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

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).


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.

1. Malaysia
1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview
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 Obligations
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 network
1.5.3 International infrastructure
1.5.4 Voice over Internet Protocol (VoIP)
1.6 Broadband and Internet market
1.6.1 Internet market overview
1.6.2 ISP market
1.6.3 Broadband market overview
1.6.4 Broadband infrastructure
1.6.5 Broadband Internet
1.6.6 Digital Subscriber Line (DSL)
1.6.7 Wireless broadband
1.6.8 Broadband Powerline (BPL)
1.6.9 Internet via satellite
1.6.10 National IPv6 Council
1.7 E-Services
1.7.1 E-Commerce
1.7.2 E-Government
1.7.3 Online video service
1.8 Broadcasting market
1.8.1 Overview
1.8.2 Regulatory environment
1.8.3 Triple play services
1.8.4 Digital TV
1.9 Mobile communications
1.9.1 Overview of Malaysia’s mobile market
1.9.2 Mobile technologies
1.9.3 Major mobile operators
1.9.4 Mobile voice services
1.9.5 Mobile data services
1.9.6 Mobile content and applications
2. Philippines
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 PLDT
2.4.8 Philippine Telephone and Telegraph Co (PT&T)
2.4.9 Smart Communications Inc
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 market overview
2.6.2 Internet exchanges
2.6.3 Internet regulations
2.6.4 Gearing Up Internet Literacy and Access for Students (GILAS)
2.6.5 Cybercafés
2.6.6 ISP market
2.6.7 Broadband market overview
2.6.8 Cable modems
2.6.9 Digital Subscriber Line (DSL)
2.6.10 Wireless broadband
2.6.11 Internet via satellite
2.6.12 IP networks
2.7 E-Services
2.7.1 E-Commerce
2.7.2 E-Government
2.7.3 Content
2.7.4 Instant Messaging (IM)
2.8 Convergence
2.8.1 Overview of broadcasting market
2.8.2 Digital TV
2.9 Mobile communications
2.9.1 Overview of the Philippines’ mobile market
2.9.2 Regulatory issues
2.9.3 Mobile technologies
2.9.4 Major mobile operators
2.9.5 Mobile voice services
2.9.6 Mobile data services
2.9.7 Mobile content and applications
3. Glossary of Abbreviations
Table 1 - Country statistics Malaysia - 2008
Table 2 - Telecom revenue and investment statistics - 2007
Table 3 - Telephone network statistics - 2007
Table 4 - Internet user statistics - 2007
Table 5 - Broadband statistics - 2007
Table 6 - Mobile statistics - 2007
Table 7 - National telecommunications authorities
Table 8 - Fixed lines in service and teledensity - 1995 - 2007
Table 9 - Internet users - 1995 - 2007
Table 10 - Internet subscribers - 1995 - 2007
Table 11 - Dial-up Internet subscribers - 1995 - 2007
Table 12 - TMNet dial-up Internet subscribers and market share - 1999 - 2007
Table 13 - Broadband subscribers - 2002 - 2008
Table 14 - Broadband subscribers by access type - 2007
Table 15 - Broadband subscribers and households - 2007
Table 16 - TMNet (Streamyx) subscribers - 2003 - 2007
Table 17 - Key broadcasting statistics - 2007
Table 18 - Broadcasting sector households by technology and revenue - 1997 - 2006
Table 19 - Mobile subscribers and penetration - 1994 - 2007
Table 20 - Mobile services revenues - 1993 - 2007
Table 21 - 3G mobile subscribers and market share - 2006 - 2007
Table 22 - Mobile operators, subscribers and annual change - 2007
Table 23 - Mobile subscribers and market share by operator - 2007
Table 24 - Mobile service pre and postpaid ARPU1 by operator - 2007
Table 25 - Postpaid & prepaid mobile subscriber growth and market share - 2002 - 2007
Table 26 - Country statistics Philippines - 2008
Table 27 - Telecom revenue and investment statistics - 2006
Table 28 - Telephone network statistics - 2007
Table 29 - Internet user statistics - 2007
Table 30 - Broadband statistics - 2007
Table 31 - Mobile statistics - 2007
Table 32 - National telecommunications authorities
Table 33 - Fixed-line operators, lines, subscribers and market share - 20062
Table 34 - PLDT mobile service ARPU1 - postpaid & prepaid - 2005 - 2007
Table 35 - Fixed lines in service and teledensity - 1994 - 2007
Table 36 - Total SAS lines installed by operators at target date - end-2002
Table 37 - Fixed lines installed versus lines in operation and penetration - 1995 - 2007
Table 38 - Internet users - 1996 - 2008
Table 39 - Internet subscribers - 1996 - 2007
Table 40 - Number of registered ISPs - 2001 - 2006
Table 41 - Broadband subscribers - 2001 - 2008
Table 42 - Broadband subscribers and households - 2007
Table 43 - PLDT broadband subscribers and market share - 2005 - 2008
Table 44 - Broadband subscribers by service provider - March 2008
Table 45 - PLDT DSL subscribers - 2001 - 2008
Table 46 - Key broadcasting statistics - 2007
Table 47 - Broadcasting statistics, households: TV, cable, MMDS satellite and broadcasting revenue - 1996 - 2007
Table 48 - Mobile subscribers and penetration - 1992; 1994; 1996 - 2008
Table 49 - Mobile services revenue - 1993 - 2007
Table 50 - 3G mobile subscribers and market share - 2006 - 2007
Table 51 - 3G mobile subscribers by operator - 2007
Table 52 - Mobile operators, subscribers and annual change - 2007
Table 53 - Mobile market share by operator - 2007
Table 54 - Globe Telecom subscribers - 2001 - 2007
Table 55 - PLDT mobile operators - monthly ARPU by contract type - 2007
Exhibit 1 - ICT targets in Ninth Malaysian Plan - 2000 - 2010
Exhibit 2 - Individual and Class licences by category - March 2007
Exhibit 3 - Telekom Malaysia’s major shareholders - December 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 - 2008
Exhibit 8 - Major broadcasting companies

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