator has not disclose a firm timeline for the actual auction. partially due to an agreement to offer lower tariff rates on certain days such as holidays and continued lack of access to credit by smaller businesses and the purported lack of the flow-on effects from investments to the local community. although we caution that it would take a few years before we see significant improvements. the Telecommunication Regulator of Cambodia. A pre-bid conference of prospective 3G consultancy firms was held on September 20 2012.0 67.0 80. as part of a plan to modernise the countrys investment management system. Pakistan could still be looking to auction 3G licences before end-2012.0 75.© Business Monitor International Page 21 21.5 57.5 60. the lowest in the region. Cambodias overcrowded telecoms industry remains a concern. Further.

0 44.5 32. we expect the next generation technology to be well received in the country.7 60.0 42.• 6Malaysia 52.0 61.0.3 14 11Sri Lanka 45.0 71. which would help to support ARPU levels. Malaysia was ranked eighth with a Telecoms Ratings score 59. based on BMIs proprietary Country Risk Ratings that could affect the realisation of anticipatedreturns. Given the changes.1 60.1. It was reported in September 2010 that the MCMC would award nine licences.5 47.0 45.0 60. and this was confirmed by local media in December 2011.7 60.2Scores are weighted as follows: Rewards: 70%. mainly due to the positive effects of cash handouts and increased welfare spending by the government.0%.5% in 2013.5 56.4 59.9 50. The country had an industry rewards score of 52. However. which could be downgraded in the future if the regulator continues to muddle through the LTE licence issuance process.0 26.1 64.0 57.1% in the next five years.8 55.5 57.5.8 16 16Cambodia 40.9% from 4.0 64.9 9 9Philippines 50.8% in 2012 before accelerating towards 5. which has a sizeable portion of consumers that are tech-savvy and willing to pay for the latest products and services.0 70. Malaysia Telecommunications Report Q1 2013 comparable. The Malaysian telecoms market is regulated by the Ministry of Communications and Multimedia Commission (MCMC).0 33.3 32.0 50. which is likely to push consensus estimates for growth towards the upper range of Bank Negara Malaysias target of 4.3 41.5 45.2 40. Assuming the government is able to finalise the allocation of LTE licences.4% yo-y in Q212. and we forecast the entire industry (comprising mobile. We expect private consumption to grow at a relatively resilient pace of 4. Unlike emerging peers such as Vietnam and Cambodia.1 12 14India 52.0 46. The Rewards rating evaluates the size and growth potential of atelecoms market in any given state.0 64.4 11 12Thailand 52.2 66.7 60.0 60.2 49. Malaysias real GDP grew by a better-than-expected 5. and countrys broader economic/socio-demographic characteristics that impact theindustrys development.7 60. Malaysia was the second-highest ranked emerging country in the region behind China. fixed line and broadband) to grow by an average of 3.9 17 15Laos 37.0.5 39.1 52.3 40.3 50. The latest reading is expected to trigger a wave of analyst upgrades over the coming months.0 38. which was slightly lower than the regional average of 54.7% previously. However.2 10 13Bangladesh 52. some licensees have claimed that the government has yet to finalise the allocation.0 56.of which industry risks 40% and Country Risks 60%.5 36. of which industry rewards 65% and country rewards 35%.9 50. we note .0 40. Real GDP growth in Q112 was also revised upwards to 4. The country has a relatively mature telecoms market.0 49. Source: BMIMalaysia In our newly revised Asia Pacific Telecoms Risk/Reward Ratings. even though the companies are ready to offer commercial services. Malaysia has a comparatively stable market with a growing proportion of postpaid subscribers.0 60.0 53.6 15 18Vietnam 44. Risks: 30%.1 8 7Indonesia 57. the Risks rating evaluates industry-specific dangers and those emanating from the statespolitical/economic profile. The country received an industry risks score of 70. Mobile 3G services are also on the rise. beating consensus estimates of around 4. we highlight that past scores and rankings are not© Business Monitor International Page 23 23.6% by a significant margin.0 43. Malaysia stood out largely due to its stronger macroeconomic position.9 13 10Pakistan 45.6 18 17Average 54.0-5.0 61.

however. The operators subscribers will be able to access more than 30 Islamic products and services across all devices through .0 109.2 30. Source: BMI. Packet One. We believe that the announcement of a generous election budget for 2013 by Prime Minister Najib Razak will help to boost voter support for the BN coalition and should be sufficient to give the BN a marginal edge at the next general election.8bn. Malaysia Telecommunications Report Q1 2013 Table: Malaysian Mobile Market Regional Comparisons. The bid was reported to be worth MYR1. though not enough to justify the licensing of nine 4G LTE operators. reported the Business Times. Uptake of mobile broadband services has slowed in recent quarters. Maxis launched an array of Islamic content and services in line with its Salam Ikhlas 2012 campaign. However.• • that the risk of a sustained collapse in exports over the coming months could potentially lead to widespread job losses in export-driven sectors.35year CAGR (%) 2. In October 2012. sound files and contact lists. regulators. operators© Business Monitor International Page 25 25. The package will allow customers to connect with family and friends through messaging. mobile operators continue to encourage the usage of more lucrative non-voice services. A degree of mobile broadband fatigue notwithstanding. Malaysia Telecommunications Report Q1 2013Market OverviewMobile Regional Perspective Malaysia is one of the more developed Asian mobile markets. location-based functions and sharing photos. 2011 Malaysia Asia PacificPostpaid As % Of Market 20. with smartphones and mobile computers increasingly being used to lure customers onto their networks. ■ In August 2012. partly due to its multi-racial and pro-democracy platform.33G As % Of Entire Mobile Market 28. suggesting that there are still limits to consumers willingness to invest in pure data services and content. prompt households to cut back on spending.4 24.6 15.3Blended ARPU (US$) 17. Despite the Pakatan Rakyat (PR) coalitions growing popularity in recent years. The exclusive package on DiGi Easy Prepaid is effective from October 22 2012 and is available until March 31 2013. Malaysia Mobile Market Regional Comparison 2011 Data from 18 countries where available. regulators.1Data from 18 countries where available. videos. operatorsKey Developments ■ DiGi and mobile content provider WhatsApp have teamed up in October 2012 to offer unlimited access to WhatsApp Messenger services. Uncertainties over the outlook for employment could.© Business Monitor International Page 24 24. calling it misleading as it is based on speculation (The Star). The operator added that it has not expressed interest in any bid nor has it sought approval to do so. in turn. However.1 16. Source: BMI.64) with 100MB of data for free. TM has denied any such move. Telekom Malaysia (TM) was believed to be seeking the finance ministrys approval to bid for Green Packets mobile broadband unit.0Data ARPU (US$) 21. The unlimited access will be for five days at a cost of MYR5 (US$1. we believe that this will nonetheless be insufficient to unseat the ruling Barisan Nasional at the upcoming general election. f = BMI forecast. with a vibrant and fast-growing 3G sector and robust growth noted in non-voice service usage. A slowdown in the fixed mobile market has also conspired to hamper the governments plan to serve 50% of the population with affordable broadband services. we still see room for growth in the mobile market.8 32.2Mobile Penetration (%) 127.

this is a very poor achievement considering U Mobile has been active since early 2009. ■ DiGi added 10 new roaming outlets to its portfolio of networks in August 2012.9% and resulted in a penetration rate of 133. iPads. Between them. Poland. audio. it would appear that the number of new customers joining the Maxis network is being offset by continued deactivation of inactive accounts. This represented a q-o-q increase of 3. The services are inclusive of imsak and buka puasa times. Using its new definition of active subscriber numbers. Also.8% and a y-o-y increase of 8. The subscribers overseas data charges would be capped at a fixed rate of as little as MYR36 a day. Pakistan. though it did not specify when that milestone had been reached.3Total 34. mostly in the prepaid arena For the quarter ended June 2012. apps. buoyed by strong demand for its data and mobile broadband packages and the lure of premium devices and integrated services such as the Apple iPhone and BlackBerry handsets.696 36. The alerts enable the subscriber to know exact times during the month of Ramadan. Either way. although the momentum tapered to 75. Albern Murty.386mn subscribers in June 2012 using Maxis old subscriber-counting definition or 3.which does not regularly disclose customer numbers . Q212Operator No.000 in the quarter ended June 2012.000 in the subsequent quarter. where subscribers are offered free alerts annually. of Subscribers (mn) Market Share (%)Maxis Communications* 12. Using the old methodology. Maxis notes that it is enjoying strong sales of smartphones and data plans despite a falling user base. the agency said. Maxis© Business Monitor International Page 26 26. Spain and Brazil to its current list of networks. Android devices and PCs.060mn if Maxis old definition of active subscribers is applied). New Zealand.956mn subscribers at the end of March 2012 (36. the three leading operators .490mn if we assume the regulator is now making its assessments using Maxis new definition. In May 2012.4DiGi 10. Table: Malaysia Wireless Market. The operator added Macau. 3G-only operator U Mobile .would have accounted for just 2.Celcom Axiata. Bangladesh. Malaysia Telecommunications Report Q1 2013 Communications and DiGi served 34. The operators TravelSure Unlimited Roaming service will allow subscribers to access services with internet roaming rates in more than 40 countries.• SMS. We therefore assume that many customers are upgrading their existing packages rather than joining as new customers. Slovakia.000 subscribers while Celcom added 79.Mobile Growth There were approximately 38.3Celcom 12. Hungary. It remains difficult to properly gauge Maxis performance while it continues to report two sets of total customer numbers.304 29. video. Serbia. according to the companys chief marketing officer. Android and BlackBerry users can obtain a 5GB storage space by signing up for a free personal cloud account. Maxis appears to be growing rapidly.031 34.000 (according to its new active subscriber calculations). ebooks. Meanwhile.3%. Maxis and Celcom recovered from the net losses in the previous quarter .Maxis gained 51. according to the latest data from the Malaysian Communications and Multimedia Commission (MCMC).956 .446mn mobile subscribers in Malaysia at the end of June 2012. U Mobile announced that it now had over 2mn subscribers. MMS. DiGi reported the strongest net addition among the three mobile operators with 293.

000 in Q311. and an over-reliance on low-cost prepaid services. Malaysia Telecommunications Report Q1 2013 and rationalising the costs of operating transmission systems. Unlike its rivals. we could see Celcom capture the postpaid market leadership in the next two years. That said. assuming that existing trends maintain. down by 0.• • 100.696mn active subscribers meant that it 2009-2012 accounted for 36.000 subscriber net increase in the quarter.4% even though it recovered from the net subscriber loss of 28.000 in Q112.000 in Q411 and 26. Source: BMI. The companies have been recording sluggish growth in service revenues and profits for some time as market maturity. In June 2010. it is worth noting that the operator occasionally suffers from high rotational churn in the prepaid segment.000 lost in Q112. the operators are focusing on three key areas: operations and maintenance. Celcoms market share fell to 34. transmission and site sharing. 43.3% of the market in Q212.5pps from Q112. The consistently strong performances underscore our view that DiGi could draw level with its rivals in the near future.3 percentage points (pps) q-o-q.0* Figures are per new subscriber definition. the companies can at least make substantial savings in their outgoings. DiGi and Celcom Axiata signed an MoU to collaborate on network and infrastructure projects for the long term. leaving resources free to innovate in the development of new services and applications and to more aggressively target low-income and rural subscribers with affordable services and devices. A definitive agreement was signed in January 2011 under a three-year term.000 in Source: MCMC. although this was not enough to offset the 90. Third-ranked DiGi could be in a position to overtake them both as the company continues to outperform in terms of customer additions and accounted for 29. up by 0. However.3% of the market.000 subscribers in the quarter. has dampened consumer appetites for their services. Malaysia Telecommunications Report Q1 2013Market Shares Malaysia Prepaid Mobile Omitting U Mobile due to a lack of verifiable data. despite the increasing use of higher value premium services.000. up from 293. reducing spending on services such as power© Business Monitor International Page 28 28. slashing expenditure on infrastructure rental fees. Maxis postpaid subscriber base continued to decline while subscriber growth came from the prepaid segment as the company has launched a number of prepaid-focused promotions. With rival Maxis focusing on the prepaid market. By proactively addressing operating and capital costs through collaboration. The company noted that its postpaid segment is regaining momentum post high rotational churn. Under the terms of the MoU. The network infrastructure sharing scheme targets the removal of surplus base station sites and optimising base station deployment. operators Q112. DiGis Q312results were available for analysis and these showed a 75. which helped it win back old customers. potentially leaving it vulnerable to changes in market dynamics. Postpaid net additions in Q212 reached 56. Subscriptions Maxis 12.000 in the previous quarter. Subscriptions operators are keen to see the postpaid sector emerge 2009-2012 to . The maturity of the mobile sector has been Malaysia Postpaid Mobile supported by growth in the prepaid sector. operators© Business Monitor International Page 27 27. up from 48. The operator gained 51. and radio access network elements.

become the market driver as customers swap from prepaid to postpaid. The growth in postpaid is the result of low-cost services and competitively priced core services, and the introduction of attractive handsets and smartphones, leading to mobile broadband services growing in popularity. That said, despite improvements in the postpaid arena, the prepaid market continues to dominate. At the end of June 2012, the three principal operators reported serving 27.334mn prepaid subscribers, up by 3.8% y-o-y. This would represent Source: MCMC, operators 78.2% of the total number of customers they served. The regulator, however, believes there were 31.214mn prepaid subscribers as of Q212, representing an annual increase of 9.7% and 81.2% of the total market of 31.214mn. However, the 1.304mn increase in the number of prepaid subscribers from Q112 could be attributed to the inclusion of data from MVNOs. According to the MCMC, MVNO data, which were excluded in prior results, were included in Q212. Meanwhile, the number of postpaid subscribers in the country reached 7.232mn at the end of June 2012, according to data from the regulator. The three leading operators, however, said that they served 7.622mn postpaid subscribers at that time, representing annual increase 2.6%. Again, a difference in active subscriber© Business Monitor International Page 29 29. Malaysia Telecommunications Report Q1 2013 definitions accounts for this discrepancy. Postpaid subscribers accounted for 18.8% of the market at that time, according to the regulator. Maxis was serving 9.559mn prepaid subscribers at the end of Q212, up by 0.5% y-o-y. We continue to believe that gross prepaid additions are higher than these figures suggest, but that most of the gains are being offset by further eliminations of accounts now deemed to be inactive. BMI thinks it likely that Maxis will report muted growth in 2012 (Q312 data were not available for analysis at the time of writing). Prepaid subscribers accounted for 75.3% of Maxis total active subscriber base in Q212, versus 74.6% in the preceding year. In terms of Maxis postpaid base, the operator had 3.137mn such subscribers (new definition) as of Q212, down by 40,000 q-o-q even though the operator has said that it is focusing on subscriber retention through smartphone offers and roaming plans. Celcom served 9.195mn prepaid subscribers in Q212 (latest data), representing a 1.4% y-o-y increase. Celcom lost 316,000 prepaid subscribers in Q311, undermining its success in adding 343,000 such customers in Q211 and 117,000 in Q111. Again, this was due to the companys efforts in dealing with excessive multi-SIM prepaid accounts. However, 498,000 new prepaid customers were added in Q411, typically a strong period of the year for the company. Nevertheless, in Q112, there were 76,000 net prepaid subscriber losses at the company, which was attributed to increased interest in its postpaid and mobile broadband offerings. Celcom added 57,000 new postpaid subscribers in Q212, bringing the total to 2.837mn. This was a continued improvement from the 48,000 and 43,000 additions recorded in Q112 and Q411 respectively, but was still a little short of the 58,000 additions recorded in Q211. Postpaid customers accounted for 23.6% of the operators total subscriber base in Q212, versus 22.7% in Q211. Celcom believes that strong demand for its mobile broadband services has been driving growth in the prepaid arena. With new devices continually being added to its range of packages, Celcom has begun reporting an improvement in its

subscriber composition and is again narrowing the gap with Maxis for the title of postpaid market leader. As for DiGi, the third-ranked operator was serving 8.647mn prepaid subscribers in Q312, representing 83.9% of the operators total subscriber base. Comparisons with its rivals were not possible as neither Celcom nor Maxis had announced Q312 results at the time of writing. In Q212, DiGi reported 8.580mn prepaid subscribers. Like Celcom, DiGi has also adopted a market segmentation approach, launching its Hit 1 prepaid plan for heavy using youth subscribers, charging MYR1 per day for SMS and© Business Monitor International Page 30 30. Malaysia Telecommunications Report Q1 2013 MYR0.12 per minute for calls to any network, a rate three times lower the normal rate of MYR0.36 per minute. In terms of the postpaid market, DiGi had 1.649mn subscribers in Q212, representing an increase of 8.3% y- o-y. The rate of growth remained robust largely due to competitively priced tariffs offered for postpaid thanks to the market segmentation approach of the operator, together with attractive postpaid services and a greater range of smartphone models, as operators focus more on 3G. The operators postpaid subscriber base increased to 1.657mn in Q312, representing a y-o-y increase of 6.0%. The other operators had not reported their Q312 results at the time of writing.Usage (MOU/ARPU) Postpaid Mobile ARPU (MYR) Maxis, Celcom and DiGi all supply data covering 2009-2012 blended, prepaid and postpaid ARPU, though data for Maxis only go as far back as September 2008, a consequence of its recent listing and improved reporting of key indicators. Responsible for the recent decline in ARPUs (postpaid and prepaid) was the aggressive pricing of postpaid and prepaid services in the market, as well as the economic recession. In Q111, Maxis Communications readjusted its ARPU in line with its new definitions for prepaid and postpaid subscribers. Despite this blended Source: operators ARPUs remained flat at MYR49 in Q111 for the third consecutive quarter. Then, in Q211, blended ARPU rose to MYR51 and reached MYR54 in Q311 and Q411. The second quarter of 2012 saw Maxis blended ARPU remained stable at MYR52. This was connected to Initiatives to enhance paid usage minutes and stimulate overall MOUs. Blended voice minutes of use fell by 5.9% y-o-y to 175 minutes. It had earlier reached a high of 186 minutes, in Q211. Prepaid ARPU similarly remained flat at MYR34 during the Q410-Q111 period before rising in Q211 to MYR36, a 5.9% q-o-q increase, and then to MYR38 in Q311, a q-o-q rise of 5.6%. There was no change in Q411, but it had slipped to MYR37 by Q112 as prepaid voice minutes fell faster than the operator could© Business Monitor International Page 31 31. Malaysia Telecommunications Report Q1 2013 grow its prepaid user base. Maxis Q212 prepaid ARPU remained stable at MYR37. Prepaid users spent an average of 130 minutes on their phones in Q212, down from 142 minutes one year earlier. Meanwhile, Maxis postpaid ARPU rose to MYR108, under new definitions, in Q211, from MYR105 in Q111. In Q311 it reached MYR110; again, there was no change in Q411 while Q112 saw a small contraction to MYR107. The contraction continued in Q212 with ARPU reaching MYR106. Besides seasonal factors and declining voice usage, ARPUs are not falling as fast as they might as customers continue to adopt the operators iPhone and BlackBerry data

packages and make better usage of mobile broadband services as the company progresses with its ambitious network improvements. Celcom, by contrast, experienced a degree of stability in Q212 as only its postpaid ARPU saw a slight decline from MYR96 to MYR95 over the course of the quarter. Blended ARPU remained at MYR51, while prepaid ARPU remained at MYR37. This appears to be linked to steady non-voice service usage, as well as marked increases in voice usage in general. Blended voice minutes rose to 263 minutes in Q212, the highest rate of usage we have on record. DiGi reported modest reductions in its blended, Prepaid Mobile ARPU (MYR) prepaid and postpaid ARPUs in Q212, reflecting the 2009-2012 falling usage of voice services, particularly in the postpaid segment. Its blended ARPU fell from MYR49 to MYR48 over the course of Q212, as blended minutes of use (MOU) remained unchanged at 270 minutes (the decline in postpaid minutes offset the increase in prepaid minutes). Similarly, prepaid ARPUs remained stable at MYR41 over the quarter. In Q212, prepaid ARPU remained unchanged at MYR41. The companys postpaid ARPU also did not Source: operators experience any changes in Q212, remaining stable at MYR85. However, this declined in MYR82 in Q212. Postpaid MOU shrank quite noticeably, from 431 minutes to 419 minutes in Q112, before declining to 396 minutes in Q212.© Business Monitor International Page 32 32. Malaysia Telecommunications Report Q1 20133G/4G Malaysia has four holders of 3G licences: Maxis, Celcom, MiTV (U Mobile) and DiGi. Malaysia issued its first two 3G licences in 2002, to Celcom and Maxis. U Mobile and TIME dotCom won their licences in March 2006, ahead of DiGi. TIME dotCom subsequently sold its 3G licence to DiGi, which is now sharing 2G/3G facilities with U Mobile. Although none of the operators discloses 3G-specific subscriber numbers and network usage data, top-line market data from the regulator and details regarding mobile broadband user figures reported by Celcom, Maxis and DiGi give a fairly comprehensive insight into 3G adoption in Malaysia. The MCMC claims that there were 12.022mn 3G subscribers in Malaysia as of June 2012 (latest date for which data were available at the time of writing), of which 7.880mn were prepaid. The total 3G subscriber base represented a y-o-y increase of 23.2% from 9.756mn at the end of Q211. Market leaders Maxis and Celcom launched services in May 2005, with Maxis collecting around 7,000 subscribers in its first few weeks of operations (by the end of Q205) and Celcom picking up some 5,000 users. By the end of the year (2005), Celcom was understood to have overtaken Maxis in a market comprising about 70,000 subscribers. DiGi joined the fray in late 2007 when it acquired TIME dotComs 3G business. Newcomer U Mobile joined the market in 2009. The operators have been reluctant to disclose more recent subscriber figures, though aggregate numbers are reported quarterly by the regulator. Meanwhile, in April 2010, the MCMC announced it was gearing up to auction three blocks of 2.6GHz spectrum in 2011, marking the regulators first formal move to bring fourth generation (4G) LTE technology into commercial play. The MCMCs aim is to rationalise spectrum holdings in order to make the most efficient use of these scarce resources and to boost use of mobile broadband services. However, in mid-October 2010 the regulator said it had awarded spectrum in the 2.6GHz band to nine telecoms operators. The winning

000 in March 2007.000 sites were being used in this way at the end of Q411. Asiaspace received only 10MHz of spectrum. Maxis expected to have invested about MYR2bn in the expansion of its 3G network. the company said that HSPA+ coverage had been expanded to more than 5. REDtone Marketing and YTL Communications plus newcomer Puncak Semangat secured the licences. Packet One Networks (P1). Maxis wireless broadband network can support theoretical peak network rates of up to 21Mbps. it was clear that nine LTE networks were not economically viable and it was being reported that YTL had approached Asiaspace and P1 with a view to pooling their resources or pursuing a formal business combination. were allocated 20MHz of spectrum. was due to a fall in 3G handset prices. Despite missing its target of 2mn 3G subscribers by April 2008. where it had launched its 3. This network agreement with Ericsson was in addition to Maxis earlier contract with Siemens in August 2005 for the delivery of 3G/W-CDMA equipment in the Klang Valley and northern Malaysia. Maxis Communications As part of its plan to achieve 80% 3G coverage by 2014. The operator reported 1. By the end of 2009.5G network in September. Further investments in its next generation network were made in December 2009. the rate of take-up was extremely encouraging. Mobile operators Celcom Axiata.© Business Monitor International Page 33 33. The company claimed that services were initially available only to select customers on a trial basis. Maxis Broadband. As of Q411. An investment of MYR5mn was enough to deploy such services in Penang as well. however. bar Asiaspace and Puncak Semangat. Malaysia Telecommunications Report Q1 2013 By mid-February 2012.000 households. compared with 350. typical access rates of 1015Mbps are most likely. in recognition of its lack of pre-existing infrastructure. as well as WiMAX operators Asiaspace. possibly because it already owns considerable spectrum for other purposes. it is believed. Maxis signed a network expansion agreement with Ericsson in September 2005. Nothing further had been reported at the time of writing. All.3mn active 3G subscribers as of March 2008.100 sites in total. DiGi Telecommunications and U Mobile. Maxis expanded its high-speed downlink packet access (HSDPA) network so that it reached Penang as well as the Klang Valley. the newcomer was granted 30MHz of spectrum. approximately 1. Maxis pledged to invest over MYR1bn over the following three years on its 3G provision in the Klang Valley. covering 81% of the population. The technology is being rolled out alongside Maxis existing 3G infrastructure in certain areas of the country. Maxis expanded its 3G network so that it reached Penang.• operators will be able to launch high-speed mobile broadband services using LTE technology by January 1 2013. although Maxis is keen to point out that. This indicates growth of 271%. when Maxis launched its HSPA+ platform. With HSPA+. At the same time. In December 2005. In November 2006. but began offering a commercial service in 2010. but BMI believes many of the new entrants will have little choice but to consolidate in order to protect their investments. This. reaching some 20. in areas with good coverage. these rates are around double those . the company is offering 3G services at 900MHz in order to improve indoor coverage and increase data transfer speeds. Meanwhile. Nevertheless. an important area for tourism and business travellers.

such as LTE. in recognition of the regulators decision to award 2. which could be introduced within the next few years. Through the collaboration. Consequently. The operators agreed to look into sharing telecoms base stations for the purpose of TIME dotComs proposed broadband WiMAX network. Asiaspace would act as a mobile virtual network operator and leverage Maxis network infrastructure to offer LTE services. DiGi later received approval from the MCMC for the transfer of TIME dotComs licence. As part of the agreement. and that the low 3G tariffs it introduced would sustain that growth. Maxis claims it will deploy HSPA+ on a© Business Monitor International Page 34 34. In May 2011. Penang. the company believes the agreement will enable it to accelerate the deployment of its 3G network by four to five times and deliver significant cost savings. Maxis and U Mobile entered into a multibillion ringgit agreement to share Maxis 3G radio access networks (RANs) for a period of 10 years. The company said that it saw mobile internet usage as being its primary growth driver for at least the first two years of operations. the DiGi Turbo 3G network covered 50% of the population of . DiGi Despite losing out on an earlier chance to win a 3G licence. TIME dotCom was also invited to take part in the placement of 76. equivalent to a 3. Malaysia Telecommunications Report Q1 2013 strategic basis across Malaysia. In November 2007. Furthermore. TIME dotCom agreed to sell its 3G concession and frequencies for 27. Maxis will receive a significant new source of revenue and will enhance utilisation of its network in areas currently underutilised.5% stake in the operator. The companies said this was Malaysias first active 3G RAN sharing arrangement.000 3G sites by early 2013.© Business Monitor International Page 35 35. Reportedly.6GHz spectrum to these and seven other companies in Q411.5mn DiGi shares (necessary for Telenor to lower its stake in the company to 49%) in compliance with foreign ownership regulations. where U Mobile is committed to continue providing mobile broadband services over its own facilities. as more than 54% of its base station sites were shared with other operators at the end of Q311.5mn new DiGi shares. Maxis has considerable experience of network sharing. Maxis would be in charge of building and running the LTE network while Asiaspace would provide additional spectrum in order to increase network coverage and capacity. HSPA+ also provides a useful stepping stone to 4G technologies. Nothing further had been reported at the time of writing. The shared locations will exclude urban market centres such as Klang Valley. The deal will help U Mobile extend its 3G footprint to more than 4. Johor Bahru and Ipoh. Maxis and WiMAX provider Asiaspace were said to be considering sharing network infrastructure as they prepare for the rollout of next generation LTE services. As for U Mobile. In October 2011. DiGi agreed to review its international and domestic infrastructure agreements with TIME dotCom so that it would spend MYR10-15bn a year over a three-year period. The deal also encompasses LTE sharing. Malaysia Telecommunications Report Q1 2013 For each of the three years to late 2010. DiGi was to invest MYR400mn (US$118mn) in extending its Turbo 3G service to about 70% of the population.• • currently offered by the companys HSDPA network in certain areas of the country. By the end of 2010.

the companies commenced physical RAN swapping. so that we have an advantage in terms of content synergies. the equipment was provided by ZTE of China. It is difficult to tell whether STTs involvement is having a positive effect on U Mobiles operations and business strategy. declaring: 3G is not purely voice. see earlier entry on Maxis Communications). It expected to achieve this via vendor financing. calling on the resources of its shareholders and by offering shares to the public. This had increased to just 54% by the end of 2011. Meanwhile. MiTV said it would need to invest MYR1bn in rolling out an NGN over a two-year period. To help with this.1mn subscribers by the end of 2010. citing unspecified difficulties in working with the managers appointed by U Television. but BMI is far from certain whether an offering would be successful given U Mobiles poor progress to date and the increasing likelihood that U Mobile and some of the new LTE licensees are already considering merging in order to protect their investments and achieve the scale needed to take on Maxis. a figure that cannot be verified to BMIs complete satisfaction.© Business Monitor International Page 36 36. The shares were sold by U Television. Celcom and DiGi in the mobile market. U Mobile launched services over a dual-cell HSPA+ platform. manage and maintain MiTVs WCDMA/HSPA network. Celcom has probably been the most active in securing MVNO partners and has worked with . Singapore Technologies Telemedia (STT) purchased a 33% stake in U Mobile for MYR626mn (US$184mn). Ericsson was to build. U Mobile noted that its subscriber base had passed the 2mn mark.• Malaysia. this will extend 3G coverage nationwide by the end of 2013 (for details. In May 2012. which had taken control of the company in Q309 after fellow investors NTT DoCoMo of Japan and KT Freetel of South Korea exited the business. DiGi plans to have upgraded its network to the point by which it can be in a position to migrate to LTE 4G technology by the end of 2012. versus 95% coverage by its 2G network at the same time. but the participation of an experienced telecoms player such as STT is welcomed. Malaysia Telecommunications Report Q1 2013 In February 2010. DiGi has entered into a network collaboration agreement with Celcom Axiata. the operator failed to make much of an impact and it quickly became clear it would fail to sign up 3. We have an IP network with 41 channels. Local media reports suggest that an initial public offering (IPO) of shares in U Mobile is being contemplated by the shareholders of U Television. a network sharing agreement was established with Maxis in 2011. MiTV was later renamed U Television and its nascent 3G mobile telephony business was eventually dubbed U Mobile. In a contract signed in August 2006. as had been promised. MiTV Chairman Rosman Ridzwan was not surprised at his companys successful 3G licence bid. In October 2010. despite trialling services in the Klang Valley from September 2007 and rolling out a commercial service in Kuala Lumpur in early 2009. but would account for the 2mn subscriber difference between total market data published by the regulator and the figures reported by the three principal operators. In Q411. Others At the time of being granted its 3G licence. its multimedia delivery. However. a process expected to be completed by the end of 2012. raising data transfer rates in selected areas to 42Mbps.MVNOs A number of companies have established MVNO agreements with the three leading players.

Maxis and DiGi all report growing usage of non-voice services within their core mobile services businesses. Perangsang Telco. the availability of smartphones and other multimedia mobile devices and the deployment of mobile data networks. it is clear that non-SMS services have recently gained a superior position in terms of usage.1% from MYR2. up from 23% in 2010. though it is only DiGi that provides a detailed breakdown of non-voice service revenue composition. Merchantrade. entered into an agreement with Samena Telacom and MVNO operator FRiENDi to establish a new MVNO in Malaysia. Malaysia Telecommunications Report Q1 2013 BMIs mobile operator database shows that the three main operators generated non-voice revenues totalling MYR7. Using DiGi as a benchmark for trends in the Malaysian mobile value-added services market.Mobile Content/Value-Added Services Celcom. though the rate at which usage is growing remains constrained by affordability. Tune Talk and XOX Com. Services are provided under the Smart Pinoy brand. down from 34% a year earlier. Overall. meanwhile. an MVNO business controlled by Philippine incumbent Philippines Long Distance Telephone Company (PLDT).• REDtone International. The company does not comment on the contributions these MVNOs are making to its expansion in Malaysia and the MVNOs themselves are reticent about disclosing how many customers they have.3% a year earlier. DiGi saw the most substantial growth in 2011. Low-value SMS and related messaging services have historically accounted for the majority of nonvoice revenues at all three companies. On average. non-voice services accounted for 36% of mobile service revenues in 2011. Such revenues accounted for 29% of DiGis total mobile service revenues in 2011. however.678bn. Maxis was the most significant contributor to mobile non-voice revenues in 2011. More recently. Unsurprisingly.615bn in 2011. up from 32. non-voice accounted for 45% of Maxis total mobile service revenues in 2011.5% from MYR6.569bn in 2010. Celcom took a 49% stake in PLDT Malaysia. Celcom accounted for 32% of the mobile non-voice service revenue market in 2011. Its non-voice revenues totalled MYR1.494bn in non-voice mobile service revenues in 2011. Second-ranked Celcom generated MYR2. such revenues represented 34% of its total mobile service income in 2011 (33% in 2010).787bn in 2011. This represented a y-o-y increase of 18.153mn in 2010. representing a y-o-y increase of 11. a vast improvement from the 44% recorded a year earlier.7% from MYR3. a wholly owned unit of Kumpulan Perangsang Selangor.© Business Monitor International Page 37 37. REDtone. Although it is the smallest of the three principal operators and accounted for only 21% of the Malaysian mobile non-voice service market in 2011. up by almost 38% from MYR1. it accounted for 47% of the market (48% a year earlier). . In June 2012. claimed to have reached 2mn subscribers by April 2011 (latest data).244bn in 2010. given its position as market leader. divested a number of non-core operations in August 2012. DiGi reports that non-SMS revenues accounted for 54% of overall nonvoice revenue in Q411. Meanwhile. versus 41% a year earlier. At MYR3. which seem to have included its MVNO business. Tune Talk. Perangsang Telco will own 30% of Ceres Telekom while FRiENDi will own 65% and Samena will own 5%. in November 2011.172bn a year earlier. such revenues increased by 16.

Subscribers There were 298. Maxis began 2009-2012 deploying HSPA+ from late December 2009. Increased competition in the field is set to come from new entrant U Mobile. In a change in reporting format.428 7.345 26. Maxis has been affected most of all. down from 320.000 a year earlier.1DiGi 1. of postpaid subscribers(000) 6. DiGi. MYR58 per month for postpaid users).913 33.244 2. DiGis HSPA network covered 55% of the Malaysian population. non-SMS represented 56% of non-voice revenues.569 7.2Celcom 2. operators© Business Monitor International Page 38 38. serving 994.1 32. it invested MYR720mn in expanding the networks.747 34. Malaysia Telecommunications Report Q1 2013 DiGi reported serving 5.2% of its overall non-voice service revenues for the year. still has a long way to go before it will catch up with Celcom.635 34. providing much-needed extra data traffic processing capacity to its basic 3G network.000 in Q212 and 299.334No.678 16.172 1.742 26.673 32. representing 39.5% of non-voice revenues.560mn cumulative mobile Celcom Mobile Broadband internet and mobile broadband subscribers in Q312.869 33. In 2011.127 7.623 25. Growth since Q311 has been slow. Table: Malaysia Mobile Non-Voice Service Revenue Indicators 2010 (MYRmn) 2011 (MYRmn) % chg y-o-y % 2011 totalMaxis 3. For 9M12. up from 3.698 6.585 26.615 37. its mobile Mobile Broadband Subscribers By broadband subscriber base slipping from a high of Operators (000) 681. particularly in the larger cities where there is a rising demand for bandwidth-intensive media-rich services. wireless includes mobile broadband.000 subscribers at the end of June 2012 (latest data). By the end of 2011. of prepaid subscribers(000) 24.328 7. the newly licensed 4G/LTE operators and a growing host of independent service providers. which only launched its Turbo 3G service in late October 2009.744 25.929 7. DiGis pure mobile data revenue totalled MYR633mn in 2011. pay-per-use.0%. Turbo 3. such as video streaming and downloading.• • By Q212. Table: Mobile Market Overview Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12SubscribersNo.773 33.289 7. Malaysia Telecommunications Report Q1 2013Mobile Broadband Celcom appears to be the leading provider of mobile broadband services in Malaysia. WiMAX and CDMA EV-DO connections.787 18. Source: Celcom Axiata The MCMC believes there were 3.5 100.942 27.591 .560 7.000 in Q311 to 588.7 47. This represented a y-o-y increase of 10.7Total 6.153 3. of mobile subscribers(000) 31. In 2010.© Business Monitor International Page 39 39.187 26.0Source: BMI.000 dedicated mobile broadband 2009-2012 subscribers as of Q312.8 20. To BMI.912 32.994 26.494 11.533 34. though its rivals have also been affected by changes in the rules regarding the marketing and bundling of mobile broadband services to consumers. DiGi made capital expenditures totalling MYR611mn as part of its drive to expand its mobile broadband footprint.449mn wireless broadband subscribers at the end of June 2012.000 by Q212.019 31.419mn three months earlier. A separate figure for mobile broadband is no longer available.641 7. or 43.4% and a quarterly increase of 5.956No. DiGis mobile broadband service. pure mobile data revenues totalled MYR589mn.321 24. initially Source: operators found success as a result of the low tariffs it charges for access to Turbo 3G (MYR5 per month for prepaid subscribers.

438 11.3 22.106 1.190 1.6 77.400 1.1 121.727 11.1 119.2 13.3No.756 12.698 4.4 60.2 63.735 12.513 9.243 3.8 6.3 45.023 2.7 78.123 1.2% of postpaid subscribers 21.216Mobile service revenue(MYRmn) 2.381 10.691 12.9Capex/subscriber (MYR) 10.255 7.451 1.504 7.757 7. Malaysia Telecommunications Report Q1 2013 Maxis Communications Continued Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12Voice revenues (MYRmn) 1.5 117.310 2.977 8.168 1.735 4.9 22.129 8.472Source: BMI.7 36.3 56.0 45.946 1.186 1.130 2.216 2.400 7.163 2.836 10.1 42.0 21.031Type: Prepaid (000) 7.5 44.749 9.667 9.4 22.0 46.018 5.053EBITDA (MYRmn) 1.152 2.2 4.321 1.5 55.221Net profit (MYRmn) 4.6 21.596 11.605 8.1 122.244 2.2 1.038 2.7 21.2 12.158Non-voice revenues(MYRmn) 704 747 809 893 857 885 952 984 970 942% of voice serviceRevenues 65.726 4.6 17.0 54.1 22.696Type: Prepaid (000) 9.8 58.0 121.5 42.2 41.319 1.160 1.8 20. MCMC Table: Celcom Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12Subscriber NumbersTotal number (000) 10.181 1.082 1. of net additions (000) 400 281 553 429 -1.743 12.1 41.504 7.090 1.100Net profit (MYRmn) 552 532 601 610 540 552 538 901 573 466EBITDA (MYRmn) 1.954 12.0 77.7 37.211 1.028 1. Malaysia Telecommunications Report Q1 2013 Mobile Market Overview Continued Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12Subscriber UsageARPU (prepaid) (MYR) 127 123 121 116 114 115 118 117 115 115ARPU (contract) (MYR) 274 278 275 284 282 284 290 292 288 286Financial StructureOperating revenues(MYRmn) 7.2 120.4 78.170 2.384 9.3 13.171 9.265 2.692 12. operators Table: Maxis Communications Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12Subscriber NumbersTotal number (000) 12.952 12.074 8.1% of non-voice serviceRevenues 34.9 57.553 8.0 41.193 11.7 54.158 2.054 8.3 43.211 13 -64 43 -90 51Market share of netadditions (%) 46.5© Business Monitor International Page 40 40.672 4.9 41.429 9.387 1.177 3.070 5.308 3.6 23.152 2.3 78.675 7.0 10.525 13.324 10.294 1.645 12.8Mobile net additions (000) 863 654 1.559Type: Postpaid (000) 3.9 21.6 36.398 1.959 8.9 78.0 3.196 1.474 1.104 1.247 9.622% of prepaid subscribers 78.5 7.829 5.8 88.115 5.201 3.5 57.8 14.255 1.136 3.1 78.5 77.9Source: BMI.075 2.195Type: Postpaid .8 37.827 4.4 9.1Subscriber UsageMinutes of use/subscriber(prepaid) 122 123 126 126 137 142 141 136 131 130Minutes of use/subscriber(contract) 358 364 352 356 348 353 350 350 339 341Minutes of use/subscriber(blended) 173 173 172 171 180 186 185 181 175 175Monthly blended ARPU(MYR) 52 51 49 49 49 51 54 54 52 52Monthly ARPU (prepaid) (MYR) 37 36 35 34 34 36 38 38 37 37Monthly ARPU (contract)(MYR) 102 103 101 108 105 108 110 110 107 106Monthly ARPU (wirelessbroadband) (MYR) 69 69 70 64 61 63 63 65 64 66© Business Monitor International Page 41 41.106Capital expenditure(MYRmn) 135 307 489 513 257 225 220 316 78 176Capex as % operating Rev 6.267 3.138 1.9Financial StructureOperating revenue (MYRmn) 2.5 116.500 9.043 -999 860 -26 888 -102 423Mobile penetration rate (%) 111.2 17.8 36.• • 7.6 36.972 13.137Market share (%) 40.6 39.097 11.468 9.259 1.024 3.8 36.980 11.063 2. Maxis.722 9.0 22.2 41.243 3.327 11.1 119.5 246.065 8.7 44.539 1.687 9.133 2.2 12.3 24.8 121.041 2.1 113.229 2.0 78.133 1.211 2.2 36.1 38.5 22.1 22.306 3.437 1.

382 1.363 7.5 18.318 8.1 27. Malaysia Telecommunications Report Q1 2013 Celcom .2 -13.5 61.4 46.2 23.663 2.920 9.4 30.8 33.8 3.7 34.6 69.9 9.813 3.3 32.3FinancialStructureOperatingrevenue(MYRmn) 1.9 49.3No.0 34.6 25.3 28.459 1.602 1.583ow prepaid(MYRmn) 947 956 954 952 986 1.• • (000) 2.8 29.247 8.467 2.8 74.4No.404 2.468 1.049 4.2 25.937 4.3 31.2 11.7 69.7 68.380 1.431 1.605 2.647Type:Postpaid(000) 1.5 1.034 1.operating revenues are mobile revenues as of September 2009.050ow postpaid(MYRmn) 379 313 377 379 395 411 423 427 436 420Datarevenues(MYRmn) 1.901 1.0 27.0 2.826 1.256 4.837Market share (%) 33.7 6.017 3.7Subscriber UsageMinutes of use (prepaid) 147 145 150 187 162 159 174 194 212 227Minutes of use (contract) 386 387 374 363 356 360 358 366 371 403Minutes of use/subscriber 195 193 195 202 200 198 210 228 244 263Monthly blended ARPU (MYR) 53 52 51 50 50 49 50 51 51 51© Business Monitor International Page 42 42.649 1.9 41. MCMC Table: DiGi Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12SubscriberNumbersTotalnumber(000) 8.029 1.9 6.6Capex/subscriber (MYR) 8 25 24 22 13 20 17 32 10 13(1) Capex is the total for Celcom Group mobile operations.Continued Jun-10 Sep10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep12subscriber(blended)Minutes ofuse/subscriber(prepaid) 192 200 216 236 241 239 241 240 243 241Minutes ofuse/subscriber(contract) 504 489 469 478 474 464 458 431 419 396MonthlyblendedARPU (MYR) 53 53 52 50 50 50 50 49 48 48MonthlyARPU(prepaid)(MYR) 47 47 44 43 43 43 42 41 41 41MonthlyARPU(contract)(MYR) 83 82 85 83 84 85 86 85 85 82% of voiceservicerevenues 78.520 1.563 1.765 8. of netadditions(000) 158 142 518 78 447 327 303 16 293 75Marketshare of netadditions(%) 24.434 1.257.8 72.710 1.303 8.331 1.5 33. (2) Mobile and fixed-line/broadband revenues separated.351 1.1 -15.523 1.105 8.264 4.854 3.633 1.3 69.032 1.304Type:Prepaid(000) 6.8 5.229 10.7 -7.054 8.294 1.0 3.703 1.721 1.9 27.425Celcom mobile serviceRevenues (MYRmn) 1.3 29.617 9.580 8.716 1.335 1.843 9.8 26.0 -1.736 1.6 34.Continued Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12Monthly ARPU (prepaid) (MYR) 42 40 39 38 37 36 37 37 37 37Monthly ARPU (contract) (MYR) 90 92 92 91 94 92 95 96 96 95Financial StructureOperating revenue (MYRmn)2 3.4 34.779 6.5 28.768 1.657Marketshare (%) 25.111.440 1.780 2.195 4.3 6.6 9.9 72.8 29.588 2.908 1.919Celcom net profit (MYRmn) 441 476 484 487 481 490 502 622 539 570Celcom EBITDA (MYRmn) 773 818 814 794 811 806 816 838 840 866Capital expenditure (MYRmn)1 88 266 265 243 149 239 195 382 120 159Capex as % operating rev 2.331 1. Malaysia Telecommunications Report Q1 2013 DiGi .545 1.1 25.2 70.044 1.580 1. of net additions (000) 236 215 501 96 134 400 -289 542 -28 79Market share of net additions(%) 27.9 34.480 1.732 2.7 33.544 2. Source: BMI.7 30.9 4.5 28.6 34.3 30.940 4.6 28.430 1.331 7.865 7.470 1.8 52.468 1.5SubscriberUsageMinutes ofuse/ 240 246 255 274 277 273 274 270 270 265© Business Monitor International Page 43 43.470ow SMS(MYRmn) 274 302 334 362 384 424 445 448 445 460ow non-SMS(MYRmn) 168 177 186 191 191 198 204 200 195 194Net .326 1.302 1.767 8.7% of nonvoiceservicerevenues 21.569 1.689 2.290 9.7 69.936 10.8 76. Axiata.5 33.2 27.

6 146. telecoms operators cannot expect to maintain their revenue growth momentum through acquiring new subscribers. Furthermore. MCMC© Business Monitor International Page 45 45. there is a combination of telecoms industries in various stages of technological development and maturity. there is an increasing emphasis on VAS. LTE and near field communication (NFC).0Capex/subscriber(MYR) 10 14 22 6 5 10 20 8 11 9Source: BMI. which leverages on telecoms companies existing infrastructure and knowledge. NFC: The Next Big Thing? Google launched its mobile payment service. which enables users to perform financial transactions using their NFC-enabled devices. NFC is a wireless technology that allows data transmission between two objects in close proximity. political and social issues in order attract investors.• • • profit(MYRmn) 106 125 148 171 193 226 241 248 250 266EBITDA(MYRmn) 278 289 332 331 236 292 394 321 324 315© Business Monitor International Page 44 44. While Google Wallet is currently only available in the US. and replacing existing credit cards and coupons is© Business Monitor International Page 46 46. Malaysia Telecommunications Report Q1 2013 DiGi . Shifting Market Warrants New Strategy As the market approaches saturation. Consequently. especially amid an uncertain global economy that has yet to fully bounce back from the 2008 financial crisis.0 74. developed countries such as Japan and South Korea are well ahead of the curve with the introduction of next-generation technologies such as nationwide fibre networks. Malaysia Telecommunications Report Q1 2013 just one of the many possibilities.0 118.0 150.0 308. on September 19 2011. the ubiquitous nature of telecoms services and their deep integration into the daily life of consumers and businesses have attracted the attention of other industries. Malaysia Telecommunications Report Q1 2013Mobile Regional Content The Asia Pacific region comprises a mix of well-established highly developed countries and emerging markets that are trying to balance economical.0 309. Asian telecoms companies have been exploring opportunities to take advantage of the technology. companies need to source for new revenue streams in uncharted territories or engineer means to extract higher earnings from their existing subscriber base.2 193. Japanese and South Korean mobile operators announced in February . DiGi. which has not been hindered by lower purchasing power. has presented new business opportunities such as mobile payment and e-health.0 82. we are seeing a rapidly growing appetite for the latest technologies and services in these countries. Instead. in turn. Google Wallet.Continued Jun-10 Sep10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep12Capitalexpenditure(MYRmn) 578 594 653 657 672 708 728 737 752 715Capex as %operatingrev 133. As a result. which gives rise to a wide spectrum of value-added services (VAS) that cater to the diverse needs of consumers and businesses. As expected. This. The presence of high-speed connectivity and increasingly sophisticated devices has lifted the constraints for integration between industries and services that were previously thought to be mutually exclusive. While emerging markets are still primarily reliant on the traditional SMS and voice services for communication. Venturing into new industries or countries is often a costly and risky proposition.0 177.

as well as create 5. 2011Date Country Details LG Electronics announced plans to launch NFC-based B2B products in 2012. ZTE announced that it will include NFC functionality in all of its next generationFeb-11 China handsets from Q211 after signing a deal with semiconductor manufacturer NXP.© Business Monitor International Page 47 47. Despite the publicity generated by NFC-based mobile payment services. The Korea Communication Commission (KCC) went a step further by planning to mandate domestic smartphone manufacturers to offer NFC-enabled mobile phones in the country. which allows users toJan-11 China make payments on public transport systems and at more than 2.5bn in added values. KRW347. we believe that at status before concocting novel and profitable methods to capitalise on the capabilities. SK Telecom launched its Q-Store. which frustrates consumers and businesses.000 businesses. South KDDI partnered with Softbank and SK Telecom. However.• 2011 strategic partnerships to launch NFC-based cross-border mobile services. Around 200 products such asMar-11 South Korea consumer . BMI believes that this is an important step to minimise fragmentation. Japan. In order to ensure that its NFC technology could be widely adopted. thereby hindering adoption. Waon and Nanaco. while NTT DoCoMo teamed up with KTFeb-11 Korea to explore cross-border NFC opportunities. which allows consumers to browse items in-store and purchase them online via their mobile handset. Although both companies have prior experience with NFC-based services in their respective domestic markets. The rationale was to rope in various stakeholders while the market is still in its infancy in order to ensure the entire industry moves in the same direction. it is no longer sufficient to have a narrow business scope when the global market is several times larger. China Telecom a launched commercial NFC service in Beijing. we believe that companies have yet to devise a definitive business model to generate significant revenue from the technology. The KCC has reckoned that its NFC mobile industry would generate KRW1. Products. Japanese mobile operator NTT DoCoMo and South Koreas KT plan to launch commercial services using NFC in their respective markets by end-2012. Meanwhile. equipment manufacturers. South Koreas SK Telecom planned to complete mutual compatibility tests with Japans KDDI and Softbank Mobile by H111 before launching NFC-based mobile services in both countries by end-2011.034trn in production revenue. Consumers and businesses would expect lower transaction costs or there would be few incentives to embrace another new system. will be initially launched in Europe. Softbank plans to offer polyurethane stickers to allow iPhone 4 users to use mobileJan-11 Japan payment services Edy. billing services providers and government organisations. Similarly. the companies have submitted their technological specifications to global industry associations and standardisation bodies. the South Korean telecoms regulator has formed an NFC alliance that brings together domestic mobile network operators. Malaysia Telecommunications Report Q1 2013 Table: Selected NFC Developments.Jan-11 South Korea which include interactive TVs and payment terminals.707 jobs in the next five years. companies are keen to quickly bring the technology to mass. The concerted approach is largely due to the potential size of the market. financial institutions.

which was swiftly followed by Japans NTT DoCoMo. email. At present. and plans to roll outJul-11 New Zealand services in 2012. The system will be powered by a microSD card programmed with consumers banking information and inserted into an NFC-Jul-11 Australia enabled mobile handset. Australian supermarket Coles ran a two-week advertising campaign that allowed consumers to download exclusive digital Coles content such as recipes and cookbookSep-11 Australia videos via an NFC-enabled handset. which will enable subscribers to access the IPTV service on smartphones and tablet . FarEasTone and Taiwan Mobile have agreed to partner to promote NFC-based mobile e-commerce and ewallet services. Operators such as Singapores M1 and Australias Telstra have also hopped on the bandwagon in mid-2011. we believe that companies are moving towards introducing data-intensive VAS that fully utilise the ability of nextgeneration mobile connections. Samsung Electronics. internet messaging and a vast variety of mobile applications. LTE services are largely limited to USB modems due to a lack of compatible mobile devices. many of these features do not strictly require high-speed mobile internet access promised by 4G. we expect the situation to begin changing in 2012. Malaysia Telecommunications Report Q1 2013 4G Brings New Opportunities Next-generation LTE technology has been making its presence felt across the Asia Pacific region as mobile operators progressively roll out commercial services. The Grand NFC Korea Alliance was formed by the Korea Communications Commission. SK Telecom introduced an NFC-enabled USIM card that brings NFC functionality to any mobile phone.based NFC service in the next three months. contactless smartcard provider EasyCard. FarEasTone announced that it plans to introduce NFC technology after it has launchedJun-11 Taiwan its mobile payment service in 2011. BMI© Business Monitor International Page 48 48. The Commonwealth Bank of Australia said it plans to launch a mass-market microSD. The companies have approached HTC. Chunghwa Telecom. Mobile devices with 3G connectivity has enabled consumers to engage in activities such as web browsing. Besides payments. Hong Kongs CSL New World Mobility was the quickest off the blocks with a limited launch of its LTE/Dual Cell-HSPA+ network in November 2010. Vodafone New Zealand announced that it was trialling NFC. Australias Optus formed a partnership with FetchTV in May 2011 to launch an IPTV service in the country in H211. Samsung Electronics plan to release two more NFC-enabled Bada-based smartphones in 2011. which it did in August 2011. The collaboration will go beyond the traditional method of delivering content via a fixed-broadband network by integrating mobile functionality.Jun-11 South Korea payment service providers and mobile operators together. on top of the Samsung Wave 578 NFC deviceApr-11 South Korea launched in February 2011. the USIM also supports peer-to-peerSep-11 South Korea communications. which brought stakeholders such as handset manufacturers.Source: NFC World.• electronics products and luxury items are available in the first store in Seoul. financial institutions. That said. However. For example. and the large-scale launch of 4G smartphones and tablet computers should herald a new generation of mobile VAS.Sep-11 Taiwan VIBO Telecom and Asia Pacific Telecom to join the collaboration. However.

© Business Monitor International Page 49 49. M2M technologies refer to the ability of different devices to communicate and relay information. Malaysia Telecommunications Report Q1 2013 SMS Still King In Emerging Markets For Now Although there is growing consumer demand for 3G and nextgeneration variants in emerging markets. in 2008 and expanded its portfolio further in August 2011 to encompass monitoring of fixed assets. surveillance and security. as well as tracking of various objects ranging from vending machines to tanks. . telematics and digital billboards. a GPS vehicle tracking system. The increasingly prevalent mobile service (49% at the end of June 2011) is an efficient means to raise the accessibility of financial services. BMI believes that Optus push to develop a multi-device IPTV service is in line with consumers changing behaviour where mobility is highly sought after. the momentum in Asia has yet to gain significant traction. 2007-2011 Source: Infocomm Development Authority. which was supposed to take place in September 2010. basic SMS-based VAS still has a vital role to play. For example. and would spur interest in next-generation high-speed 4G technologies. Thailand is a prime example after its long-awaited 3G auction. representing 846mn subscribers. Philippine Long Distance Telephone Company. The Philippines Globe Telecom launched its first M2M service. By comparison. especially considering that a significant proportion of consumers in emerging markets are still using feature phones. SMS Losing Its Shine Faster In Developed Countries SMS Count For Philippine Long Distance Telephone Company & Entire Singapore Market.© Business Monitor International Page 50 50. BMI Consequently. and it is in the general interest of mobile operators to push out data services to offset declining voice revenue in light of decreasing tariff rates due to competition. 2G subscribers accounted for 90% of the total market (as of August 2011). according to the Ministry of Industry and Information Technology. where an auction scheduled to happen by end-2011 is looking increasingly unlikely to materialise. was derailed after a legal challenge by state-owned operators. although 3G services have made their way into China. industry developments tend to be held back by poor planning and lack of foresight from the governments and regulators.• • computers. Besides services such as video streaming and video conferencing. where we forecast that 98% of the 940mn mobile subscribers would still be using 2G subscription by end-2011. and Western European mobile operators and M2M vendors have been actively developing the market to pursue greater adoption. the machine-tomachine (M2M) market could be one area that could receive more attention from Asian companies following the launch of LTE services. ehealth. A similar situation exists in Pakistan. They can be used in areas such as smart utility metering. The Bangladesh Bank released a guideline on mobile financial services in September 2011 and it aims to bring formal banking and payment services to its unbanked population at an affordable cost. Malaysia Telecommunications Report Q1 2013 Untapped Population Bring Financial And Telecoms Industries Together Mobile banking is one area in Asias emerging markets where there have been significant developments due to rural consumers lack of access to traditional financial services. A similar situation exists in India. but we see companies increasing their emphasis on the new growth prospect.

Germany.0% of the total in Europe.7% year-on-year (y-o-y) to US $885mn in the January-May 2011 period. Reportedly. we are starting to see 3G taking centre stage. significantly better than the 20. just 15% of Bangladeshs population has bank accounts. Globe Telecom and Smart Communications teamed up with Ericsson to launch an SMSbased international remittance service between Europe and the Philippines. according to GfK Vietnam. Malaysia Telecommunications Report Q1 2013 Googles open Android mobile operating system and low-cost manufacturers hopping on the bandwagon. In 2010. partnered with the Philippine Savings Bank and UnionBank respectively in August 2011 . Smart Communications parent. G. 3G Gaining Momentum Although the traditional SMS and voice services are still the dominant communication modes. especially if transaction costs are lower compared with traditional third-party international remittance providers. Malaysia Telecommunications Report Q1 2013Fixed-Line The latest data we have for the total number of fixed lines in Malaysia are for Q212 when there were 3.the UK. the Philippines already has a robust domestic mobile money transfer system. We expect a close collaboration between mobile operators and financial institutions to order to introduce easy-to-use and affordable SMS-based mobile banking services. Sales of smartphones in Vietnam surged by 73% y-o-y to almost 850. which generated PHP40mn in revenue. Sweden and Poland .8% and 7. The Philippine Long Distance Telephone Company.Philippine mobile operators have also set their sights on the significant population of overseas Filipino workers (OFW).958mn direct exchange lines. This represented q-o-q and y-o-y decreases of 1.3% respectively and was in contrast with the positive growth seen in 2010. according to MCMC data. powered by Globe Telecoms GCASH and Smart Communications Smart Money. Spain.• • particularly in rural regions where mobile operators are currently expanding their network coverage. Besides extending their domestic service coverage . down from 34% in the same period in the preceding year. there were 94. The Bangko Sentral ng Pilipinas reported that OFW remittances from the seven countries grew by 5. which represented 62. and we envisage strong demand for Ericssons money service.000 net additions in 2009 and the net loss of . France. Italy. By comparison. sales of feature phone units grew by 24% y-o-y. which could become a profitable venture if a critical subscriber mass is achieved. companies could more than offset the decline by adapting to the changing consumer preference by introducing 3G-based VAS catered to consumer needs.© Business Monitor International Page 52 52.XChange. The number of SMS increased to 16mn in the half year ended June 2011 and earned the company revenue of PHP21mn.Globe Telecom and its wholly owned unit.but Ericsson has connected the Philippines to the loop. While SMS and voice revenue would come under threat.000 units in the first seven months of 2011. The Ericsson Money Services portfolio was previously available in seven European markets .000 net additions. While Bangladesh is only starting to embrace mobile banking. especially with increasingly more affordable smartphones due to© Business Monitor International Page 51 51. reported that 26mn financial-related SMS were sent in 2010. The basic SMS serves as a convenient and possibly affordable means for OFWs to quickly remit money.

By end-2010.7%. mobile broadband accounted for 42. the data provided by MCMC for the Q211 period onwards appear to have been restated and it may be that the older figures incorrectly showed positive growth. A breakdown of its Q212 figures revealed TM had 2. hence our belief that the two parties accounting procedures are rather different. Nevertheless. There were 2. corporate ARPU reached MYR59 and was a q. rather than the more traditional ADSL lines. up by 18.000 in 2008. Meanwhile. predicting the fixed-line market of Malaysia is difficult.958mn total reported by the regulator for Q212.3% y-o-y.1% of the total and represented a decrease from Q211 when it accounted for 62. it then fell back to MYR33 in Q112. it offers up blended fixed-line ARPU based on call usage only. we can see that mobile broadband access as a percentage of the total has risen greatly.977mn fixed-line Telekom Malaysia Fixed-Line subscribers represented decreases of 1. In terms of ARPU. however. TMs fixed-line ARPU increased to MYR35. this amounted to 1.468mn residential fixed.5% while over the year. As of Q112. which accounted for 62.000 lines.509mn lines by the end of June 2012. there was a loss of 313. and based on figures from MCMC. TM said there had been a decline in residential and corporate lines during 2009 and Source: Telekom Malaysia into 2010.Broadband Demand for broadband is increasingly arriving from mobile technology. Clearly. Disparities between the regulators data and that of TM are often seen.000 lines more than the 3.8% of the total. As for its corporate subscriber base. By Q212. It uses a definition for fixed-line subscribers different to that of the MCMC.o-q decline of 6. down by 5. However. Such ARPUs averaged MYR34 during 2010 and 2011.450mn mobile broadband subscribers as of Q112.977mn at the end of June 2012 (latest available data at the time of writing).© Business Monitor International Page 53 53. which are rather different.000 lines is certainly not representative of the installed and active fixed line bases of all the alternative operators in the country.line subscribers. it was up by 16.3%© Business Monitor International Page 54 .8% q-o-q and Indicators 7. compared to 42. When comparing the technologies used to access broadband in Q112 (latest available breakdown). subscriber base has remained relatively stable in this 2009-2012 range in the last two years.6% of the total. Instead. The popularity and wider availability of wireless broadband services may account for the decline that was seen in 2011. TMs 3. the operators fixed-line Subscriber Lines (000) & ARPU (MYR). though it did dip to MYR33 in Q111 before returning to MYR34 for each of the subsequent three quarters.3% while over the year it was flat. In 2011.2% of the total in Q111.5% from 1.• 58. with no real growth pattern and constant market fluctuations. which is 19. Telekom Malaysia (TM) maintains a virtual monopoly in the fixed-line market. Malaysia Telecommunications Report Q1 2013 At the end of June 2012.596mn a year earlier. TM has stopped reporting fixed-line ARPUs broken down by subscription type. which represented a q-o-q increase of 23. The uptrend in 2010/2009 could be attributed to a bundling strategy by Malaysian telecoms operators in order to mitigate the declining demand for traditional fixed-line services. residential ARPU reached MYR21. given that it reported a fixed-line base of 3. The difference of 19.

The state remains fully committed to broadband improvement across the country. This is a result of a change to the way the company counts active subscriptions. It is estimated that about 13mn broadband subscribers will be accessing the internet on their smartphone handsets by 2015.• • 54. In terms of annual performance.000 subscribers in Q212. This is mostly being fuelled by the growing penetration rate of smartphone handsets. Operators are targeting areas of the country where existing 3G networks are straining to meet consumers rising demand for bandwidth-intensive media-rich services. it is estimated revenues from Broadband Access By Technology mobile broadband services reached MYR6bn and are Q212 forecast to reach MYR9bn as of 2015. Malaysia Telecommunications Report Q1 2013 The mobile operators are seen as having played a Malaysia Mobile Broadband significant role in the governments plan to achieve a Market Share 50% household broadband penetration by the end of Q212 2010. down from 35. the regulator merely reported that there were 3. This target was reached on November 1 2010. Commenting on the marked slowdown in mobile broadband growth in Q112.711mn ADSL subscribers as of Q112.6% and up by 21. Malaysia Telecommunications Report Q1 2013 from 2. said it had 1. In addition. the MCMC did not provide a breakdown for the various wireless broadband technologies.3% y-o-y and 1. reporting 320. Celcom claims to be the mobile broadband market leader in Malaysia and had about 994.3% in Q111. which is the leading ADSL service provider.2% y-o-y.9% q-o-q . which are becoming increasingly affordable while also allowing access to a greater amount of applications.© Business Monitor International Page 55 55. and a focus on promotional Source: MCMC campaigns of their service.071mn a year earlier. down by 1.000 subscribers in Q212. Given that deploying fixed lines will take time. accounting for 29. Meanwhile. Alternative platforms include SDSL. has been from operators deployment of 3G networks. ADSL still plays an important role in the market. down by 1. BMI expects to see faster growth of mobile broadband services as a result. DiGi said that this was due to a conscious decision to reposition its broadband offerings to manage growth and reduce excessive usage on its network.627mn Streamyxbranded ADSL subscribers at the end of Q212 (latest data). largely over laptops and using USB modems. In Q212.000 subscribers after three quarters of customer losses.9% to 588. the use of mobile networks to deliver broadband services is seen as the quickest and surest way of closing the gap. DiGi trails Maxis by a considerable distance.0% and a y-o-y rise of 10. There were 1. At the end of 2010.7% of all broadband connections at the end of Q112 (latest breakdown reported by the regulator). representing a q-o-q increase of 5. Malaysias Deputy Prime Minister Tan Sri Muhyiddin Yassin claims that the result was achieved after cooperation between the public and private sectors. part of the drive behind mobile broadband access. With the mobile operators having launched HSPA+ services and beginning to move to 4G LTE platforms. representing a qo-q increase of 1. ADSL was overtaken as the dominant broadband technology in Q410.449mn wireless broadband subscribers. Maxis Communications user numbers declined by 5. and although fibre-optic cables are being laid.4%. Instead. Telekom Malaysia (TM).6% q-o-q. fibre and WiMAX. Source: operators While demand for mobile broadband may be rising rapidly.

© Business Monitor International Page 57 57.799 in Q411 (latest data).000 buildings nationwide linked to that fibre infrastructure. etc) and with close to 3. and make improvements to the social welfare of Malaysians. Sarawak and Pahang. Based on fixed-line infrastructure. TIME dotComs fibre-optic network and TMs own UniFi High-Speed Broadband service). services are provided by TM. mobile and WiMAX operators ■ Zone 3 . The HSBB platform is charged with boosting GDP by 0.National High-Speed Broadband (HSBB) Project Telekom Malaysia UniFi Indicators In September 2008. TIME otcom should do well if it elects to© Business Monitor International Page 56 56. domestic ISPs that have received a licence from the MCMC are able to establish their own services via the HSBB network. particularly Sabah.• • and 5. Malaysia Telecommunications Report Q1 2013 serve corporate customers. TIME otcom became the first FTTH operator in Malaysia when it launched commercial services in early February 2010.3% y-o-y to 19.000 jobs by 2017. The project will take 10 years and MYR11. HSBB is charged with providing speeds of between 10Mbps and 100Mbps. In February 2010. Around 61. Malaysias national HSBB network in partnership 20102012 with the government. HSBB differs from the existing national broadband network. approximately MYR2.1bn) to deploy. which provides point-to-point connections. FTTH services were launched in the Klang Valley and are progressively expanding into other areas in the country. has created three wholesale offerings with the aim of raising interest. Malaysia Telecommunications Report Q1 2013 These services include HSBB (Transmission). The number of ADSL connections has been decreasing since Q311 as mobile broadband substitution takes effect and customers move to alternative operators platforms (such as the WiMAX services offered by PacketOne Networks (P1)and YTL. TIME otcom is attempting to establish a first mover advantage in the high-speed broadband market in Malaysia.3bn (US$3. indicating that non-voice services are its core area of interest. federal roads.optic cables (traversing major highways.5% y-o-y. HSBB (Access). .areas not covered by Zone 1.6% of its service revenues were derived from the provision of data services in 2011. which uses both fixed line and wireless.6% and creating 100. With its extensive network of terrestrial and submarine fibre. compared with BBGP speeds of between 256Kbps and 4Mbps. The government has placed strong emphasis on building a k-economy by focusing on the establishment of a Multimedia Super Corridor (MSC) and High-Tech Parks as already found in many developed countries. the operator is increasing the number of hotspot zones deployed in key population centres. Broadband to the General Population (BBGP). Source: Telekom Malaysia Deployment is being undertaken in three zones: ■ Zone 1 . TM. TM won the bid to build Subscriptions (000) & Sign-Up Rate (%). In its effort to grow its broadband base. in an effort to facilitate this process. The number of hotspot zones rose by 80. Its intentions are to realise a competitive economy.4bn was to have been spent in the first three years alone. for which the government utilises monies from the universal provision fund TM leases capacity over its HSBB network to domestically licensed operators.HSBB network covering commercial areas ■ Zone 2 .areas where there is low economic activity and rural areas. To this end. power distribution networks.

was launched in March 2010 and. TM believes using capacity on the HSBB would be a cost-effective solution for Maxis to consider.3bn) stimulus package. The total number of UniFi subscriptions increased by 616% during 2011 to reach a total of 236. rising to an average of more than 21. The deal will enable Maxis to deliver fibre-optic broadband services to 1. In November 2009. broadband became the cornerstone of the governments MYR60bn (US$16. TM was reporting a take-up rate of 15-20% of premises passed by the FTTH-based network.3mn premises by end-2012. like many other Asian countries. and HSBB (Connection). TM signed a memorandum of understanding with Celcom Axiata in February 2011 to jointly deliver multi-access. ZTE and FiberHome Technologies Group. the telecoms infrastructure owned by PDC is connected with the wholesale Ethernet and high-speed broadband (HSBB) transmission network of TM. There were 384. digital subscriber line (DSL) and© Business Monitor International Page 58 58. Expected to have a positive impact on GDP.501 (33. ZTE Corporation was contracted to supply TM with equipment for use in the HSBB network. which inked a deal with the operator to invest MYR1bn over five years to deploy wireless broadband services. TM selected four foreign companies as contractors for its HSBB network. This commenced with WiNet in May 2009. a service that Maxis has indicated interest in offering. In March 2010. Among other things. interconnecting call communication between TMs networks and the service provider. The four contractors are French vendor Alcatel-Lucent and three Chinese companies Huawei Technologies. At a time when Malaysias economy.• offering connectivity to service providers that offer IP-based value-added application services. Malaysia Telecommunications Report Q1 2013 mobile virtual network operator (MVNO) services. Telekom Malaysia signed a five-year agreement with Perbadanan Pembangunan Pulau Pinang Telecommunication Services (PDC Telco) for the expansion of broadband services in the country. TM is providing wholesale access to its HSBB network. has been impacted by the global recession. multi-media. wholesale internet access.036 in 2010). In December 2010. As the network has the capability to deliver bandwidthintensive services such as IPTV. Subsequently.dubbed UniFi . by the end of 2011. TM signed a 10-year agreement with mobile operator Maxis Communications allowing the company to acquire capacity on the HSBB network on a wholesale basis.000 by the end of the year. The agreements encompass several areas such as the HSBB. Under the terms of the agreement. WiNets service is consumer focused and offers internet services in 100 locations at a speed of 1Mbps. fixed and mobile convergence services to consumers. the development of the HSBB network has become something of a priority. The first HSBB service . An average of 12. P1 subscribed to HSBB (Transmission) and HSBB (Access) services later in 2011. ZTE supplied multi-service access nodes (MSAN) to TM in the first phase of the deployment. Q312 data were not available for .000 service activations per month were recorded in H111. The two operators seek growth in high-speed broadband services. announced on March 13 2009. a move that will help stimulate competition in the market. In June 2010. employment and easing access to new markets with the potential for greater foreign direct investment.024 subscribers by June 2012.

Channel News Asia. El-Khafi and RTM. By end-2012. among others. TM was offering three consumer HSBB packages and three business HSBB packages. including 32 premium channels and 18 free channels (of which 12 were in high definition (HD). Further deals have been signed since then and. Disney-ABC International Television and Sony Pictures Television. This will bring the total number of areas served by HSBB to 98.659 (4. HSBB infrastructure will be extended to 17 new areas. Local content comes from Bernama TV. TM had been trialling IPTV services with 100.000 customers.557 consumer and 58. TM does not disclose subscriber figures in relation to HyppTV.259mn premises have been passed with a take-up rate of 30. By June 2012. These are VIP20 (MYR249/month).320 in 2010). denoted by their respective bandwidth speeds. by the end of 2011. TM reports that around 70% of HSBB infrastructure deployed in brownfield sites uses fibre technology. TM announced that 1.16mn ports had been made available for customer subscriptions. however. HIT Entertainment.• analysis at the time of writing. including its extensive fibre-to-thepremises network. By the end of 2011. BIZ20 (MYR899/month for one fixed IP. according to TM.467 business subscriptions. 17 were VOD channels and 18 were interactive service channels. MYR359/month for dynamic IP).IPTV IPTV services have been launched by TM and form a key value-added service (VAS) offering over the HSBB platform. mostly in the Klang Valley region where TM has been focusing on HSBB deployments. TM initially signed content and programming distribution deals in March 2010.842 by the end of 2011 (28. and. Malaysia Telecommunications Report Q1 2013 local. It aimed to serve 300. Content providers partnering with the incumbent include well-known global brands such as the BBC. Star Chinese. the remaining 30% (deployed in high-rise commercial and residential buildings) employs VDSL2 technology (a fibre/copper combination).806 in 2010). BIZ10 (MYR599/month for one fixed IP and MYR289/month for dynamic IP) and BIZ5 (MYR199/month for dynamic IP) for businesses. in all. A free trial service ran until the end of June 2010. a total of 1. there were 325. At the end of June 2012.5%. Euronews. although Time dotComs 3.600km of fibre-optic cables. During 2011.000 customers since embarking on a major upgrade of its transmission and switching network in Q209. Services are provided under the HyppTV brand name. the operator was offering 85 HyppTV channels. At the time of writing. The new service is being offered as part of a broadband bundle. while the number of business subscriptions grew by 719% to 34. Astro All Asia Networks (ASTRO) launched an IPTV service in partnership with fibre-optic network operator Time otcom in April 2011. CBS. By the end of 2015. Meanwhile. 62 PSTN switches had been migrated by the end of the year. a total of 666 PSTN switches are to be migrated. mostly key industrial sites outside the Klang Valley. VIP10 (MYR199/month) and VIP5 (MYR149/month) for consumers. HSBB will be extended to the east coast and East Malaysia. The number of consumer subscriptions grew by 600% y-o-y to 201. regional and international partners in the print and broadcasting sectors. 59 legacy PSTN switches were migrated to next generation network IP switching solutions. Greenfield deployments are 100% fibre. During 2012. which serves the Klang Valley region (including Kuala . with 20© Business Monitor International Page 59 59.

On the back of this. expanding coverage from the 60 high-rise condominiums and 11.• Lumpur) and the Penang region. Therefore. REDtone Multimedia. according to the Malaysian Communications and Multimedia Commission (MCMC) bundles means the market could grow at a much faster rate.000 high-rise residences by the end of 2011. and in January 2009 the operator extended coverage to the areas of Bandar Kinrara.700 IPTV subscribers in Malaysia as of Q212. Further regional expansions continued. Maxis has been open about its intention to venture into the pay-TV market through the IPTV route. The pay-TV market continues to grow steadily. Kota Damansara. reducing the potential market for such services. and by December had launched in the Johor region. the reach of broadband services remains limited. but the growing penetration of broadband access. coupled with attractively priced triple. but it seems likely that the vast majority of these subscribers are served by TMs HyppTV platform. mobile and fixed broadband services. renaming it eTV in 2011. The most active operator since acquiring a WiMAX licence. Malaysias TV broadcasting market is served by four free-to-air channels operated by the Media Prima group as well as two state-owned broadcasters and ASTROs DTH offering.WiMAX In an effort to introduce greater competition in the broadband market. Malaysia Telecommunications Report Q1 2013 units: REDtone Multimedia. ASTRO planned to reach 167. REDtones decision to exit the IPTV sector suggests that margins were insufficient to maintain the unit. The regulator claims that there were 328.200 at the end of 2010. Astro and Maxis signed an agreement to jointly develop and market unique telecoms product bundles. While BMI believes there is some potential for IPTV in the market. WiMAX licences were awarded to a number of operators. The announcement came after REDtone announced that it divested stakes in three of its non-core businesses in July 2012. representing a household penetration rate of 47. In Q212. P1 commenced expanding its WiMAX network to include secondary cities as part of . was sold to Swift Bell Consolidated (80% stake) and CCSB Consulting (20% stake). including its IPTV unit. The move was also intended to provide broadband service coverage to rural areas where access through fixed-line infrastructure has not been possible. with alternative ISPs heavily reliant on access to TMs network.600 at the end of 2011 and 29.183mn pay-TV subscribers in Malaysia by Q212. P1 began offering services in August 2008 in the Klang Valley. including pay-TV. The MCMC data are not broken down by service provider. In September 2012. the firm signed strategic partnerships with 14 content providers. REDtone Software and REDtone Mobile. its partnership with Time otcom is primarily seen as a defensive move aimed at securing a firm position in a new and fast-growing market to offset potential losses as customers inevitably move to its rivals. ASTRO accounts for almost all pay-TV subscribers in Malaysia. up from 232. with the aim of launching commercial IPTV services in Q312.000 homes signed to the service prior to its launch. which operated the IPTV business. REDtone Multimedia launched IPTV in January 2010 as DETV. The company announced that its earnings would no longer be weighed down with the losses from the three© Business Monitor International Page 60 60. Shah Alam and parts of the Overseas Union Garden in Old Klang Road. offering live channels and a selection of VOD products. There were 3.

announcing an investment of US$88mn in November 2009 and stated that services would be available in the Kuching. integrated delivery platform that utilises the most advanced and cost-effective technologies.3% in Q211 and 5.8% in Q212. Citing data from the regulator and competing service providers. in May 2010. P1 had deployed 303. the company said.1mn from Green Packet. it was claimed.2% of subscribers had never used broadband services before. The operator brought its services to Kluang. By the end of 2011.8mn contract is expected to be completed by the end of 2012. Miri. In April 2012. P1 announced it had signed a full turnkey contract with Chinese telecoms equipment vendor ZTE Corporation and ZTE (Malaysia) Corporation Sdn Bhd.000 subscribers as of Q212. In May 2010. As of August 2009. invested a further MYR201. The operator received approval in October 2009 to deploy its services in the Sabah and Sarawak regions. P1 said it had already invested more than MYR1bn in establishing its Malaysian network. P1 claimed to have been serving 410. P1 had utilised 50% of its US$150mn of vendor financing facilities from ZTE. Bintulu. down from 5. SK Telecom (SKT). Taiping and Sitiawan in 2009. The company added 102 sites in Q112. bringing the total to 1. Batu Pahat. during which it plans to© Business Monitor International Page 61 61. there were 80. Sandakan and Tawau areas in Q210. Kota Kinabalu.000 in Q411. ZTE is responsible for designing. On completion of this additional investment‚ SKT holds a 25.5mn from SKT and up to MYR151. The operator . if there was sufficient demand. In addition. P1 had 1. IPE services help to maximise productivity and minimise costs by making the full panoply of consumer and business-to-business (B2B) available via a common.97% share in P1 while Green Packet holds a 59. the largest mobile network operator in South Korea. The US$76.5% . The investment consists of MYR50. Previously. Around 41% of subscribers were based in Selangor.8% in Q211. P1 reported postpaid ARPU of MYR80 in Q212. agreed to invest US $100mn for a 25% stake in P1.which had already received a MYR41. Under the terms of contract. P1 estimated its share of Malaysias broadband market at 7.000 by early December 2009. SKT has a long-term growth strategy at the heart of which is its commitment to industry productivity enhancement (IPE). SKT and Green Packet Berhad‚ the major shareholders of P1.700 sites. Furthermore. it would consider expanding services to further rural areas in East Malaysia.said that.000 WiMAX subscribers. P1 also announced that it was on target to reach 45% network coverage by 2010. The company said this was within the industry average. P1 announced that it was expecting services to be launched in Q212 starting with Kota Kinabalu in Sabah. constructing and maintaining P1s 4G WiMAX network across Malaysia.5mn grant from Malaysias Universal Service Provision (USP) fund to extend services into underserved areas of the country . By the end of June 2012.300 WiMAX terminals in Malaysia. In May 2011.629. improving on the MYR75 of Q211. up from 389.• its aggressive expansion plans.6mn in P1 to support the accelerated expansion of its 4G WiMAX ⁄ TD-LTE network expansion.36% share. Muar. Churn stood at 4. 33. the operator said it would launch services by July 2010. Malaysia Telecommunications Report Q1 2013 launch commercial services in Sabah and Sarawak . a figure that had risen to 120. Commenting on the transaction. By May 2011.

600MHz frequency range. REDtone holds the 2. The operator noted that it had signed up 600 WiMAX subscribers. It expects its WiMAX offerings to account for about half of its total group turnover by 2015. The value of the contract was not disclosed. The company initially targeted subscribers in the Jalan Tanjong. stated that the WiMAX coverage would be expanded to Miri by Q110 and to Sibu by the end of 2010.000 for voice services. with the latter the first operator to launch services in Malaysia. Piasau. The expansion was in line with the operators strategy to© Business Monitor International Page 63 63. the operator announced plans to roll out its wireless broadband coverage in the cities of Miri and Sibu in Sarawa in 2010. In March 2012.5GHz WiMAX base stations for deployment on the east coast of Malaysia. However. Malaysia Telecommunications Report Q1 2013 deploy WiMAX in areas with significant demand for high-speed services. behind market leader TM (Streamyx/ADSL) (36. on top of the 1.• • in Q311 (latest data).3% and TMs UniFi offering accounted for a further 3. Lau Bik Soon. YTL e-Solutions contracted Samsung of South Korea to provide it with WiMAX-related hardware.900 units already being set up across the country. In August 2009. Samsung was also tapped to supply the operator with 2.000 picocells to enhance its in-building coverage. Subsequently.3%). DiGi accounted for a further 6. The operator aims to deploy WiMAX services across Peninsular Malaysia. entered .5%) and Maxis (14. it was announced that Samsung Electronics would supply further base stations for YTLs new nationwide wireless broadband network. Lutong and Senadin regions in Miri.9% of the market.© Business Monitor International Page 62 62. Yi Hai Hai. Although P1 appears to be the most active. but stated that.branded services were launched across peninsular Malaysia. with a national customer base of 10. the firm has acquired spectrum for 4G services in the 2. The commercial launch of WiMAX services was promised by YTL e-Solutions by October. Furthermore. REDtones wholly owned subsidiary. The operator is expanding the coverage of its broadband services in Sarawak. The Korean vendor was to provide 500 2. it was not until November 2010 that YES.0%).5% of the market. Other operators accounted for the remaining 12. in April 2009. REDtone announced plans to invest at least MYR10mn in upgrading its services in the financial year 2010-2011.3GHz spectrum for Sarawak and Sabah regions in the country. Malaysia Telecommunications Report Q1 2013 Celcom (19. significantly augmenting its broadband capacity and geographic reach. in February 2010. YTL e-Solutions also asked Samsung to provide radio network equipment and WiMAX handheld devices. up from the current figure of 25%. REDtone launched its WiMAX services in Miri. Reportedly. with national coverage planned for June 2010. In November 2009. it faced increasing demand for mobile broadband. REDtone Marketing. In July 2010.December 2009. REDtone asked the government to consider granting it a national WiMAX licence after meeting its 25% network coverage requirement in Sabah and Sarawak. In October 2011. and expected to invest up to MYR2. Meanwhile.5bn to deploy mobile broadband services nationally. The executive director of REDtone. P1 agreed to take access and wholesale fibre services on TMs HSBB platform. Asiaspace DotCom and REDtone Telecommunications have also launched services since 2008.

while U Mobile contracted ZTE. Local media reported in October 2010 that WiMAX provider YTL Communications was awarded 80MHz in the 700MHz band in order to provide hybrid TV services. Meanwhile.Asiaspace.Celcom.• into an agreement with TM. Maxis Communications and U Mobile . Asiaspace could act like a mobile virtual network operator and leverage Maxis network infrastructure to offer LTE services. Malaysias The Star quoted unnamed sources and said Maxis could be in charge of building and running the LTE network while Asiaspace would provide additional spectrum in order to increase network coverage and well as four WiMAX operators .1mn premises covered by the HSBB network nationwide. DiGi. That said. The 700MHz band has been a contentious issue in Malaysia in recent months. However.LTE As many as nine Malaysian mobile operators could be awarded with LTE licences once the government finalises the licence distribution process and the potential fees involved. Both operators are aiming to maximise connection speeds of their existing HSPA+ networks. offering mobile broadband services on the 700MHz band means that operators would be able to pass cost savings on to Malaysian consumers. This agreement gives REDtone access to all 1. Celcom Axiata awarded its network upgrade contracts to Ericsson and Huawei Technologies. Maxis and WiMAX provider Asiaspace were reportedly in talks to explore the possibility of sharing network infrastructure as they prepare for the roll-out of next generation LTE services in Malaysia. and help the government to achieve its goal of higher broadband penetration rates in the country. Table: Wireline Developments. Furthermore. under which TM will provide HSBB (Access) and HSBB (Transmission) services to REDtone. four mobile operators . the 700MHz band has added benefits of lower cost and better building penetration (which are important factors in urban cities). Malaysia Telecommunications Report Q1 2013 Although the MCMC denied in November 2010 that it had issued spectrum in the 700MHz band to YTL. this attracted the attention of the Malaysian telecoms industry as alternative operators were concerned that YTL could use the spectrum to offer LTE services or resell the licences for a profit instead. which would instil greater confidence from operators. Securing 80MHz in this frequency band would have given YTL a significant competitive advantage over its rivals. In May 2011.© Business Monitor International Page 64 64. P1. compared to higher frequency bands. BMI welcomes the regulators plan to conduct a fair and transparent sale of the 700MHz spectrum. 2010-2012Date Value Details TIME dotCom and Setia Haruman (SH) have announced that they will work together on the development . The HSBB access will provide REDtone with the opportunity to broaden its service offerings to the small and medium-sized enterprise (SME) segment. and have opted for LTE-compatible equipment with a view of offering next-generation services in the future. Besides being suitable for offering LTE services. In March 2011. the incident has raised questions about the transparency of the countrys spectrum awarding process. Consequently. According to Malaysian news agency The Star in September 2010. the MCMC also announced in March 2011 that it is looking to initiate an auction for spectrum space in the 700MHz band. REDtone and YTL Communications and an unnamed new entrant are expected to each receive a 20MHz block of 4G spectrum.

The move forms part of the operators national broadband initiative to $33m enhance broadband coverage across the country. 2010-2012 . TM announced the launch of a network infrastructure project for Malaysian firm Dewan Bandaraya Kuala Lumpur (DBKL). Fibrecomm will offer high-speed bandwidth connectivity to ABN. The BDM. costing US$45mn. reports Total Tele. The 10-year deal can beApr-12 na extended to 15 years.400 offices. The twoOct-12 na will deploy a fibre-optic network in the CFZ that will reach 3. Meanwhile. will offer additional international bandwidth capacity to countries in the region and will work as a gateway to Asia as moreJan-12 na and more companies launch operations in Asia. backbone fibre transmission network and local access distribution US network across the region. an easy-to-use packet optical networking platform that unites Carrier Ethernet and wavelength services delivery at the metro service edge. reports Bernama. voice as well as other multimedia services. The Batam-Dumai-Melaka (BDM) highbandwidth optical fibre submarine cable system. which links Indonesia to Malaysia.300 new homes and 1.© Business Monitor International Page 65 65. Global interconnection and interoperability solutions provider Inteliquent announced a strategic alliance with Telekom Malaysia (TM) for implementation of the formers EtherCloud (SM) solution for the operator. Malaysia Telecommunications Report Q1 2013 Wireline Developments. The deal will allow ABN to accelerate the launch of its TV.• of fibre connectivity. designing and preparing the primary infrastructure for the Cyberjaya Flagship Zone in Malaysia. Construction will begin in Q312 or Q412 and will beJul-12 na completed in 2014. Fiberail offersJun-12 na backbone infrastructure and ancillary services to telecoms providers across Peninsula Malaysia. SH is the company tasked with planning. Fiberail selected BTI 7000 Series.ContinuedDate Value Details TM plans to invest MYR100mn in network migration and upgrades in Sarawak. TM aims to cater to various customer segments withApr-11 n its nationwide network coverage. Fiberail expanded deployment of BTI Systems Integrated Services Delivery Platform solutions. is completed and ready to carry data traffic. broadband. The deal will help TM extend its Global Ethernet reach through Inteliquents more than 120 points of presence (PoP) across the globe. The operator will spend the funds on its core network. Inteliquent will use the operators extensiveJul-12 na coverage to cater to the rising demand for Ethernet in Malaysia and Asia Pacific. NEC will act as the main engineer and deployment firm. built as joint venture between regional telecoms firms PT XL Axiata and PT Mora Telematika. Asian Broadcasting Network (ABN) selected domestic network operator Fibrecomm as its backhaul partner. Bernama reports the three-year DBKL Net project will result in DBKLs . The network will be called The Asia-Pacific Gateway and will connect eight regional countries. Time dotCom said it will cooperate with China Telecom and Facebook to construct a new submarine cable. along with its co-location facilities to accommodate the latters network equipment. The stakes of individual firms have not been released. The move has extended Fiberails delivery of Mobile Backhaul and Carrier Ethernet Business services across the country and supports provision of international interconnect services to Thailand and Singapore. TeleGeography reports.

the WiMAX licence holder.• internet speed being boosted by the roll-out of a Metro Ethernet Virtual Private Network (Metro-E VPN). inks a deal with Samsung of South Korea for the provision of WiMAX services across Peninsular Malaysia. and to realise operating synergies with his other payTV and telecoms businesses. In addition. construct and maintain its nationwide WiMAX network.5%. TIME dotCom becomes the first FTTH operator in Malaysia. The Star newspaper reported that cellular towers and infrastructure owner . Under the terms of the contract. there has been some movement with regards to digital broadcasting in the country.2mn in a submarine telecoms cable system linking Malaysia and Indonesia.18mn US (US$7. Although such plans have yet to be confirmed.Mar-11 na Networks at 33 existing offices and departments will be integrated as part of the project.Jul-10 na REDtone Telecommunications launches its WiMAX services in Miri. ensure their networks and services have the scale needed to be financially viable and compete with established offerings from the existing players. furtherFeb-11 $4mn linking Dumai and Batam in Indonesia. BMI believes that consolidation is inevitable. Samsung will provideFeb-10 na radio network equipment and WiMAX handheld devices. From mid-September. Malaysia Telecommunications Report Q1 2013Industry Trends & DevelopmentsIndustry Trends & Developments The most notable trends and developments emerging from Malaysias telecommunications industry continue to surround the fast-growing High Speed Broadband (HSBB) market as well as the nascent mobile broadband sector. some of the new entrants to the market are already talking about the need to consolidate in order to protect the value of their assets. Telekom Malaysia contracts ZTE to supply equipment for its high-speed broadband (HSBB) network. Krishnan wants to expand the business into India and China. Sarawak region.Nov-10 na household broadband penetration in Malaysia was 53. ZTE will supply multi-service equipment and other products and services. given the crowded nature of the Malaysian mobile market.May-10 na P1 contracts ZTE Corporation to help design. dubbed Batam-Dumai-Malacca (BDM). YTL e-Solutions. a view we have held ever since the regulator announced plans to issue so many licences. The move will enable the operator to offer faster 100Mbps connectionMar-11 na to its subscribers with the help of ZTE.May-10 na Maxis Communications says it is trialling IPTV services in the Klang Valley region. TM will invest MYR12. The 400km-long cable system. among other markets. Broadband penetration passes the 50% government target for the end of 2010. Tycoon Ananda Krishnan offers to take control of local satellite operator MEASAT Global.Jun-10 na Under the agreement. when it launches a commercial service inFeb-10 na the Klang Valley region. operators© Business Monitor International Page 66 66.6mn). In late February 2012. Source: BMI. The new system will connect Malacca State in Malaysia and Dumai in Indonesia. U Mobile is scheduled to sign a strategic alliance deal with ZTE on March 15 2011 to enhance its broadband coverage in Malaysia.Mobile Consolidation Imminent? Just months after the Malaysian authorities issued nine LTE mobile broadband = not available. will be deployed in collaboration with Indonesian telecoms operators PT XL Axiata and PT Mora Telematika and will cost about MYR23. which include Malaysian mobile operatorJul-10 na Maxis.

BMI believes that Asiaspace. which may not appeal to YTL and Asiaspace. All three secured LTE-compatible 2. 3G operator U Mobile is yet to make much of an impact due to its limited financial resources and prefers to leverage the 2G/3G infrastructure of the incumbents. we believe it unlikely that mobile market leaders Celcom Axiata. we are forecasting mobile subscriber numbers to rise from 36. DiGi and U Mobile as well as WiMAX operator REDtone International and new entrant Puncak Semangat. P1 is owned by Malaysian mobile broadband technology vendor Green Packet and South Korean mobile network operator SK Telecom. P1 is understood to be considering a public share offering and may only be open to consolidation if it sees sufficient value in the© Business Monitor International Page 67 67. Most notably. along with a third company. along with existing 2G/3G mobile network operators Celcom Axiata. countering the MCMCs efforts to make the market more competitive. versus the 20GHz offered to its rivals. Maxis and DiGi would be permitted to buy any of the newcomers as any deals would give them a dominant market position. Asiaspace Chairman Datuk Abdul Ghani Abdullah was quoted as saying that consolidation is the most logical option facing the newcomers as duplication of assets such as towers and cell sites would be a wasteful use of financial resources in a market where capital expenditures are. Malaysia Telecommunications Report Q1 2013 spectrum and network assets of YTL and Asiaspace. With this view in mind. However. Both companies plan to launch 4G services in the Klang Valley and some areas in . With more than 400. therefore.6GHz spectrum in December.661mn in 2011 to 41. as would P1s ZTE-supplied dual-mode WiMAX/TD-LTE network.6GHz spectrum from the MCMC in December 2011.• Asiaspace had been approached by WiMAX licensee YTL Communications. Asiaspace has also failed to get its own aMax-branded WiMAX network off the ground and. Although BMI is keen to see at least one new entrant bring a new competitive dynamic to the mobile market.000 WiMAX subscribers and the increasing likelihood that it will turn EBITDA-positive in 2012 after just four years of operations. This would be attractive to any companies considering a deal with P1.857mn by 2017. at least. we hold to our view that only those with sufficient scale and financial resources will succeed and that a degree of consolidation will be inevitable. In mid-July 2012. Given their size. we would still not rule this out as a potential dealbreaker. We therefore do not see it as an initiator of consolidation. Green Packet. and will remain high. Maxis and REDtone established an infrastructure-sharing partnership in order to accelerate the rollout of 4G services. Maxis Communications. would be keen to consider consolidation as it received just 10MHz of 2. a clear indication that market saturation means few growth opportunities for a surfeit of new players. However. with a proposal to combine the businesses. P1 has a 10-year agreement with Telekom Malaysia to utilise capacity on the fixed-line incumbents high-speed broadband (HSBB) network. the privately owned company may be prepared to be subsumed into one or more of the new LTE licensees in order to safeguard its future and protect its investments to date. pooling its resources with one or more of its rivals would save it having to completely write off its investments to date. Its shareholders would also look for a significant ownership stake in the combined entity.

This indicates that the MCMC will split 180MHz of 2.3mn in 2011. According to TIME dotCom the firm accounts for less than 5% of the fixed-line market in Malaysia even though it is the second largest player. Maxis also has a 3G infrastructure-sharing agreement with U Mobile. TIME dotCom would be able to become a regional wholesaler and capitalise on the growing data demand from enterprises and telecoms companies in countries such as Thailand. and enabling the provision of IP Transit services. which incurred a net loss of MYR950mn in 2008 amid strong competition and a legacy build-up of non-productive assets. ■ diversify into the datacentre and managed services market. Global Transit Communications (MYR102mn) and Global Transit Limited (MYR101mn) is a significant turnaround for TIME dotCom. TIME dotCom underwent a management change in October 2008 and has embarked on a series of transformations. we believe that TIME dotComs foray into the regional data wholesale market is a move in the right direction. Hong Kongs Pacnet and Japans KDDI to build the 9. Indonesia and Vietnam. which is one of the main reasons for the collaboration with REDtone in addition to cost savings.6GHz spectrum among nine operators.© Business Monitor International Page 68 68.TIME Invests In Regional Data Centre In November 2011. Malaysia Telecommunications Report Q1 2013 Operators must meet certain conditions before being allocated the spectrum. The sharing agreement. TIME dotCom is currently a domestic player and its growth potential is limited by rivals such as Telekom Malaysia and the countrys population. Given the limited domestic growth opportunities. ■ tap into a regional wholesale customer base and strengthen its presence in the global bandwidth market by accessing international bandwidth at asset owner prices. Global Transit Communications (which owns and operates a global network that connects multiple datacentres around the world and peering points in Singapore. which is expected to secure a block of LTE spectrum. However. which would transition Malaysias second largest fixedline operator into a regional telecoms player.• Selangor early next year. by acquiring Global Transit Limited (which partnered with companies such as Indias Bharti Airtel. TIME dotCom agreed to acquire the AIMS Group. However. Global Transit Communications and Global Transit Limited. which have helped the firm to report a net profit of MYR117. Hong Kong and the US) and the AIMS Group (which owns and operates a carrier-neutral datacentre in Malaysia). and. which heeds the governments call to reduce resource duplication. the ministry has reportedly yet to confirm the allocation. The acquisition of the AIMS Group (MYR119mn). Maxis has said that it is difficult to deliver quality service and operate efficiently with small amount of spectrum.620km Unity Cable System). extends beyond infrastructure as Maxis and REDtone will also combine their spectrum allocations to offer customers LTE services that have download speeds of up to 150Mbps. . with the majority receiving 20MHz each. BMI believes that the acquisitions position TIME dotCom favourably in light of the growing regional demand for data. and the process may not complete until end-2012. The collaboration could therefore be extended to 4G since Maxis has said that its network could accommodate two to four partners. The acquisitions allowed TIME dotCom to: ■ enter into the international submarine cable business.

which was significantly cheaper and faster than rivals offerings. TIME dotCom has inherited a substantial base of existing customers.© Business Monitor International Page 70 70. Maxis has the benefit of being the countrys largest mobile operator. Further. Maxis has signed strategic partnerships with 14 content providers and aims to offer IPTV services in July. down from 247. while broadband provider Vasseti Datatech targets a launch of a few hundred channels in Q312.000 commercial subscribers in December 2010. By end-2012.cost offering. the number of IPTV subscribers increased from 25. and its partnerships with 14 content providers such as Radio Televisyen Malaysia.500. but its limited network coverage presents a cap to its growth potential.000 in March 2010). which has been driving growth in the overall stagnating pay-TV market.and features such as VOD. It is expected that Celcom could announce its entry into the IPTV market in H212 The Malaysian Communications and Multimedia Commission (MCMC) reported that there were 3. Celcom Axiata signed an HSBB agreement with TM in June 2011.• • Furthermore. Vasseti Datatech targets 20. We believe that this would help Maxis catch up with leaders TM. Malaysia Telecommunications Report Q1 2013Entrants To Spur IPTV Growth The growing adoption of Malaysias fibre-based High Speed Broadband (HSBB) service is paving the way for greater competition in the IPTV sector.955mn in December 2010 (we believe that earlier data are not comparable as there were 9.© Business Monitor International Page 69 69. It is likely that the operator will replicate its low. Malaysia Telecommunications Report Q1 2013Maxis And Astro Choose Collaboration Over Competition Astro and Maxis have signed an agreement to jointly develop and market unique telecoms product bundles. of which 30% are residential condominiums.000 retail broadband and IPTV services with revenue of more than MYR10mn. and it aims to leverage on its fibre optic network that runs across the east and west coasts of the Malaysian peninsula. Vasseti Datatech launched a MYR199 1Gbps fibre broadband service in August 2010. thereby supporting growth for the overall pay-TV industry. The deployment of the HSBB has lowered entry barriers for potential broadband service providers.114mn pay-TV subscribers in Malaysia at the end of March 2012. Meanwhile. and it is a natural progression for companies to launch IPTV services thereafter. Maxis aims to offer competitively priced packages less than MYR200 (US$63) a month . The broadband operator claims to have 100 buildings passed in Klang Valley. . Vasseti Datatech is reportedly testing IPTV services.600 to 261. Five Star Production and Travel Channel International provide a good start. thereby allowing the firm to bundle multiple telecoms services. Maxiss IPTV ambition has been known since it signed a 10-year HSBB contract with Telekom Malaysia (TM) in December 2010. personal video recorder and multi-screen capability. Vision Plus Entertainment. up from 2. including pay-TV. and we believe that the firm could significantly increase the attractiveness of its wholesale services if it can smoothly integrate the different complementary companies. BMI believes that it is important that Maxis secures sufficient attractive content. Astro All Asia Networks and REDtone. Between December 2010 and March 2012. Additionally. and we expect Malaysias second-ranked mobile operator to similarly pursue a multi-play strategy.

wholesale operator Fiberail said it had expanded deployment of BTI Systems Integrated Services Delivery Platform solutions. the largest in the country. The . Astro broadcasts more than 156 channels and has 50% penetration of TV homes in Malaysia. BMI believes there will be questions about a permanent merger between the operators. as a viable platform from which to quickly build its IPTV subscriber base. Vassetti Datatech and REDtone. while its wireless internet services have 82% population coverage. broadband. the firms partnership with Astro suggests a strategy to leverage the infrastructure. Malaysia Telecommunications Report Q1 2013Regulatory DevelopmentRegulatory Development Malaysias Telecommunications Act 1950 and Broadcasting Act 1988 were repealed on April 1 1999. BMI had identified Maxis existing mobile subscriber base. including almost 13mn mobile subscribers to which it can market its Astro.On-The-Go service.• • mobile and fixed broadband services. BMI expects the arrival of Astros content to boost demand for Maxis fibre and wireless internet service. This development points to collaboration. when the new Communications and Multimedia Act 1998 (CMA) was brought into effect. Fibrecomm will offer high-speed bandwidth connectivity to ABN. capabilities and relationships of an existing service provider as opposed to building those from scratch. For its part. the fixed and wireless networks significantly increase its potential IPTV subscriber base. Malaysia Telecommunications Report Q1 2013 In April 2012. the firm signed strategic partnerships with 14 content providers. The move extended Fiberails delivery of mobile backhaul and carrier ethernet business services across the country and supports provision of international interconnect services to Thailand and Singapore.000 customers by June 20 2012. rather than competition. Astro. Malaysian cable TV firm Asian Broadcasting Network (ABN) has selected Fibrecomm as its backhaul partner.352 fibre internet subscribers and 27. with the aim of launching commercial IPTV services in Q312. A solo venture into the IPTV market would have pitted Maxis against experienced players and industry leaders Telekom Malaysia.location facilities to accommodate the latters network equipment. the operators fibre network is currently available to around 1. This cannot be ruled out considering that both companies have links to local billionaire Tan Sri Ananda Krishnan. although BMI expects it to be lengthy considering the amount of resources that will be committed to implementation and marketing. However. Astro will be able to access Maxis customer base. The duration of the Maxis-Astro partnership has not been disclosed. Meanwhile. The 10-year deal can be extended to 15 years.3mn households. along with its co.© Business Monitor International Page 72 72.Fiberail Gets Active In June 2012. Maxis Home had 57. Maxis have been open about its intention to venture into the payTV market through the IPTV route. Fiberail offers backbone infrastructure and ancillary services to telecoms providers across Peninsula Malaysia.© Business Monitor International Page 71 71.000 wireless internet subscribers. including just 9. which BMI believes offers greater growth opportunities for both firms. BMI expects the partnership to significantly improve Maxis and Astros competiveness in their respective markets by offering multiplay packages. The deal will allow ABN to accelerate the launch of its TV. voice as well as other multimedia services. In Q212. However.

myMalaysian Communications andMultimedia Commission(MCMC)63000 CyberjayaSelangorMalaysiaTel: 00 60 3 8688 8000Fax: 00 60 3 8688 1000Web: www. in line with the governments there are three principal regulatory agencies in Malaysia.• • act had been drawn up the previous year. Currently. capital.myMinistry of Information The Ministry of Information Malaysia was set up with the objective of ensuringMalaysia effective dissemination of the governments messages through electronic media. Day-to-day responsibilities for regulating and62668 Putrajaya policing Malaysias electronic communications sector are delegated to the MCMC. Its main aim is toBlock E4/5. broadcasting and computing services. following the creation of the Malaysian Communications and Multimedia Commission (MCMC) in November 1998. Malaysia Telecommunications Report Q1 2013 ■ to grow and nurture local information resources and cultural representations that facilitate the national identity and global diversity ■ to regulate the long-term benefit of the end-user ■ to promote a high level of consumer confidence in service delivery from the industry ■ to ensure an equitable provision of affordable services over ubiquitous national infrastructure ■ to create a robust applications environment for end-users ■ to facilitate the efficient allocation of resources such as skilled labour. The Act sets 10 national policy objectives for the communications and multimedia sector: ■ to establish Malaysia as a major global centre and a hub for communications and multimedia content/ information services ■ to promote a civil society where information-based services will provide the basis of continuing enhancements to quality of work and life© Business Monitor International Page 74 74. The MCMC had itself been created through the merger of the government bodies Jabatan Telekom Malaysia (JTM) and the Ministry of Informations broadcasting regulatory division. Malaysia Telecommunications Report Q1 2013 Table: Malaysia: Regulatory Bodies And Their ResponsibilitiesRegulatory Body ResponsibilitiesMinistry of Energy.skmm. based on the concept of convergence of the telecommunications. and the MCMC. Water and The Ministry of Energy.mySource: BMI Legislation The Communications and Multimedia Act (CMA.© Business Monitor International Page 73 73. although there are additional authorities that have a considerable influence on the The primary regulatory agencies are: the Ministry of Energy. knowledge and national assets ■ to promote the development of capabilities and . the Ministry of Information.588) took effect on April 1 1999.Bukit Putra50610 Kuala LumpurMalaysiaTel: 00 60 3 2282 5333Fax: 00 60 3 2282 1255Web: Water and Communications Malaysia (MEWC) is aCommunications Malaysia government body that was set up to develop Malaysias communications and multimedia industry. or Act No. efficient and safe services at a reasonable price toAdministrative Centre consumers throughout the country. policy and programmes to enhance public understanding andAngkasapuri involvement with the governments activities.MalaysiaTel: 00 60 3 8883 6000Fax: 00 60 3 8889 3712Web: www. face-toface communications and film-making activities. Water and Communications (MEWC). Parcel E facilitate and regulate the growth of industries in these sectors to ensure theFederal Government availability of high-quality.

DiGi and U Mobile and three WiMAX providers . which is supported by the fact that the majority of the operators would only need to pay MYR10mn (US$3mn) for their spectrum. which secured 30MHz of spectrum.P1. administrative and sector transparency. A fourth WiMAX operator. Malaysia Telecommunications Report Q1 2013 Malaysian billionaire Syed Mokhtar al-Bukhary. This could be based on the notion that existing mobile and WiMAX operators have additional spectrum in other frequency bands. We see Maxis. which would reduce the likelihood of price competition. P1 is another strong contender arising from its WiMAX subscriber base of 388.Regulatory Developments LTE Licences Awarded After announcing a plan to issue LTE licences for spectrum in the 2.Malaysia Telecoms SectorCompany name Ownership MarketTelekom Malaysia Khazanah Nasional . emphasis on process rather than content.© Business Monitor International Page 76 76. According to The Edge Financial Daily citing a source close to the regulator. and industry self-regulation.Maxis. the biggest winner turned out to be Puncak Semangat. However. BMI questions the decision to crowd the nascent market with nine operators. the spectrum allocations were equitable even though they were not equal. BMI does not deny the fact that Puncak Semangat could have the financial capability to roll out yet another network given that it is backed by a© Business Monitor International Page 75 75. the MCMC finally allocated nine blocks of spectrum to companies in early December 2011. we envisage the number of LTE spectrum holders to reduce and we are concerned that future transfers of spectrum may result in higher costs.000 as of Q411. Asiaspace. By comparison.• • skills within Malaysias convergence industries ■ to ensure information security and network reliability and integrity. flexibility. Celcom Axiata. In addition. operators would need to pay a significantly higher price if an auction system was adopted. especially if a regulator had been overzealous in awarding licences. However.were each awarded 20MHz of 2. but the current global market norm is towards network sharing to reduce rollout cost and time.6GHz frequency band in September 2010. Meanwhile. was only given 10MHz and this could be largely attributed to the fact that the firm reportedly ceased offering WiMAX services more than a year ago. Malaysias five mobile operators . Malaysia Telecommunications Report Q1 2013Competitive LandscapeCompetitive Landscape Table: Key Players . REDtone and YTL Communications . Eventually. BMI sees companies adopting aggressive price strategy to attract consumers. Celcom Axiata and DiGi coming out on top given their established position in Malaysias mobile industry and the ability to bundle related telecoms services. This is a possible scenario if operators existing spectrum allocation is insufficient to support demand and less successful providers put a premium on their assets before exiting the market. consolidation is another common theme. allotting the largest spectrum block to Puncak Semangat also raises an eyebrow as the new entrant has no experience and network infrastructure unlike the eight alternative firms. Additionally.6GHz spectrum. However. bias towards generic rules. it is unfair to use this measure as the spectrum is not interchangeable. regulatory forbearance. The CMA is said to be based on the basic principles of transparency and clarity: more competition and less regulation.

928 2. Malaysia Telecommunications Report Q1 2013 telephony sectors. (14.781 1.715 1995Celcom 2. Telekom Malaysia believes HSBB will boost the countrys national GDP by 0. as it looks to offset continued revenue losses in its fixed-line voice business.445 5.684 na 2.73%).332 1.075 754 1994Time DotCom 102 104 93 93 98 109 105 1994* Telekom Malaysia demerged from mobile operations in December 2007. it was publicly listed in 1990.Telekom Malaysia* 2.owned 28.832 3.• • (28. Government entities including investment holding company Khazanah Nasional Bhd .590 1. TIME dotCom (3. consolidating the incumbents position as leader in the broadband sector.Financial Indicators.42%. the operator has been boosting its wireless solution portfolio by .579 1. The Employees Provident Fund owned 13.67%) international).954 2. ■ Awarded nationwide high-speed broadband network by government. 20052011 (US$mn) 2011 2010 2009 2008 2007 2006 2005Company Name revenues revenues revenues revenues revenues revenues revenues Est.562 1. data.6%) MobileASTRO MEASAT Broadcast Network Systems Direct-tohome TVSource: BMI Table: Selected Operators . Employees Provident Fund (12. internetMaxis Communications Private (80%).853 2.801 1. ■ Fixed-line telephony segment still remains the largest revenue contributor.345 1. ■ Falling broadband ARPU due to rising number of subscribers opting for low-end package.660 1984Maxis Communications 2.328 2.000 jobs by 2017.Opportunities ■ Broadband subscriber numbers showing strong potential for continued growth.Threats ■ Fixed-line customers migrating to mobile and broadband technologies and alternatives such as VoIP.966 2.Weaknesses ■ Declining fixed-line trend continues.41% at that time.Strategy TMs objectives remain largely focused on the deployment of its broadband services and high-speed broadband (HSBB) project. while AmanahRaya Trustees Bhd held 10. Originally established in 1984. AmanahRaya Trustees Fixedline telephony (domestic.sectors.42%). Malaysia Telecommunications Report Q1 2013Company ProfilesTelekom Malaysia SWOT AnalysisStrengths ■ Malaysias leading telecoms operator. while the operator is also boosting its international cable links with a contract signed with NTT Communications to deploy two pairs of fibre-optic cables by YE12. ■ Ability to expand overseas fixed-line/broadband projects through international units.281 1.61%).271 1. Despite competition having been permitted in the fixed-line market since the late 1990s.18%). public (20%) MobileCelcom Axiata Group (100%) MobileDiGi Telecommunications Telenor (49.Company Overview Telekom Malaysia (TM) is the countrys incumbent fixed-line and data operator. ■ Increasing competition due to the countrys High Speed Broadband Network.933 1. ■ Separation of fixed-line and mobile units should enable greater growth in both segments. Source: BMI© Business Monitor International Page 77 77. Others (44.179 1. the operator controls over 90% of the local market and therefore is a dominant player in the fixed broadband and voice© Business Monitor International Page 78 78.6% and create 100.73% of TM as of end-September 2012. It spun off its mobile operations as Axiata Group but has an indirect relationship with Axiata as Khazanah Nasional also has a majority stake in that company.426 2. Further.220 1988DiGiTelecommunications 1.500 4. na = not available. although declining. with presence in fixed-line and internet sub.435 2.

In November 2009 Alcatel-Lucent Technologies. Consolidated EBITDA amounted to MYR797mn in Q212.4% y-o-y. That said. Global Business and other non-telecommunications related services under TM Ventures. the latest financial report available from TM related to the quarterPerformance ended March 31 2012. we believe demand for mobile broadband services could outpace the growth of fixed broadband services. Malaysia Telecommunications Report Q1 2013 reflecting TMs growing strengths as an international service provider. ■ Axiatas acquisition of SunShare Investments redeemable preference shares from TM at a cost of MYR141mn. TM was not one of the nine telecoms operators that received a LTE licence in 2011.6 y-o-y.2mn households provided with coverage. announcing on February 9 2011 the promotion of a one-month free subscription and a waiver for the MYR200 installation fee for customers who sign up online.831bn while Wholesale revenues declined by 0. to MYR212mn.Operational TM is responsible for deploying a high-speed broadband service project over a 10-yearDevelopments period. The operators demerger exercise involved the separation of its mobile and fixed businesses in two distinct entities: Axiata Group (formerly Telekom Malaysia International .2bn (with state support of MYR2.TMI) includes international mobile operations and domestic mobile operations under Celcom. up by 6. voice and related services). data.677bn. ■ TM transfer of the 3G spectrum assignment to Celcom at its book value of MYR40mn. mainly due to positive growth across all product areas (internet and multimedia. Huawei Technologies.• increasing the number of Wi-Fi hotspots in order to improve the operators competitiveness in Malaysias mobile broadband industry. ■ TM acquisition of a 51% stake in Fibrecomm Network from Celcom at a cost of MYR33bn. mostly in major urban areas. up by 8. Revenues from the Global line of business increased by 10. The operator is aggressively pursuing a greater number of UniFi subscribers. ZTE and FiberHome Technologies. all foreign companies. were chosen by TM as contractors for its HSBB project. The project is valued at MYR15. data and broadband. we expect TM to continue to drive subscriber growth for its next generation nationwide fixed-broadband service (UniFi) and bundle value-added services such as IPTV to boost its attractiveness to consumers.4bn) and will see some 2. By the end of . Internal restructuring included: ■ Axiatas acquisition of Celcom from TM at a cost of MYR4. Retail revenues grew by 9.8% y-o-y while EBITDA margin was 32. Telekom Malaysia includes TMs domestic interests in fixed-line voice.3%. Allowing mobile operators to access its HSBB platform will also enable TM to benefit as a provider of wholesale services. Consolidated posttax profit was up by 174. The agreement between TM and the state was eventually signed in September 2008. South Asia accounted for 32% of Global revenues in H112. Consolidated group revenue amounted to MYR2.Company Structure TM has streamlined its operations.0% y-o-y due to the underlying revenue increase and the recognition of deferred tax income. Broadband services over the HSBB network commenced in Q110 and are offered under the UniFi brand name.Financial At the time of writing. and.5% y-o-y to MYR187mn.© Business Monitor International Page 79 79. With an increasing number of consumers opting to use mobile devices such as netbooks and tablets.425bn.0% y-o-y to MYR1.

• March 2012.713mn ■ No. valued at MYR412mn. was signed in December 2010.791bn ■ Annual revenues (2011): MYR9.745 UniFi subscribers. now International. The WiNet/Telekom Malaysia deal was valued at MYR250mn.5mnOperational Data ■ No. while the second will link Malaysia to Hong Kong by the end of 2012). In February 2011. for the construction of the Batam-Dumai. become the first group to enjoy the service in Pahang. Meanwhile. In September 2012. there were A second agreement.112mn ■ No. Malaysia Telecommunications Report Q1 2013 that the Malaysia-Japan link has begun operations while the Hong Kong link is scheduled for completion in Q113. and targeted 1mn subscribers by 2012. which will result in a further four pairs of fibre-optic cables with other regional operators in the Philippines and Singapore.3% of UniFi subscribers were residential at that time. in the East Coast region.541 a year earlier. The cable system is called Cahaya Malaysia and forms part of a much larger cable project. The UniFi network covered 81 exchanges and passed 1.Financial Data ■ Annual revenues (2010): MYR8. now Mango and now HaiRun.011mn ■ No. of fixedline subscribers (Q212): 3. of broadband subscribers (Q212): 2. North Wing. in October 2012 through a collaboration with Hong Kongs PCCW Media. of fixed-line subscribers (Q112): 4.207bn ■ Net profit (2011): MYR1.974mn ■ No. of fixed-line subscribers (2011):© Business Monitor International Page 81 .151bn ■ Revenues (Q112): MYR2. A third wholesale access service agreement was struck in June 2011. The addition came after the launch of HyppSports HD and FOX Football Channel. down from MYR188 in Q111. of broadband subscribers (Q112): 1. UniFi. TM announced© Business Monitor International Page 80 80.5mn) over the following five years. the operator is also involved in deploying international cables with Japans NTT Communications.425bn ■ Net profit (2010): TM announced the expansion of its HSBB service.Malacca Cable System. with mobile operator Celcom Axiata. Menara TM. of employees: 26.923mn ■ No. up from 63. The operators first wholesale access service agreement was inked in May 2009 with WiNet Technology. of broadband subscribers (2010): 1.191bn ■ Net profit (Q112): MYR250.050mn ■ No. of fixed-line subscribers (2010): 4. TM signed an agreement with Indonesias Excelcomindo (XL) Axiata and Mora Telematika in February 2011. The expansion sees 300 residents in Alor Akar. Around 85.6mn ■ Net profit (Q212): MYR348. TM launched three channels.334mn ■ No. offering wireless broadband services. HSBB ARPU was MYR182 in Q112. Kuantan. A fourth wholesale agreement was signed in mid-October 2011 by Packet One Networks (P1).667 ■ Year established: 1984Company Details ■ Telekom Malaysia ■ Level 51.220mn premises at that time. with Maxis Communications.977mn ■ No. The company agreed to invest MYR1bn (US$283. A total of US$140mn is to be invested by Telekom Malaysia to lay two pairs of fibre-optic cables (the first was to have been completed by mid-2012 linking Japan to Malaysia.384bn ■ Revenues (Q212): MYR2. Malaysia Jalan Pantai Baharu Malaysia Tel: +60 (3) 2240 1221 ■ Fax: +60 (3) 2283 2415 ■ Web: www. of broadband subscribers (2011): 1. making it the state with the highest number of HSBB customers in the East Coast. The remaining costs will be covered by NTT Communications. In August 2012.

8% of the share capital. the most recent financial and operating data available for analysisPerformance from Maxis related to the quarter ended June 2012. Subsequently.9% of Maxis. although demand was very much higher. part of the Usaha Tegas Group.2bn. ■ Revenue growth being led by rising usage of wireless broadband services.Strategy Maxis strategy is three-pronged: to maximise its voice business.3% of Maxis shares. ■ Ability to offer services across its international units such as M-money. The company received a 3G licence in March 2003. with approximately 36% market share. in line with rest of the market. ■ Introduction of compulsory registration for prepaid services and mobile number portability could impact subscriber base. representing 8.05bn (US$803mn).• • 81. the operator acquired competitor TimeCel. Maxis was de. thereby becoming the largest player in the market. ■ Growth in international activity through acquisition of Indias Aircel and launch of Axis in Indonesia. Global institutional investors subscribed for more than US$800mn. In© Business Monitor International Page 82 82. with the remainder held by Saudi Telecom. of which 11.2bn. Malaysian institutions and Bumiputera investors collectively hold 18. the company expects to deliver shareholder value through performance enhancement. with domestic contribution diminishing.62bn) was made by Binariang GSM.Company Overview Maxis is an integrated communications service provider.Threats ■ Maturing domestic mobile market.Opportunities ■ Re-listing in November 2009 saw a cash injection of MYR11. a mobile broadband platform and fixed-line voice and international backbone facilities to Malaysian consumers and business customers as well as multinationals. The company listed on the Kuala Lumpar stock exchange (KLSE) in July 2002. . Retail investors own 2.9% is held by Bumiputera investors and agencies of the Malaysian government and 7% is held by Malaysian institutions. to secure data access leadership and penetration.Financial At the time of writing. controlled by Usaha Tegas and Saudi Telecom. A general offer for a 99. ■ Launch of HSPA+ will aid growth of very highspeed wireless broadband coverage in the country. In November 2009. owned by Malaysian business tycoon Ananda Krishnan. Malaysia Telecommunications Report Q1 2013 May 2003. raising MYR3. Maxis Bhd relisted on the Bursa Malaysia.8bn (US$4.Weaknesses ■ Expected decline in ARPU.listed from the Bursa Malaysia on June 2007. investments to secure sustainable future revenue streams and prudent financial management. ■ Intense competition from Axiata and DiGi has led Maxis to rely increasingly on international operations. In executing this plan. operating a nationwide cellular telephony network. and to deliver products and services beyond telecommunications. ■ Facing start-up costs relating to Axis Telekom in Indonesia. following the completion of the privatisation offer by Binariang GSM. the largest initial public offering (IPO) in Malaysian history. Prepaid subscriber mix at 75% of mobile subscriber base.44% stake in Maxis at a cost of MYR15. Shares sold in the offering fetched MYR11. Seventy percent of the business is owned by Maxis Communications Bhd. Malaysia Telecommunications Report Q1 2013Maxis Communications SWOT AnalysisStrengths ■ Largest mobile operator in Malaysia. useful in accelerating wireless broadband and 3G roll-out plans. in May 2007. both prepaid and postpaid.

Recipients of the service are able to collect funds in cash from over 345. The company said it was waiting for spectrum allocation from the government to deploy LTE technology on a commercial basis. covering more than 10. reflecting well on Maxis rapid transformation. down by 15. up from 12. Maxis noted that MYR1.6% y-o-y. Earlier figures have not been restated.000km of fibre infrastructure. Maxis began augmenting its 3G network with HSDPA technology and. It will benefit largely Malaysian foreign workers. making y-oy comparisons meaningless. These figures are based on new accounting methods. Maxis Communications awarded a contract to Alcatel-Lucent in August 2011 covering the deployment of a 100Gbps optical backbone network. since December 2009. Much of this investment was focused on augmenting its mobile broadband networks and services.000 in Q212. Maxis and REDtone entered into an infrastructure and spectrum sharing agreement in July 2012 that will enable both firms to fast track the roll-out of their 4G networks throughout the country. HSPA+ coverage was extended to around 5. ItDevelopments secured a 3G licence in March 2003 and launched a commercial 3G service in selected cities in May 2005. Maxis operates its optical fibre network. Maxis registered a post-tax profit of MYR466mn for Q212. Its EBITDA margin was a very strong 49.• Consolidated revenue grew by 2.000 sites in total and deployment of 3G using the 900MHz band was continued to extend indoor coverage and increase data transfer rates. Malaysia Telecommunications Report Q1 2013Operational Maxis launched its GSM network in 1995. it has been deploying upgrades based on HSPA+ technologies aimed at securing high-value mobile broadband customers.216bn.9% of mobile service revenue in Q212. The prepaid net additions were the highest in five quarters and were due to the launch of Maxiss New Hotlink Plan in March 2012.© Business Monitor International Page 83 83.000 in Q211. the operator announced new definitions for its mobile subscriber as its postpaid subscriber base excluding subscribers barred for under 50 days prior to reporting date. In March 2011.2% y-o-y. Maxis Communications announced in May 2010 that it was conducting trials of its 4G LTE technology and IPTV services in Klang Valley in Malaysia. Non-voice revenues now account for almost 46% of mobile service revenues. It received the spectrum in Q411. In September 2006. Ericsson has been Maxis principal network equipment supplier. Mobile broadband revenue totalled MYR137mn in Q212.696mn mobile subscribers as of Q212. This was led by mobile internet growth as the existing content range driving demand for data usage.4% to MYR942mn.756mn in Q211. while prepaid subscribers excludes subscribers not contributing any revenue for under 50 days prior to reporting date.9%. Together with Western Union. down from 625.800MHz bands. up by 13. Non-voice service revenues accounted for 44.7% y-o-y to MYR2. The number of mobile broadband subscribers totalled 588. within Peninsular Malaysia with part of the fibre infrastructure delivered through collaborative sharing and swapping.000 Western Union agents across 200 countries. using the 900MHz and 1. There were 12. In its Q411 results.017bn had been invested in 2011. Both Maxis and REDtone are looking to launch their 4G LTE . growing by 6. Maxis launched its mobile money transfer service in Malaysia in late 2010.

527bn ■ Net profit (Q112): MYR573mn ■ Net profit (Q212): MYR466mnOperational Data ■ No.73% of Telekom Malaysia. technology and knowledge in packaging integrated products. despite aggressive launch of promotions. Panasonic.maxis. occupying over one-third of the market.800bn ■ Revenues (Q112): MYR2. Kuala Lumpur City Centre Kuala Lumpur 50088. Malaysia Telecommunications Report Q1 2013Financial Data ■ Revenues (2010): MYR8.focusing on . Other investors include the Employees Provident Fund Board (11.645mn ■ No. of wireless broadband subscribers (Q212):© Business Monitor International Page 85 85.229bn ■ Revenues (Q212): MYR2. Khazanah Nasional also owns 28.400 ■ Year established: 1995Company Details ■ Maxis Communications ■ Level 18. As of September 30 2012. Axiata Group was 39.000 ■ No.735mn ■ No. with other regions to follow closely thereafter.000 ■ No.000 ■ No. focused on three core areas: ■ Customer focus and differentiation .416bn ■ EBITDA (2011): MYR4.295bn ■ Net profit (2011): MYR2. Maxis and Atrixx have agreed to collaborate and pool together their resources.47%).423bn ■ EBITDA (Q112): MYR1.08% owned by Khazanah Nasional Berhad. aiding growth of its postpaid base. of wireless broadband subscribers (Q112): 613. services and distribution which will effectively reduce cost for customers. of employees (2011): 3. of wireless broadband subscribers (2010): Maxis and Atrixx International signed a Collaborative Arrangement Agreement for a strategic partnership between the three companies to provide cost savings benefits on telephone charges and office communication when using a Panasonic PBX. of mobile subscribers (2011. Malaysia Telecommunications Report Q1 2013Celcom SWOT AnalysisStrengths ■ Second-ranked mobile operator. Panasonic Malaysia.954mn ■ No.216bn ■ EBITDA (2010): MYR4.696mn ■ No.Strategy In June 2011.Company Overview Celcom Axiata is the mobile network operator that was spun off from incumbent Telekom Malaysia as part of a multinational business called Axiata Group.Threats ■ Maturing market means greater price competition to maintain market share.000 ■ No. Menara Maxis. Under the agreement. ■ Clear market segmentation strategy has enabled Celcom to report strong rises in revenue.133bn ■ Net profit (2010): MYR2. of mobile subscribers (Q112): 12. ■ Mobile broadband subscriptions gaining momentum with a subscriber base of 994.Weaknesses ■ So far unable to overtake Maxis Communications mobile market position.Opportunities ■ 3G deployments continue to be a focal point for the operator. of wireless broadband subscribers (2011): 668. of mobile subscribers (2010): 13. Celcom Axiata announced a number of new executives and restructured its operations. Maxis GSM Line and Atrixx GSM Gateway.• • services in early 2013 in selected areas of the Klang Valley.© Business Monitor International Page 84 84. This has led to significant falls in both prepaid and postpaid ARPU.869bn ■ Revenues (2011): MYR8. The company also outlined a new strategic imperative. despite increases in minutes of use.69%) and Amanah Raya Nominees (6. of mobile subscribers (Q212): 12. ■ Postpaid ARPUs continue to fall due to friends and family based tariffs. New Definition): 12.000 at the end of June 2012. Malaysia Tel: +60 (3) 2330 7000 ■ Web: www. In August 2012.

year period.© Business Monitor International Page 87 87. without the need to reload. Celcoms Chief Executive Officer. XPAXs appeal is in allowing customers. Normalised EBITDA amounted to MYR866mn in Q212. with services initially available in the Klang Valley. The company has not disclosed 3G subscriber numbers in recent years. meanwhile.creating an agile organisation that will address the fast-changing industry and new business requirements especially in relation to mobile data and online services. while at the same time defending and resuscitating voice usage. In addition. as is the case in the majority of tariffs. to reach 30% of the total customer base by the end of 2011.5% y-o-y to reach MYR1. of which the most recent being XPAX. a new customer experience across all touch points and a comprehensive interface in consumer lifecycle management.Financial At the time of writing. Its 3G network covered more than 85% of the population of Malaysia at the end of Q112. Johor Baru. ■ Organisational process and development . Among the new positions created were those of Chief of Operations for Advanced profit. up by around 7% y-o-y.Operational Celcom is placing a greater emphasis on data. or MYR20 per week. Winning the right to deploy 3G services in 2002. The hope for Celcom is to achieve a 25% increase in its customer base. Through its partnership deal with Vodafone. Celcom awarded a . Mobile broadband services continue to drive growth: subscriber numbers grew by 10. increased by around 16% y-o-y to MY570mn.© Business Monitor International Page 86 86. the youth segment. As of Q112. Malaysia Telecommunications Report Q1 2013 ■ Human capital and talent management .919bn. Celcom launched its services in May 2005. who top up to MYR50.4% y-o-y to 994. Penang. a Chief Sales & Commercial Officer and a new Chief Marketing Officer. Celcom worked in close partnership with a number of multinational vendors. aimed at the same target audience as its UOX and SOX tariffs. in line with theDevelopments evolution of technologies and the shift of user behaviour. Malaysia Telecommunications Report Q1 2013 Celcom planned to increase its smartphone user base by at least half.0% y-o-y to MYR225mn. to keep their numbers active for a two. Adlan Ahmad Tajudin. its existing smartphone user base was reported to make up about 20% of its total mobile subscriber base. A roaming agreement with 3G operator/2G MVNO U Mobile was extended for a second three-year period beginning in July 2010. and. both access and content. as it seeks to overtake market leader Maxis Communications by 2012. new products and services beyond mobile voice.000 and mobile broadband revenues grew by around 21. Celcoms revenues grew by 8. Post. including Ericsson of Sweden and Huawei Technologies of China. Celcom offers three prepaid tariffs. Malacca and the Kulim Hi-Tech Park. was appointed to the board of the Axiata Group. A further benefit sees unlimited mobile broadband surfing charged at a daily rate of MYR6. Celcom has also launched services such as the Vodafone Mobile Connect 3G datacard and advanced roaming services across Vodafone networks worldwide. the most recent data available for analysis related to the quarterPerformance ended June 2012.• • more sophisticated consumer segment management.developing a credible cadre of Malaysian business leaders by broadening and developing internal employees and bringing in new talent as required.

of Subscribers (Q212): 12. In June 2011. with a target of 500. Huawei Technologies and Ericsson were awarded a contract to upgrade the network of Celcom. Celcom has entered into an infrastructure sharing agreement with DiGi. Huawei will work on the roll-out in the northern and southern regions as well as part of the central and eastern regions. The operator was expected to provide a mobile money service. Celcom signed an MVNO deal with XOX Com in September 2008 aimed at the Chinese community in Malaysia.192mn ■ No. Under the terms of the agreement. This was Celcoms fourth MVNO. in part aided by mobile number portability.952mn ■ No. The deal with Merchantrade focuses on foreign Indian workers. Malaysia Telecommunications Report Q1 2013 ■ Revenues (Q212):© Business Monitor International Page 89 89.908bn© Business Monitor International Page 88 88. No financial details were provided. after Merchantrade. Malaysia Tel: +60 (3) 262 3900 ■ Fax: +60 (3) 262 4900 ■ Web: www. retail messaging. and Sabah and Sarawak will be rolled out by Ericsson. of Subscribers (2011): 11.• • contract to NSN in June 2008 to expand its 3G radio and packet core network in Malaysia. The two operators will share telecoms base stations to reduce overall operating costs and end. of Subscribers (2010): 11.000 subscribers in the first three years of operation ended 2012. On March 2011. ■ Strong growth in its postpaid base. Malaysia Telecommunications Report Q1 2013DiGi Telecommunications SWOT AnalysisStrengths ■ Major international backer (Telenor. while REDtone is targeting the Chinese corporate market.031mn • Year Established: 1988Company Details ■ Celcom ■ 20/F. NSN was to upgrade Celcoms network using the vendors high broadband access network. Celcom and NQ Mobile revealed plans to provide easy access to the most comprehensive parental controls and management toolset to 12mn Celcom 161B Jalan Ampang Kuala Lumpur 50450. ■ Data . Menara Celcom. Celcom has been trialling LTE technology and is fiberising its Node-B and base stations in Sabah and Sarawak to enable speeds of up to 100Mbps. while most of the eastern region. which will triple network capacity.919bn ■ Net Profit (2010): MYR1.230bn ■ Revenues (Q112): MYR1.Financial Data ■ Annual Revenues (2010): MYR6. monthly SMS campaigns.778bn ■ Net Profit (2011): MYR1. mobile backing and mobile commerce among others.850bn ■ Annual Revenues (2011): MYR7. based on HSPA technology.user utility bills. broadening its broadband footprint across Malaysia. said to be a complete parental controls suite for child safety and monitoring. as increasing numbers migrate from prepaid to postpaid services. airtime top-up.980mn ■ No. website banners and other promotions. The agreement aims to promote the adoption of NQ Mobiles NQ Family Guardian solution. of Subscribers (Q112): 11. mobile payments. REDtone and Tune Talk all sought to sign MVNO agreements with Celcom earlier on. Celcom and Telekom Malaysia agreed that the incumbent would provide high-speed broadband (HSBB) services to Celcom.celcom.870bn ■ Net Profit (Q112): MYR539mn ■ Net Profit (Q212): MYR570mnOperational Data ■ No. In November 2012. after it placed an order with Sybase 365 in June 2009. This provided local and international money transfers. The operator will promote the NQ Family Guardian solution through direct marketing. with a 49% stake). Meanwhile.

like Celcom. up from MYR292mn in Q311.Strategy In order for DiGi to compete in Malaysias intensely competitive mobile market. Data accounted for 31. ■ Launch of mobile TV services could boost mobile data revenues. DiGi entered into a three-year domestic roaming agreement withDevelopments local MVNO U Mobile.0% y-o-y to MYR715mn. as the operator targets greater 3G network coverage. ■ GSM/EDGE network expansion likely to yield marked increase in subscriber numbers in rural areas. The network access enables U Mobile to offer voice. EBITDA grew by 1. Overall. DiGis emphasis remains on market segmentation in the immediate term. SMS and data services to its subscribers throughout the country and gives DiGi access to a 3G network in the Klang Valley region.3% of service revenues in Q312 (versus 29. the key focus was on 3G. However. is expected to see DiGi through the tough market conditions during 2011/12. DiGi. compared with rivals Celcom and Maxis who are building up a strong regional presence. complementing its 3G platform.66% and the remainder of the company is publicly listed. Some MYR150mn over the three-year period ended 2012 will go towards HSPA services in particular. clearly feeling that there is still the potential for further growth in its domestic market. ■ Dependence on domestic market at a time of reduced growth in Malaysia. both have launched successful 3G networks. With its launch in 1995. data revenue was up from MYR424mn in Q311 to MYR460mn in Q312.Opportunities ■ Around MYR150mn to be spent on 3G networks over a three-year period. DiGi has confirmed that it has no plans to expand abroad. it has since been overhauled by Celcom and Maxis and now lags© Business Monitor International Page 90 90. its wholly owned DiGi Telecommunications subsidiary became the first mobile operator in Malaysia to fully operate a digital cellular network. Operating revenue grew by 4.4% in Q311). Unlike its competitors. During 2011. This enabled DiGi to sustain an EBITDA margin of 45. combined with an eye towards cost cutting. Net profit for the quarter amounted to MYR315mn. which should aid further growth of the postpaid base. Under the terms of the agreement. it must improve both revenue and usage per user. This. with both operators tackling the youth market. The operator aims to sustain growth by lowering 3G tariffs.Threats ■ Strong competition from market leaders Maxis and Celcom.1% y-o-y to MYR1. DiGi was the only one of Malaysias principal telecoms operatorsPerformance to have published its financial and operating results for the quarter ended September 2012.Company Overview As of March 15 2012. ■ High proportion of prepaid users causes some concern as competitive market pressures rise. solely driven by improvements in data revenue.• revenues increasingly accounting for a larger percentage of overall revenues. Meanwhile.1%. ■ Blended ARPU levels lowest in marketplace and have fallen due to strong prepaid base.Operational In December 2009.Weaknesses ■ Despite good performance over the year. U Mobile has access to DiGi Tels GSM network.Com Bhd 49% owned by Norways Telenor. and mobile internet will taking precedence over the next two years.Financial At the time of writing. Service revenues grew by 2. still lags well behind rival operators in a market that is witnessing a slowdown in growth. while Malaysia Employees Provident Fund owns a further 15.583bn. Malaysia Telecommunications Report Q1 2013 well behind its rivals.2%. Keen .

NSN provided maintenance and further support services to improve . The regulator also expects to make 2. TIME agreed to sell its 3G concession and frequencies for 27. Early in 2011.800MHz spectrum bands in the near future. each costing MYR58 (US$17. with the aim of raising coverage from 30% to 50%. Further. once the company secures additional spectrum. The company also partnered with TTdotCom to utilise capacity on the broadband operators fibre-optic network. Postpaid customers. The regulator also plans to begin refarming the 900/1.20) per month. much less than its rivals. The company expects to see© Business Monitor International Page 91 91. In April 2011.2bn combined over 10 years. Additional spectrum would enable DiGi to offer 4G LTE services. offering unlimited mobile internet access for just MYR5 (US$1. DiGi has promised to share its telecoms base stations with TIME for the purposes of TIMEs proposed broadband WiMAX network. In November 2007. DiGi is working to expand its network and spectrum capacity with an eye to launching 4G services using LTE technology. equivalent to a 3. more than MYR400mn (US$118mn) is to be spent on the development of high-speed mobile services. Cash savings from the network collaboration with Celcom Axiata are estimated to be in the range of MYR2. so that it will spend MYR10-15mn a year with the operator for a three-year period. the operators Turbo 3G scheme provides an Internet Unlimited Max 5 service to prepaid customers.50) per day. Initially. Under the terms of the agreement. DiGi submitted a detailed business plan with respect to its spectrum requirements.5% stake in the company. DiGi contracted ZTE of China to build for it a unified mobile network (2G/3G/4G) beginning in Q311. The operator had expanded its 3G service to Labuan as of August 2011. but the company had launched in Taiping. It would like to increase its 900MHz spectrum holding as it owns just 4MHz in this band at present. In 2010. it will be able to increase the transmission rate by a factor of four. DiGi teamed up with Celcom Axiata in an extensive network and infrastructure-sharing exercise. covering 65% of the population in that area. Kamunting and Kampar in Perak and Miri in Sarawak by the end of 2010. Malaysia Telecommunications Report Q1 2013 incremental cost savings as early as 2012. Over a three-year period starting in 2010.6GHz spectrum available and DiGi has also expressed interest in obtaining spectrum in this band. meanwhile. DiGi announced plans in February 2010 to invest (MYR100mn) US$29mn in extending the reach of its Turbo 3G HSPA platform and mobile internet services in the states of Perak and Sarawak over the next three years. are offered the Internet Unlimited Monthly 58 plan and the BlackBerry Unlimited plan. As part of the deal. DiGi also agreed to review its domestic and international infrastructure agreements with TIME. services were offered in Ipoh and Kuching only. This largely relates to the recently launched Turbo 3G (mobile internet) service.5mn new DiGi shares. To encourage take-up. DiGi possesses a 3G licence following the transfer of TIME dotComs 3G licence to the operator. gradually ramping up to an average annual saving of MYR150200mn combined after 2015. Nokia Siemens Networks (NSN) was awarded a GSM network expansion contract by DiGi. The new network will be capable of delivering transmission rates of up to 42Mbps using HSPA technology.• to enhance and expand its mobile broadband network. The MCMC approved the move in January 2008.

permitting data transfer speeds of up to 42Mbps.334Alcatel-Lucent 15.Lucent with net sales of EUR14.765bn ■ EBITDA (Q112): MYR737mn ■ EBITDA (Q212): MYR752mn ■ EBITDA (Q312): MYR715mn ■ Net Profit (2010): MYR1.9%). was signed with Baraka Telecom. of Employees: 1. Huawei Technologies and Alcatel.580bn ■ Revenues (Q312): MYR1.118ZTE 13.661bn.569bn ■ Revenues (Q212): onSeptember 26 2012.• • network efficiency and enhance quality of service over a three-year period in the Klang Valley as of November 2009.178bn ■ Net Profit (2011): MYR1. Retrieved from www.936mn ■ No. However.327 19. the partnership was cancelled as Baraka Telecom decided to quit the MVNO business. in May© Business Monitor International Page 93 93. CNY/US$ = 0.583bn ■ EBITDA (2010): MYR2. based on 2006 pro forma revenues of EUR17.971 34.884Nokia Siemens Networks 16. of Subscribers (2011): 9. Under the terms of the deal. Subang Hi-Tech Industrial Park Shah Alam. 3G and 4G technology.29039.944 32.1bn.0bn (after converting the various reported revenues to US dollars). Source: BMI. an MVNO agreement. of Subscribers (Q312): 10. with NSN commencing operations on April 1 2007.254bn ■ Net Profit (Q112): MYR321mn ■ Net Profit (Q212): MYR324mn ■ Net Profit (Q312): MYR315mnOperational Data ■ No. utilising 2G. NSN fell to fourth position behind Ericsson. Malaysia Telecommunications Report Q1 2013Regional OverviewNokia Siemens Networks Nokia Siemens Networks (NSN).229mn ■ No.964bn ■ Revenues (Q112): MYR1.406bn ■ Revenues (2011): MYR5.15231. jointly owned by Nokia (50.digi. Baraka provided voice and data services over DiGis network.338 18. Table: Vendor Revenues (US$mn) 2010 2011Ericsson 30. Selangor 40000. of Subscribers (2010): 8. of Subscribers (Q212): 10. Expansion with LTE technology will occur when DiGi obtains the relevant spectrum. vendors While NSNs 2011 net sales increased by 11% y-o-y from EUR12.765mn ■ No.xe. The joint venture was first announced in mid-2006 after both parent companies decided to merge their mobile and fixed-phone network equipment businesses. the firm incurred an operating loss of EUR300mn after accounting for cost of sales and expenses such as . DiGis first.401bn ■ EBITDA (2011): MYR2.920mn ■ No. NSN held a top three position in the industry.Financial Performance At inception. software and professional services globally. The initial deal was valid for a period of three years.400 ■ Year Established: 1994Company Details ■ DiGi Telecommunications ■ Lot 30 Jalan Delima 1/3. is one of the major vendors for telecommunications infrastructure hardware. SEK/US$ = 0. In April 2011. Malaysia Telecommunications Report Q1 2013 In May 2009. Malaysia Tel: +60 (3) 5721 1800 ■ Fax: +60 (3) 5721 1857 ■ Web: www. of Subscribers (Q112): 9.1%) and Siemens (49. but had the option of being renewed for a further two years subject to the two companies agreeing to certain terms and conditions.304mn ■ No.Financial Data ■ Revenues (2010): MYR5. ZTE of China was awarded a contract to build a unified communications network.© Business Monitor International Page 92 92. By 2011. Work began in Q311 and ZTE is focusing on the deployment of HSPA technology.676Converted based on EUR/US$ = 1.15855.561Huawei Technologies 28.

Asia Pacific (including China) overtook Europe as the main revenue contributor in 2011 after accounting for 37.6% of its total. NSN expects cumulative restructuring charges of about EUR1.© Business Monitor International Page 94 94.077 47 283 300 583Latin America 1.481 1. The two factors combine to generate a resilient domestic demand.• • research and development. overall general and administrative expenses and a reduction of suppliers.947 3. an equivalent of 31.343 6. Pakistan.451 1.469bn in 2011. representing 36.915 3. Meanwhile. Cost savings will largely come from organisational streamlining.465 1 209 340 549Asia Pacific 2.343bn due to the firms strategy of focusing on mobile broadband.290Source: Nokia© Business Monitor International Page 95 95. Table: Net Sales By Geography (EURmn) 2010 2011 % chg y-o-y Q112 Q212 H112Europe 4. Thailand.920Middle East & Africa 1.905North America 735 1.Geographical Breakdown NSN has been traditionally reliant on the European region as seen from its revenue breakdown in 2010. and it forecast the amount to be EUR350mn in 2012. NSNs net sales declined by 8% y-o-y to EUR3. Malaysia Telecommunications Report Q1 2013Restructuring Efforts Although NSN saw its operating loss narrowed from EUR686mn in 2010. and the former could eventually overtake Europe by end-2012.1% in Q112 to 0. Consequently. customer experience management and services. the widespread economic slowdown and concerns about the sovereign debt crisis resulted in its clients scaling back on investment.791 21 378 381 759Total 12. alternative countries such as India. Indonesia. although the company will also target areas such as real estate.391 -4 270 304 574Greater China 1. The vendor generated EUR4.661 14. which is less vulnerable to external headwinds from Europe and the US.848 32 877 1.028 1.313bn. By the end of Q212. Non-IFRS operating margin declined from 1. In Q212. EUR400mn in 2013 and EUR200mn in 2014.628 4. Malaysia Telecommunications Report Q1 2013Asia Pacific Is The Place To Be Asia Pacific To Continue The shift towards Asia Pacific is a testament of the Outperforming regions growing importance for network Cisco VNI Global Mobile Data Traffic infrastructure vendors in light of the favourable Forecast By Region (TB per month) demographics and growing affluence. While Chinas market potential justifies it being reported separately. up from EUR4. There is overwhelming evidence highlighting the Source: Cisco growth opportunities in . as well as lower infrastructure equipment sales and slower operator investment environment in some markets. NSN continues to target a reduction of its non-IFRS annualised operating expenses and production overseas by EUR1bn end-2013 compared with end-2011.2bn before end-2012. the vendor had cumulative restructuring related cash outflow of approximately EUR250mn.451 1.628bn in Europe.8% of NSNs total or EUR5. European revenue declined by 3% y-o-y to EUR4. which was partially offset by lower operating expenses.041 11 2.8% in Q212 in light of lower net sales. Vietnam and the Philippines are not to be ignored. the vendor initiated a new strategy and restructuring programme on November 23 2011. NSN aims to end-2012 with higher net cash than end2011.8% of the total.469 -3 930 990 1. However.366bn the previous year. Asia Pacific (excluding China)s contribution was almost at parity with Europe in H112.

Although NSN demonstrated the worlds first LTE radio access solution in 2006. Chinese vendors Huawei Technologies and ZTE are strong contenders in the TD-LTE space due to their early involvement in the Chinese technology as well as cost competitiveness. which has created the worlds first intelligent. refarming the 900MHz GSM frequency band. Malaysia Telecommunications Report Q1 2013 contracts with seven of the top eight ranked operators by 2010 global revenue. In August 2012. up from 1. selforganising network. The LTE variant has been adopted by India and China (partially) where operators and consumers are highly price sensitive. LTE has started to gain traction with strong growth in markets such as South Korea and Japan (for example. Table: NSN Selected Asia ActivitiesDate Country Details Optus selected Nokia Siemens Networks as a partner for its key network initiatives. NSN reported that it estimates a 54% increase in Indias mobile data traffic (2G and 3G) in H112. Nokia Siemens Networks deployed a new telecoms operating system for KDDI. NSN has the additional challenge of balancing its restructuring programme and investing heavily to keep pace with its rivals. FDD-LTE network.• Asia Pacific. 2G and 3G mobile data connections will still be the norm in the near-tomedium term due to the affordability of products and services. According to the report. With the competition also focusing on Asia Pacific. and we expect the adoption of next generation 4G technologies to accelerate in light of the growing number of compatible smartphones. countries such as Singapore and Australia are ramping up their network coverage.663mn LTE subscribers in South Korea at the end of July 2012. Meanwhile. there were 8. which is compatible with a broad range of LTE frequencies. In developed countries. Nokia Siemens Networks is the sole LTE coreJul-12 Australia provider for Optus.191mn in December 2011). The estimate. The GTI is an industry body that advocates and promotes 4G mobile broadbandJun-12 na using TD-LTE technology. Nokia Siemens Networks will . Indian Railways selected Nokia Siemens Networks as its partner for equipping the KolkataMay-12 India metro line with Global System for Mobile Communications . and providing infrastructure and services for LTE roll-out in Sydney and Perth. is in line with BMIs growth outlook for Indias mobile data market following the introduction of 3G services in late 2010. Ericsson is one of the front runners as it has signed LTE© Business Monitor International Page 96 96. The agreement includes modernisation of the mobile network. a first-time 3G user consumes almost 400MB of data every month compared to about 100MB consumption over 2G. irrespective of the network they are using. In developing markets. which is based on NSNs MBit Index. We expect mobile operators to continue investing in these technologies as the growing data demand weighs on their networks. the company faces strong competition in the rapidly growing market. Nokia Siemens Networks became a member of the Global TD-LTE Initiative (GTI) Partner Forum. Softbank Mobile selected Nokia Siemens Networks to supply. The vendor also claims its 85 LTE networks in 36 countries cover 305mn people. as part of this agreement.Railway (GSM-R) infrastructure. especially considering that launch of Apples new iPhone 5. In addition. Meanwhile. The approach automatically manages KDDIs 3G and 4G networks to ensure people receive a consistent voice and dataMay-12 Japan service. deploy and integrate its 4G.

Nokia Siemens Networks was one of the first companies to successfully demonstrate TD-LTE on 2. Nokia Siemens Networks will provide its 1. The company will also provide services including network integration and commissioning. Nokia Siemens Networks NetAct operations support system will enable monitoring. Gujarat.800MHz LTE radio equipment© Business Monitor International Page 97 97. Nokia Siemens Networks will also modernise StarHubs GSM network. and West Bengal. Telkomsel expects to provide improved service quality using Nokia Siemens Networks Customer Experience Management on Demand. management and optimisation of KTs LTE network. Nokia Siemens Networks will manage and maintain Bharti Airtels 3G and GSM networks as well as internet Wireless Access Network. Bharti Airtel selected Nokia Siemens Networks as its managed services partner in eight circles of the country . TOT selected Nokia Siemens Networks to upgrade its 3G network to HSPA+. Nokia Siemens Networks all-IP ready HSPA+ solution is based on the Dual Carrier HSDPA technology. Nokia Siemens Networks was implementing its Circuit Switched Fallback technology to enable CDMA and LTE technologies to work together in KDDIs network. As part of the contract. Under this five-year managed services contract. Maharashtra and Goa. helping the operator reduce power consumption generated byApr-12 Singapore network equipment by up to 50%. It will alsoApr-12 Japan provide optimised backhaul transport with its FlexiPacket Microwave platform. Telekomunikasi Indonesia now benefits from bandwidth of 40Gbps per channel on its JaSuKa undersea cable between Dumai andDec-11 Indonesia Dangas. The deployment will allow KDDI to use its existing CDMA network to continue delivering high-quality voiceDec-11 Japan services while . The company will also deploy its Liquid Cores COTS ATCAbased Open Mobile Switching Server. theJan-12 India operators enterprise broadband service.ContinuedDate Country Details including its Flexi Multiradio Base Stations. A 354km undersea link in Indonesia. The new portal will provide one single entry point to view real-time experience metrics for every customer on Telkomsels network. along with continuous reporting of customer insights that help it to improve its customers experience andFeb-12 Indonesia generate new revenue streams. Bharti Airtel selected Nokia Siemens Networks to build and operate its TD-LTE network in Maharashtra. Mumbai. Flexi Multiradio Base Station and the 3G Radio Network Multicontroller. while reusing existing assets. which together with the Flexi Multiradio Base Station enables a smooth transition toApr-12 Thailand LTE.• deploy its Flexi Multiradio Base Station for both Softbank Mobiles FDD-LTE network and HSPA+ network expansion. KT selected Nokia Siemens Networks as one of its LTE mobile broadband infrastructure andJan-12 Japan services vendors. This will allow Telkomsel to have a unified view of customer data. Orissa.3GHz BWA spectrum in India using commercial hardware at itsFeb-12 India Bengaluru R&D facility in October 2010. Kolkata. critical to the countrys international connectivity. has been upgraded by Nokia Siemens Networks.Bihar and Jharkhand. Madhya Pradesh and Chhattisgarh. Malaysia Telecommunications Report Q1 2013 NSN Selected Asia Activities . StarHub selected Nokia Siemens Networks as its LTE mobile broadband infrastructure and services vendor.

Guangdong and Zhejiang. Passengers will be able to connect via Wi-Fi or directly to the network if they have a compatible WiMAX device. Celcom Axiata awarded a contract to Nokia Siemens Networks to boost its network as part of its ongoing network expansion and upgrade in Klang Valley. Under the contract. Nokia Siemens Networks successfully ran live TD-LTE trial networks in Hangzhou and Xiamen for China Mobile.ContinuedDate Country Details With the approval of the Ministry of Industry and Information Technology. Nokia Siemens Networks will provide HSPA+ at up to 42Mbps to cater to the explosiveJun-11 Malaysia smartphone growth in Malaysia. China. Nokia Siemens Networks would deploy its single radio access network including its Flexi Multiradio Base Station and NetAct management system to provide consolidated configuration.800MHz band.© Business Monitor International Page 98 98. Shanghai Unicom awarded a five-year contract for network maintenance services to Nokia Siemens Networks. dense wavelength division multiplexing optical network for China Unicom. Under the contract. Nokia Siemens Networks will offer field maintenance services.800MHz frequency band. It will be the first time that WiMAX has been used to support broadband access for passengers onSep-11 Taiwan a high-speed rail service. transmission and fixed-line networks ofMay-11 China China Unicoms Shanghai branch. Malaysia Telecommunications Report Q1 2013 NSN Selected Asia Activities . monitoringMay-11 South Korea and network optimisation. Anhui. The trial is based on FDD-LTE technology and showcasesOct11 Indonesia Indosats network readiness to refarm the existing 1. Indosat and Nokia Siemens Networks successfully conducted the countrys first LTE field trial in the 1. Hubei. Nokia Siemens Networks announced that it was deploying a 5. As part of the contract. The technology paves the way for upgrades to 100Gbps across seven provinces: Chongqing. 40Gbps per channel. SK Telecom selected Nokia Siemens Networks 100G-ready optical network equipment.Jul-11 China Jiangsu. The devices allow consumers to enjoy broadband access at up to 102MbpsSep-11 China downlink and 51Mbps uplink to support data-intensive services on TD-LTE networks. Nokia Siemens Networks will deliver its hiT 7300 dense wavelengthJun-11 South Korea division multiplexing platform to SK Telecom.000km. Nokia Siemens Networks became one of the first telecoms equipment vendors to participate in the large-Mar-11 China scale TDLTE trial with China Mobile. LG Uplus selected Nokia Siemens Networks to roll out its LTE network. Protelindo renewed its managed services contract with Nokia Siemens Networks for maintaining and operating more than 5. Fujian. Nokia Siemens Networks launched three new 4G devices at PT Expo Comm in Beijing. Trial users were able to enjoy peak download and upload speeds of up to 100Mbps along with uninterrupted access to applications such as video streamingJul-11 China and online HD video conferencing. covering the base stations.• maximising the efficiency of its newly deployed LTE network. VeeTIME worked with the Taiwanese Government to offer onboard connectivity enabled by its existing WiMAX system provided by Nokia Siemens Networks. Optus selected Nokia Siemens Networks as its sole packet core vendor in a multimillion dollar agreement to address growing bandwidth requirements and offer new data servicesApr-11 Australia along with improving time to market.000 .

53 8.092 2.828 2.04 1.415 26.40 4. The tables show key datapoints from all of these charts.Source: Nokia Siemens Networks© Business Monitor International Page 99 99.93 8.62 11.73855-59 years 455 593 646 887 1.88 10.53 6. The centre now remotely managesJan-11 India more than 87.7710-14 years 11.86 6. Nokia Siemens Networks announced the relocation and expansion of its Global Network Solutions Centre (GNSC) to a new site in Chennai.026 2.09 5.795 1.44 7.721 23.03 2.7850-54 years 3.97 7.926 2.115 2.155 1.486 1.73 4.15 7.705 2.96 9.83 6.947 2. UN.47 1.536 2.47 1.59 8.5435-39 years 6.16 10.700 1.57 4.190 1.251 1.3545-49 years 3.92 2.92 9.12 1.9535-9 years 2.221 1.09445-49 years 679 930 1.399 1.727 1.25 8.99 5.106 2.50 2.55 5.96 8.58 5.86 7.51 6.20 3.94 4.56 1.32 2.489 2.33440-44 years 926 1.779 1.81 6.689 1.23 9.07 5.08 5. 14 times the number when it opened four years ago.285 2.67 7.460 2.21 9.825 1. 1990-2020 (% of total) .23 8.721 2.649 1.90850-54 years 617 670 921 1.84525-29 years 1.935 2.401 29.0670-74 years 1.Continued 1990 1995 2000 2005 2010 2012f 2015f 2020f25-29 years 9.00 9.942 2.13 11.87 1.856 2.05 9.76 3.33465-69 years 258 322 366 489 545 617 764 1.24 3. India.924 2.0465-69 years 1.31 9.95020-24 years 1.63© Business Monitor International Page 101 101.209 20.54 11.315 2.31 5. Malaysia Telecommunications Report Q1 2013Demographic ForecastDemographic Forecast Demographic analysis is a key pillar of BMIs macroeconomic and industry forecasting model.802 2.17 1.955-9 years 12.84 9.26 6.62 7. Not only is the total population of a country a key variable in consumer demand.05 8.48735-39 years 1.0375+ years 1.55 10.097 1.43 8.62 6.82415-19 years 1.652 2.208 1.98 9.35 2.341 2.2755-59 years 2.824 2.839 2.746 1.03 2.0840-44 years 5.000 base station sites.467 1.26 8. 1990-2020 (% of total) 1990 1995 2000 2005 2010 2012f 2015f 2020f0-4 years 13.039 2.11 7.22 6.27 4.953 2.9420-24 years 9.49 5.195 1.65660-64 years 370 420 549 605 836 939 1.26 6.206 2.440 1.948 2.444 1.38 9.897 2.614 2.19 8.82 6.411 1.01070-74 years 190 210 261 306 417 432 473 67175+ years 206 235 267 327 392 450 529 663 Table: Malaysias Population By Age Group. Table: Malaysias Population By Age Group. Malaysia Telecommunications Report Q1 2013 Malaysias Population By Age Group. the change in the structure of the population between 2011 and 2050 and the total population between 1990 and 2050.14 .55 9.54 5.343 2. Malaysia Telecommunications Report Q1 2013 The accompanying charts detail Malaysias population pyramid for 2011.469 2.94 3. Source: World Bank.670 1.39 3.840 2. as well as life expectancy. withMar-11 Indonesia the possibility of yearly extensions.34 6.87 11.74 5.830 2.708 1.52 7.01 1.86 2.17 8.9530-34 years 7.612 2.62330-34 years 1.21 5.616 2.908 2.24 8.56 1.9860-4 years 2.934 2.03 10.80 11.322 30.43 12.341 2.445 2.791 1.000 2.25 8.100 28.44 7.755 1.759 1. but an understanding of the demographic profile is key to understanding issues ranging from future population trends to productivity growth and government spending requirements.13 1.89 9.714 32.487 2.• • • base station towers for a multi-year period.5615-19 years 10.13 1. 1990-2020 (000) 1990 1995 2000 2005 2010 2012f 2015f 2020fTotal 18. in addition to important metrics including the dependency ratio and the urban/rural split.620 2.0260-64 years 2.51 9.89410-14 years 2.840 2.112 2.42 1. BMI© Business Monitor International Page 100 100.49 3.07 4.556 1.284 2.75 8.54 2.69 6.11 2.413 2.97 8.02 10.65 8.483 2.76 8.10 8.763 1.

136 10. total.305.0 32.470.355 1.557 14. % of total 3 59.431 19. as % of total working age population.429.3Urban population.572 18.4 27.8© Business Monitor International Page 103 103. 1990-2020 1990 1995 2000 2005 2010 2012 2015 2020Urban population.8 8. 1990-2020 1990 1995 2000 2005 2010 2012f 2015f 2020fDependent ratio.344f = BMI forecast.7 46. total. 000 4 10.7 23. 000 9.0 8.435 11. 000 6 6.Source: World Bank.2 44.3 38.• • 1.8 51.616 8.7 45. % of total working age 1 68.844. 7 65+.8 55. BMI© Business Monitor International Page 102 102. % of total working age population.Digital .6 17.798 12.6 62. 000 2 7.5 11.406 8.082.6 65. 000 8 655 767 894 1. Malaysia Telecommunications Report Q1 2013 Table: Malaysias Rural And Urban Population.4 26.9 9.9 63.4 66.4 25. % of total 49.6 74.1Dependent population.016Active population.5 21.3 76.2 7.087.613.328.636 8.72 2.7 6.671Pensionable population.7Rural population. 8 65+.1 23.186 20. 4 15-64.755 7. 2 0>15 plus 65+.8 14.1 6.612. % of total working age population.54 1.787.3 60. Malaysia Telecommunications Report Q1 2013GlossaryGlossary Table: Glossary Of Terms2G second generation GDP Gross Domestic Product NGN Next Generation Network GPR Global Packet Radio3G third generation S Service Mbps megabits per secondADS Global System for MobileL Asymmetric Digital Subscriber Line GSM Communications MHz megahertzARP HDS High-bit-rate DigitalU Average Revenue per User L Subscriber Line MNP Mobile Number Portability HSD High-Speed DownlinkASP Average Selling Price PA Packet Access MoU Memorandum of Understanding HPS High-Speed PacketBMI Business Monitor International A Access MOU Minutes of Use HSU High-Speed Uplink Packet MPLbn billion PA Access S Multiprotocol Label Switching HTM HyperText MarkupBTS Base Transceiver Stations L Language MSC Mobile Switching CentreCDM MVNA Code Division Multiple Access Hz Hertz O Mobile Virtual Network Operator Information And CommunicationCRM Customer Relationship Management ICT Technology na not availableD-AMP Digital-Advanced Mobile Phone OIBD Operating Income beforeS Service IDD International Direct Dialling A Depreciation and Amortization International Long-DLD Domestic Long-Distance ILD Distance POP Point of PresenceDMB Digital Multimedia Broadcasting IPO Initial Public Offering R&D research and developmentDSL Digital Subscriber Line IP Internet Protocol SaaS Software-asa-ServiceDSL Digital Subscriber Line AccessAM Multiplexer IPTV Internet Protocol TV SDSL Symmetric Digital Subscriber Line Integrated Services DigitalDSU Digital Subscriber Unit ISDN Networks SIM Subscriber Identity ModuleDTH Direct-To-Home ISP Internet Service Provider SMS Short Messaging ServiceDVB.7Rural population.1 19.1 57. 3 15-64. total. % of total working age 5 62.9 65.7Pensionable population.9 80.970Youth population.5 54.500 1.396 7. % of total 50.25 1.697 9. 000 9.718 16.529 9. 6 0>15. 5 0>15.0 42.372.5 50.6 7.1 6.668 8.971 10.280 21.8 7.411 8. as % of totalpopulation.528.7 7.6 58.38 1.631.123.9 53.TDMH Digital Video Broadcasting-Handheld IT Information Technology A Time Division Multiple Access TD-DVB.164 8.7 10.3 7.7 62.767 2.6Active population.1 52.01 Table: Malaysias Key Population Ratios.793.2 20.803 8.1 8.0 50.6 72. UN.7 39.0 66.1 6. 1 0>15 plus 65+.5 64.122 1.5Youth population. % of total workingage 7 6.0 59.0 67.015.

Telecommunications ratings na.Country risk long-term ratings nana = not applicable. Source: BMI Average Market Growth: Indicator takes into consideration the historical growth patterns of the fixed. ADSL versus WiMAX ■ Operator behaviour.Country risk short-term ratings na. and is unlikely to turn into a significant decline in the short term. Using historical data is often the most desirable method of analysis. Where markets have reached saturation they are not likely to expand as fast as those that are less developed. such as VoIP versus fixed-line. In most cases.• • • Video Broadcasting-Satellite International SCD Time Division-Synchronous CodeSH Handheld ITU Telecommunication Union MA Division Multiple Accesse/f estimate/forecast JV joint venture trn trillionEBIT Earnings Before Interest. Middle East & Africa km kilometres VoIP Voice over Internet ProtocolEV-DO Evolution-Data Optimised LANs Local Area Networks VLAN Virtual Local Area NetworkFDI Foreign Direct Investment LEC Local Exchange Carrier WAP Wireless Application Protocol W.Inflation -5%Telecommunications business environment ratings. UMT Universal MobileDA Depreciation and Amortization Kbps kilobits per second S Telecommunications System© Business Monitor International Page 104 104. Malaysia Telecommunications Report Q1 2013MethodologyMethodology Table: Key Indicators For Telecommunications Industry ForecastsEmerging markets WeightingAverage market growth 80%Subjective indicators. High growth may be more likely to be repeated in the near future. ■ Tracking growth. Subjective Indicators: Indicators look at a number of factors. For example. subscriber data is derived from individual operators and/or national regulators. Operators corporate strategies and investment behaviour may dictate changes in the telecommunications market. broadband and mobile markets. internet. Meanwhile.Inflation -5%Developed marketsAverage market growth 90%Subjective indicators. Japan and South Korea are both highly developed technophile markets where growth prospects are high in 3G. China and India both offer high growth in successfully emerging markets.Real GDP growth 25%. ■ Market maturity.Real GDP growth 15%. providing a basis from which to forecast. These types of markets often share similar telecoms markets.© Business Monitor International Page 106 106.CDMFTTB Fibre-ToThe-Building LTE Long-Term Evolution A Wideband CDMA WiBrFTTH FibreTo-The-Home M2M machine-to-machine o Wireless Broadband WiM Worldwide Interoperability forFTP File Transfer Protocol mn million AX Microwave AccessGbps gigabits per second MEA Middle East & Africa WLL Wireless Local LoopGPO MENN Gigabit Passive Optical Network A Middle East & North Africa WTO World Trade OrganizationSource: BMI© Business Monitor International Page 105 105. Malaysia Telecommunications Report Q1 2013 ■ Competition from alternative technologies. Malaysia Telecommunications Report Q1 2013 Glossary Of Terms Continued2G second generation GDP Gross Domestic Product NGN Next Generation NetworkEC European Commission KHz kilohertz VOD Video On DemandEMEA Europe. although there may be exceptions to this rule. Taxes.line. This is similarly the case for . such as: ■ Neighbouring/similar states.

we use BMIs proprietary Country Risk Ratings (CRR) in a nuanced manner to ensure that only the aspects most relevant to the Telecoms Industry are incorporated. of subscribers Denotes breadth of telecoms market.GDP per capita. For short-term (one-to-two year period) and long-term (three years and more) economic and political ratings. Ratings System: Conceptually. Overall.Country rewards2 A highly urbanised state facilitates network roll-out and implies higher wealth.ARPU Denotes depth of telecoms market.No. such as the broader economic/socio-demographic environment. and around 20 separate indicators/datasets. Denotes sector dynamism. ■ Country Risk Ratings. Finally. Proportion of population under 24 years old. where possible. Large markets score higher than smaller ones. US$ A proxy for wealth.• regulatory developments. Overall. Second. Third. The remaining weighting of real GDP represents the health of the economy. Scores based on annual average growth over our five-year forecast% y-o-y period and also take into account the penetration rate. The indicators are adjusted by BMIs independent benchmark ratings. we identify factors (in terms of current industry/country trends and forecast industry/country growth) that represent opportunities to would-be investors.Urban/rural split rural states score lower. Malaysia Telecommunications Report Q1 2013 Indicators: The following indicators have been used. First.. and involve our: ■ Telecommunications Business Environment Ratings. and also broader industry/state characteristics that may inhibit its development. comparative insight into the opportunities/risks for companies across the globe. States with young populations tend to be moreAge range attractive markets. the ratings system divides into two distinct areas: Rewards: evaluation of sectors size and growth potential in each state.. the rating uses three subjectively measured indicators. high inflation distorts investment confidence in the telecoms market. High-value markets score better than low-value ones. of operators competitiveness.RisksIndustry risks- ..© Business Monitor International Page 107 107. the system offers an industry-leading. Risks: evaluation of industry-specific dangers (regulatory and competitive issues) and those emanating from the states political/economic profile that call into question the likelihood of anticipated returns being realised over the assessed time period. Pre-dominantly.Subscriber growth. which have been accounted for in our integration of the Telecommunications Business Environment Ratings. and the inflationary weighting represents investment confidence. Subjective evaluation against BMI-defined criteria. we attempt. which look at a significantly higher number of indicators.Telecoms Business Environment Ratings Risk/Reward Ratings Methodology: BMIs approach in assessing the risk/reward balance for Telecoms Industry investors globally is fourfold. Evaluates market openness and. we identify country and industry-specific traits that pose or could pose operational risks to would-be investors. to identify objective indicators that may serve as proxies for issues/ trends to avoid subjectivity. Table: Ratings IndicatorsIndicator RationaleRewardsIndustry rewards1. High income states receive better scores than low income states.No. as well as. A more comprehensive assessment of the Risk/ Return trade-off for the industry (see Telecoms Business Environment Ratings below for greater explanation). For example. with overall score also affected by country size.

• Regulatory Subjective evaluation against BMI-defined criteria. From CRR.Legal framework key risk in some emerging markets.Country risks 60Source: BMI Sources: Sources used in telecoms reports include national ministries and media/telecoms regulatory bodies. The overall score for country structure is also affected by the power transmission networks national coverage. Denotes risk of additional illegal costs/possibility of opacity in tendering/business. Evaluates predictability of operatingindependence environment. where relevant. national and international industry organisations.Country risks. Evaluates the risk of a sharp change in the broad direction of government policy. of which . From CRR. the GSM Association and the International Telecommunication Union (ITU) and international and national news agencies. Denotes states vulnerability to externallyrisk induced economic shock. officially released company results and figures.1.Policy continuity From of investment can be a. it would be inappropriate to give all subcomponents equal weight.2.Industry risks 40 .© Business Monitor International Page 108 108. Source:BMI Weighting: Given the number of indicators/datasets used.Corruption operations affecting companies ability to compete. Overall market structure score also affected by telecoms sector tax rate and.Industry rewards 65 Country rewards 35Risks 30. such as the CTIA. Denotes strength of legal institutions in each state . the following weighting has been adopted.© Business Monitor International Page 109 • • • • • • • • • • • • • • • • • Connect on LinkedIn Follow us on Twitter Find us on Facebook Find us on Google+ Learn About Us About Careers Our Blog Press Contact us Help & Support Using SlideShare SlideShare 101 Terms of Use Privacy Policy Copyright & DMCA Community Guidelines .Short-term external Rating from BMIs Country Risk Ratings (CRR). %Rewards 70. Consequently. which tend to be the principal triggers of economic crises.. of which . broader security issues. Malaysia Telecommunications Report Q1 2013 Table: Weighting Of IndicatorsComponent Weighting.

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