Information Technology in Malaysia

Telecommunication Infrastructure

Phone Lines Per Thousand

Malaysia while having made tremendous strides in developing its telecommunications infrastructure is still in its infancy and is considered as having a low "teledensity" rate. Presently the country has only 16.6 per 100 people which is targeted to be increased to a penetration rate of 45 lines per 100 by the year 2005. The current Malaysia telephone penetration rate is at 166 telephones per thousand, up from a previous rate of 93 telephones per thousand in 1990. The GoM is actively promoting policies to increase this rate by encouraging growth in the entire telecommunications industry, including the fixed line market and has issued eight new licenses for new telecommunications companies to enter the market.. With this advent of new companies it is expected that the penetration will continue to grow, with an estimated penetration rate of 24.7 phone lines per 100 by the turn of the century.1

 

FIXED-LINE SERVICES OPERATORS

Source: StarGraphics, July 1996

Fiber trunks and Phone Cables

Malaysia presently has an adequate copper analog system that is being replaced and expanded upon by a new digital fiber optic cable network as demand for capacity increases. This will allow the introduction of advanced telecommunications services in the country. Currently the only fiber-trunks constitute the backbone of the major telecommunications exchanges..

T1, ISDN and other high speed services

T-1 service and ISDN service was recently introduced by one of the telecommunications licensee’s Telekom Malaysia and is still quite low. The penetration rate rise is rising and this is mainly attributed to the upgrading of current infrastructure and the implementation of new technologies such as digital, fiber optics, broadband, wireless and cellular, ATM and ISDN.1

Mobile Phones, PCS and Cellular Systems

One area of Malaysia’s telecommunications industry that has been prospering is the wireless phone market; Malaysians cellular penetration rate is about 6% - or about 1 million users, one of the highest in the region. The cellular market continues to grow and has an anticipated growth rate of 30% over the next three years reaching a total of about 2.5 million handset users by the year 2005. from the present base of, or a rise from a current rate of 35 cellular phones per thousand people to 165 by the year 2000. One estimate, by the Malaysian cellular industry, pegs the growth rate at around 20,000 new subscribers per month. There is concern as to what the saturation point is but a penetration rate of 40% is not uncommon in countries where wireless service has been available for a long time as in Australia and the Nordic regions.

Five new networks were launched in 1995 - two Global System for Mobile telecommunication (GSM) networks (Binariang and Celcom) and three Personal Communication Networks (Mutiara, Sapura Digital and MRCB Telecommunications). PCN is an enhanced version of the European GSM. There were many concerns regarding these duplicate networks about the cost of the networks and the commercial viability of having five domestic service networks, five international gateways, and eight cellular networks in a country of 19.3 million people.1

Cellular Service Technology Subscribers in Malaysia

Composition of Cellular Service Technology Subscribers 1995

 

Main Service Providers

Telekom Malaysia Berhad (TMB)

Telekom Malaysia Berhad (TMB) is the dominant telecommunication service provider. TMB has more than 3 million customers and has embarked on a multibillion ringgit investment program to upgrade and modernize its network . The company plans to modernize its existing infrastructure by installing state-of-the-art digital technology. TMB first introduced cellular communication in the country in 1985 via the Atur 450.

Cellular Communications (M) Sdn Bhd (CELCOM)

Celcom is one of the GSM licensees and operates under the brand name of Celcom GSM and ART 900. The ART 900 system was introduced in 1989. Binariang Sdn Bhd Binariang is recognized as a dominant player in the industry. The cellular division operates under the brand name Maxis which uses GSM technology. GSM licensees Binariang and Celcom share about 70,000 subscribers between them. Today, the three PCN operators have attracted a total of 80,000 subscribers in less than a year.

Mobikom Berhad

Mobikom operates the Mobifon 800 service which uses both analog and digital technology, introducing the system in 1994. However this service has not been widely accepted due to the relatively high price of dual mode handsets as compare to other analog sets.

Sapura Digital Sdn Bhd

Sapura Digital is the other PCN service operator which uses the ADAM (or Advanced Digital Access for Mobile Telecommunication) brand. (Sapura Digital was recently merged with Time Telekom). Digital technology is fast gaining momentum in the country. Demand for digital mobile handsets has seen a fall in prices. Cellular market in the country continues to grow with an anticipated average growth of 30 per cent for the next three years reaching a total of about 2.5 million handset users by 2005. There is a higher penetration/rate of growth for the cellular phone market as opposed to the paging industry. One estimate puts the growth rate at around 20,000 new subscribers a month (a portion is attributed to CELCOM's already established ART 900 analog service).

 

Current Technology Market Share

Source: Jabatan Telekom Malaysia

 

Paging Market

Industry sources estimate the total market potential for the paging industry to be 500,000 subscribers, but currently there are about 150,000 (1995) subscribers in Malaysia, the penetration rate in 1995 was about 1 per cent as compared to Singapore's 20 per cent. Analysts therefore see great potential for the paging market. Operators expect the paging penetration rate to reach five per cent by the end of 1998. Industry sources have expressed the opinion that the market would be more effective if the industry were consolidated, providing improved and standardized paging services.

Malaysia has a total of 38 paging licensees. Eight of the 38 companies with local paging licenses have also been awarded nationwide licenses. Only 20 of the licensed companies currently serve the market as growth of the paging industry has been slower than that of the cellular market. Most operators offer regional coverage but have established roaming arrangements with each other allowing subscribers to have national coverage.. The market is in a stage of decline as reflected in the number of pagers sold over the years as number of paging customers have migrated to other modes of communication such as the cellular phones.. The quantity of licenses issued have made it difficult to control prices, which are dictated by customers, hurting the profitability of many paging companies and slowing the introduction of new features.

Electcoms Sdn Bhd is the dominant paging operator in the country with a market share of about 35 per cent. Other major companies include Komtel Sdn Bhd, Easycall, Hutchinson Paging and Kilatcom. Komtel with a market share of about 28 per cent, has a total subscriber base of 46,000 and operates about six networks. Easycall holds about 20 per cent of the market share and has a subscriber base of 34,000.

Source: Jabatan Telekom Malaysia

 

Satellites, Earth Stations and Teleports

Malaysia has developed it’s own satellite network with the launch of it’s own satellite (MEASAT1) in January 1996. The result was the immediate and simultaneous point to point and point to multi-point telephone is presently available throughout Malaysia’s islands.

Measat is owned and operated by Binariang Satellite Systems Sdn Bhd (BSS), a subsidiary of Binariang Sdn Bhd. Measat 2 was launched in late October of 1996. Measat 1 has 5 Ku-band and 12 C-band transponders while Measat 2 has 9 Ku-band and 12 C-band transponders (with a double capacity equivalent to 6 transponders). The C band service will provide commercial and economic benefits to all regional network operators who require broadband capacity for video, data and voice service.

Measat's satellites are from Hughes, USA Radio Television Malaysia (RTM), the government radio/television station will lease two 36 MHz C band transponders on a full-time basis and one additional 36 MHz C band transponder for occasional use. Subscribers will be able to receive communication, entertainment and information from the 20 TV and eight radio Direct-To-User (DTU) services. Binariang has a license to own and manage satellites for 20 years without restriction on the number of satellites that may be launched. Binariang is investing about US$236 million in these two satellites along with ground facilities located in Langkawi. 6

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