• The broadband market (fixed and mobile) has a high potential for growth, creating a
huge demand for broadband products. As of September 2008, Malaysia’s
broadband penetration rate is 6.5% out of a population of 27.8 million and
household penetration is 17.6%. Average usage is at the speed of 384 Kbps to
512 Kbps.
• At present, more than 70% of the broadband market are fixed-line, using
asymmetric digital subscriber line (ADSL) technology. Nevertheless, mobile
(wireless) broadband using high-speed packet access (HSDPA) technology has
been growing well since Maxis Communications Berhad (Maxis) and Celcom
Berhad (Celcom) launched the services in 2008. Following that, four WiMAX
players launched their mobile broadband service by end of 2008. Mobile
broadband is offering speed of 384 Kbps to 3.2 Mbps.
• In its efforts to become an industrialized nation by year 2020, the government is
targeting 50% household penetration by 2010. This will create a large demand for
broadband equipment.
• The government is implementing a nationwide broadband strategy which will be on
two categories of broadband:
- Broadband for General Population (BBGP) with speed of up to 2 Mbps;
- High Speed Broadband (HSBB) for selected high impact areas with usage of
between 10 Mbps to 1 Gbps through fibre.
• Telekom Malaysia Berhad (TM), a government-linked company, monopolizes the
fixed- line sector which is continuing to decline due to migration to mobile services.
TM has more than 90% market share of the fixed-line market and the balance are
held by Time.com and some smaller players which provides services to only
businesses.
• To help achieve the broadband target by encouraging greater competition, the
government awarded four WiMAX (2.3GHz spectrum) licenses to Packet One
Networks (Malaysia) Sdn Bhd (Packet One), Red Tone International Bhd (Redtone),
YTL E-Solutions Bhd (YTLe) and Asia Space Sdn Bhd (Asia Space). All licensees
are allowed nationwide coverage except for Redtone whose license covers only the
states of Sabah and Sarawak.
• Malaysia is one of the most mature mobile phone markets in the region, with
penetration rate of 94% as of September 2008. The keen competition among the
mobile operators, Maxis, Celcom and Digi Telecommunications Sdn Bhd (Digi) has
helped push forward the mobile subscriber growth. Maxis holds more than 40% of
the mobile market share.
• With the entry of a new mobile operator in 2008, UMobile, the competition is
intensifying. Mobile phone operators are offering a broader range of product
offerings, loyalty programs, greater brand awareness and aggressive marketing.
Mobile number portability (MNP) introduced in 2008 will offer opportunities for
weaker operators to grab a slice of the market. In addition, the entrance of more
mobile virtual network operators (MVNO) will increase the competition especially in
terms of pricing.
• Maxis and Celcom launched their 3G services in 2005 and UMobile in 2008. Digi
will launch in 2009, having recently acquired a 3G license via TIME dotcom.
Takeup for 3G is expected to pick up with lower 3G phone cost and continued
aggressive promotions. Since the mobile phone market is getting saturated, the
mobile operators are looking at mobile broadband as their key growth area over the
next few years.
Best Products/Services
• There exist an increasing demand for the following products:
- Broadband technologies - Mobile broadband (HSDPA,WiMAX, WiFi), fixed
broadband (ADSL, SDSL, VDSL, ETTH, FTTH) and satellite.
- Networking equipment and solutions (including routers, switches, firewall);
- Security and surveillance equipment and solutions;
Opportunities
• Infrastructure investment by telcos in 2009 will exceed RM4 billion (US$1.1
billion). This should increase when the HSSB project takes off.
• For the HSBB project, TM is rolling out phase one over 2009-2012, starting with
parts of the Klang Valley area. TM will be awarding the contracts for phase one
by the second quarter of 2009. There will be opportunities to bid for TM’s
contracts in subsequent phases of the project which will be roll out over ten
years. This would include fiber optic last mile connectivity, core network and
improvements to international connectivity. For the rollout of BBGP and rural
areas, a mixture of fixed, mobile and satellite technologies will be used.
• Maxis, Celcom, Digi and UMobile will continue to invest to expand its network
coverage for 3G and HSDPA. The four WiMAX players will continue to invest in
infrastructure to deploy their broadband services. TM and Maxis’s aggressive
overseas expansion in Asia will create demand by these operators for more
broadband products in the future.
