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2007 Asia - Telecoms, Mobile and Broadband in Malaysia and Philippines

Attention: There is an updated edition available for this report.

This report provides a comprehensive overview of the trends and developments in 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, wireless);
  • Convergence and Digital Media.

Malaysia, after heavily promoting itself as a regional high technology hub in the 1990s, has adopted a quieter profile in recent years and has been working steadily on building a technologically progressive economy. To this end it has developed one of the more advanced telecom environments in the developing world. While still in the process of expanding, the country’s telecom sector has undergone a period of consolidation with telecom companies doing battle in an increasingly competitive and changing market. Despite the slowdown that followed the economic crisis of the late 1990s, the last decade has seen positive overall growth in Malaysia’s telecom sector.

Almost 84% of the 26 million people in Malaysia had a mobile telephone service by March 2007. This meant Malaysia had the second highest mobile penetration in South East Asia after Singapore. The country passed the milestone of 20 million mobile subscribers in 2006, up from only two million in 1998. Malaysia’s mobile market has made a remarkable recovery after suffering a serious setback. Having reached annual growth levels in excess of 50% by the mid-1990s, the growth rate dropped to 17% by March 1998 as the impact of the Asian economic crisis was felt. However, the Malaysian mobile market quickly recovered and, by end-1999, there were almost three million subscribers in the country. Malaysia’s mobile users have also been enthusiastic in their adoption of SMS, with the regulator reporting that Malaysians sent more than 9 billion SMS during 2005.

On the other hand, the story with fixed-line services has not been so good in recent times. Having moved rapidly from around 2 million in 1990 to 4.7 million in 2002 (penetration approaching 20% at the time), fixed-line subscriber numbers dipped to 4.6 million by end-2003 and were sitting at 4.3 million by the start of 2007.

The take up of Internet in Malaysia has been surprisingly restrained; broadband growth in particular has been disappointing. However, over the last year or two, the broadband Internet market was finally starting to see a major surge in growth. The number of subscribers more than doubled in 2004, according to the regulator’s published figures. By end-2004, however, the market remained at a low penetration of 1%. This pattern was repeated in 2005, with another doubling of subscribers, lifting broadband penetration to just over 2%. In 2006, there was an 80% expansion, which lifted penetration to just over 3%. This represented a household penetration of around 11%. Malaysia remained well behind the regional leaders where broadband household penetration was typically running at above 50%. The Malaysian broadband market has continued to be dominated by services based on DSL technology.

Malaysia has also been continuing to develop its multi-billion dollar Multimedia Super Corridor (MSC) project, another part of the government’s strategy to turn Malaysia into the high technology hub of South East Asia. So far more than US$5 billion has been invested in this project. Although much lower key than previously, the government says it has been meeting its MSC targets, with around 1,800 companies involved by April 2007; this includes some 20 incubator companies. For the country overview, see chapter 1, page 1.

The Philippines
The Philippines has been struggling to extend its basic fixed-line telephone network to reach the wider population. Despite considerable effort over the last decade or so, the government, working with the country’s telecom operators, has not succeeded. Fixed-line teledensity stands at less than 4% and 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 target set for the government’s Service Area Scheme. The plan fell well short of target and since then fixed-line penetration has remained relatively static.

More recently, however, and no doubt contributing to the problems in the fixed-line sector, there has been a focus on and a rapid take-up of mobile services. Following on from that, the market has witnessed the remarkably high national usage of SMS. Mobile penetration has grown quickly to have reached 51% (46 million subscribers) by early 2007, up from less than three million mobile subscribers in the country at end-1999. The continued growth has confounded the market; there have been times when the growth looked to have reached a plateau, but then it found a way to continue. Not surprisingly, mobiles have well and truly overwhelmed fixed-line services. Much of the recent growth in mobiles has also been coming from outside the main city of Manila, with the big operators, Globe and Smart, vying for lower income segments of the population by offering a range of cheap prepaid products. Further growth in the market will depend on the pricing and marketing strategies of the operators, as well as the growth in the overall economy.

After lagging badly in the roll-out of Internet and broadband services, 2006 saw a significant surge in broadband subscriber numbers. By end-2006, there were an estimated 340,000 broadband subscribers in the country; the numbers had reached about 500,000 by mid-2007. This presented a much needed boost to a market where more than half the users access 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 welcome strong growth, overall broadband penetration remained low coming into 2007; there were only four broadband services for every 1000 people in the country.

There is considerable ongoing optimism in the Philippine telecom and IT market; apart from generally healthy growth at the moment, the sector has been contributing over 10% to the country’s GDP, boosted considerably by the booming mobile segment. For the country overview, see chapter 2, page 70.

Key highlights - Malaysia
almost 84% of Malaysia’s 26 million people had a mobile telephone service by March 2007, as the local mobile market appeared to be entering a consolidation phase;
following the launch of 3G mobile networks by Telekom Malaysia in late 2005, a total of close to 500,000 subscribers had been signed up to 3G services by March 2007;
for some years, there has been surprisingly little interest in broadband Internet in Malaysia, the national broadband penetration being only slightly over 3% at the end of 2006;
the broadband market however, was finally starting to take off from a low base, the subscriber numbers having increased almost fourfold in the last two years;
on the other hand, the growth in fixed-line services has continued to ‘flat-line’; fixed-line subscriber numbers have actually dipped and by the start of 2007 were sitting on 4.3 million for a penetration of 16%.
the Multimedia Super Corridor project continues to grow, with around 1,800 companies involved by April 2007.

Key highlights - Philippines
after appearing to be close to saturation, the mobile market managed to grow another 30% in 2006 and subscriber numbers were continuing to increase into 2007;
mobile penetration reached 51% (46 million subscribers) by early 2007, remarkable for a country with relatively low GDP per capita;
the broadband Internet market finally started to grow in 2006, after years of insignificant development;
there were an estimated 340,000 broadband subscribers in the country by end-2006 and this had rocketed to about 500,000 by mid-2007;
the fixed-line market continued to be a problem for the country; teledensity stood at a low 4% and only a little more than half of all towns and cities in the Philippines have a basic telephone service;
the Philippines telecom sector continues to contribute over 10% to the country’s GDP, boosted considerably by the booming mobile segment.
Key country indicators - Malaysia versus Philippines - 2006

Indicator Malaysia Philippines
Population 26.4 million 87.0 million
GDP at current prices (e) US$150.9 billion US$116.9 billion
GDP per capita (e) US$5,718 US$1,345
GDP real growth rate (e) 5.9% 5.4%
Mobile penetration (Mar 2007) 84% 51%

(Source: BuddeComm)

Data in this report is the latest available at the time of preparation and may not be for the current year.

1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview of Malaysia’s telecom market
1.3 Regulatory environment
1.3.1 Privatisation and liberalisation
1.3.2 Telecom legislation
1.3.3 Regulatory authority
1.3.4 Universal Service Obligation (USO)
1.3.5 Equal access
1.3.6 Number Portability (NP)
1.3.7 Licences
1.3.8 Tariffs
1.3.9 Anti-piracy measures
1.4 Fixed network operators in Malaysia
1.4.1 Overview of operators
1.4.2 Telekom Malaysia
1.4.3 TRI Celcom
1.4.4 Time dotCom
1.4.5 Maxis Communications
1.4.6 DiGi Telecommunications
1.5 Telecommunications infrastructure
1.5.1 Overview
1.5.2 National telecom networks
1.5.3 International infrastructure
1.5.4 Voice over Internet Protocol (VoIP)
1.5.5 Triple play services
1.6 Broadband and Internet market
1.6.1 Overview
1.6.2 ISP market
1.6.3 Content and e-services
1.6.4 Broadband market
1.7 Mobile communications
1.7.1 Overview of Malaysia’s mobile market
1.7.2 Mobile technologies
1.7.3 Major mobile operators
1.7.4 Mobile voice services
1.7.5 Mobile data services
1.7.6 Mobile applications
1.8 Broadcasting market
1.8.1 Overview
1.8.2 Regulatory environment
1.8.3 Free-to-Air TV
1.8.4 Digital Terrestrial TV (DTTV)
1.8.5 Cable TV
1.8.6 Satellite TV
1.8.7 Interactive TV
2.1 Key statistics
2.2 Telecommunications market
2.2.1 Overview of the Philippines’ telecom market
2.3 Regulatory environment
2.3.1 Regulatory authorities
2.3.2 Regulatory developments
2.3.3 Telecom sector liberalisation
2.3.4 Alternative Communications Program
2.4 Fixed network operators in the philippines
2.4.1 BayanTel
2.4.2 Bell Telecom
2.4.3 Digital Telecommunications Philippines (Digitel)
2.4.4 Eastern Telecommunications Philippines Inc (ETPI)
2.4.5 Globe Telecom
2.4.6 PhilCom
2.4.7 Philippine Long Distance Telephone Company (PLDT)
2.4.8 Philippine Telephone and Telegraph Co (PT&T)
2.4.9 Smart Communications
2.5 Telecommunications infrastructure
2.5.1 Overview
2.5.2 National telecom network
2.5.3 International infrastructure
2.5.4 Infrastructure developments
2.6 Broadband and Internet market
2.6.1 Internet overview
2.6.2 Internet exchanges
2.6.3 Internet demographics
2.6.4 Internet regulation
2.6.5 Gearing Up Internet Literacy and Access for Students (GILAS)
2.6.6 Cybercafés
2.6.7 ISP market
2.6.8 Content and e-services
2.6.9 Broadband market
2.7 Mobile communications
2.7.1 Overview of the Philippines’ mobile market
2.7.2 Regulatory issues
2.7.3 Mobile technologies
2.7.4 Major mobile operators
2.7.5 Mobile voice services
2.7.6 Mobile data services
2.7.7 Mobile content and applications
2.8 Broadcasting market
2.8.1 Overview
2.8.2 Free-to-Air (FTA) broadcasting
2.8.3 Cable and pay TV
2.8.4 Cable telephony
2.8.5 Direct-to-Home (DTH) services
2.8.6 Interactive TV
2.8.7 Broadband TV (IPTV)

List of Exhibits

Exhibit 1 - ICT targets in Ninth Malaysian Plan - 2000 - 2010
Exhibit 2 - Licences by category - March 2007
Exhibit 3 - Telekom Malaysia major shareholders - 2006
Exhibit 4 - Overview of major Malaysian broadcasters and their channels
Exhibit 5 - Overview of programming
Exhibit 6 - Terrestrial FTA TV licences
Exhibit 7 - Major submarine cables with landing points in the Philippines - 2006
Exhibit 8 - Major broadcasting companies

List of Tables

Table 1 - Country statistics Malaysia - 2006
Table 2 - Telecom revenue and investment statistics - 2005
Table 3 - Telephone network statistics - 2006
Table 4 - Internet user statistics - 2006
Table 5 - Broadband statistics - 2006
Table 6 - Mobile statistics - March 2007
Table 7 - National telecommunications authorities
Table 8 - Fixed lines in service and teledensity - 1995 - 2006
Table 9 - Internet users - 1995 - 2006
Table 10 - Internet subscribers - 1995 - 2006
Table 11 - Dial-up Internet subscribers - 1995 - 2006
Table 12 - TMNet dial-up Internet subscribers and market share - 1999 - 2006
Table 13 - Broadband subscriber growth - 2002 - 2006
Table 14 - Broadband subscribers by access type - 2006
Table 15 - Broadband subscribers and households - 2006
Table 16 - TMNet (Streamyx) subscribers - 2003 - 2007
Table 17 - Hotspots market - 2003
Table 18 - Mobile subscriber growth and penetration - 1994 - 2007
Table 19 - Mobile services revenues - 1993 - 2006
Table 20 - Mobile operators, technology, subscribers and annual change - March 2007
Table 21 - Mobile subscribers and market share by operator - March 2007
Table 22 - 3G mobile subscribers and market share - 2006 - 2007
Table 23 - Prepaid mobile subscriber growth and penetration - 2002 - 2006
Table 24 - Key broadcasting statistics - 2006
Table 25 - Growth of the broadcasting sector - 1997 - 2006
Table 26 - Country statistics Philippines - 2006
Table 27 - Telecom revenue and investment statistics - 2006
Table 28 - Telephone network statistics - 2006
Table 29 - Internet user statistics - 2006
Table 30 - Broadband statistics - 2006
Table 31 - Mobile statistics - March 2007
Table 32 - National telecommunications authorities
Table 33 - Fixed lines installed versus lines in operation and penetration - 1995 - 2006
Table 34 - Fixed-line operators, lines, subscribers and market share - March 2006
Table 35 - Fixed lines in service and teledensity - 1994 - 2006
Table 36 - Total SAS lines installed by operators at target date - end-2002
Table 37 - Internet users - 1996 - 2006
Table 38 - Internet subscribers - 1996 - 2006
Table 39 - Broadband subscribers - 2001 - 2006
Table 40 - Broadband subscribers and households - 2006
Table 41 - PLDT broadband subscribers and market share - 2005 - 2007
Table 42 - PLDT DSL subscribers - 2001 - 2006
Table 43 - Mobile subscribers and penetration - 1992; 1994; 1996 - 2007
Table 44 - Mobile services revenue - 1993 - 2006
Table 45 - 3G mobile subscribers and market share - 2006 - 2007
Table 46 - 3G mobile subscribers by operator - March 2007
Table 47 - Mobile operators, technology, subscribers and annual change - March 2007
Table 48 - Mobile market share by operator - March 2007
Table 49 - Globe Telecom subscribers - 2001 - 2007
Table 50 - Key broadcasting statistics - 2006
Table 51 - Broadcasting statistics, households: TV, cable, MMDS satellite, and broadcasting revenue - 1996 - 2006

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