Post on 30-Jul-2015
transcript
Malaysia – Mobile market projections 2020
2 futures … - Stagnate or Grow
Saravanan SFreelance Consultant – Telecom Strategy & Changesaravanans80@gmail.com
3 April 2015
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Exec Summary – Malaysian Operators have to decide if they are going to stagnate orgrow their services business going forward.
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• The Malaysian market has 2 possible future directions – one of stagnation around the $7.5 Bn markOR maintain growth to reach close to $10 Bn by 2020,
• Stagnation Drivers :• Excessive navel gazing…. - with more focus on Costs and Margins and not enough on Growth /
Innovation and Solutions• Under-spending on Capex – coverage, quality, technology, products and services partnerships /
innovation – a recurrent theme in Malaysia• Price competition in Data
• Growth Drivers• Focus on market growth – through new products and services• Focus on Innovation – especially in IoT solutions, Regional Mid Size Corporate Mobility solutions• Leverage regional market leadership – especially for Axiata and Telenor to build scale for Eco-
system partnerships.• Widen business scope beyond Core Communication – to Devices Retail / Supply chain• Promote Multi-device / multi-connection ownership and usage• Promote Data – OTT - Content synergetic deal making and sell solutions / experiences rather
than pure data
Malaysia Market - Macro Drivers – Past Trends ..Assumptions for the future : Population growth trends continue to decline to 1.35% p.a. by 2020; while GDP grows at between5-6% (real) and a $ GDP deflation rate of 4 – 4.5% in line with the past trends averaged over last 8 years
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27 27 28 28 29 29 30 30
19
2320
25
2931 31
34
4.8 5.5 5.4 6.4 6.9 7.2 7.2 6.8
2.5%2.4%
2.7%2.6%
2.4% 2.3% 2.3%
2.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2007 2008 2009 2010 2011 2012 2013 2014
Malaysia Macro Trends - GDP, Pop, Mob Rev & Indy % of GDP
Pop Mn GDP $ Tens Bn
Mob Rev $ Bn Mob Rev % GDP
Malaysia Industry Revenue % of GDP – in context of global trends 3 future scenarios..Based on GDP / Capita vs, Mobile Indy Rev % of GDP analysis carried out for top 55 markets..
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y = 0.0211x-0.13
R² = 0.1853y = 0.0249x-0.171
R² = 0.3288y = 0.0257x-0.176
R² = 0.3917
y = 0.0266x-0.187
R² = 0.3999
y = 0.0259x-0.188
R² = 0.4114y = 0.0251x-0.186
R² = 0.4155y = 0.025x-0.193
R² = 0.4263
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0
Indy Rev % GDP (Y-axis) vs. GDP per Capita (X-axis) by year
Indy Rev % GDP 06
Indy Rev % GDP 07
Indy Rev % GDP 08
Indy Rev % GDP 09
Indy Rev % GDP 10
Indy Rev % GDP 11
Indy Rev % GDP 12
Power (Indy Rev % GDP 06)
Power (Indy Rev % GDP 07)
Power (Indy Rev % GDP 08)
Power (Indy Rev % GDP 09)
Power (Indy Rev % GDP 10)
Power (Indy Rev % GDP 11)
Power (Indy Rev % GDP 12)
y = 0.0211x-0.13
R² = 0.1853y = 0.0249x-0.171
R² = 0.3288y = 0.0257x-0.176
R² = 0.3917
y = 0.0266x-0.187
R² = 0.3999
y = 0.0259x-0.188
R² = 0.4114y = 0.0251x-0.186
R² = 0.4155y = 0.025x-0.193
R² = 0.4263
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0
Indy Rev % GDP (Y-axis) vs. GDP per Capita (X-axis) by year
Indy Rev % GDP 06
Indy Rev % GDP 07
Indy Rev % GDP 08
Indy Rev % GDP 09
Indy Rev % GDP 10
Indy Rev % GDP 11
Indy Rev % GDP 12
Power (Indy Rev % GDP 06)
Power (Indy Rev % GDP 07)
Power (Indy Rev % GDP 08)
Power (Indy Rev % GDP 09)
Power (Indy Rev % GDP 10)
Power (Indy Rev % GDP 11)
Power (Indy Rev % GDP 12)
GDP / Cap =$ 16,500By 2020
Mob Indy % ofGDP = 1.6
Mob Indy % ofGDP = 1.8
Mob Indy % ofGDP = 1.35
7.37.8
8.2
8.8
9.3
9.9
4.8
5.5 5.4
6.4
6.97.2 7.2
6.87.2
7.57.8
8.28.5
8.8
7.1 7.2 7.3 7.4 7.4 7.4
2.0% 2.0% 1.9% 1.9% 1.9% 1.8% 1.8%
2.5%2.4%
2.7%
2.6%
2.4%2.3%
2.3%
2.0%1.9%
1.9%1.8%
1.7%1.7%
1.6%
2.0%
1.9%
1.8%
1.7%
1.6%
1.5%
1.4%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2.2%
2.4%
2.6%
2.8%
3.0%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Malaysia - Mobile Revenue Projections $ Bn
Mob Rev Scen 1 Mob Rev Scen 2Mob Rev Scen 3 Mob Rev % GDP Scen 1Mob Rev % GDP Scen 2 Mob Rev % GDP Scen 3
Three Scenarios projected for Malaysian mobile market = based on extent to which theindustry share of GDP will drop over the next 5 years..Range of Industry revenue by 2020 = $7.4 Bn to $9.9 Bn – from the current $6.8 Bn in 2014.
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In terms of product break out, Malaysia is following global trends, with Data share growing,Voice share shrinkage and SMS dropping off the charts
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74%
71%
68%
62%59%
55%53%
55%
79%
76%71%
68%66%
64%63%
61%
80% 81%79%
76%
70%68%
65% 64%
50%
55%
60%
65%
70%
75%
80%
85%
2007 2008 2009 2010 2011 2012 2013 2014
Malaysia - Voice % of Revenues
Maxis Celcom Digi
26%
29%
32%
38%41%
42% 43%44%
21%
24%
29%
32%34% 34% 34%
37%
19%18%
20%
23%
29%31%
34%35%
15%
20%
25%
30%
35%
40%
45%
50%
2007 2008 2009 2010 2011 2012 2013 2014
Malaysia - Non-Voice % of Revenues
Maxis Celcom Digi
21%
25% 25%
29%
34%
18%
21%
23%
25%
30%
15%
20%
25%
30%
35%
40%
2010 2011 2012 2013 2014
Malaysia - Pure Data % of Revenues
Maxis Celcom
17%
16%
17%
14%
10%
14%
13%
11%
9%
7%6%
8%
10%
12%
14%
16%
18%
2010 2011 2012 2013 2014
Malaysia - SMS % of Revenues
Maxis Celcom
Growth Scenario – Data revenue nearly trebles to MYR 18 Bn. Voice Revenue growsmarginally. Only happens if the industry pulls back from price competition and invests inmulti-device ownership; Own OTT service portfolios and drives M2M / IoT revenue streams
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12.8 13.8 13.6 13.8 13.7 13.7 13.6 13.2 13.8 14.0 14.2 14.4 14.5 14.5
0.81.4 2.4
3.5 4.5 5.4 6.6 7.18.7
10.211.8
13.715.6
18.0
3.03.1 3.0
3.13.0
3.12.6 1.9
1.71.5
1.2
0.90.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Malaysia Mobile Indy Rev MYR Bn - Scenario 1 - Product Breakout
Voice Rev Data Rev SMS Rev
Stagnation Scenario – Data revenue doubles while voice falls by 25% and SMS disappears.Total revenue growth is marginal. Most likely outcome in case of continued pricecompetition and a slower economic rebound. This is perhaps the most likely outcome
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12.8 13.8 13.6 13.8 13.7 13.7 13.6 13.2 13.3 12.9 12.5 12.1 11.5 10.9
0.81.4 2.4
3.5 4.5 5.4 6.6 7.18.3 9.4 10.4 11.5 12.4 13.5
3.0
3.13.0
3.13.0
3.12.6 1.9
1.7 1.4 1.0 0.7 0.5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Malaysia Mobile Indy Rev MYR Bn - Scenario 3 - Product Breakout
Voice Rev Data Rev SMS Rev
The Malaysian smartphone market currently at ~~$2.5 Bn p.a. and growing each year - Expecta 50-70% rise in volumes and potentially 30-40% by value by 2020. Operators who canleverage their deep knowledge of Subs usage, spend, credit have a huge opportunity
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38%
57%
17%
23%
32%
0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013 2014
Smart phone Penetration % of Base - Maxis & Celcom
Maxis Celcom
Despite their high margins and the growth potential of the market and country, Operators areseem chary of spending on Capex and Innovation in the last 4 years, which could adverselyaffect future revenue growth
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14%
16%
12%
9% 9%
14%
12%12%
13% 13%
11%10%
15%
13%
10%
11%
11%
13%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
2009 2010 2011 2012 2013 2014
Malaysia - Capex % of Rev
Maxis Celcom Digi
Mobile Industry general average of12% Capex / Revenue – typically
going to 15-16% during largetechnology rollouts – eg. LTE