Ms. Ng Wan Peng, Chief Operating Officer, MDeCThe Malaysian mobile industry has grown rapidly in recent years with the advent of mobile technology and high broadband penetration that sees several major corporations involved in mobile networks and services. With a population of 30 million, mobile penetration in Malaysia has long surpassed the 100% mark and the Malaysian mobile market is poised for greater growth, with much potential yet to be explored.

Here Ms. Ng Wan Peng, COO of the Multimedia Development Corporation (MDeC) discusses this exciting mobile market.

A competitive market for mobile network operators

Malaysia currently has more than 43 million mobile subscribers with 143.7% penetration rate and the subscriber base is expected to reach over 50 million by the year 2015. This resulted in a highly progressive market with local telco giants fiercely competing to gain their share of the market.

source: www.tigermine.com

The three major mobile operators – Maxis, Celcom and Digi, along with one dominant fixed operator TM Berhad, offer a highly competitive environment in the Malaysian mobile network operators market, while U-Mobile, a fourth mobile operator contributes to the already aggressive market that sees a close combat between these operators.

As at Q4 of 2013, Malaysia’s number one mobile network service provider, Celcom, has a mobile subscriber base of 13.5 million. Another telco giant, Maxis that used to be at the top spot in 2012, stood close with a subscriber base that totalled to almost 13 million in 2013. Digi, with almost 11 million subscriber base is the third largest operator in the country and U-Mobile, a fairly new player in the market is gaining momentum with just under 5 million subscribers and is targeting 10% of the market share. However, growth is expected to slow down as the market approaches saturation but is still expected to register a Compound Annual Growth Rate (CAGR) of 6.0% from 2011 to 2015.

source: www.tigermine.com

Smartphones are gaining momentum

Malaysians are progressively adopting smart devices especially amongst urbanites. In the Southeast Asia region, Malaysia has the highest daily Internet usage and 3G subscriptions had increased to over 18 million in 2013 from just over 14 million in 2012. The smartphone penetration in the Malaysian mobile market currently stands at 35.8% for smartphones and 12.1% for tablets. This indicates the need for Malaysians to get connected to the Internet besides using their devices just for voice calls and SMS purposes. In Southeast Asia, Malaysia stood second with 80% smartphone penetration amongst its population while tablet penetration increased by 23% between 2012 to 2013. Research also indicates that Malaysians replace their Smartphones every 21 months as opposed to other devices.

Demand for data

Mobile network traffic continues to grow at an impressive rate as there is demand for data services in the country, which is driven by the uptake of these smart devices. The monthly data consumption of an average smartphone in Malaysia is expected to quadruple to an average of 2GB per user in 2018. This is a positive sign for mobile network operators to increase the bandwidth of network to meet the demands of data. With increased data demand and spikes in geographies, network outage or congestion is imminent and to cope with the increasing diverging cost and revenue market realities due to the surging data traffic, service providers are focusing predominantly at reducing the cost structure as opposed to top line improvements.

source: e27.co

Rise of m-commerce

RM1.82 billion worth of transactions was reported in 2013 for mobile commerce which represents close to 50% of total e-commerce market size in Malaysia that stood at RM3.65 billion. Mobile share is projected to reach 59.6% of the market share in 2015. Movie tickets are the main driver for smartphone purchases followed by fashion and accessories, while airline tickets being the most popular items Malaysians purchase on tablets.

Challenges of m-payments

Although purchasing items via mobile is a common activity amongst Malaysians, m-payments almost do not exist as it only make up only 0.3% of the payment volume, showing there is a lack of need for the service. This is due to the common bank accounts that are easily accessible to a large majority of Malaysians and bank transfers are of preference when making online payments. With over 8 million Malaysians owning a credit card, payments made through this method is also fairly common in mobile purchases. Another factor that discourages m-payments in the country is that none of the major mobile operators enjoy a monopoly of the sector, thus it is harder for the introduction and adoption of a widely used m-payments solution. However, the Malaysian Government is quick to implement solutions in resolving this as it launched the Digital Malaysia initiative in 2012 with two key projects aimed at developing a trusted mobile digital wallet system and e-payment services for SMEs and micro enterprises in the country.

Ms. Ng Wan Peng, Chief Operating Officer, MDeCNg Wan Peng

Chief Operating Officer

MDeC

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The mobile digital wallet system will ensure the establishment of a trusted nationwide payment system that allow consumers to transact securely by embedding virtual cards, vouchers, and coupons in Mobile Digital Wallet applications in smartphones or other mobile devices, while the e-payment services will open doors for hawkers, traders or other small businesses to leverage on technology, allowing for their operations to be able to accept debit card and credit card payments via mobile e-payment terminals. These are currently being implemented under the purview of the Multimedia Development Corporation (MDeC), the Government agency entrusted to drive the country’s ICT development.

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