Publication Overview

This report provides a comprehensive overview of trends and developments in Malaysia’s telecommunications market. The report analyses the Telecoms Infrastructure, mobile, fixed broadband, Digital Media and Digital Economy sectors. Subjects include:

• Market and industry analyses, trends and developments;
• Regional market comparisons
• Telecoms Maturity Index
• Data centres and smart Infrastructure;
• Major players, revenues, subscribers, ARPU;
• Broadband (FTTH, DSL);
• Internet of Things, 5G developments
• Mobile, broadband and mobile broadband forecasts to 2023-4.

Researcher:- Phil Harpur
Current publication date:- October 2019 (25th Edition)

Executive Summary

Malaysia makes strong progress in the IoT market

With its widespread application of modern technologies such as fibre optics, wireless transmission, digitalisation and satellite services, Malaysia has built one of the more advanced telecom networks in the developing world.

The penetration of fixed lines in Malaysia continues to fall as the mobile segment continues to expand and dominate the market, especially the mobile broadband segment. The fixed line market is predicted to gradually decline over the next five years to 2024 as mobile and mobile broadband penetration continue to increase.

The country’s telecom sector, whilst still expanding and developing, has undergone a period of consolidation with its telecom companies operating in an ever increasingly competitive and changing market. Substantial government participation in ICT development has also been a particular characteristic of the Malaysian market. It has strongly backed the roll-out of a national broadband network.

The Malaysian data centre market has seen strong recent growth which is predicted to continue over the next five years, growth has been strong from both from local and international providers. Local Malaysian telcos are also beginning to consolidate their data centre footprint, by leasing data centre space in third party data centres, a trend more evident in developed markets such as Singapore.

The Malaysian fixed broadband market remains underdeveloped. Telekom Malaysia’s fibre-based services on the High Speed Broadband (HSBB) network has seen progress in the fixed broadband market, however progression has been slow.

Telekom Malaysia is rolling roll out a last mile access network to homes and businesses utilising fibre-to-the-home (FTTH), Ethernet-to-the-home (ETTH) and VDSL2 technologies. The ten-year HSBB 2 project encompasses the deployment of additional access and core capacity covering state capitals and selected major towns throughout the country.

Growth in the fixed broadband subscriber market has been flat over the past five years due to a stagnant number of fixed lines and the growing dominance of mobile broadband. Over the next five years to 2024 slow growth is expected to continue.

The Malaysian government aims to launch its ‘National Fibre Connectivity Plan’ in 2019. The plan will develop broadband infrastructure to ensure more efficient spectrum allocation to achieve the targeted 30Mbps speed in rural and remote areas within five years.

Malaysia’s mobile market is relatively developed compared to other Asian markets but has experienced a slight decline in market penetration over the last four years due to an increasingly saturated market.

With its widespread application of modern technologies such as fibre optics, wireless transmission, digitalisation and satellite services, Malaysia has built one of the more advanced telecom networks in the developing world. The country has a national objective to see Malaysia ranked as a developed country by the year 2020.

Flat to very slow growth is predicted over the next five years to 2024 in the mobile subscriber market. It will be constrained from higher growth due to a saturated mobile subscriber market and strong local competition.

Progress has been reported on closing the urban/rural divide, with expanding mobile infrastructure in rural areas.

Malaysia has seen a rapid increase in mobile broadband penetration over the past seven years driven by strong growth of 4G mobile subscribers and high data caps. Strong but slowing growth is predicted over the next five years to 2024 as the market reaches a heightened state of maturity. The mobile broadband market will be driven by increasingly faster speeds offered by the mobile operators as they roll out their 4G and 5G networks and improve tariffs due to strong competition.

It is predicted that 5G will be used widely in Malaysia by 2022-2023. Mobile operators continue to carry out 5G trials as they work towards this date.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key Developments

• The penetration of fixed lines continues to fall as the mobile segment continues to expand and dominate the market.
• The fixed line market is predicted to gradually decline over the next five years to 2024.
• The Malaysian data centre market has seen strong recent growth.
• Slow growth in broadband penetration is predicted for the next five years to 2024.
• The Malaysia government aims to launch its ‘National Fibre Connectivity Plan’ in 2019.
• It is predicted that 5G will be used widely in Malaysia by 2022-2023.
• Malaysia has seen a rapid increase in mobile broadband penetration over the past six years.
• Assessment of the global impact of COVID-19 on the telecoms sector,

Key companies mentioned in this report:

Axiata, Maxis Communications, U Mobile; DiGi; Altel; Alcatel Lucent; ZTE, TMNet; Telekom Malaysia; Celcom Axiata; Green Packet/Packet One Networks (P1); REDtone; Asiaspace; YTL; Time DotCom, Fibrecomm.

Phil Harpur
October 2019