Malaysian mobile telco carriers and resellers could be in for a lacklustre few years amid expectations of negligible mobile service revenue growth in the country until at least 2025, according to new analysis.
Malaysia’s mobile service revenue is expected to grow at a negligible compound annual growth rate (CAGR) of just 0.7 per cent, from US$5 billion in 2020 to US$5.2 billion in 2025, data and analytics company GlobalData predicts.
The expected flatlined growth rate is largely due to a steady decline in mobile voice and mobile messaging service revenues, the analyst firm claims.
Indeed, mobile voice and mobile messaging service revenues are anticipated to continue to decline over the forecast period because of a widespread consumer shift towards over-the-top (OTT)-based communication platforms.
The uptake of OTT services at the expense of voice and messaging services means that the expected stagnating mobile service revenue growth rate will not be uniform across the full stack of services offered by providers.
Mobile voice service revenue is expected to register a CAGR decline of 3.2 per cent during the forecast period, due to declining voice subscriptions as well as voice service average revenue per user (ARPU) levels.
However, mobile data service revenue is anticipated to increase at a CAGR of 2.9 per cent, driven by the steady rise in the adoption of higher ARPU 4G services and growing mobile data service consumption, GlobalData said.
“4G will remain the leading mobile technology by subscriptions in Malaysia through the forecast period 2020-2025, driven by continued 4G network expansion by operators, supported by the government’s Jalinan Digital Negara Plan...initiative to improve 4G network coverage,” said Hrushikesh Mahananda, GlobalData associate project manager.
Moreover, with the country’s major mobile service providers progressing their 5G network infrastructure rollouts, and the Malaysian Communications and Multimedia Commission establishing a new special purpose vehicle, Digital Nasional Berhad, for the deployment of 5G nationwide, mobile data consumption is likely to rise further.
Over the forecast period, average monthly data usage in Malaysia is expected to increase from 12.5GB in 2020 to 16GB in 2025, driven by the growing consumption of mobile video services over smartphones, on the back of data-centric plans offered by mobile network operators.
According to Mahananda, Malaysian telco Maxis Communications led the mobile services market in terms of subscription share in 2020 and is likely to remain the leading mobile operator through 2025.
“Maxis’ market leadership will be primarily driven by its strong focus on the postpaid segment by offering promotional plans and investments in 4G network expansion, particularly in rural areas,” Mahananda said.
GlobalData's latest analysis comes as the Malaysian telco market witnesses some major consolidation, with the country's telco conglomerate Axiata Group and Norwegian telecommunications provider Telenor signing a deal that paves the way for the merger of their respective Malaysian mobile operations, Celcom and Digi.
The companies said on 21 June they had successfully concluded due diligence and signed the transaction agreements for the proposed merger of Celcom Axiata and Digi, which for merger purposes will come together as ‘MergeCo’.
Once the combination is complete, Celcom and Digi will become Celcom Digi Berhad.