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 analytics company GlobalData.
The company’s 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 per cent growth through 2021 with estimated sales of $8.4 billion , the same figure it posted in 2016.
The Malaysian telecom services market suffered a revenue decline of 8.1 per cent 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 per cent 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 per cent 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 per cent to reach $2.7 billion 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 per cent of total revenues in 2021. With ravenous demand for data, operators will continue to invest in LTE/LTE-A and fibre network expansion to maintain growth.”
Fixed broadband revenue growth will be led by rising FTTx adoption and rising demand for multiplay services.