Steady growth in the consumption of mobile data, fixed broadband, VoIP and pay-TV services is set to help Malaysia’s telecom market remain viable through to 2021, according to GlobalData, a leading data and analytics company.
The company’s latest report: Malaysia: Expansion of High-Speed Wireless and Fixed Broadband Networks to Drive Telecom Market Growth’ confirms that the sector, which has struggled since 2014, is expected to recover from 2019 onwards returning a flat performance of +0.01% growth through 2021 with estimated sales of $8.4bn, the same figure it posted in 2016.
The Malaysian telecom services market suffered a revenue decline of 8.1% in 2016, mainly due to a weak economy, a price war on broadband services and a general decline in voice revenue. Revenues were further reduced as operators competed with each other to offer cheaper plans to counter weak consumer spending.
Mobile services revenue is set for a flat compound annual growth rate (CAGR) of 0.8% until 2021, due to the huge erosion in mobile voice revenues caused by user migration from voice telephony to OTT-calling applications together with free calling offered by operators as part of bundle deals.
GlobalData Analyst Alfie Amir, commented: “Mobile voice revenue, which used to be a backbone to the industry, contributed 37.8% of total service revenues in 2016 is now facing stiff competition from OTT-calling applications. As a large number of users are now migrating to these services while traditional revenue streams are being eroded.”
Fixed broadband, mobile data and the pay-TV segments are set to provide a boost to sales, driving the market upwards and helping it to stay afloat over the next four years. Mobile data revenue is expected to grow at a CAGR of 2.8% to reach $2.7bn in 2021, driven by the rising consumption of high-bandwidth online content on smartphones, and adoption of 4G/LTE-A.
Amir added: “Data services will be the largest revenue generator from 2018, contributing 50% of total revenues in 2021. With ravenous demand for data, operators will continue to invest in LTE/LTE-A and fiber network expansion to maintain growth.”
Fixed broadband revenue growth will be led by rising FTTx adoption and rising demand for multiplay services.
Information based on GlobalData’s report: Malaysia: Expansion of High-Speed Wireless and Fixed Broadband Networks to Drive Telecom Market Growth