Malaysia building a technologically progressive economy
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.
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.
Peter Evans Senior Analyst Asia
BuddeComm has just released a new report on this country - for more info see: 2008 Asia - Telecoms, Mobile and Broadband in Malaysia and Philippines.
