Is Your Business Adapting To The Evolving Telecoms Industry?

By

Sandy Clarke

24-06-2016

4 min read

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At the turn of the millennium, a report by American University described Malaysia as one of the most advanced countries in South-East Asia with regard to the country’s telecommunications network.

Access to mobile communications has increased substantially over the past 15 years, thanks, in part, to the emergence at the beginning of the last decade of firms including Maxis, Celcom, Digi, and Time.

TelecomsThe rise of such companies put an end to the monopoly—held prior to 1995 –by the largely state-owned Telekom Malaysia (TM); however, TM remains the dominant provider, retaining over 90% of the market share.

Nevertheless, the advent of competition has meant “lower tariffs and improved service quality,” and saw a significant rise in the number of subscribers from 872,000 in 1995 to 5.5mil in 2000.

Fast forward to 2014, and a report by On Device Research acclaimed Malaysia as being “miles ahead of the pack” in comparison to its more populous neighbours such as Vietnam, the Philippines, and Indonesia.

Heavy investment by the Malaysian government in world-class infrastructure has led to “high Internet penetration, a growing e-commerce industry and typical-for-Asia high social media usage.” The key findings reveal an impressive trend in the development of Malaysia’s telecoms industry, and offer an encouraging forecast of what’s to come.

Ahead of the pack

Due to the focus of investment and development in the country’s telecoms industry, Malaysia appears not only to be heading in the right direction in the digital age, but is leading the way and setting an example for other south-east Asia nations to follow.

Of the more lucrative benefits gleaned from the telecoms evolution, businesses are seeing a population that has taken strongly to online purchasing, with savvy Malaysians frequenting large daily deal and e-commerce sites.

The number of hours spent on the Internet each day sees Malaysia dwarfing other Asian countries, with an average of 3.1 hours compared with Indonesia (2.5 hours), Hong Kong (2.1 hours—also the world average), Singapore (two hours), China (1.9 hours), Vietnam (1.7 hours), and Japan (one hour).

As reported by On Device Research, “E-commerce revenues (excluding services) were US$380mil in 2013 and Japanese giant Rakuten who launched in Malaysia less than two years ago estimates this to increase to US$530mil in 2017.”

In BuddeComm’s Malaysia-Telecoms, Mobile and Broadband report (Evans, 2015), it alludes to the building of an advanced telecom sector as being central to Malaysia’s objective of being ranked as a fully developed nation by 2020.

Playing a pivotal role in the cultivation of an advanced telecom sector is the implementation of mobile broadband, which has provided a considerable boost in terms of accessibility, consumer reach, commerce and communications.

On the development of broadband, the report states: “With an effective combination of fixed and mobile broadband, household broadband penetration in Malaysia had reached 72% by mid-2015, according to the MCMC (Malaysian Communications and Multimedia Commission).

“The long awaited surge in Internet demand had arrived, this happening after a period of slower than expected development. Fibre-based broadband services are expanding rapidly and started to impact the market; at the same time DSL (digital subscriber line) numbers were flat or in decline.”

Some other key points from BuddeComm point to the continuing trend of development within Malaysia to ensure it maintains its pace ahead of the pack:Facebook.

  • Malaysia’s population of 30 million had a mobile penetration of 145% by early 2015.
  • After a slow start following launch, next generation mobile services (3G, 3G+, 4G) are having a big impact on the mobile and Internet markets in Malaysia.
  • Since the issue of 4G/LTE licences at the end of 2012, the operators have been working to maximise population coverage with this platform.
  • The key indicator broadband household penetration had surged to 72% by mid-2015 (Note: This figure included both fixed and mobile access services).
  • The MCMC’s target of 75% household broadband penetration by 2015 appears within reach.
  • The building of a National Broadband Network is well under way, with Telekom Malaysia implementing a rapid roll-out of the government-sanctioned High-Speed Broadband (HSBB).
  • As well as building an open network, Telekom Malaysia was also signing up subscribers to its own UniFi fibre-based service.
  • The Asia Pacific Gateway (APG) undersea cable launch was pushed back to early 2016.
  • The MEASAT-3b satellite was launched in September 2014.
  • Growth in Malaysia’s fixed-line services was in decline, with national fixed-line penetration having fallen to around 12%.
    Source: BuddeComm

Food for thought

So what does all this mean for businesses in Malaysia? In a 2014 article by businesscircle.com.my, Google Malaysia’s managing director, Sajith Sivanandan, urged business leaders to adapt to the evolving world of e-commerce or risk losing out on lucrative revenue streams as a result.

Noting the opportunities for business, he said that Malaysians “love the Internet and their smartphones, and the combination of these two trends is what sets it apart from the world,” but warned, “This is a massive wake up call to any business in Malaysia without a mobile-optimised site or app. . .this is no longer a viable approach.”

As we draw towards the Malaysian government’s development deadline of 2020, it appears to be the case that businesses need to play their part in making use of the country’s telecoms infrastructure in order to help Malaysia reach its status of a developed nation.

According to the various reports and their findings, the means—and an eager market—are certainly available for businesses to take full advantage of the opportunities the telecoms industry has to offer.

Sandy is a freelance writer for Leaderonomics and The Star newspaper, with 10 years of prior experience as a political journalist in the UK. He admires the commitment towards social and economic progress in Malaysia and hopes the country secures its 2020 objective. To connect with Sandy you can follow him @RealSClarke on Twitter. For more Business Strategy articles, click here
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