2008 Asia – Telecoms, Mobile and Broadband in Malaysia and Philippines

DUBLIN, Ireland–(EMWNews)–Research and Markets (http://www.researchandmarkets.com/research/0d5355/2008_asia_teleco)

has announced the addition of the “2008 Asia – Telecoms, Mobile and

Broadband in Malaysia and Philippines” report to their offering.

This report provides a comprehensive overview of the trends and

developments in the telecommunications and digital media markets in

Malaysia and the Philippines. Subjects covered include:

Key Statistics;

Market and Industry Overviews;

Regulatory Environment;

Major Players (fixed and mobile);

Infrastructure;

Mobile Voice and Data Market;

Internet, including VoIP and IPTV;

Broadband (DSL, cable modem, wireless).

Researcher:- Peter Evans

Executive Summary:

“Malaysia

Malaysia has developed one of the more advanced telecom environments in

the developing world. For a period in the 1990s the country was busily

promoting itself as a regional high technology hub, but in recent times

it has adopted a quieter profile and has set about the task of steadily

building a technologically progressive economy. While still in an

expansion phase the Malaysia’s telecom sector

has undergone a period of consolidation with telecom companies doing

battle in an increasingly competitive and changing market. The last

decade has seen healthy overall growth in the country’s

telecom sector.

Coming into 2008 just over 90% of the 27 million people in Malaysia had

a mobile telephone service. This gave Malaysia the second highest mobile

penetration in South East Asia after Singapore. The 25 million mobile

subscriber milestone is set to be passed in 2008, up from only two

million in 1998. Malaysia’s mobile market had

made a remarkable recovery after suffering a serious setback; having

reached annual growth levels in excess of 50% by the mid-1990s, growth

dropped sharply coming into 1998 as the impact of the Asian economic

crisis was felt. However, the market quickly recovered. Following the

example set by the Philippines, Malaysia’s

mobile users have also been enthusiastic in their adoption of SMS, with

the regulator reporting that Malaysians sent more than 10 billion SMS

during 2006.

By contrast, growth of fixed-line services has been far more modest,

especially in recent times. Having moved rapidly from around 2 million

in 1990 to 4.7 million in 2002 (almost 20% penetration), fixed-line

subscribers dipped to 4.35 million (just under 16% penetration) by the

start of 2008.

Internet take-up in Malaysia has been surprisingly restrained, with

broadband growth in particular being disappointing. However, over the

last few years, the broadband Internet market finally started to

experience a major surge. During 2006-07 there was close to 200%

expansion, lifting penetration to 5%, from only 1% at end-2004. Coming

into 2008 the market, which is dominated by services based on DSL

technology, was expanding at an annual rate of more than 50%, passing

the 1.5 million subscriber mark (or around 16% household penetration).

Malaysia, however, remains well behind the regional leaders where

broadband household penetration is typically running at above 50%.

Malaysia has also been continuing to develop its multi-billion dollar

Multimedia Super Corridor (MSC) project. Although the project has become

much lower key than previously, the government says it has been meeting

its MSC targets, with more than 2,000 companies involved by June 2008;

R&D investment to date totalled more RM814 million.

The Philippines

Despite considerable effort over the last decade or so, the Philippine

government, working with the country’s telecom

operators, has not succeeded in its efforts to extend the basic

fixed-line telephone network to reach the wider population. Fixed-line

teledensity stands at less than 5%; only a little more than half of all

Philippine towns and cities have a telephone service. A fixed-line

teledensity of 12% by 2002 was the original target set for the

government as part of its Service Area Scheme (SAS). The plan fell well

short of target and since then fixed-line penetration has remained

relatively static.

The mobile market has been a totally different story. No doubt

contributing to the problems experienced in the fixed-line sector, the

Philippines has witnessed a strong focus on and a rapid take-up of

mobile services. Penetration has grown quickly to reach 60% (55 million

subscribers) by early 2008. The continued growth has confounded the

market; there have been times when the sector looked to have reached a

plateau, but then it found a new ways to grow. Of particular note has

been the remarkably high national usage of SMS. The mobile phone has

captured the imagination of the population; not surprisingly, mobiles

have well and truly overwhelmed fixed-line services. A large proportion

of the recent growth has also been coming from outside the main city of

Manila, with the big operators, Globe and Smart, vigorously competing

for lower income segments of the population by offering a range of cheap

prepaid products.

Further mobile growth will depend on pricing and marketing strategies of

the operators, and, most importantly, the growth level in the overall

economy. Growth is expected to ease over 2008-2010, with mobile

penetration only expected to rise to about 75% (about 15 million new

subscribers) over that period.

The Philippines has been lagging badly in its roll-out of Internet and

broadband services. 2006 saw the start of a significant surge in

broadband uptake, with an estimated 340,000 subscribers by year-end,

rising to almost 1 million in mid-2007, providing a much needed boost to

a market where over half the users are still accessing the Internet at

cyber cafes and other such venues. The jump followed the expansion of

PLDT’s SmartBro service, a wireless broadband

product similar to WiBro in South Korea. Despite the fresh new growth,

overall broadband penetration remains low; there were only 11 broadband

services for every 1,000 people in the country early in 2008.

The Philippine telecoms and IT market continues to exude considerable

optimism despite the ups and downs; the sector has been contributing

more than 10% to the country’s GDP, obviously

being given a massive boost by the mobile segment.

Key highlights:

– Over 90% of Malaysians had a mobile telephone service by early 2008.

– The launch of 3G mobile networks by Telekom Malaysia and Maxis in late

2005 saw a total of almost 1 million subscribers signed up for new

generation services by end-2007.

– While 3G numbers were growing quickly they still only represented 4%

of the total mobile subscriber base, leaving plenty more room for growth.

– After surprisingly little interest in broadband Internet for many

years, broadband penetration in Malaysia has finally started to grow –

up by 50% in 2007;

– Broadband subscribers in Malaysia represented only 5% of the

population at end-2007.

– Growth in fixed-line services has continued to ‘flat-line’

with penetration of only about 16%.

– The MSC project continues to grow, with more than 2,000 companies

signed up by June 2007.

– The mobile market in the Philippines managed to grow another 20% in

2007, on top of 30% in 2006, with subscribers continuing to increase

through 2008 despite expectations that the market was saturating. Mobile

penetration reached almost 60% by early 2008;

– Broadband Internet access finally started to grow in 2006, continuing

into 2007 with a massive surge of almost 200% over the year, but this

was still only 4% of the population.

– The fixed-line market continued to be a problem for the Philippines;

fixed teledensity stands at less than 5% with no sign of increased

expansion in sight.

– The Philippines telecom sector continues to contribute over 10% to the

country’s GDP.

Comparative key indicators: Malaysia and the Philippines –

2007

Indicator Malaysia Philippines

Population 26.7 million 90.0 million

GDP at Current prices1 US$208 billion US$173 billion

GDP per capita1 US$7,600 US$1,900

GDP real growth rate1 5% 6%

Mobile penetration 90% 59%

Broadband penetration 5% 1%

Fixed-line penetration 16% 5%

(Source: BuddeComm)

Note: 1estimates for 2008.

Data in this report is the latest available at the time of preparation

and may not be for the current year.”

For more information visit http://www.researchandmarkets.com/research/0d5355/2008_asia_teleco

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