Malaysia Telecoms Industry Report - 2023 - 2030

This report provides analyses of revenue and market forecasts as well as statistics of the Indonesian telecoms industry including market sizing, 5-year forecasts, market insights, key telecom trends, 5G, and digital infrastructure, and also features the following:

• Overall Telecommunications Market by Major Operators
• Telco Operators Profile, Revenue, and EBITDA Mix
• Mobile Subscribers & Revenue Market Overview and Forecasts
• Spectrum Holdings
• IoT Market Overview
• Broadband Subscribers & Revenue Market Overview and Forecasts
• Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables)
• Telecom Tower Market Analysis and Forecast
• Thematics / Opportunities relating to 5G, M&A, and e-Commerce
• Telco M&A Transaction Database

WHY YOU SHOULD BUY THE MALAYSIA TELECOMS INDUSTRY REPORT:

• Benefit from the latest market opportunities
• Target business opportunities and risks in the telecoms sector through our reviews of the latest industry trends, regulatory changes, and major deals, projects, and investments
• Understand the threats to your operations and investments and protect your company against future risks
• Gain insight into emerging trends that could support, strengthen or disrupt your activities in the market
• Get a full view of the competitive landscape to assess your market position.
• Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
• Assess the activities, strategy, and market position of your competitors, partners, and clients

Malaysia Telecoms Industry Report at a Glance

The Malaysian telecommunications market is a thriving mobile market with four large network operators, an incumbent fixed-line provider with a near-monopoly, and the overall market underpinned by strong economic fundamentals, albeit some political uncertainties.

Key Developments

• The merger of Celcom and Digi is now complete and become the largest telecommunications operator in Malaysia
• FTTH footprint on track to pass 8m premises in 2023
• 5G rollout in Malaysia is underway with 61% of the country covered but undertaken by a wholesale government monopoly via a special purpose vehicle, Digital Nasional Berhad (DNB)
• A group of six mobile operators could potentially buy up to a 70% stake in Digital Nasional Bhd (DNB). DNB would offer discounted pricing for 5G wholesale access until the 80% nationwide coverage target is achieved by the end of 2024
• Malaysia’s 3G network was shut down in early 2022

The analyst forecasts that mobile subscriptions will continue to grow in the 2023-30 period and fixed broadband subscribers will also continue to grow and increase its household penetration over the same period.

Over the last 2 years, Malaysia made tremendous progress in improving its FTTH footprint and providing services with speeds of  100Mbps and over to two third of the broadband subscribers.

4G speeds also improved with over 50% of 4G sites now equipped with fibre backhaul and 4G coverage reaching over 97% of the population. 5G take-up remains slow with operators dragging their feet to sign-up to resell 5G services from the wholesale DNB network.

Mobile subscribers numbers and revenue are growing strongly and the back of population growth and the market shift to postpaid. The analyst forecasts 40m 5G subscribers by 2030.

The analyst expects the overall telecoms revenue to grow through to 2030 after a marked slowdown in 2019 and 2020 due to legacy voice revenue pressure partially offset by mobile data growth in addition to the COVID-19 pandemic impact.

Capex Investments
The Capex to GDP ratio remained relatively stable between 2015 and 2018 but has been sliding in 2019 and growing again with DNB building its 5G network from 2022 onwards through to 2027. Telekom Malaysia nearly halved its Capex in 2019 but boosted back its FTTH investments in 2022 while Maxis, CelcomDigi have more consistent investment profiles.

Mobile Subscribers and Revenue
Over the last five years, the market shifted to postpaid as subscribers move to increased data allowances. Overall, the number of prepaid subscribers decreased significantly. Mobile network operators are facing competitive pressure with the market shifting to legacy prepaid voice and SMS to data-centric usage increasingly becoming the sole offering differentiator.

According to a benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB. In contrast, Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive. Malaysia has the highest monthly download per user while pricing per GB decreased by half for Malaysian users.

Broadband Subscribers - FTTH Push and Fixed Wireless
The Jendela initiative is a Malaysian government program of building full-fiber networks to homes, businesses, and government buildings covering 98% of the population by the end of 2025 as well as providing 100% 4G coverage with minimum speeds of 100Mbps.

The broadband market is now experiencing strong growth mostly driven by competition by TIME, Celcom, Maxis, and CelcomDigi with Telekom Malaysia still the dominant fixed broadband incumbent.

Telecom Tower Infrastructure getting a boost from the Jendela initiative
The Malaysian telecom towers are reaching an estimated 44,710 towers in 2022. The largest tower company (towerco) is edotco, the infrastructure arm of Axiata also the owner of Celcom, one of the original Malaysian mobile network operators. edotco grew out of the original carve-out of Celcom.

The remaining share of the towerco market is relatively fragmented and owned by mobile operators, Maxis, DiGi, Celcom, U Mobile, and Telekom Malaysia. The 13 State-backed telecommunications infrastructure companies are also controlling a large swath of regional coverage, leaving only a small share to private independent towercos.

Mobile operators must contend with the current de-facto exclusivity arrangements for some state-backed companies controlling infrastructure rollout and permits at the state level. In general, the industry structure is quite fragmented and we are expecting MNO tower divestments and towercos consolidation in the future, which will improve industry economics and improve the speed of implementation.

Thematics - Telecoms Infrastructure / 5G / M&A / e-Commerce
Infrastructure funds, pension funds, and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centers, submarine cable, and fiber infrastructure.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centers, submarine cables, and fiber infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.

The analyst predicts the next wave of transactions is likely to continue being about “scale” among small ISPs and largely about infrastructure for Telekom Malaysia, Maxis, Axiata, and Digi.

In most markets, telcos operators increasingly find inorganic market growth very challenging, provided the limited scope for M&A due to regulatory barriers.

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.