KUALA LUMPUR, Malaysia, Dec. 8, 2015 /PRNewswire/ -- Malaysian mobile subscriptions grew 0.8% to reach 42.74 million subscribers, earning revenues of RM23.09 billion in 2015. Non-voice revenue grew by 12.81% to RM10.59 billion in 2015.
According to Mr. Ajay Sunder, Vice President of Telecoms, Frost & Sullivan Asia Pacific, overall mobile subscriber penetration is expected to remain stable. "However, churns rates will increase because of intensified competition."
The Malaysian mobile services market observed very intense competition. As mobile subscriber growth stagnates, operators get desperate to gain subscription market share to drive up their service revenues. MNOs are targeting newer customer segments through innovative pricing plans that integrate voice, data and digital services.
"Increased competition and declining revenues will negatively impact the operational profitability (EBITDA) of the services provider by 1-2%. Mobile service revenues are presenting early signs of downward trend. GST, data & voice bundles and intense competition will negatively impact the revenues for all service providers," said Mr. Sunder.
Voice revenues were negatively impacted by free calls offered to compensate the increased burden from GST, particularly in the prepaid segment. Increased voice call quotas bundled with monthly plans also impacted the ARPM realization.
Non-voice revenue is expected to contribute just under 50% of total service revenues. Digital Media services such as E-Commerce will drive the next generation non-data service revenues for Malaysian Telcos.
All operators saw significant increase in their data revenue; however, overall non-voice revenues were negatively impacted because of sharply declining SMS revenues.
"SMS revenue was negatively impacted by the adoption of OTT messenger Apps such as WhatsApp and WeChat. In order to promote data adoption, operators rolled-out data bundles with devices and also offered free basic data that offered unlimited access to key instant messaging apps. These further sliced out SMS revenues," said Mr. Sunder.
He continued, "Adoption of LTE services will also grow at a very fast pace. LTE subscribers are expected to reach close to 10% of the overall subscriber base by 2016."
Capex spending is expected to be in line with 2015 spending of RM3.2 billion, to support network modernization and LTE network expansion.
Data Driven Devices
With the gradual decline in smartphone prices, overall smartphone penetration in Malaysia increased from 38% in 2013 to 60% in 1H 2015 with a user base of 25.56 million users.
"Smartphone adoption was primarily driven by specific campaigns for the affordable segment; however launch of new devices from Apple & Samsung helped in driving the growth in the premium segment," said Mr. Sunder. "Most of the service providers offered rebates on smartphones bundled with their postpaid plans, while Digi also launched bundled plans for their prepaid subscribers."
Mobile internet subscriptions are rising very quickly and will reach up to 41.9 million users by 2018.
Malaysia E-Commerce on the Rise
"The Malaysian E-Commerce market is slowly but steadily gaining strong momentum. With strong adoption of smartphones and tablets as well as mobile internet and broadband, it is going to be over USD6 billion business in next couple of years," said Mr. Sunder.
He continued, "Though E-Commerce through mobile platforms is in its early stages, it has huge potential to grow as smartphone penetration and internet usage is constantly growing. Telecom operators in the country are also bringing down the entry barriers for people to use mobile internet."
The development of mobile payment ecosystems and growth in mobile-commerce (m-commerce) urge many E-Commerce companies to launch mobile applications and mobile websites.
The Mobile B2C E-Commerce in Malaysia was worth USD227 million in 2015.
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SOURCE Frost & Sullivan