Publication Date: December 2023
Report Pages: 157
Analyst: Henry Lancaster
As part of a diverse range of initiatives designed to move the country from developing to developed status by 2025, Malaysia has enabled and encouraged open competition in its telecommunications market. The result is very high penetration levels in both the mobile and mobile broadband segments, and near-universal coverage of LTE networks.
The incumbent telco Telekom Malaysia retains an almost monopolistic hold on the fixed-line market, as well as a significant lead in fixed broadband. However, there is growing market competition as more fibre cable networks are being deployed around the country on top of Telekom Malaysia’s national backbone. Operators such as Maxis have seen a rapid growth in the number of fibre subscribers, in part due to the migration of its existing fixed wireless broadband subscribers to the faster fibre network.
Consumers are the main beneficiaries of the highly competitive market. They enjoy widespread access to high-speed mobile services as well as attractive offers on bundles to keep data use up but prices low. The downside is that Malaysia’s MNOs and MVNOs have struggled to increase revenue in line with growth in the number of subscribers and with greater demand for broadband data. While the operators have been successful in moving a significant proportion of customers from prepaid to higher-value postpaid accounts, ARPU remains under pressure because of competitive pricing. The overcrowded mobile market saw some consolidation in 2022 when Digi and Celcom merged, creating CelcomDigi. The new entity has more than 20.3 million subscribers and will be better placed to provide cheaper services to customers through improved economies of scale.
The government elected to create a single 5G network managed by a single operator, DNB, providing wholesale access to the MNOs. All MNOs except Maxis had signed access deals by early 2023. DNB covered 50% of populated areas by the end of 2022 and expected to cover 80% by 2024.
There was some reticence among MNOs to sign access deals with DNB, given that the latter’s monopoly limited opportunities for the MNOs to differentiate their 5G services, or negotiate wholesale pricing. Following calls by the MNOs for a dual wholesale network model, the newly installed government in December 2022 announced that it would consider allowing a second 5G network to be built, with access to be made available from January 2024.
Telekom Malaysia, TIME dotCom, Maxis Communications, Celcom Axiata, Digi, CelcomDigi, U Mobile, Altel.
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