Market Trends of Malaysia ICT Industry
IT Services Type Segment is Expected to Hold Significant Market Share
- The Malaysian government has set up Digital Nasional Berhad, a special-purpose entity under the Ministry of Finance, to align with the objectives of the Malaysia Digital Economy Blueprint. This initiative aims to expedite the adoption of 5G technology at the enterprise level, thereby propelling the growth of the country's telecommunication services.
- For instance, in May 2024, Digital Nasional Berhad (DNB) and Telefonaktiebolaget LM Ericsson launched a program to accelerate the digital transformation of Malaysian enterprises. Furthermore, as outlined in a prior memorandum of understanding (MoU), Intel Corporation has become the technology partner, focusing on crafting 5G use cases to enhance enterprise adoption of this advanced technology. These tailored use cases will foster the creation of innovative telecommunication solutions and ensure they align with the dynamic needs of enterprises. With its high-speed and low-latency features, 5G facilitates seamless communication among machines, robots, and systems in a factory setting, showing Malaysia's growing demand for telecommunication services.
- Malaysia's strategic initiatives, supported by domestic and international entities, position the nation to harness the potential of 5G technology. This advancement promises improved connectivity, fuels economic growth, and drives the nation's digital transformation, presenting lucrative opportunities for telecommunication service providers.
- Additionally, in August 2024, in response to the surging demand for 5G capacity, Malaysian providers CelcomDigi and U Mobile are competing to establish the nation's second 5G network. CelcomDigi has put forth a proposal to the Malaysian Communications and Multimedia Commission for this endeavor. Meanwhile, U Mobile, showcasing its commitment, has signed multiple Memoranda of Understanding (MoUs) to signal its readiness for the 5G rollout, showing the increasing potential of telecommunication services in Malaysia.
- Furthermore, in March 2024, Malaysia's communications minister stated that the government's National Digital Network program to upgrade its broadband infrastructure will be completed by the end of 2025, which would drive the availability of high-speed telecommunication services for the country's enterprises.
- Therefore, the growth of 5G services, wired telecommunication infrastructure, and governmental efforts to increase the adoption of high-quality telecommunication services at the enterprise level are driving market growth in the country.
- Given the rising 5G adoption, industry benchmarks highlighted Malaysia's 5G network as a frontrunner in Southeast Asia and among the top globally, noting its median download speed of 125.14 megabits per second (Mbps) surpassed those of Singapore, Thailand, and the Philippines. The International Trade Administration (ITA) acknowledged Malaysia's 5G network as one of the best in ASEAN for its consistent speeds. Given this backdrop and the government's backing, the renewed push for 5G is poised to accelerate the growth of Malaysia's ICT market during the forecast period.
Understand The Key Trends Shaping This Market
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IT and Telecommunication End-user Segment Holds Major Market Share
- The IT infrastructure sector is poised for significant growth and market share expansion during the forecast period. This surge is primarily driven by the increasing need for complex IT infrastructure integration and the ongoing wave of digitization. While the Internet of Things (IoT) is heralded as the next big wave, its rising popularity brings with it heightened vulnerabilities. As more critical systems become susceptible to malware attacks, often resulting in substantial financial compromises, the security services market stands to gain. This is especially true with the anticipated uptick in business adoption of cloud technologies and IoT devices.
- The IT and telecom sectors, witnessing rapid technological adoption, have emerged as dominant markets. Current companies, focusing on core competencies and strategic initiatives, are increasingly adopting bring-your-own-device (BYOD) policies. This shift not only boosts the demand for streamlined mobility services but also underscores the need for effective mobile device management. Moreover, with a burgeoning mobile subscriber base, the adoption of BYOD policies is seen as a means to enhance operational flexibility and work efficiency.
- Further, in May 2024, during the Microsoft Build: AI Day event in Kuala Lumpur, Malaysia, Microsoft Chairman and CEO Satya Nadella unveiled a USD 2.2 billion investment aimed at bolstering cloud and AI infrastructure in Malaysia. Photo by Graham Denholm/Getty Images for Microsoft.
- This initiative is set to revolutionize data processing and transmission methods, potentially shaping the trajectory of future technologies and applications. By establishing a high-capacity network, the project aims to meet Malaysia's surging demand for bandwidth and speed, especially as the nation accelerates its 5G adoption and ecosystem development.
- This integrated network enhances TM's capability to deliver robust connectivity and network performance across diverse sectors, including healthcare, finance, transportation, and education. Additionally, the hybrid cloud 5G core network is poised to propel the development of smart cities, the Internet of Things (IoT), and other advanced technologies demanding swift, low-latency connectivity.
- As per DNB's June 2024 report, Malaysia boasted approximately 13.2 million 5G users by the end of April 2024, marking an 11-fold surge since March 2023. Furthermore, nationwide 5G data consumption surged from 9,538 terabytes (TB) in January 2023 to 160,782 TB by April 2024.
