Market Trends of Malaysia Telecom Industry
Rising Demand for 5G Driving the Market’s Growth
- MIDA reports that telecommunications companies in the region are currently establishing the foundation for the fifth generation (5G) of mobile internet connectivity to enhance speed and stability. The Malaysian government has unveiled ambitious investment strategies to elevate the country's digital technology standing in the near future. Furthermore, the expanding 5G utilization and governmental initiatives to enhance 5G coverage will contribute to substantial market growth over the coming years.
- In the past few years, Malaysia has been proactively advocating for the advancement of its digital economy. The implementation of 5G networks has the potential to boost economic progress and bolster a nation's competitiveness, enticing investments, fostering innovation, and amplifying productivity gains across diverse industries. Consequently, there is a significant emphasis on broadening 5G infrastructure in Malaysia to stimulate economic growth and maintain competitiveness internationally. As the utilization of 5G technology grows among enterprises and individuals, the demand for swift and reliable internet services will persistently rise, consequently propelling the growth of Malaysia's telecommunications market to greater heights.
- As of September 2023, the Communications and Digital Ministry of Malaysia reported that the rate of 5G adoption in the country remained low despite the extensive network coverage. The Ministry disclosed that the current adoption rate stood at 4.2%, even though the 5G network coverage had reached 68.8%. Additionally, the Ministry assured that the government is committed to further expanding 5G coverage, aiming to achieve 80% coverage in densely populated areas by the end of 2023. Furthermore, escalating investments to promote 5G adoption in the regional market are anticipated to have a substantial impact on the market.
- Additionally, Malaysian telecommunications companies such as Telekom Malaysia, CelcomDigi, YTL Communications, U Mobile, and Maxis have all agreed to the wholesale access agreement with state-owned network operator DNB. DNB was expected to continue expanding the 5G network infrastructure in the country until 80% coverage had been reached by the end of 2023. Furthermore, the Malaysian government confirmed that DNB will be privatized once it achieves its 5G population coverage goal. The government's announcement in May 2023 stated that a second 5G network would be deployed in 2024, with a new entity established to oversee Malaysia's second 5G network.
- Furthermore, DNB unveiled the largest 5G experience center in Malaysia in November 2023 in collaboration with Swedish vendor Ericsson. The primary objective of this state-of-the-art facility is to increase awareness and encourage the utilization of 5G technology throughout the country. This innovative center will function as an educational platform for customers, partners, industry professionals, academic institutions, and government authorities to explore the capabilities of 5G technology through interactive demonstrations and technology exhibitions.
- In February 2024, Telekom Malaysia’s enterprise division, TM One, revealed the establishment of two new laboratories designed to expedite the advancement of 5G-enabled digital services and solutions for major corporations and the government. The firm emphasized that both facilities would function as central locations for integrating cutting-edge technologies, concepts, and digital innovators. These 5G laboratories will offer a collaborative environment where the telecommunications company, its clients, and partners can explore and create customized solutions.
- Additionally, as per the Malaysian Communications and Multimedia Commission, there were roughly 8.2 million mobile broadband subscriptions utilizing 5G technology in Malaysia by the fourth quarter of 2023. This represented a significant rise from the approximately three million subscriptions recorded in the previous quarter. The increase in 5G mobile broadband subscriptions in the country has been substantial over the past year. Noteworthy companies like U Mobile and Celecom are playing a significant role by providing an exceptional average of 5G download speeds of over 400 Mbps. These substantial vendor activities are expected to stimulate the market in the country.
- The government's proactive involvement is crucial in realizing the national 5G connectivity goal. Malaysia has continuously dedicated resources to improve its digital infrastructure. Through initiatives like the National Fiberisation and Connectivity Plan (NFCP) and the MyDIGITAL program, Malaysia is already leading in connectivity compared to some neighboring countries. This strong foundation sets the stage for 5G integration and demonstrates readiness for next-generation technology in its digital infrastructure. The substantial government backing to enhance 5G is anticipated to greatly drive the market.
Understand The Key Trends Shaping This Market
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Data and Messaging Services Segment Expected to Hold a Significant Market Share
- The data and messaging services industry in the nation encompasses internet, SMS, and other communication services provided by both fixed and mobile networks. This industry is experiencing growth in Malaysia as a result of the implementation of 5G services and fiber-optic fixed internet connections, among other factors. Telecom companies are establishing collaborations, securing licensing deals, enhancing fiber and copper network infrastructure, and rolling out 5G services nationwide to meet the growing need for data and messaging services in the country.
- For instance, in July 2023, Hotlink introduced an upgraded prepaid plan that merges elements from the well-known Hotlink Unlimited and Hotlink Pantas plans. The new Hotlink Prepaid Plan provides added value, versatility, and a wider range of internet pass choices. Moreover, Hotlink gave out 20% cashback vouchers to customers who bought new internet passes at the launch. These notable advancements by the company are anticipated to further boost market prospects in the upcoming years.
- Moroever, the rising adoption of 5G technology, fueled by the growing consumer need for high-speed connections and extensive network expansions by the government and leading telecom companies, is projected to boost the demand for data services. Malaysia's initiative to extend 5G coverage to approximately 85% of rural residents by 2024 is expected to further stimulate growth. These substantial advancements in 5G technology will undoubtedly bolster the segment’s expansion in the coming years.
- The country's increasing adoption of digital business processes, including the utilization of internet-based services in various industries such as BFSIs, governments, retail, manufacturing, and healthcare, is driving the need for telecom service providers' data services across industries and among the population. This encompasses internet data packages for both prepaid and postpaid data services. Furthermore, market vendors are broadening their data service offerings to facilitate market expansion in Malaysia.
- The market has witnessed various acquisitions, investments, and partnerships between telecommunication companies in order to enhance their market share in mobile and fixed data services. For instance, in August 2023, Maxis introduced its long-awaited series of new plans featuring 5G services. These enhanced plans offer over twice the data for both 4G and 5G, along with extra bonus data for 5G. These plans are tailored to address the growing digital requirements of consumers and businesses, particularly in terms of video content consumption and productivity tools.
- Furthermore, the growth of the optical fiber network, implementation of mobile internet networks like 4G and 5G, and the demand for fast data and messaging services across various industries and retail customers to bolster the nation's digitalization plan are driving the data and messaging services market in the country’s telecommunications industry. As per Statistics Malaysia, in 2023, approximately 97.1% of the population in Malaysia had access to the 4G LTE mobile network. In contrast, around 95.3% had access to the previous 3G network in 2020. Such significant developments in the field of connectivity are expected to drive the segment's growth and enable more market opportunities for telecom players in the country.
