August 18, 2010
The broadband market in Malaysia has been lagging behind other markets the Asia-Pacific region, some with even lower GDP per capita than Malaysia. This is despite the fact that the Malaysian telecom regulator, MCMC, has been actively voicing its “50% household broadband penetration” goal for years. While that goal seemed more like wishful thinking for the past few years, when the household broadband penetration rate was less than 20%, we believe that things are about to change very fast in the next five years.
As I discussed in my Country Intelligence Report on Malaysia, the main forces behind this trend are:
- Government commitment to assist the rollout of a national broadband network
- Combination of fixed and mobile technologies such as fiber, HSPA and WiMAX
- Increasing consumption power of a young and tech-savvy population
The Asia-Pacific region leads the world in fiber adoption, and government initiatives to increase broadband penetration are mushrooming from Australia to Singapore. The Malaysian government is no exception, and the MCMC is assisting TM, the fixed incumbent operator, with billions of dollars to roll out a fiber-based network in metropolitan areas. Meanwhile, WiMAX is being deployed, also with government funding, in more rural areas.
While I would have much more liked to see a wider fiber network deployed, half a network is certainly better than no network. The result will be an increase in the proportion of fiber and WiMAX access lines, as depicted below.
Mobile operators, however, are the biggest contributors to this momentum. Understanding the gap between supply and demand in the fixed broadband market, mobile operators were quick to roll out HSPA networks, and consumers were quick to understand the benefits of mobile broadband. Combined, the three leading operators will spend more than US$600m in 2010 in capex to enhance network coverage and quality.
The fact that Malaysia’s population is becoming more and more affluent (Economist Intelligence Unit expects GDP per capita to hit the US$10,000 mark by in 2014), combined with its youthfulness (50% of the population is currently under the age of 25) will increase not only the “want” aspect of demand, but also the “willingness to pay,” allowing for further adoption and development.
— Tae-Hyung Kim, Senior Analyst
Malaysia: High-Speed Broadband Project to Fuel Telecom Capex and Revenue Surge
Country Intelligence Reprt published August 2010
We expect the telecom market in Malaysia to grow at a CAGR of 9.7% during the 2010-2015 period, from $9.8bn to $15.5bn, supported by a strengthening economy and rising demand for fixed and mobile broadband services.
Asia-Pacific Fixed Communications Forecast
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The Asia-Pacific Fixed Communications Forecast quantifies fixed voice, Internet and IPTV adoption and service revenues trends, at the residential, corporate and total market level. It tracks demand and projects future growth.
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