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1. Q1 2013 www.businessmonitor.comMALAYSIATELECOMMUNICATIONS

REPORTINCLUDES 5-YEAR FORECASTS TO 2017ISSN 1748-4677Published by:Business Monitor International

2. Malaysia Telecommunications Report Q1 2013 INCLUDES 5-YEAR

FORECASTS TO 2017Part of BMIs Industry Report & Forecasts

SeriesPublished by: Business Monitor InternationalCopy deadline: January2013Business Monitor International 2013 Business MonitorInternationalSenator House All rights reserved.85 Queen Victoria StreetLondonAll information contained in this publication isEC4V 4AB copyrighted in thename of Business MonitorUnited Kingdom International, and as such no part ofthisTel: +44 (0) 20 7248 0468 publication may be reproduced, repackaged,Fax:+44 (0) 20 7248 0467 redistributed, resold in whole or in any part, or usedEmail:[email protected] in any form or by any means graphic, electronicorWeb: http://www.businessmonitor.com mechanical, including photocopying,recording, taping, or by information storage or retrieval, or by any other means,without the express written consent of the publisher.DISCLAIMERAll

information contained in this publication has been researched and compiled fromsources believed to be accurate and reliable at the time ofpublishing. However, inview of the natural scope for human and/or mechanical error, either at source orduring production, Business MonitorInternational accepts no liability whatsoeverfor any loss or damage resulting from errors, inaccuracies or omissions affectingany part of thepublication. All information is provided without warranty, andBusiness Monitor International makes no representation of warranty of any kindasto the accuracy or completeness of any information hereto contained.

3. Malaysia Telecommunications Report Q1 2013CONTENTSBMI Industry

View ............................................................................................................... 7BMI Industry

View ..................................................................................................................................... 7SWOTAnalysis .....................................................................................................................9 MobileSWOT ........................................................................................................................................... 9 WirelineSWOT ....................................................................................................................................... 10IndustryForecast .............................................................................................................. 11Mobile ................................................................................................................................................... 11 Table: Telecoms Sector - Mobile - Historical Data And

Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 11ARPU .................................................................................................................................................... 13 Table: Telecoms Sector - Mobile ARPU - Historical Data &Forecasts (MYR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 13 Fixed-Line .............................................................................................................................................. 15 Table: Telecoms Sector - Fixed Line - Historical Data And


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Forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 15Broadband ............................................................................................................................................. 16 Table: Telecoms Sector - Internet - Historical Data AndForecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . 16Industry Business EnvironmentOverview ...................................................................... 18 Industry BusinessEnvironmentOverview ..................................................................................................... 18Table: Asia Pacific Telecoms Risk/Reward RatingsQ113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Malaysia ................................................................................................................................................ 23MarketOverview ...............................................................................................................25

Mobile ................................................................................................................................................... 25 Table: Malaysian Mobile Market Regional Comparisons,2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 26 KeyDevelopments .................................................................................................................................. 26 MobileGrowth ...................................................................................................................................... 26 Table: Malaysia Wireless Market,Q212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 MarketShares ....................................................................................................................................... 28 Usage(MOU/ARPU) .............................................................................................................................. 313G/4G .................................................................................................................................................. 33MVNOs ................................................................................................................................................ 37 Mobile Content/Value-AddedServices ........................................................................................................ 37Table: Malaysia Mobile Non-Voice Service RevenueIndicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 MobileBroadband ................................................................................................................................. 39 Table: Mobile MarketOverview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Table: Maxis Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 41 Table:Celcom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . 42 Table:DiGi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 43 Mobile Regional

Content .......................................................................................................................... 46 Table: Selected NFC Developments, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 48 Fixed-Line .............................................................................................................................................. 53 Business Monitor International Page 4

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Broadband ............................................................................................................................................. 54 National High-Speed Broadband (HSBB)Project ......................................................................................... 57IPTV ..........................................................................................................................

.......................... 59WiMAX ....................................................................................................................

............................ 61LTE ..................................................................................................................................................... 64 Table: Wireline Developments, 2010-2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Industry Trends &Developments .................................................................................... 67 IndustryTrends &Developments ................................................................................................................ 67 Mobile Consolidation

Imminent? ..............................................................................................................67 TIME Invests In Regional DataCentre ....................................................................................................... 69Entrants To Spur IPTVGrowth ................................................................................................................. 70Maxis And Astro Choose Collaboration OverCompetition ............................................................................. 71 Fiberail GetsActive ................................................................................................................................ 71RegulatoryDevelopment .................................................................................................. 73RegulatoryDevelopment ........................................................................................................................... 73 Table: Malaysia: Regulatory Bodies And Their Responsibilities . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 74 RegulatoryDevelopments ....................................................................................................................... 75CompetitiveLandscape .................................................................................................... 77Competitive


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Landscape ............................................................................................................................. 77 Table: Key Players - Malaysia TelecomsSector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Table: SelectedOperators - Financial Indicators, 2005-2011

(US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 77CompanyProfiles .............................................................................................................. 78TelekomMalaysia .................................................................................................................................... 78 MaxisCommunications ............................................................................................................................. 82Celcom .................................................................................................................................................. 86 DiGiTelecommunications .................................................................................................

........................ 90RegionalOverview ............................................................................................................ 94Nokia SiemensNetworks ........................................................................................................................... 94 FinancialPerformance ........................................................................................................................... 94 Table: Vendor Revenues(US$mn) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94RestructuringEfforts .............................................................................................................................. 95 GeographicalBreakdown ........................................................................................................................ 95 Table: Net Sales By Geography (EURmn) . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 95 Asia Pacific Is The Place ToBe ................................................................................................................ 96Table: NSN Selected AsiaActivities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97DemographicForecast ................................................................................................... 100DemographicForecast ........................................................................................................................... 100 Table: Malaysias Population By Age Group, 1990-2020 (000) . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 101 Table: Malaysias Population By Age Group, 1990-2020 (% oftotal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . 101 Table: Malaysias Key Population Ratios, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Table: Malaysias Rural AndUrban Population, 1990-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 BusinessMonitor International Page 5

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2013Glossary ........................................................................................................................... 104Glossary .............................................................................................................................................. 104 Table: Glossary Of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104Methodology .................................................................................................................... 106Methodology ......................................................................................................................................... 106 Table: Key Indicators For Telecommunications IndustryForecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . 106 Telecoms Business EnvironmentRatings ................................................................................................... 107 Table:Ratings Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 108 Table: Weighting Of Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . 109 Business Monitor International Page 6

6. Malaysia Telecommunications Report Q1 2013BMI Industry ViewBMI

Industry View BMI View: Although the Malaysian mobile market still offersopportunities for organic growth - new MVNOs continue to enter the market, asreported in this quarters update - network operators face considerable challenges

as voice usage declines and customers prove reluctant to upgrade to postpaidservices. Subscriber numbers growth and mobile broadband usage were weakerthan expected as operators tried to encourage greater voice consumption. In thebackground, although, non-voice service revenues are still growing, which isencouraging for those operators starting to build 4G LTE networks. That said,low- value SMS services remain a large part of non-voice revenue, so operatorsneed to contain costs wherever possible. Key Data Our telecoms forecasts havebeen extended to 2017. We envisage 41.9mn mobile subscribers, 3.6mn fixed-linesubscribers and 7.2mn broadband subscribers. Mobile subscriber growthrebounded in Q212 (latest available data for analysis), although the momentumcould taper in Q312 after weaker figures from DiGi. ARPUs have exhibitedstability, although we believe that the trend of long-term decline remains due tostrong competition and price promotions. Key Trends & Developments Astro andMaxis have signed an agreement to jointly develop and market unique telecomsproduct bundles, including pay-TV, mobile and fixed broadband services. Maxishas been open about its intention to venture into the pay-TV market through theIPTV route. In Q212, the firm signed strategic partnerships with 14 contentproviders, with the aim of launching commercial IPTV services in Q312. A soloventure into the IPTV market would have pitted Maxis against experienced


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players and industry leaders Telekom Malaysia, Astro, Vassetti Datatech andREDtone. DiGi and WhatsApp have teamed up to offer unlimited access toWhatsApp messenger services. The collaboration demonstrates that mobilenetwork operators and over-the-top (OTT) content providers are able to coexistand develop a revenue-sharing business model. While a threat, OTT providers

could also lead to consumers upgrading their services with telecoms operators.Business Monitor International Page 7 7. Malaysia Telecommunications Report Q1 2013 Malaysia had a Telecoms

Rating score of 59.1 in BMIs latest Asia Pacific Telecoms Risk/Reward Ratings.Recent data continue to indicate that the Malaysian economy is in the midst ofrebalancing. Deteriorating global economic conditions have become a major dragon manufacturing exports. Meanwhile, increased public spending has helped toboost domestic demand. However, we see limited room for additional fiscalstimulus by the government going forward, and this suggests that economicgrowth is poised to remain relatively subdued at 3.8% for 2012 before witnessinga mild pickup towards 4.6% in 2013. Business Monitor International Page 8

8. Malaysia Telecommunications Report Q1 2013SWOT AnalysisMobile SWOTSWOT AnalysisStrengths Three well-established mobile operators and fiveadditional operators licensed to provide 3/4G services. Sophisticated consumerprofile eager to use mobile data and value-added services (VAS). Strongregulator supportive of competition in the mobile sector, creating a mature marketwith penetration in excess of 100%.Weaknesses Little room for further growthin an overly competitive and increasingly saturated mobile market. ARPU ratescontinue to decline, despite operators witnessing the beginnings of prepaid topostpaid migration. Despite WiMAX licences being awarded in 2005, littleprogress has been made.Opportunities 3G services providing numerousbusiness opportunities for content providers and a new market for handset

vendors. Launch of mobile number portability (MNP) has helped to bolstercompetition. Upgraded networks have led to strong demand for mobilebroadband services, which could help close the digital divide gap emergingbetween urban and rural markets.Threats Maturity of market could lead to asaturated domestic market, as in Singapore. Possibility that Malaysia could bedisplaced as a regional foreign direct investment (FDI) hub by China, withvendors opting to locate/relocate to neighbouring countries. Lack of keystrategic regional investors, aside from Telenor and SingTel. Business MonitorInternational Page 9

9. Malaysia Telecommunications Report Q1 2013Wireline SWOT SWOT

AnalysisStrengths Several operators (mobile and WiMAX) are licensed to offer

broadband services, helping to create greater broadband access. Governmentinitiative to improve state of high-speed internet infrastructure.Weaknesses Telekom Malaysia continues to exercise effective monopoly of domestictelephony and domestic/international leased line markets. Continued decline offixed-line sector at hands of mobile, digital subscriber line (DSL) and voice overinternet protocol (VoIP) substitution. Broadband tariffs remain high, as dowholesale broadband costs, which are being passed on to the end-customer.Opportunities WiMAX licensing helping rapid growth of wireless


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broadband technologies. Broadband market set to experience growth, with BMIforecasting more than 7.2mn subscribers by the end of 2017, up from 6.1mn in2012.Threats Award of governments high-speed broadband (HSBB) project toTelekom Malaysia has compounded the operators dominance of the fixedbroadband market. Only P1 has made any substantial developments with regard

to WiMAX; the other three licence holders face the loss of their licences.Business Monitor International Page 10 10. Malaysia Telecommunications Report Q1 2013Industry ForecastMobile

Table: Telecoms Sector - Mobile - Historical Data And Forecasts 2010 20112012f 2013f 2014f 2015f 2016f 2017fNo. of mobile phone subscribers (000)33,859 36,661 38,677 40,108 40,991 41,442 41,732 41,857No. of mobile phonesubscribers/100 inhabitants 119 127 132 135 135 135 134 132No. of mobilephone subscribers/100 fixed-linesubscribers 769 896 1,000 1,070 1,112 1,1411,161 1,170No. of 3G phone subscribers (000) 9,202 10,335 13,952 16,88219,415 21,162 22,326 22,7723G market as % of entire mobile market 27.2 28.236.1 42.1 47.4 51.1 53.5 54.4f = BMI forecast. Source: BMI, MCMC, operators

According to the latest figures published by Industry Trends - Mobile SectorMalaysias three mobile operators, there were 2010-2017 34.956mn mobilesubscribers in total at the end of June 2012, up by 3.5% y-o-y. However, MaxisCommunications changed its definition regarding active subscribers in Q111,reducing its reported customer base by around 1.4mn. That said, the operator hasprovided its subscriber base under the old definition. Using this figure, therewould have been 36.060mn mobile subscribers in Malaysia at the end of June2012. The figures used for our forecasts come from the national regulatoryauthority, the Malaysian f = BMI forecast. Source: BMI, MCMC, operatorsCommunications and Multimedia Commission (MCMC), which offers a morecomplete assessment as it draws in customer numbers from 3G operator/2G

reseller U Mobile as well as MVNOs. The MCMC has recently restated its year-end 2010 mobile subscriber figure, down to 33.859mn. It has not providedprevious year data for comparison, so it is unclear whether the 2009 figurepresented here is totally accurate. Business Monitor International Page 11

11. Malaysia Telecommunications Report Q1 2013 At the end of June 2012, the

MCMC reported 38.446mn mobile subscribers in the country, up from 35.301mnin June 2011. We expect prepaid subscribers and the growing number of MVNOsshould continue to help fuel growth in Malaysias mobile sector, and should alsohelp Maxis recover some of its lost subscriber base. After reporting a net loss of129,000 prepaid subscribers in Q311, Maxis has since recovered 175,000 in thesubsequent three quarters. However, we also believe that the operators willmaintain efforts to increase the number of postpaid subscribers and will focus onmigrating low-value prepaid subscribers to the more expensive contract priceplans. Data from the MCMC showed that there were 12.022mn 3G subscribers inMalaysia at the end of June 2012, up by 23.2% from 9.756mn in June 2011. Thestrong growth trajectory is due to the increasing affordability of smartphones anddata services. Like the broader mobile market, the prepaid segment is largelyresponsible for the momentum. We continue to see 3G growth gaining tractiongiven that data service accounts for only about 31% of the total mobile market,


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along with consumers relatively strong purchasing power and the availability oflow-cost devices. e expect to see 22.772mn 3G subscribers by 2017, representing54.4% of a total mobile market of 41.857mn, up from 13.952mn in 2012.Meanwhile, Malaysian operators continue to push for the launch of nextgeneration LTE services, having gained the requisite spectrum and operating

licences in Q411. While LTE is likely to become commercially available inMalaysia in 2013, operators have already started trialling the technology and arein the midst of forming network sharing agreements to reduce capital expenditureand accelerate service roll-out times. However, the five newcomers will struggleto finance their network roll-outs as the existing mobile operators will win mostof the new customers attracted to LTE. We expect consolidation among thoseplayers and - possibly - U Mobile in 2012. Business Monitor International Page12

12. Malaysia Telecommunications Report Q1 2013ARPU Table: Telecoms Sector

- Mobile ARPU - Historical Data & Forecasts (MYR) 2010 2011 2012f 2013f2014f 2015f 2016f 2017fCelcom 50.0 51.0 48.6 46.4 44.5 43.1 42.0 41.0Maxis

49.0 54.0 51.7 49.4 47.8 46.8 45.6 44.1DiGi 52.0 50.0 47.9 45.7 44.3 43.3 42.240.8Market Average 50.1 52.0 49.7 47.4 45.8 44.7 43.5 42.2f = BMI forecast.Market average adjusted based on operators markets shares. Source: BMI,operators At the time of writing, only DiGi had reported Industry Trends - MobileARPU ARPU data for Q312. Celcom Axiata and Maxis (MYR) had offered updata through to the end of Q212 only, 2010-2017 while 3G-only U Mobile hadnot disclosed any data at all. Although there were continued slow improvementsin subscriber mixes and increased usage of premium non-voice services, thesewere not enough to offset declining voice service revenues and promotions tocounter strong competition. Consequently, the market average ARPU fell slightlyin Q212. In general, we expect to see Malaysian blended mobile ARPUs continue

to fall as operators continue to engage in price promotions, for both the prepaid f= BMI forecast. Source: BMI, operators and postpaid segments, to attractsubscribers. The expansion in rural regions to boost market shares also appliesfurther downward pressure on ARPU. The operators continued reliance onprepaid services does not bode well for continued ARPU growth in the yearsahead. That said, the rate of decline would be faster still were it not for themitigating effects of Business Monitor International Page 13

13. Malaysia Telecommunications Report Q1 2013 mobile broadband as such

services become increasingly popular and help to keep prepaid ARPU ratesbuoyant. We forecast Malaysias market average blended ARPU will decline toMYR49.7 in 2012 before declining to MYR42.2 in 2017. With the three operatorsreporting flat ARPU from the previous quarter, we have retained our forecasts.However, we continue to note that there are upside risks to our forecasts given theincreasing number of 3G subscribers in the country and the impending launch ofLTE services in the next few years. Business Monitor International Page 14

14. Malaysia Telecommunications Report Q1 2013Fixed-Line Table: Telecoms

Sector - Fixed Line - Historical Data And Forecasts 2010 2011 2012f 2013f 2014f2015f 2016f 2017fNo. of main telephone lines in service (000) 4,404 4,091 3,8663,750 3,686 3,631 3,595 3,577No. of main telephone lines/100 inhabitants 15.5


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14.2 13.2 12.6 12.2 11.8 11.5 11.3f = BMI forecast. Source: BMI, MCMC,operators The Malaysia Communications and Multimedia Industry Trends -Fixed-Line Commission reports that there were 3.958mn fixed Sector lines at theend of June 2012, down from 4.268mn in 2010-2017 June 2011. Fluctuations inthe market have made predicting the fixed-line market difficult. The market

experienced a gradual contraction between Q105 and Q309 before witnessing aresurgence from Q409 to Q410, resulting in a peak of 4.404mn subscribers.However, more recent data indicate another period of decline and we believe thatthis will be the trend given the growing demand for mobile services. We believethat the recent uptrend was largely due to a telecoms service bundling strategy byMalaysian operators in order to encourage consumers to sign up f = BMI forecast.Source: BMI, MCMC, operators for fixed-line service even though they might notuse it. This is a common tactic adopted by multi-play operators in other countries,and have been relatively successful in mitigating the decline in demand for fixed-line services. For example, fixed-line incumbent Telekom Malaysia bundles atraditional fixed-line service in its fibre broadband package, and the growing

adoption of fibre broadband will benefit the fixed- line market. While this couldhelp the number of fixed lines in Malaysia to grow, in our opinion, the sector isone of decline, and this is borne out by the latest data from the MCMC. Thegovernment-backed High Speed Broadband project is a double-edged sword as itcould apply further downward pressure on Malaysias fixed-line industry ifoperators offer VoIP services via the fibre optic Business Monitor InternationalPage 15

15. Malaysia Telecommunications Report Q1 2013 network. We foresee the

fixed-to-mobile migration to gain traction based on the increasing number of 3Gsubscribers in Malaysia. Consequently, we expect the number of fixed lines inMalaysia to fall to 3.577mn in 2017, down from 3.866mn in 2012.Broadband

Table: Telecoms Sector - Internet - Historical Data And Forecasts 2010 20112012f 2013f 2014f 2015f 2016f 2017fNo. of internet users (000) 15,994 17,61017,962 18,231 18,414 18,506 18,598 18,691No. of internet users/100 inhabitants56.3 61.0 61.3 61.2 60.9 60.3 59.7 59.1No. of broadband internet subscribers(000) 4,722 5,687 6,142 6,541 6,803 6,986 7,126 7,219No. of broadband internetsubscribers/100inhabitants 16.6 19.7 20.9 22.0 22.5 22.7 22.9 22.8f = BMIforecast. Source: BMI, ITU, MCMC, operators According to the InternationalTelecommunication Industry Trends - Internet Sector Union, there were17.610mn internet users in 2010-2017 Malaysia at the end of 2011, up from15.994mn in 2010. We expect the number of internet users in Malaysia toincrease gradually over the next few years, reaching 18.691mn by the close of ourforecast period in 2017.. Meanwhile, there were 5.840mn broadband subscribersin the country at the end of June 2012, according to the MCMC. This representeda y-o-y increase of 8.2% from 5.397mn. The growth momentum in the sector isclearly declining. The Malaysian broadband market grew by 17.1% y-o-y f = BMIforecast. Source: BMI, ITU, MCMC, operators in Q112, 20.4% in Q411, 30.5%in Q311 and 66.9% in Q211. The regulators data include both fixed and mobiletechnologies with the latter (not inclusive of the 1Malaysia netbook programme)accounting for the majority at 59.1%. Business Monitor International Page 16


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16. Malaysia Telecommunications Report Q1 2013 The slowing momentum is a

combination of higher base effects and the market approaching saturation.Additionally, fixed broadband services tend to be shared among several users,while we believe that demand for mobile broadband would slow, too, given theincreasing adoption of smartphones. Tethering could eliminate the need for

consumers to subscribe to an additional dedicated mobile broadband solution.BMI forecasts the number of broadband subscribers in Malaysia to reach 7.219mnby 2017, up from 6.142mn in 2012. At the end of 2017, the broadband penetrationrate will increase to 22.8% from 20.9% in 2012. Meanwhile, other developmentsaimed at developing the spread of broadband relate to the governments nationalHigh Speed Broadband (HSBB) network project. According to TelekomMalaysia, responsible for deploying the HSBB together with the government, thenetwork will boost GDP by 0.6% and create 100,000 jobs by 2017. TelekomMalaysia is on track to meet its network coverage target of 1.3mn premises by2012, and has signed up operators such as Packet One Networks, Maxis andCelcom Axiata as retail and wholesale providers to boost the number of high-

speed broadband subscribers in the country. Furthermore, operators are gearingtowards for the commercial launch of LTE services. Business MonitorInternational Page 17

17. Malaysia Telecommunications Report Q1 2013Industry Business

Environment OverviewIndustry Business Environment Overview This quarterBMI has adjusted the methodology for our proprietary Risk/Reward Ratings.While the fundamental principles are unchanged, we have expanded the data usedto assess the potential and challenges of investing in telecoms markets. Assubscriber growth is no longer the key driving force behind market value growth,the majority of markets are now looking at encouraging existing subscribers toincrease their spending on services, making factors such as the economic outlook

an increasingly important determinant in ranking market opportunities. Futurespending ability and our long-term economic views are therefore integral to ouradjusted ratings. We have also introduced a more nuanced assessment of marketdynamics as one contributing score for the industry rewards. Asia Pacificstelecoms industry registered a Varying Opportunities telecoms rating score of56.2, up from 55.6 the Asia Pacific Telecoms Risk/Reward Ratings previousquarter. The improvement was driven by a broad base increase in the variousreward and risk scores. However, we highlight that past ratings are not perfectlycomparable as we have tweaked our methodology. The countries rankings havealso changed in light of the fine-tuning. Japan remained the most attractive marketin Asia Pacific with a telecoms rating score of 74.9 on a risk/ reward basis. Whilemature, operators have already turned their focus to extracting greater value fromtheir existing subscriber bases via upgraded and add- on services. The countrywas one of the first in the Source: BMI region to launch commercial LTEservices, and operators have seen positive responses from consumers. However,the outlook for Japan is looking increasingly vulnerable. Besides an ageingpopulation, which bodes poorly for long-term spending on new telecoms productsand services, businesses have become increasingly bearish towards current andfuture business conditions, based on the September 2012 Tankan survey by the


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Bank of Japan. This could eventually filter down to consumers, leading to reduceddiscretionary spending. Business Monitor International Page 18

18. Malaysia Telecommunications Report Q1 2013 Australia was ranked second

with a telecoms rating score of 73.1. The countrys significant land mass meansthat achieving complete telecoms coverage is a daunting task, although this

presents an opportunity for companies to fill in the gaps. At present, the NationalBroadband Network, which in part aims to bridge the digital divide, is stillprogressing well. However, the opposition Coalition party has announced that itwould revamp the entire project to reduce immediate cost. The trade-off comes inthe form of businesses and consumers receiving slower connectivity that requiresanother upgrade in the future. The effective and forward-looking Singaporeanregulator ensures that the country has a long-term plan and that variousstakeholders collaborate on vital developments. Consequently, Singapore has thehighest industry risks score in the region. While the countrys comparatively smallpopulation size places a limit on its industry rewards score, Singapores strongmacroeconomic position has helped it to rank third in Asia Pacific. However, we

highlight that, as with many countries in the region, continued global economicweakness would have a negative effect on export-dependent Singapore. HongKong is similar to Singapore in many ways, which include its industry rewardsand industry risks scores. Data from the regulator have shown that mobile dataconsumption remains on a strong growth trajectory, which bodes well for themobile content industry. The territory was ranked fourth due to weaker countryrewards and country risks. Although Hong Kong is also vulnerable to externalshocks and we are adopting a cautious take on consumer spending going forward,we expect private consumption to remain the main outperformer, among othergrowth components. BMI previously highlighted that South Korea could overtakeHong Kong in our ratings table, although this view has yet to play out. South

Koreas nascent LTE market is one of the most vibrant in the region as all threemobile operators have launched nationwide commercial services. The countryalso has the support of device manufacturers such as Samsung Electronics and LGElectronics. Among the top five countries in the region, South Korea has thelowest country rewards score, and we see room for further downside. Thegovernment has so far been able to put off fiscal stimulus to boost a falteringeconomy. However, this abstinence may not last for long as economic growthcontinues to slide on the back of slower private consumption growth and adeteriorating trade picture. Business Monitor International Page 19

19. Malaysia Telecommunications Report Q1 2013 China is the highest-ranking

emerging market in the Asias Big Three Asia Pacific region due to its sheergrowth potential, Asia Pacific Telecoms Risk/Reward Ratings which is reflectedin the countrys industry rewards score of 68.8. Chinas economic imbalances havegrown consistently over the past decade, to a point where we now believe theyhave reached a peak. The coming years should see rebalancing take place, withthe current economic structure giving way to a more sustainable and consumer-driven economy, particularly consumer services. However, the telecoms market isdominated by state-owned firms and there is no indication from the governmentthat it is looking to liberalise the industry. Taiwan was ranked joint sixth with a


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telecoms rating Source: BMI score of 61.8. The competitive landscape is slightlyskewed, although the regulator has been evaluating ways to level the playingfield. While the governments bet on WiMAX is increasingly unlikely to generatea significant return on investment, the industry has started to transition to TD-LTE technology. Malaysia came in eighth position after registering a telecoms

rating score of 59.1. The country remains one of the most attractive emergingmarkets in the region, partially due to a more developed economy. Further, thegovernment has the Economic Transformation Programme (ETP), which aims toturn Malaysia into a high-income nation by 2020. The ETP has identified 12 keyeconomic areas, which include the telecoms industry. Initiatives such as launchinge-government, e-healthcare and ubiquitous broadband connectivity are expectedto play key roles. Indonesia is the third most populous country in the world,although its fragmented geography has placed a dampener on the growthpotential. As expanding network coverage is a challenging task, operators tend tofocus on the more lucrative urban cities instead of pursuing low-valueopportunities in rural regions. Meanwhile, the private consumption outlook for

Indonesia was robust in H112, supported by strong income growth and increasingaccess to credit. However, we believe that the Indonesian consumer has hit itscyclical peak, and now see growth in the space slowing modestly in 2013 to 5.5%from 5.7% in 2012. Business Monitor International Page 20

20. Malaysia Telecommunications Report Q1 2013 Although the merger between

the Philippine Long Distance Telephone Company and DigitalTelecommunications Philippines has been completed, the telecoms market is stillin a transitional phase. The National Telecommunications Commission is lookingto award a 3G licence in the near future and this could herald the introduction of anew player. Bangladesh had a telecoms rating score of 50.4 with its countryrewards component holding the country back. The allocation of 3G services is

expected to take place in the near future, which would provide a much-neededrevenue stream for mobile operators. Further, a recent slew of export datasuggests that growth is looking set to embark on a sustained recovery. Thecountry registered record export earnings of US$2.4bn in August 2012, havingrecorded two straight months of positive y-o-y growth in July and August 2012.Like Bangladesh, Thailand is about to issue 3G licences. This process has been inthe making for a number of years but failed to materialise previously due to amyriad of factors. However, the new regulator, the National Broadcasting andTelecommunications Commission, has been so far performing well. A successful3G auction and prolonged stability in the telecoms industry should see Thailandstelecoms scores improve in the medium term. Not too long ago, Indias telecomsindustry was experiencing robust growth, but the market is now struggling with ahost of issues. Although its market potential is comparable to that of China, thecompetitive landscape is overcrowded and operators had resorted to an aggressiveprice war to sustain subscriber growth. Additionally, legal and regulatoryuncertainties continue to plague the sector, which have significantly hamperedcompanies ability to make long-term investment decisions. Given the convolutedsituation, which involves a multitude of stakeholders ranging from thegovernment to foreign companies, we do not expect a resolution in the near


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future. At present, Pakistan could still be looking to auction 3G licences beforeend-2012, although, like Thailand, the process has been repeatedly delayed. Apre-bid conference of prospective 3G consultancy firms was held on September20 2012, but the regulator has not disclose a firm timeline for the actual auction.Further delays would leave Pakistan trailing behind its regional peers as

consumers and businesses would not have access to mobile broadbandconnectivity. Business Monitor International Page 21 21. Malaysia Telecommunications Report Q1 2013 After tweaking our

methodology, Sri Lanka has The Laggards moved up the ratings table to 15thposition. The Asia Pacific Telecoms Risk/Reward Ratings market is graduallyexpanding following the end of the civil war, with the public and private sectorsengaging in network expansions and new product launches. However, recovery isa long-term process and this is reflected in Sri Lankas country rewards score of26.7, the lowest in the region. Sri Lankas export growth came in at a new multi-year low of -17.4% y-o-y in July 2012. There are a number of factors that haveresulted in Vietnam ranking near the bottom of our Risk/ Reward Ratings. In

addition to market saturation in Source: BMI the mobile industry in light ofaggressive price competition by operators, the largest determinant is thedominance of state-owned companies. Foreign operators from countries such asSouth Korea and Russia have left the market due to a lack of meaningful growthopportunities. Further, there is no independent regulator with the Ministry ofInformation and Communications responsible for regulating the industry.Cambodias overcrowded telecoms industry remains a concern, especially whenthe government continues to adopt a liberal approach in the issuance of licences.The creation of an independent telecoms regulator, the TelecommunicationRegulator of Cambodia, should bring stability into the market by ensuring thatpolicies are free from government influence and agenda, although we caution that

it would take a few years before we see significant improvements. The Laotiantelecoms market has exhibited some signs of stability after all the operatorsagreed to adhere to a minimum tariff rate of LAK800. However, we believe thatdepressed ARPU rates will persist in the near term, partially due to an agreementto offer lower tariff rates on certain days such as holidays and continued lack ofaccess to credit by smaller businesses and the purported lack of the flow-oneffects from investments to the local community. The country is also one of thesmallest in our Risk/Reward Ratings, which limits its growth potential. However,the Ministry of Planning and Investment Office has announced the approval ofBusiness Monitor International Page 22

22. Malaysia Telecommunications Report Q1 2013 funds to enhance the countrys

IT infrastructure, as part of a plan to modernise the countrys investmentmanagement system, and provide for more efficiency within the businessenvironment. Table: Asia Pacific Telecoms Risk/Reward Ratings Q113 RewardsRisks Industry Country Industry Country Telecoms PreviousCountry RewardsRewards Risks Risks Rating Rank RankJapan 80.0 66.7 80.0 67.9 74.9 11Australia 68.8 80.0 80.0 68.4 73.1 2 3Singapore 55.0 83.3 90.0 86.5 71.9 32Hong Kong 55.0 76.7 90.0 65.0 67.1 4 4South Korea 62.5 57.0 80.0 69.7 64.9 55China 68.8 31.7 70.0 81.8 61.8 =6 8Taiwan 52.5 60.0 80.0 75.0 61.8 =6


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6Malaysia 52.5 57.0 70.0 71.4 59.1 8 7Indonesia 57.5 45.0 60.0 64.8 55.9 99Philippines 50.0 46.7 60.0 60.1 52.2 10 13Bangladesh 52.5 36.7 60.0 56.9 50.411 12Thailand 52.3 32.7 60.0 61.9 50.1 12 14India 52.5 32.1 60.0 61.2 49.9 1310Pakistan 45.0 42.0 60.0 50.5 47.3 14 11Sri Lanka 45.0 26.7 60.0 57.0 44.6 1518Vietnam 44.0 33.3 40.0 64.0 43.8 16 16Cambodia 40.0 38.3 50.0 45.3 41.9 17

15Laos 37.5 39.0 40.0 53.2 40.6 18 17Average 54.0 49.2 66.1 64.5 56.2Scores areweighted as follows: Rewards: 70%, of which industry rewards 65% and countryrewards 35%; Risks: 30%,of which industry risks 40% and Country Risks 60%.The Rewards rating evaluates the size and growth potential of atelecoms marketin any given state, and countrys broader economic/socio-demographiccharacteristics that impact theindustrys development; the Risks rating evaluatesindustry-specific dangers and those emanating from the statespolitical/economicprofile, based on BMIs proprietary Country Risk Ratings that could affect therealisation of anticipatedreturns. Source: BMIMalaysia In our newly revised AsiaPacific Telecoms Risk/Reward Ratings, Malaysia was ranked eighth with aTelecoms Ratings score 59.1. Given the changes, we highlight that past scores

and rankings are not Business Monitor International Page 23 23. Malaysia Telecommunications Report Q1 2013 comparable. Malaysia was the

second-highest ranked emerging country in the region behind China. Malaysiastood out largely due to its stronger macroeconomic position. The country had anindustry rewards score of 52.5, which was slightly lower than the regional averageof 54.0. The country has a relatively mature telecoms market, and we forecast theentire industry (comprising mobile, fixed line and broadband) to grow by anaverage of 3.1% in the next five years. Unlike emerging peers such as Vietnamand Cambodia, Malaysia has a comparatively stable market with a growingproportion of postpaid subscribers. Mobile 3G services are also on the rise, whichwould help to support ARPU levels. Assuming the government is able to finalise

the allocation of LTE licences, we expect the next generation technology to bewell received in the country, which has a sizeable portion of consumers that aretech-savvy and willing to pay for the latest products and services. The Malaysiantelecoms market is regulated by the Ministry of Communications and MultimediaCommission (MCMC). The country received an industry risks score of 70.0,which could be downgraded in the future if the regulator continues to muddlethrough the LTE licence issuance process. It was reported in September 2010 thatthe MCMC would award nine licences, and this was confirmed by local media inDecember 2011. However, some licensees have claimed that the government hasyet to finalise the allocation, even though the companies are ready to offercommercial services. Malaysias real GDP grew by a better-than-expected 5.4% y-o-y in Q212, beating consensus estimates of around 4.6% by a significant margin.Real GDP growth in Q112 was also revised upwards to 4.9% from 4.7%previously. The latest reading is expected to trigger a wave of analyst upgradesover the coming months, which is likely to push consensus estimates for growthtowards the upper range of Bank Negara Malaysias target of 4.0-5.0%. We expectprivate consumption to grow at a relatively resilient pace of 4.8% in 2012 beforeaccelerating towards 5.5% in 2013, mainly due to the positive effects of cashhandouts and increased welfare spending by the government. However, we note


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that the risk of a sustained collapse in exports over the coming months couldpotentially lead to widespread job losses in export-driven sectors. Uncertaintiesover the outlook for employment could, in turn, prompt households to cut back onspending. Despite the Pakatan Rakyat (PR) coalitions growing popularity inrecent years, partly due to its multi-racial and pro-democracy platform, we believe

that this will nonetheless be insufficient to unseat the ruling Barisan Nasional atthe upcoming general election. We believe that the announcement of a generouselection budget for 2013 by Prime Minister Najib Razak will help to boost votersupport for the BN coalition and should be sufficient to give the BN a marginaledge at the next general election. Business Monitor International Page 24

24. Malaysia Telecommunications Report Q1 2013Market OverviewMobile

Regional Perspective Malaysia is one of the more developed Asian mobilemarkets, with a vibrant and fast-growing 3G sector and robust growth noted innon-voice service usage. Uptake of mobile broadband services has slowed inrecent quarters, however, suggesting that there are still limits to consumerswillingness to invest in pure data services and content. A slowdown in the fixed

mobile market has also conspired to hamper the governments plan to serve 50%of the population with affordable broadband services. However, mobile operatorscontinue to encourage the usage of more lucrative non-voice services, withsmartphones and mobile computers increasingly being used to lure customersonto their networks. A degree of mobile broadband fatigue notwithstanding, westill see room for growth in the mobile market, though not enough to justify thelicensing of nine 4G LTE operators. Malaysia Mobile Market RegionalComparison 2011 Data from 18 countries where available. f = BMI forecast.Source: BMI, regulators, operators Business Monitor International Page 25

25. Malaysia Telecommunications Report Q1 2013 Table: Malaysian MobileMarket Regional Comparisons, 2011 Malaysia Asia PacificPostpaid As % Of

Market 20.8 32.2Mobile Penetration (%) 127.0 109.3Blended ARPU (US$) 17.116.33G As % Of Entire Mobile Market 28.2 30.0Data ARPU (US$) 21.4 24.35-year CAGR (%) 2.6 15.1Data from 18 countries where available. Source: BMI,regulators, operatorsKey Developments DiGi and mobile content providerWhatsApp have teamed up in October 2012 to offer unlimited access toWhatsApp Messenger services. The exclusive package on DiGi Easy Prepaid iseffective from October 22 2012 and is available until March 31 2013. Theunlimited access will be for five days at a cost of MYR5 (US$1.64) with 100MBof data for free. The package will allow customers to connect with family andfriends through messaging, location-based functions and sharing photos, videos,sound files and contact lists. In October 2012, Telekom Malaysia (TM) wasbelieved to be seeking the finance ministrys approval to bid for Green Packetsmobile broadband unit, Packet One, reported the Business Times. The bid wasreported to be worth MYR1.8bn. However, TM has denied any such move,calling it misleading as it is based on speculation (The Star). The operator addedthat it has not expressed interest in any bid nor has it sought approval to do so. In August 2012, Maxis launched an array of Islamic content and services in linewith its Salam Ikhlas 2012 campaign. The operators subscribers will be able toaccess more than 30 Islamic products and services across all devices through


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SMS, MMS, apps, video, audio, ebooks, iPads, Android devices and PCs. Theservices are inclusive of imsak and buka puasa times, where subscribers areoffered free alerts annually. The alerts enable the subscriber to know exact timesduring the month of Ramadan. Meanwhile, Android and BlackBerry users canobtain a 5GB storage space by signing up for a free personal cloud account.

DiGi added 10 new roaming outlets to its portfolio of networks in August 2012.The operator added Macau, Pakistan, Bangladesh, New Zealand, Poland,Slovakia, Hungary, Serbia, Spain and Brazil to its current list of networks. Theoperators TravelSure Unlimited Roaming service will allow subscribers to accessservices with internet roaming rates in more than 40 countries. The subscribersoverseas data charges would be capped at a fixed rate of as little as MYR36 a day,according to the companys chief marketing officer, Albern Murty.Mobile GrowthThere were approximately 38.446mn mobile subscribers in Malaysia at the end ofJune 2012, according to the latest data from the Malaysian Communications andMultimedia Commission (MCMC). This represented a q-o-q increase of 3.8% anda y-o-y increase of 8.9% and resulted in a penetration rate of 133.3%, the agency

said. Between them, the three leading operators - Celcom Axiata, MaxisBusiness Monitor International Page 26 26. Malaysia Telecommunications Report Q1 2013 Communications and DiGi -

served 34.956mn subscribers at the end of March 2012 (36.060mn if Maxis olddefinition of active subscribers is applied). 3G-only operator U Mobile - whichdoes not regularly disclose customer numbers - would have accounted for just2.386mn subscribers in June 2012 using Maxis old subscriber-counting definitionor 3.490mn if we assume the regulator is now making its assessments using Maxisnew definition. Either way, this is a very poor achievement considering U Mobilehas been active since early 2009. In May 2012, U Mobile announced that it nowhad over 2mn subscribers, though it did not specify when that milestone had been

reached. It remains difficult to properly gauge Maxis performance while itcontinues to report two sets of total customer numbers. Using the oldmethodology, Maxis appears to be growing rapidly, buoyed by strong demand forits data and mobile broadband packages and the lure of premium devices andintegrated services such as the Apple iPhone and BlackBerry handsets. Using itsnew definition of active subscriber numbers, Maxis notes that it is enjoying strongsales of smartphones and data plans despite a falling user base. We thereforeassume that many customers are upgrading their existing packages rather thanjoining as new customers. Also, it would appear that the number of newcustomers joining the Maxis network is being offset by continued deactivation ofinactive accounts, mostly in the prepaid arena For the quarter ended June 2012,Maxis and Celcom recovered from the net losses in the previous quarter - Maxisgained 51,000 subscribers while Celcom added 79,000 (according to its newactive subscriber calculations). DiGi reported the strongest net addition among thethree mobile operators with 293,000 in the quarter ended June 2012, although themomentum tapered to 75,000 in the subsequent quarter. Table: Malaysia WirelessMarket, Q212Operator No. of Subscribers (mn) Market Share (%)MaxisCommunications* 12.696 36.3Celcom 12.031 34.4DiGi 10.304 29.3Total 34.956


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100.0* Figures are per new subscriber definition. Source: BMI, operatorsBusiness Monitor International Page 27

27. Malaysia Telecommunications Report Q1 2013Market Shares Malaysia

Prepaid Mobile Omitting U Mobile due to a lack of verifiable data, SubscriptionsMaxis 12.696mn active subscribers meant that it 2009-2012 accounted for 36.3%

of the market, down by 0.3 percentage points (pps) q-o-q. The operator gained51,000 subscribers in the quarter, although this was not enough to offset the90,000 lost in Q112. Maxis postpaid subscriber base continued to decline whilesubscriber growth came from the prepaid segment as the company has launched anumber of prepaid-focused promotions, which helped it win back old customers.Celcoms market share fell to 34.4% even though it recovered from the netsubscriber loss of 28,000 in Source: MCMC, operators Q112. The company notedthat its postpaid segment is regaining momentum post high rotational churn.Postpaid net additions in Q212 reached 56,000, up from 48,000 in Q112, 43,000in Q411 and 26,000 in Q311. With rival Maxis focusing on the prepaid market,we could see Celcom capture the postpaid market leadership in the next two

years, assuming that existing trends maintain. Third-ranked DiGi could be in aposition to overtake them both as the company continues to outperform in termsof customer additions and accounted for 29.3% of the market in Q212, up by0.5pps from Q112. Unlike its rivals, DiGis Q312results were available foranalysis and these showed a 75,000 subscriber net increase in the quarter, up from293,000 in the previous quarter. The consistently strong performances underscoreour view that DiGi could draw level with its rivals in the near future. That said, itis worth noting that the operator occasionally suffers from high rotational churn inthe prepaid segment, potentially leaving it vulnerable to changes in marketdynamics. In June 2010, DiGi and Celcom Axiata signed an MoU to collaborateon network and infrastructure projects for the long term. Under the terms of the

MoU, the operators are focusing on three key areas: operations and maintenance,transmission and site sharing, and radio access network elements. The networkinfrastructure sharing scheme targets the removal of surplus base station sites andoptimising base station deployment, slashing expenditure on infrastructure rentalfees, reducing spending on services such as power Business MonitorInternational Page 28

28. Malaysia Telecommunications Report Q1 2013 and rationalising the costs of

operating transmission systems. A definitive agreement was signed in January2011 under a three-year term. The companies have been recording sluggishgrowth in service revenues and profits for some time as market maturity, and anover-reliance on low-cost prepaid services, has dampened consumer appetites fortheir services, despite the increasing use of higher value premium services. Byproactively addressing operating and capital costs through collaboration, thecompanies can at least make substantial savings in their outgoings, leavingresources free to innovate in the development of new services and applicationsand to more aggressively target low-income and rural subscribers with affordableservices and devices. The maturity of the mobile sector has been MalaysiaPostpaid Mobile supported by growth in the prepaid sector. However,Subscriptions operators are keen to see the postpaid sector emerge 2009-2012 to


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become the market driver as customers swap from prepaid to postpaid. Thegrowth in postpaid is the result of low-cost services and competitively priced coreservices, and the introduction of attractive handsets and smartphones, leading tomobile broadband services growing in popularity. That said, despiteimprovements in the postpaid arena, the prepaid market continues to dominate. At

the end of June 2012, the three principal operators reported serving 27.334mnprepaid subscribers, up by 3.8% y-o-y. This would represent Source: MCMC,operators 78.2% of the total number of customers they served. The regulator,however, believes there were 31.214mn prepaid subscribers as of Q212,representing an annual increase of 9.7% and 81.2% of the total market of31.214mn. However, the 1.304mn increase in the number of prepaid subscribersfrom Q112 could be attributed to the inclusion of data from MVNOs. Accordingto the MCMC, MVNO data, which were excluded in prior results, were includedin Q212. Meanwhile, the number of postpaid subscribers in the country reached7.232mn at the end of June 2012, according to data from the regulator. The threeleading operators, however, said that they served 7.622mn postpaid subscribers at

that time, representing annual increase 2.6%. Again, a difference in activesubscriber Business Monitor International Page 29 29. Malaysia Telecommunications Report Q1 2013 definitions accounts for this

discrepancy. Postpaid subscribers accounted for 18.8% of the market at that time,according to the regulator. Maxis was serving 9.559mn prepaid subscribers at theend of Q212, up by 0.5% y-o-y. We continue to believe that gross prepaidadditions are higher than these figures suggest, but that most of the gains arebeing offset by further eliminations of accounts now deemed to be inactive. BMIthinks it likely that Maxis will report muted growth in 2012 (Q312 data were notavailable for analysis at the time of writing). Prepaid subscribers accounted for75.3% of Maxis total active subscriber base in Q212, versus 74.6% in the

preceding year. In terms of Maxis postpaid base, the operator had 3.137mn suchsubscribers (new definition) as of Q212, down by 40,000 q-o-q even though theoperator has said that it is focusing on subscriber retention through smartphoneoffers and roaming plans. Celcom served 9.195mn prepaid subscribers in Q212(latest data), representing a 1.4% y-o-y increase. Celcom lost 316,000 prepaidsubscribers in Q311, undermining its success in adding 343,000 such customers inQ211 and 117,000 in Q111. Again, this was due to the companys efforts indealing with excessive multi-SIM prepaid accounts. However, 498,000 newprepaid customers were added in Q411, typically a strong period of the year forthe company. Nevertheless, in Q112, there were 76,000 net prepaid subscriberlosses at the company, which was attributed to increased interest in its postpaidand mobile broadband offerings. Celcom added 57,000 new postpaid subscribersin Q212, bringing the total to 2.837mn. This was a continued improvement fromthe 48,000 and 43,000 additions recorded in Q112 and Q411 respectively, but wasstill a little short of the 58,000 additions recorded in Q211. Postpaid customersaccounted for 23.6% of the operators total subscriber base in Q212, versus 22.7%in Q211. Celcom believes that strong demand for its mobile broadband serviceshas been driving growth in the prepaid arena. With new devices continually beingadded to its range of packages, Celcom has begun reporting an improvement in its


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subscriber composition and is again narrowing the gap with Maxis for the title ofpostpaid market leader. As for DiGi, the third-ranked operator was serving8.647mn prepaid subscribers in Q312, representing 83.9% of the operators totalsubscriber base. Comparisons with its rivals were not possible as neither Celcomnor Maxis had announced Q312 results at the time of writing. In Q212, DiGi

reported 8.580mn prepaid subscribers. Like Celcom, DiGi has also adopted amarket segmentation approach, launching its Hit 1 prepaid plan for heavy usingyouth subscribers, charging MYR1 per day for SMS and Business MonitorInternational Page 30

30. Malaysia Telecommunications Report Q1 2013 MYR0.12 per minute for calls

to any network, a rate three times lower the normal rate of MYR0.36 per minute.In terms of the postpaid market, DiGi had 1.649mn subscribers in Q212,representing an increase of 8.3% y- o-y. The rate of growth remained robustlargely due to competitively priced tariffs offered for postpaid thanks to themarket segmentation approach of the operator, together with attractive postpaidservices and a greater range of smartphone models, as operators focus more on

3G. The operators postpaid subscriber base increased to 1.657mn in Q312,representing a y-o-y increase of 6.0%. The other operators had not reported theirQ312 results at the time of writing.Usage (MOU/ARPU) Postpaid Mobile ARPU(MYR) Maxis, Celcom and DiGi all supply data covering 2009-2012 blended,prepaid and postpaid ARPU, though data for Maxis only go as far back asSeptember 2008, a consequence of its recent listing and improved reporting ofkey indicators. Responsible for the recent decline in ARPUs (postpaid andprepaid) was the aggressive pricing of postpaid and prepaid services in themarket, as well as the economic recession. In Q111, Maxis Communicationsreadjusted its ARPU in line with its new definitions for prepaid and postpaidsubscribers. Despite this blended Source: operators ARPUs remained flat at

MYR49 in Q111 for the third consecutive quarter. Then, in Q211, blended ARPUrose to MYR51 and reached MYR54 in Q311 and Q411. The second quarter of2012 saw Maxis blended ARPU remained stable at MYR52. This was connectedto Initiatives to enhance paid usage minutes and stimulate overall MOUs. Blendedvoice minutes of use fell by 5.9% y-o-y to 175 minutes. It had earlier reached ahigh of 186 minutes, in Q211. Prepaid ARPU similarly remained flat at MYR34during the Q410-Q111 period before rising in Q211 to MYR36, a 5.9% q-o-qincrease, and then to MYR38 in Q311, a q-o-q rise of 5.6%. There was no changein Q411, but it had slipped to MYR37 by Q112 as prepaid voice minutes fellfaster than the operator could Business Monitor International Page 31

31. Malaysia Telecommunications Report Q1 2013 grow its prepaid user base.

Maxis Q212 prepaid ARPU remained stable at MYR37. Prepaid users spent anaverage of 130 minutes on their phones in Q212, down from 142 minutes oneyear earlier. Meanwhile, Maxis postpaid ARPU rose to MYR108, under newdefinitions, in Q211, from MYR105 in Q111. In Q311 it reached MYR110; again,there was no change in Q411 while Q112 saw a small contraction to MYR107.The contraction continued in Q212 with ARPU reaching MYR106. Besidesseasonal factors and declining voice usage, ARPUs are not falling as fast as theymight as customers continue to adopt the operators iPhone and BlackBerry data


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packages and make better usage of mobile broadband services as the companyprogresses with its ambitious network improvements. Celcom, by contrast,experienced a degree of stability in Q212 as only its postpaid ARPU saw a slightdecline from MYR96 to MYR95 over the course of the quarter. Blended ARPUremained at MYR51, while prepaid ARPU remained at MYR37. This appears to

be linked to steady non-voice service usage, as well as marked increases in voiceusage in general. Blended voice minutes rose to 263 minutes in Q212, the highestrate of usage we have on record. DiGi reported modest reductions in its blended,Prepaid Mobile ARPU (MYR) prepaid and postpaid ARPUs in Q212, reflectingthe 2009-2012 falling usage of voice services, particularly in the postpaidsegment. Its blended ARPU fell from MYR49 to MYR48 over the course ofQ212, as blended minutes of use (MOU) remained unchanged at 270 minutes (thedecline in postpaid minutes offset the increase in prepaid minutes). Similarly,prepaid ARPUs remained stable at MYR41 over the quarter. In Q212, prepaidARPU remained unchanged at MYR41. The companys postpaid ARPU also didnot Source: operators experience any changes in Q212, remaining stable at

MYR85. However, this declined in MYR82 in Q212. Postpaid MOU shrank quitenoticeably, from 431 minutes to 419 minutes in Q112, before declining to 396minutes in Q212. Business Monitor International Page 32

32. Malaysia Telecommunications Report Q1 20133G/4G Malaysia has four

holders of 3G licences: Maxis, Celcom, MiTV (U Mobile) and DiGi. Malaysiaissued its first two 3G licences in 2002, to Celcom and Maxis. U Mobile andTIME dotCom won their licences in March 2006, ahead of DiGi. TIME dotComsubsequently sold its 3G licence to DiGi, which is now sharing 2G/3G facilitieswith U Mobile. Although none of the operators discloses 3G-specific subscribernumbers and network usage data, top-line market data from the regulator anddetails regarding mobile broadband user figures reported by Celcom, Maxis and

DiGi give a fairly comprehensive insight into 3G adoption in Malaysia. TheMCMC claims that there were 12.022mn 3G subscribers in Malaysia as of June2012 (latest date for which data were available at the time of writing), of which7.880mn were prepaid. The total 3G subscriber base represented a y-o-y increaseof 23.2% from 9.756mn at the end of Q211. Market leaders Maxis and Celcomlaunched services in May 2005, with Maxis collecting around 7,000 subscribers inits first few weeks of operations (by the end of Q205) and Celcom picking upsome 5,000 users. By the end of the year (2005), Celcom was understood to haveovertaken Maxis in a market comprising about 70,000 subscribers. DiGi joinedthe fray in late 2007 when it acquired TIME dotComs 3G business. Newcomer UMobile joined the market in 2009. The operators have been reluctant to disclosemore recent subscriber figures, though aggregate numbers are reported quarterlyby the regulator. Meanwhile, in April 2010, the MCMC announced it was gearingup to auction three blocks of 2.6GHz spectrum in 2011, marking the regulatorsfirst formal move to bring fourth generation (4G) LTE technology intocommercial play. The MCMCs aim is to rationalise spectrum holdings in order tomake the most efficient use of these scarce resources and to boost use of mobilebroadband services. However, in mid-October 2010 the regulator said it hadawarded spectrum in the 2.6GHz band to nine telecoms operators. The winning


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operators will be able to launch high-speed mobile broadband services using LTEtechnology by January 1 2013. Mobile operators Celcom Axiata, MaxisBroadband, DiGi Telecommunications and U Mobile, as well as WiMAXoperators Asiaspace, Packet One Networks (P1), REDtone Marketing and YTLCommunications plus newcomer Puncak Semangat secured the licences. All, bar

Asiaspace and Puncak Semangat, were allocated 20MHz of spectrum; Asiaspacereceived only 10MHz of spectrum, possibly because it already owns considerablespectrum for other purposes. Meanwhile, the newcomer was granted 30MHz ofspectrum, in recognition of its lack of pre-existing infrastructure. BusinessMonitor International Page 33

33. Malaysia Telecommunications Report Q1 2013 By mid-February 2012,

however, it was clear that nine LTE networks were not economically viable and itwas being reported that YTL had approached Asiaspace and P1 with a view topooling their resources or pursuing a formal business combination. Nothingfurther had been reported at the time of writing, but BMI believes many of thenew entrants will have little choice but to consolidate in order to protect their

investments. Maxis Communications As part of its plan to achieve 80% 3Gcoverage by 2014, Maxis signed a network expansion agreement with Ericsson inSeptember 2005. Maxis pledged to invest over MYR1bn over the following threeyears on its 3G provision in the Klang Valley. This network agreement withEricsson was in addition to Maxis earlier contract with Siemens in August 2005for the delivery of 3G/W-CDMA equipment in the Klang Valley and northernMalaysia. In December 2005, Maxis expanded its 3G network so that it reachedPenang, an important area for tourism and business travellers. In November 2006,Maxis expanded its high-speed downlink packet access (HSDPA) network so thatit reached Penang as well as the Klang Valley, where it had launched its 3.5Gnetwork in September. An investment of MYR5mn was enough to deploy such

services in Penang as well, reaching some 20,000 households. The operatorreported 1.3mn active 3G subscribers as of March 2008, compared with 350,000in March 2007. This indicates growth of 271%. Despite missing its target of 2mn3G subscribers by April 2008, the rate of take-up was extremely encouraging.This, it is believed, was due to a fall in 3G handset prices. By the end of 2009,Maxis expected to have invested about MYR2bn in the expansion of its 3Gnetwork. Further investments in its next generation network were made inDecember 2009, when Maxis launched its HSPA+ platform. The technology isbeing rolled out alongside Maxis existing 3G infrastructure in certain areas of thecountry. The company claimed that services were initially available only to selectcustomers on a trial basis, but began offering a commercial service in 2010. As ofQ411, the company said that HSPA+ coverage had been expanded to more than5,100 sites in total, covering 81% of the population. At the same time, thecompany is offering 3G services at 900MHz in order to improve indoor coverageand increase data transfer speeds; approximately 1,000 sites were being used inthis way at the end of Q411. With HSPA+, Maxis wireless broadband networkcan support theoretical peak network rates of up to 21Mbps, although Maxis iskeen to point out that, in areas with good coverage, typical access rates of 10-15Mbps are most likely. Nevertheless, these rates are around double those


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currently offered by the companys HSDPA network in certain areas of thecountry. Maxis claims it will deploy HSPA+ on a Business MonitorInternational Page 34

34. Malaysia Telecommunications Report Q1 2013 strategic basis across

Malaysia. HSPA+ also provides a useful stepping stone to 4G technologies, such

as LTE, which could be introduced within the next few years. In October 2011,Maxis and U Mobile entered into a multibillion ringgit agreement to share Maxis3G radio access networks (RANs) for a period of 10 years. The companies saidthis was Malaysias first active 3G RAN sharing arrangement. The deal alsoencompasses LTE sharing, in recognition of the regulators decision to award2.6GHz spectrum to these and seven other companies in Q411. Through thecollaboration, Maxis will receive a significant new source of revenue and willenhance utilisation of its network in areas currently underutilised. Maxis hasconsiderable experience of network sharing, as more than 54% of its base stationsites were shared with other operators at the end of Q311. As for U Mobile, thecompany believes the agreement will enable it to accelerate the deployment of its

3G network by four to five times and deliver significant cost savings. The sharedlocations will exclude urban market centres such as Klang Valley, Penang, JohorBahru and Ipoh, where U Mobile is committed to continue providing mobilebroadband services over its own facilities. The deal will help U Mobile extend its3G footprint to more than 4,000 3G sites by early 2013. In May 2011, Maxis andWiMAX provider Asiaspace were said to be considering sharing networkinfrastructure as they prepare for the rollout of next generation LTE services.Reportedly, Maxis would be in charge of building and running the LTE networkwhile Asiaspace would provide additional spectrum in order to increase networkcoverage and capacity. Consequently, Asiaspace would act as a mobile virtualnetwork operator and leverage Maxis network infrastructure to offer LTE

services. Nothing further had been reported at the time of writing. DiGi Despitelosing out on an earlier chance to win a 3G licence, DiGi later received approvalfrom the MCMC for the transfer of TIME dotComs licence. In November 2007,TIME dotCom agreed to sell its 3G concession and frequencies for 27.5mn newDiGi shares, equivalent to a 3.5% stake in the operator. As part of the agreement,TIME dotCom was also invited to take part in the placement of 76.5mn DiGishares (necessary for Telenor to lower its stake in the company to 49%) incompliance with foreign ownership regulations. Furthermore, DiGi agreed toreview its international and domestic infrastructure agreements with TIMEdotCom so that it would spend MYR10-15bn a year over a three-year period. Theoperators agreed to look into sharing telecoms base stations for the purpose ofTIME dotComs proposed broadband WiMAX network. Business MonitorInternational Page 35

35. Malaysia Telecommunications Report Q1 2013 For each of the three years to

late 2010, DiGi was to invest MYR400mn (US$118mn) in extending its Turbo3G service to about 70% of the population. The company said that it saw mobileinternet usage as being its primary growth driver for at least the first two years ofoperations, and that the low 3G tariffs it introduced would sustain that growth. Bythe end of 2010, the DiGi Turbo 3G network covered 50% of the population of


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Malaysia. This had increased to just 54% by the end of 2011, versus 95%coverage by its 2G network at the same time. DiGi plans to have upgraded itsnetwork to the point by which it can be in a position to migrate to LTE 4Gtechnology by the end of 2012. To help with this, DiGi has entered into a networkcollaboration agreement with Celcom Axiata. In Q411, the companies

commenced physical RAN swapping, a process expected to be completed by theend of 2012. Others At the time of being granted its 3G licence, MiTV said itwould need to invest MYR1bn in rolling out an NGN over a two-year period. Itexpected to achieve this via vendor financing, calling on the resources of itsshareholders and by offering shares to the public. MiTV Chairman RosmanRidzwan was not surprised at his companys successful 3G licence bid, declaring:3G is not purely voice; its multimedia delivery. We have an IP network with 41channels, so that we have an advantage in terms of content synergies. In a contractsigned in August 2006, Ericsson was to build, manage and maintain MiTVsWCDMA/HSPA network. MiTV was later renamed U Television and its nascent3G mobile telephony business was eventually dubbed U Mobile. However,

despite trialling services in the Klang Valley from September 2007 and rolling outa commercial service in Kuala Lumpur in early 2009, the operator failed to makemuch of an impact and it quickly became clear it would fail to sign up 3.1mnsubscribers by the end of 2010, as had been promised. In October 2010, U Mobilelaunched services over a dual-cell HSPA+ platform, raising data transfer rates inselected areas to 42Mbps; the equipment was provided by ZTE of China.Meanwhile, a network sharing agreement was established with Maxis in 2011;this will extend 3G coverage nationwide by the end of 2013 (for details, seeearlier entry on Maxis Communications). In May 2012, U Mobile noted that itssubscriber base had passed the 2mn mark, a figure that cannot be verified to BMIscomplete satisfaction, but would account for the 2mn subscriber differencebetween total market data published by the regulator and the figures reported bythe three principal operators. Business Monitor International Page 36

36. Malaysia Telecommunications Report Q1 2013 In February 2010, Singapore

Technologies Telemedia (STT) purchased a 33% stake in U Mobile forMYR626mn (US$184mn). The shares were sold by U Television, which hadtaken control of the company in Q309 after fellow investors NTT DoCoMo ofJapan and KT Freetel of South Korea exited the business, citing unspecifieddifficulties in working with the managers appointed by U Television. It is difficultto tell whether STTs involvement is having a positive effect on U Mobilesoperations and business strategy, but the participation of an experienced telecomsplayer such as STT is welcomed. Local media reports suggest that an initial publicoffering (IPO) of shares in U Mobile is being contemplated by the shareholders ofU Television, but BMI is far from certain whether an offering would be successfulgiven U Mobiles poor progress to date and the increasing likelihood that UMobile and some of the new LTE licensees are already considering merging inorder to protect their investments and achieve the scale needed to take on Maxis,Celcom and DiGi in the mobile market.MVNOs A number of companies haveestablished MVNO agreements with the three leading players. Celcom hasprobably been the most active in securing MVNO partners and has worked with


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REDtone International, Merchantrade, Tune Talk and XOX Com. The companydoes not comment on the contributions these MVNOs are making to its expansionin Malaysia and the MVNOs themselves are reticent about disclosing how manycustomers they have. Tune Talk, however, claimed to have reached 2mnsubscribers by April 2011 (latest data). REDtone, meanwhile, divested a number

of non-core operations in August 2012, which seem to have included its MVNObusiness. More recently, in November 2011, Celcom took a 49% stake in PLDTMalaysia, an MVNO business controlled by Philippine incumbent PhilippinesLong Distance Telephone Company (PLDT). Services are provided under theSmart Pinoy brand. In June 2012, Perangsang Telco, a wholly owned unit ofKumpulan Perangsang Selangor, entered into an agreement with Samena Telacomand MVNO operator FRiENDi to establish a new MVNO in Malaysia.Perangsang Telco will own 30% of Ceres Telekom while FRiENDi will own 65%and Samena will own 5%.Mobile Content/Value-Added Services Celcom, Maxisand DiGi all report growing usage of non-voice services within their core mobileservices businesses, though the rate at which usage is growing remains

constrained by affordability, the availability of smartphones and other multimediamobile devices and the deployment of mobile data networks. Business MonitorInternational Page 37

37. Malaysia Telecommunications Report Q1 2013 BMIs mobile operator

database shows that the three main operators generated non-voice revenuestotalling MYR7.787bn in 2011. This represented a y-o-y increase of 18.5% fromMYR6.569bn in 2010. On average, non-voice services accounted for 36% ofmobile service revenues in 2011, up from 32.3% a year earlier. Unsurprisingly,given its position as market leader, Maxis was the most significant contributor tomobile non-voice revenues in 2011. At MYR3.678bn, it accounted for 47% of themarket (48% a year earlier); such revenues increased by 16.7% from

MYR3.153mn in 2010. Overall, non-voice accounted for 45% of Maxis totalmobile service revenues in 2011, versus 41% a year earlier. Second-rankedCelcom generated MYR2.494bn in non-voice mobile service revenues in 2011,representing a y-o-y increase of 11.1% from MYR2.244bn in 2010. Celcomaccounted for 32% of the mobile non-voice service revenue market in 2011, downfrom 34% a year earlier. Meanwhile, such revenues represented 34% of its totalmobile service income in 2011 (33% in 2010). Although it is the smallest of thethree principal operators and accounted for only 21% of the Malaysian mobilenon-voice service market in 2011, DiGi saw the most substantial growth in 2011.Its non-voice revenues totalled MYR1.615bn in 2011, up by almost 38% fromMYR1.172bn a year earlier. Such revenues accounted for 29% of DiGis totalmobile service revenues in 2011, up from 23% in 2010. Low-value SMS andrelated messaging services have historically accounted for the majority of non-voice revenues at all three companies, though it is only DiGi that provides adetailed breakdown of non-voice service revenue composition. Using DiGi as abenchmark for trends in the Malaysian mobile value-added services market, it isclear that non-SMS services have recently gained a superior position in terms ofusage. DiGi reports that non-SMS revenues accounted for 54% of overall non-voice revenue in Q411, a vast improvement from the 44% recorded a year earlier.


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By Q212, non-SMS represented 56% of non-voice revenues. Table: MalaysiaMobile Non-Voice Service Revenue Indicators 2010 (MYRmn) 2011 (MYRmn)% chg y-o-y % 2011 totalMaxis 3,153 3,678 16.7 47.2Celcom 2,244 2,494 11.132.1DiGi 1,172 1,615 37.8 20.7Total 6,569 7,787 18.5 100.0Source: BMI,operators Business Monitor International Page 38

38. Malaysia Telecommunications Report Q1 2013Mobile Broadband Celcomappears to be the leading provider of mobile broadband services in Malaysia,serving 994,000 subscribers at the end of June 2012 (latest data). This representeda y-o-y increase of 10.4% and a quarterly increase of 5.0%. Growth since Q311has been slow, though its rivals have also been affected by changes in the rulesregarding the marketing and bundling of mobile broadband services to consumers.Maxis has been affected most of all, its mobile Mobile Broadband Subscribers Bybroadband subscriber base slipping from a high of Operators (000) 681,000 inQ311 to 588,000 by Q212. Maxis began 2009-2012 deploying HSPA+ from lateDecember 2009, providing much-needed extra data traffic processing capacity toits basic 3G network, particularly in the larger cities where there is a rising

demand for bandwidth-intensive media-rich services, such as video streaming anddownloading. Increased competition in the field is set to come from new entrant UMobile, the newly licensed 4G/LTE operators and a growing host of independentservice providers. DiGis mobile broadband service, Turbo 3, initially Source:operators found success as a result of the low tariffs it charges for access to Turbo3G (MYR5 per month for prepaid subscribers, MYR58 per month for postpaidusers). In 2011, DiGi made capital expenditures totalling MYR611mn as part ofits drive to expand its mobile broadband footprint. In 2010, it investedMYR720mn in expanding the networks. By the end of 2011, DiGis HSPAnetwork covered 55% of the Malaysian population. Business MonitorInternational Page 39

39. Malaysia Telecommunications Report Q1 2013 DiGi reported serving5.560mn cumulative mobile Celcom Mobile Broadband internet and mobilebroadband subscribers in Q312. Subscribers There were 298,000 dedicatedmobile broadband 2009-2012 subscribers as of Q312, down from 320,000 inQ212 and 299,000 a year earlier. To BMI, DiGi, which only launched its Turbo3G service in late October 2009, still has a long way to go before it will catch upwith Celcom. DiGis pure mobile data revenue totalled MYR633mn in 2011,representing 39.2% of its overall non-voice service revenues for the year. For9M12, pure mobile data revenues totalled MYR589mn, or 43.5% of non-voicerevenues. Source: Celcom Axiata The MCMC believes there were 3.449mnwireless broadband subscribers at the end of June 2012, up from 3.419mn threemonths earlier. In a change in reporting format, wireless i

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