ISSN 1823 - 3724
Shaping a Connected Future
Industry Performance Report 2012
MCMC Publication Web Version
1 IPR 2012 Shaping a Connected Future
Malaysian Communications and Multimedia Commission (MCMC), 2013 The information or material in this publication is protected under copyright and save where otherwise stated, may be reproduced for non commercial use provided it is reproduced accurately and not used in a misleading context. Where any material is reproduced, MCMC as the source of the material must be identified and the copyright status acknowledged.
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2 IPR 2012 Shaping a Connected Future CHAIRMAN’S NOTE 5 EXECUTIVE SUMMARY 8
MODULE 1: ECONOMIC PERFORMANCE OF THE INDUSTRY 12 Malaysian Economic Performance – Overview for the Year 2012 14 Global and Malaysian GDP Growth 14 Communications Services Contribution to Growth 15 C&M Industry Performance – Overview 2012 17 Contribution of the C&M Industry to Bursa Malaysia 17 Bursa Malaysia ACE Market – An Overview of Licensees 20 Holding Companies of Licensees on ACE Market – Market Listing and Financials 21 C&M Industry Financial Performance Overview 23 Telecommunications Companies 25 Broadcasters 25 Trends of C&M Companies Financial Performance 26 Digital Signature 29 C&M Revenue by Services Market Segment 31 ARPU Comparison 33
MODULE 2: INDUSTRY REGULATORY AND DEVELOPMENT 35 Dual Role of MCMC in the Malaysian C&M Industry 37 C&M Industry Open to Investments 37 MCMC Regulatory Role 38 Licensing of the C&M Industry 41 Shareholding Structure 42 Individual and Class Licensee Ownership 43 Technical Regulation in Spectrum Usage 44 Management of Spectrum in Malaysia 44 Long Term Evolution (LTE) 47 Economic Regulation 49 Access Pricing 49 Accounting Separation 49 Consumer Protection and Beyond 54 Mandatory Standards in Consumer Protection 55 Consumer Protection Mechanisms and Market Surveillance 56 Consumer Complaints 57 Industry Forums and Self-Regulation 61 Enforcement 68 C&M Industry Development in Malaysia – Reaping Opportunities 70 Building Foundation for 2020 and Beyond 70 MCMC Development Role 73 Nationwide High Speed Broadband Focus 75 Growth of Broadband Connections 76 Mobile Broadband Services 84 3G Subscriptions 84 Mobile Communications Technology 85 The Use of Small Cell Technology 86 Universal Service Provision (USP) Scope, Targets and Evolving Approach 88 World Broadband Comparatives 91 Studies and Developments 91
MODULE 3: COMMUNICATIONS SERVICES 93 C&M Services Connections 95 Fixed Line Services 95 Wireless Fidelity (Wi-Fi) Hotspots 97 Mobile Services 98 Domain Names 104 Extending IP Addressing Availability 108
3 IPR 2012 Shaping a Connected Future MODULE 4: CONTENT SERVICES 110 Malaysian Scenario Today and Precursors to Future 112 TV Broadcast Landscape 112 Digital Terrestrial TV Service Platform 113 Development of Broadcasters 113 FTA TV Broadcasters 114 Media Prima Bhd 114 Pay TV Broadcasters 116 ASTRO 116 IPTV 116 Cable TV 116 Radio Broadcasters 117 Advertising Expenditure (Adex) 119 Global Adex 119 Adex in Malaysia 120
MODULE 5: POSTAL AND COURIER SERVICES 122 Postal Services 124 Landscape of Change and Advancement 124 Regulation of Postal Services 125 Business Units Services Description 126 Development of Pos Malaysia 126 Business in Strategic Alliance 126 Postal Operations through ICT Innovations 126 International Participation and Development 128 Philately 131 Courier Services 132 Strategic Goals 132 Industry Licensing and Revenue Performance 132
MODULE 6: STRATEGIC TRADE ACT 135 Strategic Trade Act 2010 137 MCMC Licensing Under Strategic Trade Act 2010 137 Malaysia and the Strategic Trade Act 137 Implementation and Enforcement 138 STA Framework 139 Strategic Items 140 Online Applications 140 Permits and STA Applications in 2012 140 Categories of Permits 141
MODULE 7: GOING FURTHER IN CONNECTIONS – AN OUTLOOK 142 Malaysian Economy Supporting Investments 144 C&M Industry Infrastructure and Access 144 Improving Infrastructure Reach 144 Cross Channel in Accelerating Networked Services and Content 145 Reaping Opportunities by Working Together 145 Reinforcing Efforts in Communications Services Provision 146
QUICK REFERENCE ON TERMS 148 LIST OF FIGURES 148 CONTACT US 151
4 IPR 2012 Shaping a Connected Future CHAIRMAN’S NOTE
Looking at the industry development so far, the last ten years provides witness to the successful implementation of government policies and private sector investments. The industry revenue has quadrupled to RM51 billion over this period from RM12 billion in the late 1990s on the back of a sound market capitalisation of RM190 billion, which has also grown significantly from RM50 billion. Notably in 2011 and 2012 alone, capex for the telecommunications sector alone reached unprecedented RM9 billion levels. We believe these and also the private-public partnership in building-up infrastructure such as the High Speed Broadband (HSBB) reflects investors’ confidence. On the other hand, the coverage extensions were mitigated with Universal Service Provision (USP) funding which is based on the industry’s contribution and managed by the MCMC. In 2012, an additional 2,489 Kampung Tanpa Wayar were added to make up a total of 3,844 in operation nationwide and a total of 664 towers deployed to provide extended coverage to help close the digital divide.
Given the momentum that we saw in the industry during 2012, we are optimistic with the opportunities that are in store for us in 2013, especially innovations in the areas of content and applications, which is crucial to ensure sustainable returns on investment as well as to continue to act as the enabler and catalyst for the economic growth. It may mean doing the basics better. For example, in 2012 we have seen a few success stories relating to rural and urban folks getting their business online, thanks to the accessibility and availability of broadband services. We believe the market will continue to grow with the evolving environment of our industry demands that we constantly challenge, renew and improve our approaches.
In the past ten years, mobile devices have become pivotal to the business and our personal lives. Facilitating the new wave of digital lifestyle, there is a major transitional shift from traditional (voice) mobile devices to Internet-enabled smartphone devices. Smartphones are inculcating new habits among users with, on average, 20% starting to use data-intensive applications related to video, TV, maps and navigation since purchasing their device. Research from Strategy Analytics revealed that 1 billion units of smartphones are used or a penetration of 1 in 7 worldwide. For comparison, in Malaysia the penetration stands at 1 in 4. We believe smartphone ownership in Malaysia will reach a critical mass in 2013. This could be partly due to the incentive under Budget 2013 by the Government which allows RM200 rebates for purchase of smartphones to eligible youths coupled with the decline in the price of smartphones worldwide.
To a certain extent, this will encourage growth in mobile broadband penetration and also data usage. For the service providers, potential revenue is expected to be multiplied as smartphones are able to generate up to 35 times the level of data traffic that a basic feature phone would use. Going forward, we foresee attractive packages with good Internet access, ability to support applications and coverage in the areas they roam on a daily basis are the main reasons for consumers to subscribe or purchase smartphones. Potentially, service providers may also increase the Average Revenue Per User (ARPU) with the increase in demand for data services.
As the industry and nation gather speed to make another leap forward towards 2020, a collaborative focus by all stakeholders working together to build digital lifestyle ecosystems enabling a connected future is critical to reap the many benefits from opportunities arising. This is proven by the ability to achieve broadband penetration rate of 66% of the household and mobile cellular penetration of 142%, with 3G subscriptions gaining ground year on year.
5 IPR 2012 Shaping a Connected Future The efforts in communications service provision needs to be reinforced such that challenges ahead can also be turned to opportune business manoeuvres. Towards this end, the Government has allocated the spectrum for 4G-LTE (Long Term Evolution) in step for the service providers to provide all IP-based 4G services. Going forward, the main focus will be on capacity and the quality of service, hence, the timely rollout of 4G-LTE is scheduled in 2013 with an estimated 10% population coverage, reaching 50% by 2017. More services are expected to be offered at users’ convenience, or on demand, enlisting cloud services and supporting software.
Therefore, in order to ensure sustainable and orderly growth of the industry, for the MCMC and other stakeholders, there is much groundwork to cover. This includes paving a sound basis in shaping a connected future in this new decade of growth. Hence, the MCMC’s task remains one of dual role of industry regulator as well as industry growth promoter.
From the regulatory perspective, the implementation of the revised Access Pricing for the period 2013 to 2015 and Accounting Separation is the next milestone in enhancing competition in the communications market. Competition itself will promote efficiency, i.e. in terms of technical, productivity and allocation of resources. It is therefore a powerful tool to further enhance the industry performance and attract new investments.
The national transformation programme is timely as projects underway in the National Key Economic Area on Communications, Content and Infrastructure (NKEA CCI) with a projected Gross National Income of RM57.7 billion by 2020, have first priority to tap the enhanced network capacity. Acting as a catalyst to network content development, the MCMC is also involved in exploring global markets to assist in sales of local content generated. In 2012, the MCMC together with other government agencies and local companies have garnered a total sales value of RM155 million. This contributes directly to realising the NKEA CCI EPP#1 of nurturing Malaysia’s creative content. As demand increases, investments are recouped and profitability along with national growth is assured. The multiplicative effect can propel us faster towards a developed nation status.
Social networking is huge. For instance, Facebook has now gathered more than 1 billion active users with Malaysians making up more than 13 million. There are a lot of positives in this but also a need to heighten the level of awareness of the risk posed by social networking to the public, especially children. Accordingly, the MCMC had in 2012 launched a nationwide outreach programme on the safe usage of the Internet through Klik dengan Bijak initiative. It is designed to inculcate the culture of positive use of the Internet based on the principles of the Rukun Negara amongst Malaysian users. Its logo or tagline serves as a reminder to users to be careful and to think before they respond or interact when accessing and using the Internet. Furthermore, the term ‘Klik’ is an applicable action on all digital devices and is a term that can be easily understood by all. The programme targets mainly children and youth as they are most vulnerable to cybercrimes and online abuses.
In 2012, the MCMC has also enhanced market surveillance for communications equipment and devices widely available in Malaysia. This is to ensure consumer protection wherein requisite safety standards and technical regulations are adhered to in the products offered to the public. Subsequently, this enhances consumer and investors’ confidence in telecommunications trade within ASEAN and globally.
6 IPR 2012 Shaping a Connected Future Also in 2012, the MCMC received added responsibility of permit issuance under the Strategic Trade Act 2010 (STA 2010), with enforcement requirements together with the Royal Malaysian Customes Department and other agencies. The STA 2010 provisions have important implications for regional and global export controls and compliance.
Notably, the year 2012 is one of setting the stage for paving the foundation for growth and hence, in shaping a connected future. It is my pleasure to present to our readers the Industry Performance Report 2012, with the theme ‘Shaping a Connected Future’.
…………………………………………. Dato’ Mohamed Sharil Tarmizi Chairman, MCMC
7 IPR 2012 Shaping a Connected Future Executive Summary
In 2012, there was continued cautious optimism in the global economic scene as the US economy steadied while the Euro Zone remained in marginal negative growth. In contrast, the Malaysian economy performed better than expected, recording a growth of 5.6% for 2012 (2011: 5.1%).
The Malaysian economic growth was driven by resilient domestic demand through quality growth from private sector consumption and investment activities. In a facilitative investment environment for capital spending, the growth amongst others of the services sectors, including the communications services, continued into 2012. In the C&M industry, the Government’s collaborative efforts in building broadband or 4G infrastructure also contributed to investments in fixed and mobile telecommunications, and in digitised media. This is aside from the Entry Point Projects (EPP) in the National Key Economic Area Communications and Content Infrastructure (NKEA CCI) under the Economic Transformation Programme (ETP).
Specifically in 2012, fixed and mobile service providers, including broadcasters, invested a total of RM10 billion in the ratio of 25:68:7. Investments were in new technology for product diversification and new growth areas of telecommunications such as in broadband telecommunications equipment and expansion, as well as improvement in broadcast systems and delivery of content.
The C&M Industry in 2012
On Bursa Malaysia, the C&M industry collectively captured RM190.9 billion market capitalisation, which is based on the market valuations of the major C&M companies in telecommunications, broadcasting and postal services. This represented 13% of Bursa Malaysia market capitalisation in 2012 (2011: RM138.5 billion or 10.8%). The C&M industry market capitalisation was supported by positive market sentiment and their solid financial performance in the year 2012.
On the other hand, the C&M industry revenue performance in 2012 recorded a 6.5% increase to an aggregate total of RM51 billion. The composition of industry revenue is 85.1% from telecommunications; 10.4% from broadcasting and 2.4% from postal services. Out of the RM43.4 billion in revenue garnered by the telecommunications companies (2011: RM40.5 billion or 84.6%), the fixed line revenue constituted 24.9% or RM10.8 billion while the mobile sector constituted 75.1% or RM32.6 billion.
The broadcasting sector comprising Direct-to-Home (DTH) satellite Pay TV service and Free-To- Air (FTA TV) service garnered a combined revenue of RM5.3 billion, which is an increase of 10.4% (2011: RM4.8 billion). Notably, the FTA TV and Pay TV services make up 2.2% and 8.2% respectively of the total C&M industry revenue.
The postal services sector as represented by Pos Malaysia Bhd contributed RM1.23 billion or 2.4% to industry revenue in 2012.
The 19 licensees listed through holding companies on the ACE Bursa Malaysia market garnered revenue of RM1.1 billion in 2012. The digital signature market segment remained relatively small with revenue of RM29.5 million on the back of more than five million digital certificates issued between the two digital signature issuing companies.
8 IPR 2012 Shaping a Connected Future On communications connections services, the various categories of offerings in the market have overall increased over the years. New services connections such as wired and wireless broadband have accelerated in Malaysia aside from the traditional fixed line and cellular mobile phone connections.
The demand for broadband in Malaysia has a strong complement from wireless technology services with over 3.8 million subscribers compared to fixed (wired) service with 2.3 million subscribers. In 2012, the broadband household penetration rate was 66% (2011: 62.3%) which met the Government target of 65%. This augurs well for Malaysia towards achieving the target of 75% broadband penetration nationwide by 2015 as indicated in the Tenth Malaysia Plan.
Notably, the High Speed Broadband (HSBB) infrastructure rollout has exceeded the Government target of 1.3 million premises passed in October 2012. There were 543,000 HSBB subscriptions by end of 2012 (2011: 234,400 subscriptions). In support of broadband take up the number of Wi-Fi hotspot locations has accelerated, with a total of 31,493 locations in 2012 (2011: 21,712 locations).
Fixed line service as represented by Direct Exchange Line (DEL) subscriptions posted penetration rate of 34.4% per 100 household. This contrasts with mobile phone penetration rate of 141.6% in 2012. Malaysia features more prepaid subscriptions in the ratio of prepaid to postpaid at 80:20. This translates to 33.6 million prepaid and 7.4 million postpaid subscriptions. The growth rates for prepaid and postpaid over the years have fluctuated, but the overall ratio to total subscriptions have remained constant. Notably, 3G mobile subscriptions comprise about a third of the 41 million mobile subscriptions in the country, with 3G prepaid to postpaid ratio at 60:40.
Telekom Malaysia Bhd (TM) remains an incumbent service provider in the fixed line market with 97.1% market share. On the other hand, market share for cellular mobile services based on subscribers saw Maxis leading with 32.2% (13.2 million subscriptions), followed by Celcom at 31.5% (12.9 million subscriptions), DiGi at 25.6% (10.5 million subscriptions) and U Mobile at 8.5% (3.5 million subscriptions).
In 2012, the Mobile Virtual Network Operators (MVNO) in Malaysia complementing the cellular mobile network owners, garnered 0.9 million subscriptions, or 2.2% of the 41 million mobile subscriptions in the country.
9 IPR 2012 Shaping a Connected Future Industry Regulatory and Development Management in 2012
The C&M industry in Malaysia as of 2012 shows the impact of the convergence law in Malaysia, which is the Communications and Multimedia Act 1998 (CMA). The CMA created an open telecommunications market since 1999, enabling new development and creating more opportunities.
In this journey of transformation, the MCMC as the regulator for the converging C&M industry in Malaysia is aptly tasked with the dual role of industry regulation (including licensing) as well as industry development. The MCMC is working with all stakeholders, existing service providers and new entrants or cross industry for the next leap of competitive growth.
Notably, the regulatory and industry development aspects for the networked economy are also aligned to and guided by the national development programmes under ETP vis-à-vis the NKEA CCI projects.
In national broadband network development, the National Broadband Initiative has driven broadband connections, subscriptions and usage of the service through various programmes, which included direct access to business premise or home, or community based access. Broadband to enhance business value to users is highlighted through the Get Malaysian Business Online (GMBO) project. In 2012, almost 30,000 SMEs signed up for GMBO, with about 10,000 registered website domains.
From the licensing profile in 2012 we can see growing numbers and type of businesses under the respective licence categories of provision of network facilities, network services, and content and applications services. The increases in Individual licences have moderated, but the Class licence categories in the Application Service Providers or ASP (C) recorded 941 licences at year end.
On the regulatory front, the MCMC completed a cost study in 2012 and subsequently implemented the Mandatory Standards on Access Pricing for the period 2013 to 2015 effective 1 January 2013. In order to ensure transparency in service provider operations, the Guidelines on Implementation of Accounting Separation was issued on 21 December 2012, which sets the basis for service providers to prepare regulatory financial statements starting 2013. Such financial statements would report different wholesale and retail business units, as if they were separate businesses, and are prepared over and above the statutory accounts.
The MCMC in 2012 allocated the spectrum for high speed wireless broadband of 4G-LTE in the 2.6GHz spectrum band. Infrastructure sharing is a must among the service providers, along with necessary cost based pricing. The minimum population coverage expected from service providers in this case is 10% by 2013, with increments of 10% each year to reach 50% by 2017.
In 2012, the MCMC enhanced market surveillance for communications equipment and devices widely available in Malaysia. This includes checking certification marks or labels for fraud and counterfeit. The purpose is to ensure communications equipment and devices in the Malaysian market comply with requisite safety standards and technical regulations. The ultimate goals are to ensure consumer protection and also facilitate trade in telecommunications equipment within ASEAN and globally.
10 IPR 2012 Shaping a Connected Future Furthermore, the MCMC monitoring the outcome of such surveillances done periodically with its certifying agent SIRIM Bhd 1 can facilitate further initiatives for conducive investment climate in the C&M industry.
In 2012, the MCMC implemented Klik dengan Bijak Campaign, an outreach programme that was launched in Pulau Pinang on 1 July 2012. The programme targets those most vulnerable to cybercrimes and online abuses, mainly children and youth to empower Internet users in Malaysia with the knowledge and precautionary measures when they are online.
On the Universal Service Provision front, the MCMC scope of work continues with projects supporting the goals of the National Broadband Initiative such as Kampung Tanpa Wayar , Time 3, Pusat Internet 1Malaysia , and the Komputer 1Malaysia or 1Malaysia Netbook programmes.
On the industry development front, aside from being a catalyst to the development of local content, the MCMC is also involved in the initiative to expand local content export revenue through global market exploration together with FINAS, MDeC and local companies. Such efforts bring local content to the international markets. This is expected to assist the local companies to generate more revenue for the nation. The total sales value was RM155 million. This programme contributes directly to realising the NKEA CCI EPP#1.
Outlook for the C&M Industry in Malaysia in 2013
The continued resilient domestic demand in the local economy, with signs of recovery in certain advanced economies while regional economies remain stable augur well for communications services. The C&M industry growth in 2013 is expected to track local economic growth.
Collaborative efforts between the Government and industry stakeholders have brought the industry to the status and standard in 2012. Going forward, the MCMC will continue to monitor and press ahead to ensure projects started in 2012 are completed as targeted for 2013. The projects with specific timelines in 2013 include the Get Malaysian Business Online (GMBO) project, with the target for online presence of 50,000 micro entrepreneurs in 2013 and the Klik dengan Bijak outreach programme set to be launched at state level in Sabah and Terengganu in January and February 2013 respectively, with other states to follow suit into the year.
The MCMC will continue to work with service providers according to the planned timescale schedule to implement Accounting Separation vis-à-vis industry working groups meeting at regular intervals throughout 2013 to discuss and resolve issues along the way. Also plans are in the pipeline to carry out market accessment to ascertain dominance in the market. The meeting proceedings will need to be broken into practical modules, to be tackled during the year, such as cost drivers or documentation, so that by the end of 2013 all major issues are resolved.
The implementation of 4G-LTE services to meet the target minimum population coverage of 10% for the year 2013 will be monitored for compliance.
The MCMC will continue to work closely with the industry and relevant stakeholders to ensure projects and initiatives underway are expedited and facilitated for execution.
1 Note: eComM or Online Certification for Communication and Multimedia is a platform for online application on certification and directory of certified equipment that meets Malaysian regulatory requirements. The link is at www.sirim.my 11 IPR 2012 Shaping a Connected Future
MODULE 1: ECONOMIC
PERFORMANCE OF THE INDUSTRY
12 IPR 2012 Shaping a Connected Future
Module Content
MODULE 1: ECONOMIC PERFORMANCE OF THE INDUSTRY 12 Malaysian Economic Performance – Overview for the Year 2012 14 Global and Malaysian GDP Growth 14 Communications Services Contribution to Growth 15 C&M Industry Performance – Overview 2012 17 Contribution of the C&M Industry to Bursa Malaysia 17 Bursa Malaysia ACE Market – An Overview of Licensees 20 Holding Companies of Licensees on ACE Market – Market Listing and Financials 21 C&M Industry Financial Performance Overview 23 Telecommunications Companies 25 Broadcasters 25 Trends of C&M Companies Financial Performance 26 Digital Signature 29 Development of Public Key Infrastructure in Malaysia 30 C&M Revenue by Services Market Segment 31 ARPU Comparison 33 Mobile 33 Fixed Line 34 Pay TV 34
13 IPR 2012 Shaping a Connected Future Malaysian Economic Performance – Overview for the Year 2012
Global and Malaysian GDP Growth
In 2012, there was continued cautious optimism Global World Economic Outlook in the global economic scene as the US economy Real GDP Growth Inflation steadied while the Euro Zone remained in (%) (%) 2012e 2013f 2012e 2013f marginal negative growth. In contrast, the World Growth 3.2 3.5 - - Malaysian economy performed better than World Trade 2.8 3.8 - - expected, recording a growth of 5.6% for 2012 Advanced Economies (2011: 5.1%). US 2.2 2.0 2.1 1.8 Japan 2.0 1.2 -0.1 -0.2 The better Malaysian economy growth was driven Euro Zone -0.6 -0.2 2.5 1.6 UK 0.2 1.0 2.8 1.9 by resilient domestic demand. This is quality Developing Asia 6.6 7.1 - - growth from private sector consumption and Asian NIEs #1 1.7 - 2.6 3.0 investment activities. In the C&M industry, the Korea 2.0 3.6 2.2 2.7 Chinese Taipei 1.3 3.9 1.9 2.0 Government’s collaborative efforts in building Singapore 1.3 2.9 4.6 4.2 broadband or 4G infrastructure also contributed Hong Kong #2 1.4 3.5 4.1 3.0 The People’s to more investments in consumer related services 7.8 8.2 2.6 3.0 Republic of China of telecommunications, mobile and digitised ASEAN – 4 6.2 - 3.3 - media. This is aside from the mostly private Malaysia 5.6 5 ~ 6 1.6 2 ~ 3 sector projects from the NKEA CCI under the Thailand 6.4 6.0 3.0 3.3 Indonesia 6.2 6.3 4.3 5.1 Economic Transformation Programme (ETP). Philippines 6.6 4.8 3.1 4.5 India #3 4.0 5.9 7.5 - #1 Newly Industrialised Economies #2 Inflation refers to composite price index According to Bank Negara Malaysia Annual Report #3 Newly Industrialised Economies 2012, the Malaysian economy is projected to e – Estimate f – Forecast experience a solid and steady growth of between Source: International Monetary Fund, National Authorities and Bank 5% and 6% in 2013. Better than expected Negara estimates growth in advanced economies is expected to Fig. 1.1 Global World Economic Outlook boost the Malaysian economy in 2013 as exports improve.
Selected Economic Indicators Selected Economic Indicators 2009 2010 2011 2012 (e) 2013 (f) Gross Domestic Product (GDP) #1 (2005 real prices) -1.5 7.2 5.1 5.6 5.0 ~ 6.0 Consumer Price Index (CPI) #2 (2010 = 100) 0.6 1.7 3.2 1.6 2.0 ~ 3.0 Producer Price Index (PPI) #3 (2005 = 100) -7.1 5.6 9.0 0.1 - Unemployment Rate 3.7 3.3 3.1 3.0 3.1 Overall Deficit/ Surplus as % of GDP -6.7 -5.4 -4.8 -4.5 -4.0 Per Capita Income by Purchasing Power Parity (USD) 11,781 15,190 15,676 16,368 -
#1Beginning 2012, real GDP has been rebased to 2005 prices, from 2000 prices previously . #2Effective from 2011, the Consumer Price Index has been revised to the new base year 2010 = 100, from 2005 = 100 previously. #3 Effective from 2010, the Producer Price Index has been revised to the new base year 2005 = 100, from 2000 = 100 previously.
Source: Bank Negara Malaysia, Ministry of Finance, Department of Statistics Malaysia Fig. 1.2 Selected Economic Indicators
14 IPR 2012 Shaping a Connected Future Malaysia GDP Growth Malaysia GDP Growth 2011 (%) 2012 (%) 2013f (%) Forecast Bank Negara Malaysia (BNM) 5.1 5.6 5.0 ~ 6.0 March 2013 Malaysian Institute of Economic Research (MIER) 5.1 5.1 5.6 December 2012 Economic Intelligence Unit (EIU) - 5.6 4.6 March 2013 Malaysian Rating Corporation (MARC) 5.1 5.6 5.3 February 2013 Rating Agency Malaysia (RAM) 5.1 5.2 5.3 January 2013 Source: As indicated Fig. 1.3 Malaysia GDP Growth
Communications Services Contribution to Growth
The Malaysia economic growth in 2012 was also supported by a resilient financial sector and a well developed domestic bond market. The conducive financing environment in the banking sector and the capital market facilitated funding for capital spending, which was widespread across the economic sectors, particularly in the services, manufacturing and mining sectors. Strong investment performance was supported by new and existing infrastructure projects, including those under the Economic Transformation Programme (ETP) and the regional growth corridors.
Real GDP by Expenditure (2005 = 100) 12 10 8 7.2 5.1 5.6 6 4.8 } 5-6% 4 2 0 -2 2008 2009 2010 2011 2012p 2013f -1.5
ContributionGrowthto (%) -4 -6 Private Investment Private Consumption Public Investment Public Consumption Net Export Change in Stocks GDP
Source: Bank Negara Annual Report 2012 Fig. 1.4 Private Investments and Consumption Supported Quality GDP Growth
The facilitative investment climate in Malaysia remains intact. In 2012, private investment posted a growth of 22%. This includes capital spending from consumer oriented services sector such as communications and wholesale and retail sectors as these expanded and upgraded existing infrastructure and services. Investments also were in new technology for product diversification and new growth areas of telecommunications such as in broadband telecommunications equipment.
Domestic oriented sectors such as the C&M industry continue to be buoyed by strong domestic demand. Private consumption continued to drive the Malaysia economy since late 2006. On the other hand private investments have contributed more to GDP growth since 2011.
15 IPR 2012 Shaping a Connected Future Communications Services Sector Contribution to GDP Growth
Real GDP by Economic Activity 2012 Services Sector Performance* Contribution to Growth Annual Change (%) 8
6
4 7.9 Final Intermediate 7.1 2 Services Services 4.9 0 2009 2010 2011 2012p 2013f 9.1 -2 ContributionGrowthto (%) -4 Agriculture Mining & Quarrying Final Services Finance & Insurance Real Estate & Business Sevices Transport & Storage Manufacturing Construction Communication Services
*Constant 2005 price
Source: Bank Negara Annual Report 2012 Fig. 1.5 Communications Services Sector Contribution to GDP Growth
Domestic demand is expected to continue to Communication Services Performance anchor growth in 2013. The sustained vis-a-vis Overall Services Sector investments in various segments, including 10 9.1 9.1 telecommunications, are expected to be driven 9 8 7.6 by infrastructure upgrading and continued 8 8.6 capacity expansion. 7 6.2 6 7.2 7 6.4 In areas where there is perceived gaps in 5 4 access and availability of communications 3
services in the C&M industry, the public-private Annual Change (%) 2 2.9 sector collaborative efforts is employed using 1 funding from the Universal Service Provision or 0 USP. This is especially so in ensuring pervasive 2008 2009 2010 2011 2012p broadband coverage and service quality. Overall Services Communication
Source: Bank Negara Annual Report Fig. 1.6 Communications Services Performance vis-à-vis Overall Services Sector
16 IPR 2012 Shaping a Connected Future C&M Industry Performance – Overview 2012
Contribution of the C&M Industry to Bursa Malaysia
The positive performance of Bursa Malaysia in 2012 was buoyed by favourable domestic economic outlook. At end of 2012, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) gained 10.3% to close at 1,689 points (2011: 0.8%). In line with a respectably growing domestic economy supporting low unemployment rates and stable household income streams, the C&M companies posted relatively strong stock market performance.
The C&M industry as represented by major public listed companies in telecommunications, broadcasting and postal sectors in Bursa Malaysia captured RM190.9 billion in market capitalisation (2011: RM138.5 billion). This constitutes 13% of the Bursa Malaysia market capitalisation of RM1,465.7 billion in 2012.
Market Capitalisation – C&M Industry in Bursa Malaysia
1,600 190.9 1,400 118.0 138.5 1,200 69.5 103.4 1,000 87.3 800 81.2 60.9 73.7 48.5 1,274.7 RM (billion) 600 1,157.3 1,036.7 1,146.0 896.0 400 761.4 579.1 640.8 621.6 615.3 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Others on Bursa Malaysia C&M
Source: Bloomberg, MCMC Fig. 1.7 Market Capitalisation – C&M Industry in Bursa Malaysia
In 2012, the market capitalisation of C&M industry increased by 37.8% compared with an increase of 17.4% in 2011. The increase was mainly due to higher market capitalisation posted by DiGi, that is, from RM30.2 billion in 2011 to RM41.1 billion in 2012 (up 36.1%). This is in part due to perceived potential from products and services innovation and plans for 3G expansion to further enhance the quality and performance of their network. Axiata also added on RM12.6 billion market capitalisation by value as the group continued to reap growing regional and local earnings.
Meanwhile, Pos Malaysia’s market capitalisation stood at RM1.9 billion in 2012, which is an increase of 35.7%. As part of the DRB-HICOM Group, Pos Malaysia is seeking to offer beyond postal services in order to leverage its postal assets such as post office locations and extensive network in supply chain logistics to stay ahead in a demanding landscape of increasing digital connections.
17 IPR 2012 Shaping a Connected Future By respective C&M companies, two major service providers namely Axiata and Maxis contributed a significant amount of market capitalisation by 3.8% and 3.4% respectively to the Bursa Malaysia market capitalisation. The respective individual C&M companies’ contribution to Bursa Malaysia by percentage in 2012 is shown in Figure 1.8.
Individual C&M Companies Contribution to Bursa Malaysia 2012
Axiata 3.8% Maxis Others on 3.4% Bursa Malaysia 13.0% TM 87.0% 1.5% ASTRO DiGi 1.1% 2.8%
Media Prima 0.2% TIME Pos Malaysia 0.2% 0.1%
Note: ASTRO Malaysia was listed on 19 October 2012
Source: Bloomberg, MCMC Fig. 1.8 Individual C&M Companies Contribution to Bursa Malaysia 2012
C&M Companies Market Capitalisation RM (billion) % Change % Change Companies 2010 2011 2012 (2010– 2011) (2011– 2012) Axiata 40.1 43.5 56.1 8.5 29.0 Maxis 39.8 41.1 49.9 3.3 21.4 DiGi 19.1 30.2 41.1 58.1 36.1 TM 12.6 17.7 21.6 40.5 22.0 TIME 2.0 1.8 2.2 -10.0 22.2 Pos Malaysia 1.8 1.4 1.9 -22.2 35.7 ASTRO* n.a. n.a. 15.6 n.a. n.a. Media Prima 2.6 2.8 2.5 7.7 -10.7 Total 118.0 138.5 190.9 17.4 37.8
*ASTRO All Asia Networks plc was privatised and delisted on 14 June 2010. Newly listed ASTRO Malaysia Holdings Bhd on 19 October 2012 Note: Telekom Malaysia Bhd (TM), Axiata Group Bhd (Axiata), Maxis Bhd (Maxis), DiGi.Com Bhd (DiGi), ASTRO Malaysia Holdings Bhd (ASTRO), Pos Malaysia Bhd (Pos Malaysia), TIME dotCom Bhd (TIME), Media Prima Bhd (Media Prima)
Source: Bloomberg, MCMC Fig. 1.9 C&M Companies Market Capitalisation RM (billion)
Specifically, the market capitalisation of individual C&M companies saw Axiata, Maxis and DiGi posting above RM40 billion levels. This also records these service providers as among the top ten market capitalisation companies in Bursa Malaysia. In contrast, only Axiata and Maxis were amongst the top ten in 2011.
18 IPR 2012 Shaping a Connected Future C&M Market Capitalisation 2010 – 2012
60 56.1 2012 2011 2010 49.9 50 43.5 41.1 41.1 40.1 39.8 40 30.2 30 RM (billion) 21.6 19.1 20 17.7 15.6 12.6 10 2.8 2.6 2.5 2.2 2.0 1.9 1.8 1.8 1.4 0 Axiata Maxis DiGi TM TIME Pos Malaysia ASTRO* Media Prima
Source: Bloomberg, MCMC Fig. 1.10 C&M Market Capitalisation 2010 – 2012
Top 10 Market Capitalisation 2011 Top 10 Market Capitalisation 2012
Maybank 65.5 Maybank 77.6 CIMB Group 55.3 Public Bank 57.5 Sime Darby 55.3 Sime Darby 57.2 Petronas Chemicals 49.6 CIMB Group 56.7 Public Bank 47.3 Axiata 56.1 Axiata 43.5 Petronas Chemicals 51.2 Maxis 41.1 Maxis 49.9 Genting 40.9 DiGi 41.1 IOI Corp 34.6 Petronas Gas 38.6 TNB 32.2 TNB 38.5
0 20 40 60 80 0 20 40 60 80 100 Market Capitalisation RM (billion) Market Capitalisation RM (billion)
Source: Bloomberg, MCMC Fig. 1.11 Top 10 Market Capitalisation 2011 and 2012
Noteworthy is that ASTRO Malaysia Holdings Bhd was a major new listing of C&M companies on Bursa Malaysia in 2012, with 1.5 billion shares offered to public at a total valuation of RM4.5 billion. This relisting of ASTRO follows from the privatisation of the previous ASTRO All Asia Networks plc on 14 June 2010. As at end 2012, the market capitalisation of ASTRO on Bursa Malaysia was RM15.6 billion.
19 IPR 2012 Shaping a Connected Future Bursa Malaysia ACE Market – An Overview of Licensees
By end 2012, the total number of companies listed on Bursa Malaysia ACE 2 market was 112, where 19 of these or 17% are holding companies whose subsidiaries are licensees under the CMA and the Postal Services Act 1991. The licensees indicated are mostly under the category of Applications Service Provider (Class) or ASP (C) licensees.
Licensees Listed on ACE Market 2012 Holding Company (ACE Listed) Licensee Type of Licences* Asia Media Group Bhd Asia Media Sdn Bhd ASP (C) Diversified Gateway Solutions Bhd Diversified Gateway Bhd ASP (C) DVM Technology Bhd DVM Intellisource Sdn Bhd ASP (C) Extol MSC Bhd Extol Ventures Sdn Bhd ASP (C) GD Express Carrier Bhd GD Express Sdn Bhd Courier Instacom Group Bhd iZZinet Sdn Bhd NFP (I), NSP (I) M3 Technologies (Asia) Bhd M3 Technologies (Asia) Bhd ASP (C) Ezymobile International Sdn Bhd ASP (C) Mexter Technology Bhd Mexcomm Sdn Bhd ASP (C) M-Mode Mobile Sdn Bhd ASP (C) M-Mode Bhd M-Mode Systems Sdn Bhd ASP (C) Mobile Multimedia Sdn Bhd ASP (C) MNC Wireless Bhd ASP (C) MNC Wireless Bhd Moblife.TV Sdn Bhd ASP (C) IdotTV Sdn Bhd ASP (C) mTouche Technology Bhd Mobile Touchetek Sdn Bhd ASP (C) N2N Connect Bhd N2N Connect Bhd ASP (C) Dubaitech Marketing Sdn Bhd ASP (C) Nextnation Communication Bhd Nextnation Network Sdn Bhd ASP (C) OCK Group Bhd OCK Setia Engineering Sdn Bhd NFP (I) IPSAT Sdn Bhd ASP (C), NFP (I), NSP (I) Privasia Technology Bhd Privanet Sdn Bhd NFP (I), NSP (I) DE Multimedia Sdn Bhd CASP (I) Redtone-CNX Broadband Sdn Bhd ASP (C), NFP (I), NSP (I) Redtone Marketing Sdn Bhd ASP (C), NFP (I), NSP (I) Redtone International Bhd Redtone Mobile Sdn Bhd ASP (C) Redtone Mytel Sdn Bhd ASP (C) Redtone Telecommunications Sdn Bhd ASP (C), ASP (I) Smartag Solutions Bhd Smartag Technologies Sdn Bhd ASP (C) XOX Com Sdn Bhd ASP (C), NSP (I) XOX Bhd XOX Media Sdn Bhd ASP (C) XOX Mobile Sdn Bhd ASP (C) Airzed Broadband Sdn Bhd NFP (I), NSP (I) YTL e-Solutions Bhd Y-Max Networks Sdn Bhd NFP (I), NSP (I) *ASP – Applications Service Provider; CASP – Content Applications Service Provider; NSP – Network Service Provider; NFP – Network Facilities Provider I – Individual; C – Class
Source: Bursa Malaysia ACE Market, Industry Fig. 1.12 Licensees on ACE Market 2012
2 Bursa Malaysia ACE market is an alternative market open to companies of all sizes and from all economic sectors similar to the previous MESDAQ market. 20 IPR 2012 Shaping a Connected Future Holding Companies of Licensees on ACE Market – Market Listing and Financials
The proceeds garnered in the respective IPO exercises and the offer or issue prices are as cited in Figure 1.13.
Holding Companies of Licensees – Market Listing and Financials IPO Proceeds Offer/ Issue Price Holding Company Date Listed on ACE RM (million) RM Asia Media Group Bhd 11 January 2011 22.5 0.23 Diversified Gateway Solutions Bhd 2 August 2006 16.9 0.41 DVM Technology Bhd 2 January 2004 20.7 0.40 Extol MSC Bhd 20 March 2006 7.8 0.30 GD Express Carrier Bhd 17 May 2005 10.5 0.30 Instacom Group Bhd 18 January 2005 7.7 0.43 M3 Technologies (Asia) Bhd 27 January 2003 10.1 0.45 Mexter Technology Bhd 12 April 2005 13.9 0.40 M-Mode Bhd 6 December 2004 9.2 0.45 MNC Wireless Bhd 25 October 2005 7.7 0.48 mTouche Technology Bhd 21 July 2005 9.0 0.60 N2N Connect Bhd 28 November 2005 8.4 0.70 Nextnation Communication Bhd 26 August 2005 25.0 0.78 OCK Group Bhd 17 July 2012 27.0 0.36 Privasia Technology Bhd 27 April 2006 15.6 0.60 Redtone International Bhd 9 January 2004 29.5 0.95 Smartag Solutions Bhd 18 April 2011 17.7 0.31 XOX Bhd 10 June 2011 37.4 0.80 YTL e-Solutions Bhd 2 July 2002 38.5 1.10 Source: Bursa Malaysia ACE Market, Industry Fig. 1.13 Holding Companies of Licensees – Market Listing and Financials
Referring to Figure 1.14, most of the licensees on the ACE market are categorised under telecommunications services. The other business categories observed includes software research and development, computer services, mobile content and value added services.
The presence of licensees in ACE market shows the development of the C&M industry in new areas of products and services. This is in line with the growing presence and potential of SME companies to the overall C&M industry growth.
21 IPR 2012 Shaping a Connected Future Licensees Listed on ACE Market 2012
Source: Bloomberg, MCMC Fig. 1.14 Licensees Listed on ACE Market 2012
22 IPR 2012 Shaping a Connected Future C&M Industry Financial Performance Overview
The C&M industry in 2012 recorded a total aggregate revenue of RM51 billion, an increase of 6.5% from RM47.9 billion in 2011. This is based on the financial accounts of the C&M industry revenue from the telecommunications, broadcasting, postal services and digital signature.
The aggregate domestic revenue was RM39.7 billion, which is a growth of 5.9% from RM37.5 billion in 2011. Meanwhile, the foreign revenue was RM11.3 billion representing an increase of 8.7%. The improved performance is due to better regional economic performance in 2012.
The foreign revenue was mainly contributed by the Axiata Group, which has continued to fortify its presence in the regional telecommunications markets. The Group has controlling interest in mobile communication operations in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia as well as strategic stakes in other countries such as India, Singapore and Pakistan.
C&M Industry Revenue Growth: Domestic compared to Foreign 60 +8.7% Foreign -1.0% Foreign +5.9% Domestic 50 +16.7% Foreign +7.4% Domestic + 13.9% Foreign +8.4% Domestic 11.3 + 4.2% Domestic 10.4 10.5 (22.2%) 40 (21.7%) 7.9 9.0 (23.1%) (20.4%) (21.8%) 30
37.5 39.7 20 32.2 34.9 30.9 (78.3%) (77.8%) RM (billion) (79.6%) (78.2%) (76.9%) 10
0 2008 2009 2010 2011 2012 Domestic Foreign
Source: Industry, MCMC Fig.1.15 C&M Industry Revenue Growth: Domestic compared to Foreign
C&M Industry Revenue compared to GDP 39.7 37.5 40 34.9 10 30.9 32.2 8 30 5.3 5.3 4.8 5.1 5.2 6 20 4 RM (billion) 10 2 Revenue as % of GDP 0 0 2008 2009 2010 2011 2012
C&M Industry Revenue Revenue as % of GDP
Source: Industry, MCMC Fig. 1.16 C&M Industry Revenue compared to GDP
23 IPR 2012 Shaping a Connected Future By sector revenue, the telecommunications companies held a major share of the C&M industry revenue at 85.1% or RM43.4 billion (2011: 84.6% or RM40.5 billion). This is followed by broadcasting 3 companies with 10.4% or RM5.3 billion in 2012 (2011: 10.0% or RM4.8 billion).
The postal services revenue showed improvement based on annualised revenue of RM1.23 billion in 2012 (2011: RM1.17 billion from RM1.01 billion in 2010).
C&M Industry Revenue 2010 – 2012
60 50 40 30 45.4 47.9 51.0
RM (billion) 20 10 0 2010 2011 2012
C&M Industry Revenue by Sector 2010 – 2012
Source: Industry, MCMC Fig. 1.17 C&M Industry Revenue 2010 – 2012
3 Excludes Media Prima print revenue. 24 IPR 2012 Shaping a Connected Future Telecommunications Companies
Telecommunications Companies Revenue In 2012, the telecommunications sector 2010 – 2012 revenue grew by 7.2% to RM43.4 billion (2011: up 3.8% to RM40.5 billion). This is RM43.4 billion RM40.5 billion RM39 billion based on aggregated revenue for major 100 1.0% 0.8% 0.8% 14.7% 14.7% 13.9% telecommunications service providers namely, 80 Axiata, Maxis, TM, DiGi and TIME. 20.7% 21.7% 22.7%
60 The respective market shares of the 23.0% 22.6% 22.5% 40 companies were relatively consistent over the last three years as shown in Figure 1.18. 20 40.7% 40.2% 40.0%
Percentage Contribution(%) 0 2012 2011 2010
TIME DiGi Maxis TM Axiata
Source: Industry, MCMC Fig. 1.18 Telecommunications Companies Revenue 2010 – 2012
Broadcasters
Broadcasting Revenue The broadcast ing services sector comprises 2010 – 2012 mainly four Free-To-Air television (FTA TV) channels owned by Media Prima Bhd (Media RM5.3 billion RM4.8 billion RM4.6 billion Prima), two Government channels run by 100 1.6% 1.7% 1.8% Radio Televisyen Malaysia (RTM), and a 18.4% 19.1% 19.1% subscription-based multichannel satellite TV 80 service provider, ASTRO. 60 The trend of total broadcasting revenue over 40 80.0% 79.2% 79.1% the last three years is shown in Figure 1.19. 20
Percentage Contribution(%) 0 2012 2011 2010
RTM Media Prima ASTRO
Note: Excludes Media Prima Print Revenue
Source: Industry, MCMC Fig. 1.19 Broadcast Revenue 2010 – 2012
25 IPR 2012 Shaping a Connected Future Trends of C&M Companies Financial Performance
Overall, the C&M companies in telecommunications, broadcasting and postal have recorded a growing trend in revenue. However, operating profit margins have fluctuated as the companies plough back revenue for investments as they continue to invest heavily in infrastructure for various purposes such as network modernisation, coverage expansion and new IT infrastructure investments to meet demand and improve profitability.
The EBITDA margins are contrasted to show the varying degree of capitalised asset investments undertaken by the various service providers. With the available data, it can be seen that whilst other service providers show steady investment trend, TIME spots relative volatile margin performances. This is in view of the recent restructuring in the group and Mergers & Acquisitions activities undertaken.
Nevertheless, based on revenue, TIME posted the highest revenue growth of 33.3% among telecommunications service providers, driven by global bandwidth sales, data centre and growth in fixed line business.
C&M Companies Financial Performance 2008 – 2012 Revenue RM (billion) #1 Operating Profit Margin (%) Companies 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 TM 8.7 8.6 8.8 9.2 10.0 8.4 12.4 14.8 13.6 11.9 TIME - 0.3 0.3 0.3 0.4 - - 11.2 22.4 17.5 Axiata (including 11.3 13.3 15.6 16.3 17.7 17.5 24.1 22.1 24.6 23.1 Celcom) Maxis 8.4 8.6 8.9 8.8 9.0 38.0 35.5 37.7 36.7 31.9 DiGi 4.8 4.9 5.4 6.0 6.4 31.9 28.4 30.1 26.8 25.1 ASTRO #2 - - 3.6 3.8 4.2 - - 28.8 26.0 19.0 Media Prima #3 0.8 0.7 1.5 1.6 1.7 20.4 38.1 20.8 18.9 17.8 Pos Malaysia 0.9 0.9 1.0 1.2 1.2 #4 9.4 9.1 8.2 12.4 12.1 #1 Including revenue from foreign operations #2 Newly listed ASTRO Malaysia Holdings Bhd on 19 October 2012. Revenue adjusted for calendar year #3 Includes Print Revenue. Media Prima completed acquisition of The New Straits Times Press (Malaysia) Bhd (NSTP) in 2010 #4 Adjusted for calendar year. Change of financial year end from 31 December to 31 March effective year 2012
Source: Industry, MCMC Fig. 1.20 C&M Companies Financial Performance 2008 – 2012
26 IPR 2012 Shaping a Connected Future C&M Companies EBITDA 2008 – 2012
EBITDA RM (billion) EBITDA Margin (%) Companies 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 TM 2.8 3.1 3.3 3.4 3.2 31.6 33.2 31.5 32.5 30.7 TIME - 0.1 0.1 0.1 0.1 - 21.9 27.0 40.3 32.8 Axiata 4.3 6.1 7.4 7.2 7.4 38.1 46.1 47.3 44.2 42.0 Celcom - 2.7 3.0 3.1 3.4 - 43.8 43.9 43.7 43.7 Maxis 4.4 3.4 4.4 4.4 4.2 52.1 39.6 49.5 49.8 47.1 DiGi 2.2 2.1 2.4 2.8 2.9 45.1 43.3 44.4 46.4 46.0 Pos Malaysia 0.1 0.1 0.1 - 0.2 13.7 14.5 13.8 - 19.4#3 Media Prima #1 0.2 0.3 0.4 0.4 0.4 26.3 44.9 27.3 24.9 23.8 FYE Jan FYE Jan FYE Jan FYE Jan FYE Jan FYE Jan FYE Jan FYE Jan FYE Jan FYE Jan 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 ASTRO #2 - 1.0 1.4 1.7 1.7 - 30.4 37.4 44.0 40.2 #1 Includes Print. Media Prima completed acquisition of The New Straits Times Press (Malaysia) Bhd (NSTP) in 2010 #2 FYE 31 January #3 12 months FYE 31 March 2013
Source: Industry, MCMC Fig. 1.21 C&M Companies EBITDA 2008 – 2012
Telecommunications Companies Operating Profit Margin compared to EBITDA Margin 2008 – 2012 60 TM TIME Maxis DiGi Celcom 50 52 50 50 47 45 46 46 40 43 4444 44 44 44 40 40 38 38 35 37 30 33 33 33 32 32 31 32 32 Margin (%) 30 27 28 27 20 25 22 22 17 10 15 14 12 12 11 8 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Operating Profit Margin (%) EBITDA Margin (%)
Note: Celcom operating profit margin not available
Source: Industry, MCMC Fig. 1.22 Telecommunications Companies Operating Profit Margin compared to EBITDA Margin 2008 – 2012
TM revenue gained a solid 8.7% increase to RM10 billion in 2012 from RM9.2 billion recorded in 2011, driven by Internet and data services. TM charts stable EBITDA margins of over 30% over the years while operating margin averaged 14% over the last three years. TM is steadily rolling out High Speed Broadband or HSBB services nationwide alongside extending Internet access beyond homes and offices through Wi-Fi hotspots. In 2012, besides network upgrades, TM invested and built the Asia Pacific Gateway (APG) submarine cable system, which will provide fibre connectivity to eight countries in the Asia Pacific region to meet rising demand in data. 27 IPR 2012 Shaping a Connected Future
Mobile service providers show EBITDA margins above 40%. This is the same for both service providers operating domestically and internationally. Essentially, mobile service providers are expanding and strengthening their existing mobile network and coverage along with preparation for the next generation mobile network efficiencies that LTE (Long Term Evolution) or 4G services can offer.
In 2012, the Axiata group posted revenue increase of 8.6% to RM17.7 billion from RM16.3 billion 4 in 2011. This growth was driven by data services and strong performance from all operations both domestic and foreign. Domestically, Celcom shows the highest infrastructure investments over the last two years.
Maxis revenue for 2012 stood at RM9 billion, an increase of 2.3%, mainly driven by growth in all its business segments, including non voice services (2011: RM8.8 billion). Maxis continued its investments in network infrastructure and focused on provision of future digital services. In 2012, Maxis entered into infrastructure sharing partnerships with U Mobile and Redtone to meet user demand for data access and higher speeds.
Furthermore, Maxis is leveraging on provision of home fibre Internet services now available to more than 1.3 million homes in the Klang Valley, selected areas of Pulau Pinang, Johor, Perak, Melaka, Negeri Sembilan and Kedah. This is offered through a combination of their own fibre optic infrastructure and the HSBB initiative. Maxis introduced Internet speeds of 10Mbps, 20Mbps or 30Mbps catering to consumer needs. Mobile customers are offered rebates with the home fibre Internet subscription.
Meanwhile, DiGi revenue in 2012 was RM6.4 billion, an increase of 6.7% (2011: RM6 billion or an increase of 11.1%). The growth was driven primarily by strong demand for mobile Internet services and growing demand for smartphone plans and packages. DiGi provision of data services include broadband plans with upload and download speeds over DiGi 3G network at 14.4Mbps. Solutions offered include services for individual and business use as well as machine to machine solutions.
DiGi transformation investment plans continued in optimising its 3G network for more consistent speeds and better mobile Internet experience. DiGi is also investing in network infrastructure to spur mobile Internet business aside from preparation into rollout of the upcoming 4G-LTE network and accompanying services.
All mobile service providers also offer smart packages that cater to customer needs, such as addressing affordability and quality of service. These have various offerings by price level and length of use, such as fees on daily, weekly and monthly basis.
4 Axiata restated revenue from RM16.5 billion. 28 IPR 2012 Shaping a Connected Future Digital Signature
Under the Digital Signature Act 1997, the MCMC has a licensing and regulatory role of the certifying agencies. In 2012, there are two licensees issuing digital signatures, namely MSC Trustgate.com (Trustgate) and DigiCert Sdn Bhd (DigiCert). These certifying agencies posted combined revenue of RM29.5 million in 2012 (2011: RM26.9 million). This represents an increase in revenue of RM2.6 million or 9.7% from 2011.
Out of the total digital signature revenue for 2012, Trustgate posted RM5.9 million or 20% market share. This is an increase of 5.4% from RM5.6 million in 2011. Meanwhile, DigiCert recorded revenue of RM23.6 million which is an increase of 10.8% from 2011. This is in line with a higher take up of eFiling for tax return submission under the Inland Revenue Board.
Digital Signature Act 1997 and the Role of MCMC
Source: MCMC Fig. 1.23 Digital Signature Act 1997 and the Role of MCMC
29 IPR 2012 Shaping a Connected Future Digital Certificate Revenue
30 25.3 26.0 25 23.6 21.3 19.3 20
15 RM (million) 10
5 5.4 4.6 3.9 5.6 5.9 0 2008 2009 2010 2011 2012
DigiCert MSC Trustgate
Note: DigiCert revenue adjusted for calendar year 2011 and 2012 due to change of financial year end from 31 December to 31 March effective y ear 2011
Source: Industry, MCMC Fig. 1.24 Digital Certificate Revenue
Development of Public Key Infrastructure in Malaysia
Source: MCMC Fig. 1.25 Development of Public Key Infrastructure in Malaysia
30 IPR 2012 Shaping a Connected Future
C&M Revenue by Services Market Segment
The C&M services market segment excluding revenue from foreign operations shows the significant impact of mobile revenues contributing close to 60% of C&M industry revenue as a whole. However, there is a slowing industry revenue trend averaging 7% over the last three years mainly due to a more established market in mobile services in Malaysia in terms of service connections.
In this mobile case, the investments in 4G-LTE going into 2013 is expected to boost mobile data capacity constraints and reap opportunities from new mobile services that can be provided over based network.
Services Market Segment excluding Foreign Revenue 2008 – 2012 Services Market 2008 2009 2010 2011 2012 Contribution to the C&M Industry (%) Segment (Public Listed (RM (RM (RM (RM (RM 2008 2009 2010 2011 2012 Companies) billion) billion) billion) billion) billion) Fixed Line 8.1 8.0 8.2 8.6 9.6 26.2 24.8 23.5 22.9 24.2 Mobile 17.8 18.8 20.5 21.6 22.6 57.6 58.4 58.7 57.6 56.9 Subscription TV #1 2.9^ 3.2 3.6 3.8 4.2 9.4 9.9 10.3 10.1 10.6 Free-To-Air TV #2 0.8 0.8 0.9 1.0 1.1 2.6 2.5 2.6 2.7 2.8 Postal (excluding courier) #3 0.9 0.9 1.0 1.2 1.2 2.9 2.8 2.9 3.2 3.0 Others #4 0.4 0.5 0.7 1.3 1.0 1.3 1.6 2.0 3.5 2.5 Total 30.9 32.2 34.9 37.5 39.7 100 100 100 100 100 Growth (%) - 4.2% 8.4% 7.5% 5.9% #1 ASTRO Malaysia Holdings Bhd only ^ ASTRO All Asia Networks plc #2 Media Prima Bhd (excluding print revenue) and Radio Televisyen Malaysia (RTM) #3 Pos Malaysia Bhd only #4 ACE market and digital signature market
Source: Industry, MCMC Fig. 1.26 Services Market Segment excluding Foreign Revenue 2008 – 2012
In 2012, the fixed line revenue market segment recorded double digit growth of 11.6%, as the incumbent service provider accelerated the public- private partnership high speed broadband rollout over recent years. Open access to this network by other service providers augurs well for growth in revenue and profit in fixed line services.
Broadcasting sector is derived from advertising expenditure or adex, with Pay TV operator deriving revenue from subscription fees as well. Both Free-To-Air TV (FTA TV) and Pay TV sectors posted revenue growth of 8.2% and 11.3% respectively. FTA TV growth is expected to remain relatively stable in 2013 as the expected growth for adex in the country is a positive one.
Pay TV is also expected to benefit from positive adex forecast as well as growth due to increase in connections as a result of a strategic approach to diversify earnings through making use of content and distribution network assets.
The domestic C&M services market revenue and trend profile along with market shares are shown in Figures 1.27 and 1.28 respectively.
31 IPR 2012 Shaping a Connected Future C&M Services Market Share 2008 – 2012 (%) Others
Postal (excl. courier)
Free-To-Air TV
Subscription TV
Mobile
Fixed Line
0 10 20 30 40 50 60
Fixed Line Mobile Subscription TV Free-To-Air TV Postal (excl. courier) Others 2012 24.2 56.9 10.6 2.8 3.0 2.5 2011 22.9 57.6 10.1 2.7 3.2 3.5 2010 23.5 58.7 10.3 2.6 2.9 2.0 2009 24.8 58.4 9.9 2.5 2.8 1.6 2008 26.2 57.6 9.4 2.6 2.9 1.3
excl. – excluding
Source: Industry, MCMC Fig. 1.27 C&M Services Market Share 2008 – 2012 (%)
C&M Services Market Revenue and Trend Profile 2008 – 2012
Note: This chart is not drawn according to scale
Source: Industry, MCMC Fig. 1.28 C&M Services Market Revenue and Trend Profile 2008 – 2012
32 IPR 2012 Shaping a Connected Future ARPU 5 Comparison
Mobile
In 2012, three major mobile telecommunications service providers namely Celcom, DiGi and Maxis recorded approximately 80% or 28 million prepaid subscriptions and the balance are postpaid subscribers.
Service Provider Blended ARPU (RM) Figure 1.29 shows a three years (that is, 2004, 2008 and 2012) comparison of the declining number in 2004 2008 2012 blended ARPU. Price reductions were for, amongst Celcom 73 57 50 others, prepaid starter pack and SMS. DiGi 60 59 48 Maxis 85 59 53 Source: Company Annual Reports; Analyst Briefing and Presentation Fig. 1.29 Blended ARPU (RM) 2004, 2008 and 2012
The decline in ARPU is offset by an increase in new subscriptions, which translated into reasonably stronger profitability for the service providers. The industry benefited from higher connections of new subscribers over a wider income group.
Figure 1.30 shows that overall postpaid ARPU is about two to three times higher than prepaid ARPU across the service providers. This trend is common in the mobile sector and effective for service provider profitability as prepaid is a cash business and is a driver to increasing demand for mobile services. Overall, the demand for mobile Internet and other data service continues to support profitability across all service providers.
Postpaid & Prepaid ARPU (RM) Blended ARPU (RM) 2010 – 2012 2010 – 2012
2012 94 84 107 2012 50 48 53 2011 94 84 108 2010 92 83 104 2011 50 50 52 2012 36 41 37 2011 36 43 36 2010 52 52 50 Prepaid2010 Postpaid 39 46 36
Celcom DiGi Maxis Celcom DiGi Maxis
Source: Company Annual Reports; Analyst Briefing and Presentation Source: Company Annual Reports; Analyst Briefing and Presentation Fig. 1.30 Postpaid and Prepaid ARPU (RM) 2010 – 2012 Fig 1.31 Blended ARPU (RM) 2010 – 2012
5 Average Revenue per User (ARPU) is calculated by dividing number of subscribers by the total revenue within a given timeframe. ARPU is usually quoted as a monthly figure.
33 IPR 2012 Shaping a Connected Future Fixed Line
TM Fixed Line and Broadband ARPU TM UniFi Blended ARPU 2010 – 2012 2011 – 2012 185 100 184 80 184 80 80 60 78 183 40 182
ARPU ARPU (RM) 182 20 35 34 34 0 Blended ARPU (RM) 181 2010 2011 2012 180 Fixed Line Broadband 2011 2012
Source: Company Annual Reports; Analyst Briefing and Presentation Source: Company Annual Reports; Analyst Briefing and Presentation Fig. 1.32 TM Fixed Line and Broadband ARPU 2010 – 2012 Fig. 1.33 TM UniFi Blended ARPU 2011 – 2012
ARPU for TM fixed line and Streamyx broadband are relatively consistent across three years from 2010 to 2012. ARPU for UniFi saw at RM182 in 2012 likely due to various discounts provided especially for the SMEs that year in comparison to 2011.
Pay TV
The subscription based multichannel satellite TV service provider namely ASTRO has increased ARPU from RM85 to RM93 between FY12 and FY13. This was driven by higher demand for value added products and services offered, that is, the HD B.yond set top box upgrade.
Broadcast Pay TV Residential ARPU (RM) Notably, demand for B.yond HD and Super Pack has FY11 FY12 FY13 increased by 64% and 109% respectively between FY12 ASTRO* 85 89 93.2 and FY13. For each new HD service subscription, ASTRO *Based on accounts for the year ended 31 January garners an incremental RM20 per subscriber. Source: ASTRO prospectus; ASTRO 4 th Quarter and unaudited full year results Fig. 1.34 ASTRO Pay TV Residential ARPU (RM) Super Pack packages offered at a starting price of RM125 also provides marked contributed to ARPU growth.
34 IPR 2012 Shaping a Connected Future
MODULE 2: INDUSTRY
REGULATORY AND DEVELOPMENT
35 IPR 2012 Shaping a Connected Future
Module Content
MODULE 2: INDUSTRY REGULATORY AND DEVELOPMENT 35 Dual Role of MCMC in the Malaysian C&M Industry 37 C&M Industry Open to Investments 37 MCMC Regulatory Role 38 Licensing of the C&M Industry 41 Licensing Profile over the Years 41 Shareholding Structure 42 Equity Stake in Major Public Listed Telecommunications and Broadcasters 42 Individual and Class Licensee Ownership 43 Technical Regulation in Spectrum Usage 44 Management of Spectrum in Malaysia 44 Long Term Evolution (LTE) 47 Economic Regulation 49 Access Pricing 49 Accounting Separation 49 A Review of Access Pricing in Malaysia 50 Implementation of Accounting Separation in Malaysia 52 Consumer Protection and Beyond 54 Mandatory Standards in Consumer Protection 55 Consumer Protection Mechanisms and Market Surveillance 56 Consumer Complaints 57 A Note on MCMC Complaints Handling Process 59 Industry Forums and Self Regulation 61 Community Outreach Empowering Users 65 Klik Dengan Bijak (KDB) Campaign 65 Enforcement 68 C&M Industry Development in Malaysia – Reaping Opportunities 70 Building Foundation for 2020 and Beyond 70 National Transformation Programme 70 NKEAs in National Transformation Programme 71 NKEA CCI Approach 71 NKEA CCI Highlights 2012 72 MCMC Development Role 73 Content Development 74 Nationwide High Speed Broadband Focus 75 Growth of Broadband Connections 76 Broadband Enhancing Business Value for Users 78 Broadband Penetration Rate by State 79 Fixed Line Broadband Services Offered by TM 80 Service Packages Offered 82 HSBB Enhanced Infrastructure Requirements 83 Mobile Broadband Services 84 3G Subscriptions 84 Mobile Communications Technology 85 The Use of Small Cell Technology 86 Universal Service Provision (USP) Scope, Targets and Evolving Approach 88 Kampung Tanpa Wayar (KTW) 89 Time 3 89 Pusat Internet 1Malaysia (PI1M) 90 Komputer 1Malaysia (1Malaysia Netbook) 90 World Broadband Comparatives 91 Studies and Developments 91
36 IPR 2012 Shaping a Connected Future Dual Role of MCMC in the Malaysian C&M Industry
C&M Industry Open to Investments
The adoption of a convergence law by the Government for the C&M industry in the late 1990s has accelerated the growth of the industry over the last 12 years. The implementation of Communications and Multimedia Act 1998 (CMA) had the impact of managing liberalisation and convergence of the C&M industry then, and today creating the basis for building next generation converged infrastructure, network facilities and services, including content and application services over the network.
Specifically, the telecommunications industry investment profile in terms of capital expenditure show increasing trend over the years. This stems from a yearly spending of approximately RM0.5 billion for infrastructure before 1990, to RM3.5 billion on average when mobile was introduced in the 1990s. Notably, the 10 years since the introduction of the CMA saw spending on infrastructure escalate to a yearly average of nearly RM5 billion. 2011 and 2012 saw capex at RM9 billion levels.
Infrastructure growth in a developing country like Malaysia is critical. The business climate in Malaysia remains condusive for investment and the C&M industry is one which has thrived on domestic investments in a fast growing domestic demand supported economy. The regulatory stance for the C&M industry is also encourages new investments, especially in the Class licence category.
C&M Industry Capex 8
7 6.7 6 6.0
5
4 3.0
RM (billion) 3 2.8 2.7 2.7 2.5 2.6 2.4 2.6 2.5 2.5 2 2.2 2.0 1.7 1.8 1.9 1.3 1 0.5 0.7 0.2 0.4 0 0.1 0.1 0.1 0.2 0.2 2004 2005 2006 2007 2008 2009 2010 2011 2012
Broadcasting Fixed line Mobile
Source: MCMC Fig. 2.1 C&M Industry Capex
The CMA as gleaned from the 10 National Policy Objectives also drives an overarching pro investment stance. In view of propelling growth of the C&M industry from the regulatory and development points of view, the MCMC as a converged regulator is aptly tasked with a dual role of industry regulator and promoter.
37 IPR 2012 Shaping a Connected Future MCMC Regulatory Role
The MCMC regulatory role covers the CMA, the Postal The Laws – Regulatory Role Services Act 2012 6 and Digital Signature Act 1997 as CMA MCMCA* Postal Digital the latter two duties were subsumed over the years 1998 1998 Services Act Signature Act 2012 1997 to generate effective industry growth. The duties of * Malaysian Communications and Multimedia Commission Act the MCMC under the Strategic Trade Act 2010 were Source: MCMC assumed effective 16 February 2012. Fig. 2.2 The Laws – Regulatory Role
The CMA and the Digital Signature Act are part of the national policy objectives to develop Malaysia towards a developed nation status as envisioned in Vision 2020. Other cyber laws to this effect so far are as follows:
CMA – One of the Cyber Laws in Malaysia
Existing Cyber Existing Cyber Purpose Purpose Laws Laws
• The Computer • Covers offences relating to misuse Digital Signature To regulate the use of digital Crimes Act 1997 of computers Act 1997 signatures
• To regulate and facilitate the The Copyright • Scope of copyright protection Communications development of converging (Amendment) Act widened to cover communications and Multimedia Act communications and multimedia 1997 to public through wired or wireless 1998 means industry • To provide necessary legal certainty Electronic for transactions and remove The Telemedicine • Commerce Act 2006 To facilitate the practice of procedural and administrative Act 1997 and eGovernment Telemedicine impediments for eGovernment Activities Act 2007 activities
Source: CMA Section 3(2) Fig. 2.3 CMA – One of the Cyber Laws in Malaysia The 10 National Policy Objectives for C&M Industry in Malaysia 1. Creating a Global Hub 6. Promote Access and Equity To establish Malaysia as a major centre for C&M information To ensure equitable provision of affordable services over ubiquitous national infrastructure 2. Building a Civil Society 7. Creating Robust Applications Environment To promote a civil society where information based services will To create a robust applications environment for end users provide a basis for continuing enhancements and quality of work and play 3. Nurturing Local Content and Culture 8. Facilitating Efficient Allocation of Resources To grow and nurture local information resources and cultural To facilitate the efficient allocation of resources such as skilled representation that facilitate the national identity and global labour, capital, knowledge and national assets diversity 4. Ensuring Long Term Benefits for End Users 9. Developing Industry Capabilities To regulate for the long term benefits of end users To promote the development of capabilities and skills within Malaysia’s convergence industries 5. Nurturing User Confidence 10. Promoting Secure and Safe Networking To promote a high level of consumer confidence in service To ensure information security and network reliability and integrity delivery from the industry Source: CMA section 3(2) Fig. 2.4 The 10 National Policy Objectives for C&M Industry in Malaysia
6 Supercedes the repealed Postal Services Act 1991 38 IPR 2012 Shaping a Connected Future The MCMC work programme and activities are in accordance with the principles of the CMA, transparency, national interest and self regulation. The MCMC vision for the future of the C&M industry is as follows:
With this vision, it is obvious then that the dual role The MCMC Vision of MCMC in regulatory and development are apt. The
A globally competitive, efficient and MCMC regulatory powers and functions stem from increasingly self-regulating C&M Section 16 of the MCMCA while the industry decision industry generating growth to meet the economic and social needs of Malaysia. making process involves all stakeholders, including the highest reporting level for the nation.
Source: MCMC Fig. 2.5 The MCMC Vision
The Malaysian laws governing the C&M industry are provisioned in such a way that while long term development is the ultimate goal, the regulatory and industry development aspects for the networked economy – guided by the national development plans – is at best an implement- review-reshape process. This allows for dynamic changes to be made over time as the networked economy emerges, and reinforces our lives in work and play from corporates to individuals alike. In this phased way, the infrastructure, services, and content and applications have developed in a manageable manner.
In time, as envisioned by the National Policy Objectives for the C&M industry, as the influence of the Internet or a connected life reaches the very roots of society – in the home as well as our thoughts – the ultimate is for the nurturing of a well-informed and self-restrained society.
The dynamics of the process leading to this ultimate scenario are shown in Figure 2.6 as the functions and working procedure of the MCMC. The ‘ecosystem’ of feedback process through complaints from consumers and the workings with the service providers and the self regulation industry Forums are presented in Figure 2.6.
The industry sectors in which the MCMC has jurisdiction is shown in Figure 2.7.
39 IPR 2012 Shaping a Connected Future Functions and Working Procedure Communications & Multimedia Act 1998 and Postal Service Act 2012
Source: MCMC Fig. 2.6 Functions and Working Procedure
Sectors under MCMC Jurisdiction
Source:MCMC Fig. 2.7 Sectors under MCMC Jurisdiction 40 IPR 2012 Shaping a Connected Future Licensing of the C&M Industry
Prior to enacting the CMA, licensing was demarcated by way of technology and sector, that is, telecommunications or broadcasting. The converged licences under the CMA are technology neutral and are designed to allow services crossing into sub-segment markets. For example, provision of Pay TV service can be through satellite or through fibre for IPTV to residential high rise buildings.
There are two types of licences, Individual or Class. There are four categories of licences, namely Network Facilities, Network Services, Applications Services (Class licence only) and Content Applications Services Licences. Activities are mapped into either Individual or Class type.
Licensing Profile over the Years
From the licensing profile as at 2012, growth can be observed in the numbers and types of businesses under the respective licence categories of provision of network facilities, network services applications and content services. Licences issued by MCMC under the CMA have their profile in numbers as in Figure 2.8 and Figure 2.9.
As is the case, based on the continuum of more to less regulation and the nature of business landscape developing in Malaysia, the ASP (Class or C) licensees outnumber all the other categories.
Overall, the number of Class licence are expected to increase much faster over the years in view of such services making full use of available networked infrastructure as well as hitting thresholds in terms of user connections and usage conditions.
C&M Licensees (Individual) 2003 – 2012 140 122 118 114
120 112 103 101 100 87 87 83 80
80 75 68 68 63 61
60 55 42 37 37 36 No. of Licensees 40 35 30 28 24 24 23 20 20 19 19 19
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
NFP (I) NSP (I) CASP (I)
Source: MCMC Fig. 2.8 C&M Licensees (Individual) 2003 – 2012
41 IPR 2012 Shaping a Connected Future C&M Licensees (Class) 2003 – 2012
1,000 941 900 800 712 700 600 526 500 401 395 394 372 400 368
No. of Licensees 300
200 151 100 96 35 33 32 30 30 29 29 29 29 29 28 28 27 26 25 24 24 24 24 23 23 23 22 19 18 13 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
NFP (C) NSP (C) CASP (C) ASP (C)
Source: MCMC Fig. 2.9 C&M Licensees (Class) 2003 – 2012
Shareholding Structure
Equity Stake in Major Public Listed Telecommunications and Broadcasters
Based on the major public listed C&M companies, the equity stakes in these companies are mostly local shareholders. The exception is DiGi, which has majority foreign equity stake.
Equity S take (%) in Major Public Listed C&M Companies 2012 Substantial Shareholders Total No. of Non Substantial Telcos Local Shares Foreign Shareholders Others Bumiputera (billion) Maxis 3 79 8 10 7 Axiata 14 57 8 21 9 DiGi 54 27 5 14 8 TM 4 63 12 21 4 TIME 3 72 - 25 1 Broadcast Media Prima 50 1 24 25 1 ASTRO 13* 71 12 4 5 Note: Based on Annual Report 2012 *Includes Malaysian and foreign institutional and selected investors as per ASTRO IPO prospectus
Source: MCMC Fig. 2.10 Equity Stake (%) in Major Public Listed C&M Companies 2012
42 IPR 2012 Shaping a Connected Future Individual and Class Licensee Ownership
In 2012, there were an accumulative total of 277 licensees in the Individual category. Close to 96% of these licensees are locally owned, with detailed breakdown as shown in Figure 2.11. The remaining 4% or 10 licensees are majority foreign owned, that is, eight licensees of NSP (I) and two licensees of NFP (I). A similar profile is seen in the Class Licences.
Profile of Shareholder: C&M Licensees (Individual & Class) 2012 60
Individual (277) 49 50 Class (1,013) 43
40 35
30 25
20 16 13
Percentage of Companies by Bumiputera, Bumiputera, by Companies of Percentage 10 8
Non-bumiputera, GLC, Others and Foreign (%) Foreign and Others GLC, Non-bumiputera, 6 4 2 0 Bumiputera Non-Bumiputera GLC Others* Foreign
Types of Shareholder Type of Licence Local Total Foreign Bumiputera Non-Bumiputera GLC Others* Percentage (%) 43 25 13 16 4 Individual Total Number of Licensees 118 70 36 43 10 227 Percentage (%) 49 35 2 8 6 Class Total Number of Licensees 496 355 20 81 61 1,013
Note: Categories profile is based on more than 50% ownership *Mixed shareholding, no particular type of shareholder having a controlling interest in the company
Source: MCMC Fig. 2.11 Profile of Shareholder: C&M Licensees (Individual & Class) 2012
43 IPR 2012 Shaping a Connected Future Technical Regulation in Spectrum Usage
The Technical Regulations provision of the CMA covers spectrum assignment, technical standards including certifying agencies 7 and technical forum, and numbering and electronic addressing aspects.
Specifically, the regulations prohibit the use of spectrum without an assignment of spectrum. This is to safeguard and ensure efficient usage of spectrum, which is a finite national asset. In this respect, the MCMC is tasked with assigning spectrum, including reissue of spectrum assignment (refarming), apparatus and class assignment which has to comply with the Spectrum Plan.
The MCMC also monitors interference in spectrum usage, and the feedback issuance is need to enhance efficiency in spectrum usage and policy development.
Management of Spectrum in Malaysia
The Mission of Spectrum Management
To ensure that spectrum usage is efficient and in line with provisions of the CMA To create the environment for the use of radio spectrum in the present and for the future in Malaysia
Spectrum is One of the National Assets
Spectrum Policy and Management Objective of Spectrum Management
Main Functions: Develop and adopt best practices from the • Spectrum policy and management over the perspectives of administration, regulation and long term technical support to achieve: • National spectrum regulations and allocation • Maintain international relationships within • Efficient spectrum usage the context of spectrum management • Minimising interference (ITU-R Radio • Capacity building of experts in the field of Regulation (RR) Article 15) spectrum management • Harmonising spectrum usage (domestic and • Ensure readiness of computerised spectrum international) management devices • Coordination (ITU-R Radio Regulation (RR) Article 9) • Notification (ITU-R Radio Regulation (RR) Article 11)
7 For example, the MCMC has appointed SIRIM Bhd as its product certifying agency (type approval agency) to provide certification approval for telecommunications products in Malaysia. This is to ensure that imported telcommunications products comply with technical standards set by the MCMC. In other words, any company intending to sell an imported telecommunications product in Malaysia has to apply for a mandatory SIRIM certified label .
44 IPR 2012 Shaping a Connected Future Management of Spectrum in Malaysia (Cont’d)
Spectrum Plan
The Spectrum Plan is a vital document which contains radio frequency allocation for various wireless services in Malaysia and accompanying notes on constraints when using the frequencies
The Spectrum Plan is used as a: • Fundamental document to manage the allocation and assignment of our national band • Reference for the ITU approved allocation • Reference to the availability of services using the frequency and the
conditions to use them.
The latest National Spectrum Plan was issued in September 2011 and superseded the November 2006 edition.
Standard Radio System Plan (SRSP)
SRSP Objectives To guide on the use of spectrum which is allocated based on the Spectrum Plan
Main Use of SRSP The SRSP provides information on: • Minimum technical requirements for the efficient use of allocated frequency bands • The equipment characteristics and minimum specifications, frequency channelling and coordination initiatives required in order to ensure efficient and interference-free deployment of radio systems • Radio systems and device specification and classification
45 IPR 2012 Shaping a Connected Future Management of Spectrum in Malaysia (Cont’d)
Spectrum Monitoring
- Part of the Feedback Process for Spectrum Planning and Policy Management
Source: MCMC Fig. 2.12 Spectrum Monitoring is One of the Feedback Process
Spectrum Monitoring - Guided by Spectrum Monitoring Plan
• Types of spectrum monitoring: - Field strength reception (BS) - Quality reception (MS) - Occupancy level • Analysis of illegal spectrum usage • Enforcement action for illegal spectrum usage • Maintenance (preventive/repairs) • Timely calibration to ensure accuracy during measurement • Procure test/monitoring equipment
46 IPR 2012 Shaping a Connected Future Long Term Evolution (LTE)
Long Term Evolution (LTE) is a high performance radio interface for 4th generation mobile communications systems. Developed by the Third Generation Partnership Project (3GPP), LTE is the evolution of the Universal Mobile Telecommunications System (UMTS) towards an all IP broadband network 8. Also known as 4G-LTE, the original specification of this standard was that the speed must exceed 100Mbps 9 . However, none of the current technologies meet those specifications but it is still marketed as 4G as they represent substantial improvement over 3G.
Source: http://www.answers.com/topic/w -cdma -umts Fig.2.13 Evolution of Digital Cellular Standards
Work on LTE standards began in 2004. The first completed LTE standard which is based on 3GPP Release 8 specification was published in March 2009. LTE standards development was then continued with 3GPP Release 9, with the specification completion in December 2009. The first commercial LTE services were launched in Sweden and Norway in December 2009 based on 3GPP Release 8 followed by the United States and Japan in 2010.
LTE is expected to fulfil the wireless industry needs for a decade or more. In order to meet the ITU IMT-Advanced requirements for a 4G technology, 3GPP (Third Generation Partnership Programme) is developing LTE Advanced, defined in 3GPP Release 10 and beyond.
In October 2009, LTE Advanced (for systems beyond 3GPP Release 10) was submitted to the ITU as an IMT-Advanced or LTE Advanced and was finalised by 3GPP in March 2011. The technology received its first commercial implementation in October 2012 by Russian network, Yota 10 .
8 LTE Technology Overview, http://www.home.agilent.com/agilent/editorial.jspx?cc=MY&lc=eng&ckey=1803101&id=1803101. 9 The ITU-R organisation specified the IMT-Advanced (International Mobile Telecommunications Advanced) requirements for 4G standards, setting peak speed requirements for 4G service at 100Mbps for high mobility communication (such as from trains and cars) and 1Gbps for low mobility communication (such as pedestrians and stationary users). 10 A Russian mobile broadband services provider and smartphone manufacturer. 47 IPR 2012 Shaping a Connected Future According to the definition set by the ITU – Radio Communication Sector (ITU-R), International Mobile Telecommunications-Advanced (IMT Advanced) systems are mobile systems that include new capabilities of IMT that go beyond those of IMT-2000. Such systems which sometimes also referred to as LTE Advanced systems, provide access to a wide range of telecommunications services including advanced mobile services, supported by mobile and fixed networks.
The main features of an LTE Advanced system are ability to support low to high mobility applications and a wide range of data. This is to meet users and service demands in multiple environments. It boosts faster data rates than its predecessors. LTE Advanced and WiMAX Release 2 will be the first real 4G networks.
Although it has the same mobility features as LTE, LTE Advanced has two times the cell edge user throughout. It also adapts well to several network loads and can collect up to five carriers. This means LTE Advanced can allocate resources when the network gets busy, which translates to faster data rates.
The LTE technology can be used in a number of frequency bands. In the Asia Pacific region, the 1800MHz and 2.6GHz spectrum bands have been earmarked for LTE.
In Malaysia, several companies have conducted LTE technology trials since 2010. In December 2012, the MCMC announced the allocation of 2.6GHz spectrum for LTE. With the allocation of this spectrum band, fully commercial LTE networks are expected to proliferate in Malaysia starting 2013.
48 IPR 2012 Shaping a Connected Future Economic Regulation
Economic regulation under the CMA is divided into three key chapters, namely licensing, general competition practices and access to services. The purpose of the licensing chapter is to control and monitor the entry of service providers into the market, while the competition chapter provides power to the MCMC to act against licensees who engage in anti-competitive conduct. The third chapter under economic regulation, namely access to services is mainly to promote any-to-any connectivity and ensure fair and non-discriminatory access to facilities and services.
Exercising its powers provided for under economic regulation, the MCMC had carried out two major regulatory initiatives in 2012, namely the review of access pricing and implementation of accounting separation.
Access Pricing
In order to ensure access is provided in a fair, transparent and non-discriminatory manner, it is essential to ensure that both the pricing and non-pricing terms and conditions are equitable to both access seekers and access providers. On one hand, terms and conditions that are not favourable to access seekers will result in access seekers opting to “build”, rather than “buy” and such situation does not augur well for a country as infrastructure is duplicated and resources are inefficiently allocated. On the other hand, if terms and conditions are not fair for access providers, it will reduce their incentive to invest in infrastructure. In determining access prices, the MCMC has to carefully balance the interest of both access seekers and access providers that will facilitate competition in the market with consumers being the ultimate beneficiaries.
In line with the provisions under the chapter on access to services, the MCMC had carried out a study using industry data to calculate access prices for facilities and services listed on the access list. The aim of the study is determine wholesale prices paid by one service provider to another service provider for a particular facility or service.
In December 2012, the MCMC issued a public inquiry report, setting out its views on whether access prices for facilities or services will be regulated and the manner in which it will regulate those prices. The report was followed out the issuance of Mandatory Standard on Access Pricing, which determines access prices for facilities and services that the MCMC h as decided to regulate.
Accounting Separation
In December 2012, the MCMC released the Guidelines on Implementation of Accounting Separation in Malaysia. The Guidelines set out the basis on which the telecommunications service providers are required to prepare regulatory financial statements for the wholesale and retail services identified by the MCMC starting from 2013.
Accounting separation will reduce information asymmetry between regulators and service providers. As a result of the requirement imposed by the MCMC, service providers will maintain detailed data and records in order to produce the regulatory financial statements and this will enhance visibility that could be beneficial to both the MCMC and services providers. The MCMC can use regulatory financial statements to investigate and resolve competition complaints, while service providers can use the information to develop strategies for their companies.
49 IPR 2012 Shaping a Connected Future
A Review of Access Pricing in Malaysia
Price regulation of wholesale services is important in order to promote sustainable competition in the industry for the long-term benefit of end users of telecommunications services. Cost-based wholesale prices will also provide appropriate signals for investment and new entry into the market. Therefore, the MCMC ensured that there is balance between the needs of Access Providers and Access Seekers for the beneficial and efficient supply of telecommunications services. Wholesale services referred to in this context are the facilities and services that MCMC has listed on the Access List. There are currently 19 wholesale services regulated on the Access List, and this review will determine which services should have their prices regulated, and at what rate.
Recognising the impact that setting wholesale prices could have on the service providers, consumers and on the industry, since October 2011, the MCMC has embarked on a study to determine the costs to provide those services. This involved an extensive exercise to collect data from the service providers and then to build five economic cost models. There has also been extensive consultation with the service providers, in order to obtain feedback on the five economic cost models, as part of the process.
The MCMC then carried out a Public Inquiry in accordance with sections 58 and 61 of the Communications and Multimedia Act 1998 from 1 October to 14 November 2012. The purpose of this Public Inquiry is to foster a robust consultative process before the MCMC makes a decision on setting prices for regulated wholesale services for the period of 2013 – 2015. This approach was designed to promote certainty and transparency in the exercise of the MCMC’s powers.
At the close of the Public Inquiry, the MCMC received 14 submissions. After considering the submissions, the MCMC published the Public Inquiry Report that set out the findings on 14 December 2012.
In the Public Inquiry Report, MCMC noted that industry self regulation through commercial negotiation is preferable in most cases. There are circumstances, however, in which commercial negotiation is unlikely to produce an outcome for the long term benefits of end users and, in these circumstances, criteria for intervention by the MCMC are necessary.
Based on the feedback received during the Public Inquiry, MCMC will intervene in the market through ex ante regulation in the following circumstances:
• The presence of non-transitory high barriers to entry; • The continuing absence of a trend towards effective competition; and • Ex post regulatory controls are unlikely to be sufficient to address concerns regarding access to fair and reasonable access prices.
50 IPR 2012 Shaping a Connected Future
The table below summarises the MCMC’s decision.
MCMC Final View from Public Inquiry Service MCMC Final View Fixed Network Origination Service Price regulation. Separate prices for IP-based origination. Fixed Network Termination Service Price regulation. Separate prices for IP-based termination. Mobile Network Origination Service Price regulation for mobile and WiMAX voice services Mobile Network Termination Service Price regulation for mobile and WiMAX voice services Interconnect Link Service Price regulation based on transmission prices Wholesale Local Leased Circuit Service Price regulation based on transmission prices Infrastructure Sharing No price regulation Domestic Connectivity to International Services, specifically connection services to the submarine cable Price regulation based on transmission prices and co-location facilities system Price regulation for access to physical space provided by Network Network Co-Location Service Service Providers No price regulation for other co-location prices Full Access Service No price regulation Line Sharing Service No price regulation Bitstream Services, including No price regulation for bitstream services (a) Bitstream with Network Service; and
(b) Bitstream without Network Service Sub-loop Service No price regulation Digital Subscriber Line Resale Service No price regulation Digital Terrestrial Broadcasting Multiplexing Service No price regulation. [Not included in the study.] Wholesale Line Rental Service No price regulation HSBB Network Service with QoS No price regulation HSBB Network Service without QoS Transmission Service Price regulation of common transmission types
Source: MCMC Fig. 2.14 MCMC Final View From Public Inquiry
For some services, the MCMC had adopted glide paths to provide greater stability for the industry. Although there are several methods by which glide paths can be calculated, MCMC has adopted a linear glide path over a three year period. The MCMC adopted glide paths to set prices for fixed origination service, fixed termination service, mobile origination service and mobile termination service.
Subsequently, on 21 December 2012, the MCMC issued a Mandatory Standard on Access Pricing, which sets out prices for some of the above mentioned services for the period 2013 to 2015.
51 IPR 2012 Shaping a Connected Future
Implementation Of Accounting Separation In Malaysia
The MCMC has taken steps to implement accounting separation in Malaysia. Accounting separation is a regulatory tool, which involves matters such as accounting standards and methodologies, audit procedures, transparency of cost attribution to different services and reconciliation with statutory accounts. In other words, accounting separation is not a set of rules about how to organise an operator’s business, rather it is a system for recording and reporting accounting information for certain types of regulatory purposes.
Accounting separation aims to provide greater transparency and is a tool used to assess anti- competitive conducts such as price discrimination, cross subsidisation, price squeeze and margin squeeze in order to promote competition in the C&M industry.
There are many forms of separation measures that can be undertaken, that is, functional separation, structural separation and divestiture. However, comparing these stated measures, accounting separation is the least intrusive and burdensome but nevertheless meets the MCMC objectives.
Accounting separation has various benefits. To the regulator, it enhances transparency and reduces information asymetry which enables detection of potential anti competitive conduct and provides full visibility of market profitability and rebalancing. To operators, it provides strategic benefits in understanding the unit cost and profitability of different services that they are offering, as well as the impact of technological change on profitability when current costs are used. To consumers, in the long run, accounting separation will enhance competition in the market, leading to more choices at affordable rates.
Accounting separation is usually imposed on vertically integrated operators who have upstream services that are used by that operator as well as competitors to provide downstream services.
Implementing accounting separation in Malaysia marks a major undertaking for the service providers and MCMC, requiring both time and resources. Recognising the impact that accounting separation would have on the service providers and consumers, the MCMC carried out a public inquiry from 7 September to 31 October 2012. The purpose of the inquiry was to foster a robust consultative process before the MCMC made a decision on service providers who will be subjected to accounting separation and the services for which regulatory financial statements are required to be prepared. Subsequently, a Public Inquiry Report was issued on 30 November 2012.
Specifically, an assessment was carried out in the C&M industry. It was observed that only fixed and mobile networks have upstream services that are used by their own retailers and other competitors to provide downstream services. As such, only vertically integrated licensees providing fixed network services and mobile network services are required to provide separate accounts for the services identified by the MCMC. An overview of these services are shown in the tables following.
52 IPR 2012 Shaping a Connected Future
Service Identified for Accounting Separation Fixed Network Services Mobile Network Services Market Services Market Services Wholesale Wholesale exchange lines Wholesale Call origination Wholesale local access – copper Call termination Wholesale local access – fibre MVNO access Wholesale broadband access National roaming Wholesale leased lines International roaming Backhaul services RAN sharing Call origination Backhaul services Call termination Other Transit services Interconnection circuits Other Retail Retail exchange lines – business Retail Connections and subscription Retail exchange lines – residential Voice Local calls SMS National calls Data International calls International roaming Calls to mobiles Other Leased lines Broadband Other Other n.a. Other n.a. Note: The Guidelines on Accounting Separation in Malaysia as at 21 December 2012 can be viewed at http://www.skmm.gov.my/skmmgovmy/media/General/pdf/AS-guidelines.pdf
Source: MCMC Fig. 2.15 Services Identified for Accounting Separation
The implementation of accounting separation will begin in 2013. Service providers are required to prepare a set of regulatory financial statements for regulatory purposes at the level of different wholesale and retail business units, as if they were separate businesses. The regulatory financial statements are prepared over and above the statutory accounts and would detail costs, revenues, assets and liabilities by type of services determined by the MCMC.
Accounting separation will be implemented in a phased manner whereby service providers are required to submit regulatory financial statements based on historic cost for the first two years starting from 2013. This is followed by current cost basis begining 2015 and onwards. Audited regulatory financial statements are to be submitted to the MCMC nine months from the end of each financial year.
In order not to burden smaller service providers, the MCMC has set the threshold limit where operators with revenue and/or total assets below RM3 billion will be required to only produce abbreviated regulatory financial statements showing income and net assets at a less granular level. Smaller service providers are only required to submit a compliance statement endorsed by the company.
Analysing these regulatory financial reports will provide the MCMC with more detailed and reliable financial information on revenue, cost, capital employed, profitability and financial returns of telecommunication products and services in Malaysia for both fixed and mobile services. This information will enable the MCMC to make informed decisions on competition issues and the framework will allow complaints to be dealt with in a more rigorous and timely manner. However, in view of concerns expressed on confidentiality of licensee information that could harm their business, the MCMC has decided not to publish such information.
53 IPR 2012 Shaping a Connected Future Consumer Protection and Beyond
There is a provision in the CMA safeguarding the users in the supply and demand of C&M services in Malaysia. Therefore, legislation supports the MCMC and the industry stakeholders including the consumers in their roles to play.
The MCMC has a balancing role in that it implements the CMA provisions through various legislative and persuasive means. This approach involves the MCMC in the development of role as well. For example, the MCMC working with others in supporting the service provider(s) to build a critical shared communication tower in a remote location so that communication services coverage is available.
Over the years, the standards to which the service providers adhere to have been established with the industry such as mandatory standards in the quality of service provided. This also involves ensuring necessary certification and codes for various purposes. The service providers in this way have a conducive environment for their investments – safeguarded by standards or guidelines in providing supply to consumers. Thus, they are relatively assured of orderly development and recouping of investment over time. Roles and overall approaches to consumer protection are shown in the figure below.
Consumer Protection in Action – Roles and Approaches
Consumer Protection – Safeguard the User
Avenues for Consumer Complaints www.complaint.cfm.org.my http://aduan.skmm.gov.my
Certification/Codes e.g. Consumer Equipment Certification or Codes Implemented by Self Regulating Forums
Mandatory Standards on Quality of Service (Implemented by MCMC)
CMA and Subsidiary
Legislation
Source: MCMC Fig. 2.16 Consumer Protection in Action – Roles and Approaches
Among factors sought to be established are competitive pricing, wide choice, quality of service in products and services provided, including suitable networked content. Consumers play a crucial role in ensuring results of consumer protection approaches. They provide feedback for improving infrastructure, products and services instantly and over time.
54 IPR 2012 Shaping a Connected Future Mandatory Standards in Consumer Protection
The detailed regulatory mechanisms in consumer protection to achieve these deliverables include mandatory standards on quality of service, and regular customer satisfaction surveys to ascertain and monitor the level of satisfaction of consumers with the services provided by the licensees.
MCMC on Consumer Protection – Regulatory Approaches and Beyond
Regulatory Mechanism in Consumer Protection
QoS
- Mandatory standards - Consumer Satisfaction Dial up Broadband Survey Internet Access Access Services Public Switched Public CMA Rates Regulation - Mobile Content Services Telephone Payphone (Fixed Telephony Network (Mobile Content Services Promote & protect QoS Mobile effective 1 July 2010) consumer interest in Services only) Mandatory Content - Monitoring use of C&M services - Monitoring Standards Services Public Digital (latest 2010) Cellular Lease Line Services Services Enforcement Content Applications Required Applications Services Services Complaint Bureau Prepaid Registration
Others
Source: MCMC Fig. 2.17 MCMC on Consumer Protection – Regulatory Approaches and Beyond
The regulatory mechanisms have been instituted and reviewed over time to ensure that the regulatory implementation keeps up with the changing industry microcosm. This is to amend necessary provisions to ensure dynamism in the regulations, reflecting reality in aspects of regulations compared to industry developments.
Another example is the mandatory standards on quality of service, which were developed and later instituted effective 2003. Over time various other services which have previously not available have been included. In this case, these are the services for broadband access. In 2010, services involving mobile content, predominantly involving mobile messaging services, were subject to quality of service provisions under the CMA.
55 IPR 2012 Shaping a Connected Future Consumer Protection Mechanisms and Market Surveillance
The CMA has various provisions for technical standards such as requirements for safety and interoperability of network facilities and its certification aside from the establishment of technical standards forum to achieve a high level of technical competencies and service delivery through mandatory and self regulatory technical codes. All these provisions along with quality conformity assessment systems need to be enforced for effectiveness so as to ensure consumer and business confidence in their use and investment.
In 2012, besides the consumer protection mechanisms that are in place, another mechanism was established on market surveillance for customer communications equipment and devices that are widely distributed in Malaysia. This includes checking certification marks or labels for fraud and counterfeit.
Examples of product categories identified for verification of required technical specifications are hand phones, Bluetooth products, Wi-Fi products, walkie talkies, short range devices, single line phones, facsimile and ADSL modems.
The purpose is to ensure that communications equipment and devices in the Malaysian market comply with the requisite safety standards and technical regulations. The ultimate goals are to ensure consumer protection and also facilitate trade in telecommunications equipment.
Furthermore, the outcome of such surveillances done periodically with its appointed partner SIRIM Bhd 11 can facilitate further initiatives for conducive investment climate in the C&M industry.
11 Note: eComM or Online Certification for Communication and Multimedia is a platform for online application on certification and directory of certified equipment that meets Malaysian regulatory requirements. The link is at www.sirim.my 56 IPR 2012 Shaping a Connected Future Consumer Complaints
The MCMC established the Consumer Complaints Bureau (CCB) in 2007 to handle complaints from the public and other stakeholders. The information on CCB and the process to lodge a complaint is available at http://aduan.skmm.gov.my. In 2012, a total of 9,826 complaints were received against 9,222 complaints in 2011. This represents an increase of 6.5%.
Trend of Consumer Complaints 12000 2002 – 2012 9,826 10000 9,222 8,013 CCB was 8000 set up 6,178 6000 4,289
No. of Complaints 4000 2,147 2000 664 190 343 369 370 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: MCMC Fig. 2.18 Trend of Consumer Complaints 2002 – 2012
Among the type of complaints received, 70% of them were against service providers. These centred on issues such as poor service delivery or performance mainly on service disruption and quality of Internet connection; billing and charging; SMS service particularly on mobile content services; the absence of or poor service coverage; misrepresentation of service; false or fraud registration; unfair practices; postal and courier; and dispute on terms and conditions.
The remaining 30% of the complaints received were relating to content (new media, SMS, TV and radio); services provided at Kampung Tanpa Wayar (KTW); cybercrimes such as phishing; spectrum interference; Komputer 1Malaysia ; telecommunication structure and radiation; illegal installation of TVRO parabolic dish or non standard equipment; and other miscellaneous issues.
As in the previous year 2011, there were also complaints received that are not under MCMC jurisdiction such as non delivery of item purchased online; investment or quick cash scheme; copyright issues; and others. These were referred to the relevant authorities for resolution.
Out of the 9,826 complaints, 95% of these were resolved or noted for suggestions and views. On average, 21% of 9,826 complaints have been resolved within 72 working hours, which exceeded 20% target of the Key Performance Index for 2012 of the Honorable Minister.
Figure 2.19 shows complaints by service providers. For reference the trend of complaints received in 2012 in comparison to 2011 is shown in Figure 2.20.
57 IPR 2012 Shaping a Connected Future
Complaints against Service Providers
2011 2012
Pos Pos Malaysia Malaysia Others 29 Others 97 Izzinet 36 OCESB ASTRO ASTRO 122 39 35 527 246 TM U Mobile TM U Mobile Celcom 1,999 133 Celcom 1,544 188 1,137 1,587
Maxis Maxis DiGi DiGi 1,380 1,158 711 836 P1 P1 217 285 YTL YTL 78 106
Source: MCMC Fig. 2.19 Complaints Against Service Providers
Category of Complaints 2010 – 2012 2010 – 2011 201 1 – 201 2 No. Category 2010 2011 2012 Change (%) Change (%) 1. Unlicenced operator 1 2 15 - Small base 2. Radio amateur/apparatus assignment 20 17 22 10 29 3. Dispute on Terms and Conditions (T&C) 37 19 22 -40 16 4. TV parabola/non standard equipment 56 51 62 11 22 5. Telecommunication structure/radiation 44 53 64 45 21 6. Komputer 1Malaysia 28 71 64 154 -10 7. Postal/courier 68 56 65 -18 16 8. Unfair practices 57 318 100 75 -69 9. False/fraud registration 76 96 141 86 47 10. Not under MCMC 164 131 199 21 52 11. Misrepresentation of service 140 218 238 70 9 12. Miscellaneous 143 207 243 42 17 13. Spectrum interference 62 108 346 458 220 14. Cybercrimes 233 397 424 82 7 15. Kampung Tanpa Wayar (KTW) - 71 466 - Small base 16. Service coverage/availability 573 680 835 46 25 17. Short Messaging Service (SMS) 826 1,052 1,175 42 12 18. Billing and Charging 835 1,228 1,513 81 23 19. Content 1,205 1,627 1,578 31 -3 20. Poor service 3,445 2,820 2,254 -35 -20 Total 8,013 9,222 9,826 23 7 Source: MCMC Fig. 2.20 Category of Complaints 2010 – 2012
58 IPR 2012 Shaping a Connected Future Category of Complaints 2012
Unlicenced operator 15 Dispute on Terms and Conditions (T&C) 22 Radio amateur/apparatus assignment 22 TV parabola/non standard equipment 62 Komputer 1 Malaysia 64 Telecommunication structure / radiation 64 Postal/Courier 65 Unfair practices 100 False/fraud registration 141 Not under MCMC 199 Misrepresentation of service 238 Miscellaneous 243 Spectrum interference 346 Cybercrimes 424 Kampung Tanpa Wayar (KTW) 466 Service coverage/availability 835 Short Messaging Service (SMS) 1,175 Billing and Charging 1,513 Content 1,578 Poor Service 2,254 0 500 1,000 1,500 2,000 2,500 Number of Complaints
Source: MCMC Fig. 2.21 Category of Complaints 2012
A Note on MCMC Complaints Handling Process
It is pertinent to highlight that a complaint against a licensee should be referred to the licensee first. This accords the licensee the first opportunity to resolve the complaint. The other alternative should the complaint is not resolved is to lodge the complaint to the industry Forum. This is to the Communications and Multimedia Consumer Forum of Malaysia or CFM and the Communications and Multimedia Content Forum of Malaysia or CMFM.
However, in situations where resolution of the complaint is still not satisfactory, then the complainant can lodge a complaint with the MCMC. A Guideline for MCMC Complaints Handling is available at: http://www.skmm.gov.my
59 IPR 2012 Shaping a Connected Future Complaints Handling Process
Source: MCMC Fig. 2.22 Complaints Handling Process
60 IPR 2012 Shaping a Connected Future Industry Forums and Self Regulation
The self regulatory process was established by MCMC over the years in terms of initial funding and in the eventual designation of respective industry forums in the C&M industry. The four Forums in Malaysia and what they do are shown in Figure 2.23. The Forums have evolved in various ways in the last ten years. Among these are changes in management structure, solidifying and enhancing their respective objectives, and enriching discussion aside from developing voluntary industry codes, guidelines and best practices.
C&M Industry Forums Forums Designation Website Objectives and Function Communications and March 2001 www.cfm.org.my Draft, develop and prepare codes that protect the rights of the Multimedia Consumer consumers including review and amendment over time; provide an Forum of Malaysia (CFM) avenue and channel for lodging complaints, disputes and grievances; and enhance consumers’ confidence through the promotion and encouragement of high standards of service, conduct and performance throughout the C&M industry. Communications and March 2001 www.cmcf.my Committed to maintain and promote industry self regulation. Monitor Multimedia Content Forum content and related issues under the Malaysian Communications and of Malaysia (CMCF) Multimedia Content Code. Malaysia Access Forum March 2003 www.mafb.com.my To develop, formulate and recommend a voluntary access code and Bhd (MAFB) make recommendation on the access list; and to provide a common working platform for user and provider on access issues. Malaysian Technical October 2004 www.mtsfb.org.my Responsible for the preparation and maintenance of technical codes Standards Forum Bhd which includes, the requirements for network interoperability and (MTSFB) promotion of network facility safety. Source: Respective Industry Forums, MCMC Fig. 2.23 C&M Industry Forums
Industry Forums in Self Regulation
C&M Industry Forums in Malaysia CFM, CMCF, MTFSB, MAFB
Forum Members Highest Standards of Business Ethics • Consumers Platform
• Codes and guidelines are for • Service Providers industry based, abides to Discussion • Public Interest Groups laws and regulations
• NGOs • Industry best practices
• Other Stakeholders For the benefit of consumers and service providers
Self Regulation Tasks and Duties for Various Purposes
• Produce voluntary industry codes • Monitor respective areas vis-à-vis codes • Deal with issues and complaints vis-à-vis codes • Advisory (to drive service development and improvement) • Educate, create awareness, and disseminate industry information as related • Advocate professionalism in industry conduct • Conduct R&D as related • Others
Source: Industry Forums, MCMC Fig. 2.24 Industry Forums in Self Regulation
61 IPR 2012 Shaping a Connected Future Among highlights to the work of the Forums to date are the CFM deepening their services to enhance consumer awareness and creating a CFM complaints portal at www.complaint.cfm.org.my. The MTSFB highlights its work on smart network for Malaysia. In the meantime, the MAFB is working on the voluntary access code, while the CMCF has myriads of activities to ensure responsibility in online content creation and usage.
Specifically, the MTSFB was assigned the task with scopes as advisory and technical support as well as recommendations on smart network initiative to the MCMC. The smart network is the ninth Entry Point Project (EPP) of the National Key Economic Area (NKEA) of Content, Communications and Infrastructure (CCI) under the National Economic Transformation Programme. The MTSFB platform for industry discussion and dialogue on both the technical and commercial aspects of the smart network could eventually facilitate the introduction of smart packages using this network. The smart network project 12 aims to address affordability and quality of service and to sponsor a streamlined implementation of smart network features by network providers.
Notably, the ‘smart’ aspects of the network provides control over the broadband service delivery channel. This then allows end to end visibility from the servers handling customer care and billing, through the core and radio networks, to end consumer devices in order to create and deliver differentiated services profitably. Such control enables Internet service providers to offer differentiated service packages, providing best value to consumers with pricing alternatives and more varied broadband packages.
As for the MAFB, the Forum has been working on the access code and advisory responsibilities. Notably, the MAFB as of 2012 has 24 members, consisting of major licensees. In 2012, the MAFB submitted an Access Code dated 3 March 2012 to the MCMC for registration under section 95 of CMA. The MCMC did not register the Access Code and notified the MAFB of the decision and the reasons for the decision, as required under the CMA.
In addition, the Wireless and Regulatory Initiative Working Group appointed MAFB to conduct a study under the National Key Economic Area/Entry Point Project for Broadband for All (NKEA/EPP/BBFA) on the relevant regulatory and access framework and international best practices in relation to access to poles, ducts and manholes. MAFB appointed Analysys Mason to conduct the study, and the report was presented to the MCMC in 2012. After receiving feedback, MAFB has continued its work in relations to access to poles, ducts and manholes.
The CFM comprises members from the C&M industry on both the supply and demand sides which ensures consumers unbiased decision making process to solving issues and problems. In promoting the growth of the C&M industry and protection of consumer interests, the CFM fosters the highest standards of business ethics and behaviour through industry self governance. Note that the CFM has launched a new consumer portal at the end of 2012, which is at this link http://www.consumerinfo.my/
As a platform for the industry and consumer or public to voice constructive contributions to service improvements the CFM enables all stakeholders to work collaboratively.
12 Framework for Smart Network, MTSFB 010: 2011 62 IPR 2012 Shaping a Connected Future
Consumer Awareness: Safeguards Feature by CFM The CFM Complaint Channels
• Keep your personal data safe: How can identity be stolen? www.complaint.cfm.org.my
• Know your voice mail charges: How to activate and deactivate your voice Email: [email protected] mail
Customer Hotline 1800 18 222 • Make sure your phone is genuine: Why do I need to have a certified mobile phone Fax +603 2693 2288
• Track your mobile prepaid spending: Register with your mobile service Walk in or Write to: provider (Information on prepaid service at mobile prepaid section of www.consumerinfo.my) Communications and Multimedia
Consumer Forum of Malaysia • Cancel or stop all the services you do not need: How do I stop SMS spam 6-02, 6 th Floor, Wisma Straits Trading on my mobile? No. 2, Lebuh Pasar Besar
50050 Kuala Lumpur • Do you need data roaming service? For example: How to turn off iPhone
data connection Type of Complaints on Services • I want to keep my number: Mobile Number Portability (Check your mobile number is from the same network at website TV, Internet, Radio, Mobile and Fixed Line http://mnpack.skmm.gov.my) Billing Services SMS Information Others Privacy
Membership www.cfm.org.my/membership-overview
Source: CFM Fig. 2.25 Communications and Multimedia Consumer Forum of Malaysia (CFM)
As for the Communications and Multimedia Content Forum of Malaysia (CMCF), the Forum governs content by self regulation in line with the Malaysian Communications and Multimedia Content Code (Content Code). The Content Code is a voluntary one, which the CMCF has developed and registered with the MCMC on 1 September 2004. This contains guidelines and procedures for good practice and standards of content disseminated for public consumption by service providers in the C&M industry. Effectively, the CMCF works in the context of the Content Code to resolve issues on offensive and objectionable content aside from creating awareness to content providers on the obligations of creating content within the context of social values in Malaysia.
The CMCF also sees to the ongoing administration of the Content Code. This is to ensure effectiveness in the following areas:
1. Promoting public and industry awareness of the Code and compliance requirements 2. Financial and sanctions administration 3. Monitoring for Code compliance 4. Reporting and reviews 5. Amendments of the Code
Note that further details are available at http://www.cmcf.my/overview. Essentially, the CMCF activities in 2012 are elaborated in Figure 2.26.
63 IPR 2012 Shaping a Connected Future Among CMCF Activities
◦ National Population and Family Development Board (LPPKN) ▪ Seminar on Content Code and Internet ◦ Schools and higher learning institutions safety ◦ Government agencies and industry stakeholders Aimed to inform students on multimedia content code and to educate them on ▪ School cluster programme the good values of content to be shared on the Internet.
▪ In-house Content Code training Participants comprised organisations and companies involved in electronic networked medium content industry
▪ Radio Awareness advertisements Radio ads in Malay and English on topics of violent TV, ex -MMS and chat horror
▪ Klik dengan Bijak programme A community outreach programme ▪ Launched a quarterly newsletter Downloadable from CMCF website in Bahasa Malaysia and English Reaching Out
CMCF handle complaints on inappropriate ▪ Launch a set of mascots content including online, TV/radio, SMS, or ▪ Uphold social values and push for self regulation other such as billboard and MMS.
Source: CMCF Fig. 2.26 Among CMCF Activities
64 IPR 2012 Shaping a Connected Future Community Outreach Empowering Users
In addition to consumer protection safeguards from mandatory and persuasive angles involving service providers and Forums, the MCMC also seek to empower the end users through the Klik Dengan Bijak Campaign.
The Malaysian Internet users who are now mostly young people including underaged children. Hence, all users need to be aware of the lurking dangers of the abuse of the Internet and therefore ensure its safe usage.
The Klik Dengan Bijak Campaign was launched on 1 July 2012 and seeks to empower users with the knowledge of the negative elements of the Internet and what measures in terms of prevention and other related precautionary matters users can exercise when they click to go online. The overriding aim is to ensure that not only does the user practice self guidance, but also to nurture parental guidance and ensure appropriate social vigilance is mobilised to be safe while on the Internet.
Klik Dengan Bijak (KDB) Campaign
The programme is designed to inculcate the culture of positive use of the Internet based on the principles of the Rukun Negara amongst Malaysian users. The logo or tagline used serves as a reminder to users to be careful and to think before they access and use the Internet. Furthermore, the term ‘Klik’ is an applicable action on all digital device and is a term that can be easily understood by all.
The program targets those most vulnerable to cybercrimes and online abuses, mainly children and youth. The campaign serves to equip parents, guardians and other caregivers with necessary information to keep their chidlren’s online experience safe. It is also hoped that the educational content of the KDB programme will be able to stop people from becoming victims of cybercrimes and online abuse.
This programme is also endorsed by the Ministry of Information, Communications and Culture, Ministry of Education, Ministry of Science, Innovation and Technology, Ministry of Women, Family and Community Development, Ministry of Youth and Sports, Royal Malaysian Police and the Communications and Multimedia Content Forum of Malaysia .
2012 Activities for the KDB
The KDB programme was officially launched at the national level on 1 July 2012. Since the national launch, 136 follow-up events on KDB were held.
65 IPR 2012 Shaping a Connected Future
Source: MCMC Fig. 2.27 Launching of KDB Programme
Source: MCMC Fig. 2.28 Activities during KDB Programme
Awareness on KDB was further enhanced through a series of print advertisements published in major Bahasa Malaysia, English and vernacular newspapers.
Source: MCMC Fig. 2.29 Print Advertisements on Klik Dengan Bijak
In order to support the educational component of the KDB programme, several publications were developed including the following as in Figure 2.30 for easy reference .
66 IPR 2012 Shaping a Connected Future KDB Publications Internet Safety Booklet Brochure on Internet Safety
The booklet, aimed at school children, covers tips and The brochure covers cautionary and preventive tips on general precautions needed when using chatting applications, email, use of social networking websites, blogs, chat rooms and online forum, social networking websites, file sharing emails. applications, online games and blogs.
KDB Information Kit Leaflet on KDB
The Kit consists of five brochures that provide information and The leaflet provides brief information on KDB and highlights tips to help the public (adults) to be safe online . important messages concerning online safety.
Source: MCMC Fig: 2.30 KDB Publications
It is hoped that through the KDB programme, public perception of the MCMC’s role as the regulator for the C&M industry can be further enhanced and expanded. Apart from an enforcement role, the MCMC also takes proactive steps to educate the public on the use of the Internet in a safe and positive way. This is in addition to enhancing their awareness of risks and online threats.
67 IPR 2012 Shaping a Connected Future Enforcement
MCMC enforcement role is mobilised in cases of violation to compliance requirements of the various laws under its jurisdiction. Also, there were intense training programmes for the MCMC enforcement team and related stakeholders, thus deepening knowledge to face the changing scenarios of the C&M industry landscape.
Cases involve a wide range of offences committed under the Communications and Multimedia Act 1998 (CMA), Postal Services Act 1991 (PSA), Digital Signature Act 1997 (DSA), and accompanying subsidiary legislations. In 2012, enforcement actions by MCMC were taken out against 501 cases. The statistics summary of enforcement over the last three years is as follows:
Complaints Received According to Offences 2010 – 2012 No. of Complaints No Cases Law 2010 2011 2012 Sending offensive, obscene, indecent, menacing or false Section 233 (1)(a) CMA 1 Short Messaging Services (SMS) 289 255 258 Sending/Posting offensive, obscene, indecent, menacing Section 233 (1)(a) CMA 2 emails/websites/blogs or social network 133 119 94 3 Breach of Licence Condition Section 242 CMA 28 62 56 Providing network facilities, network services or Section 126 CMA 4 4 2 4 applications services without a valid licence 5 Possession of non-standard equipment/devices Section 239 CMA 44 27 47 Failure to submit Return of Net Revenue (USP) & Audited Reg. 29 & 33 C&M (USP) Account Regulations 6 64 22 10 Reg. 33A C&M (Licensing) Regulations Obligation of a designated universal service provider Reg. 11 C&M (USP) 7 – 11 – Regulations 8 Failure to deal reasonably with consumer complaint Section 188 CMA 4 1 6 Not within jurisdiction (under Computer Crimes Act 1997) Refer Other Agencies (ROA) – 9 59 15
Fraud and related activity in connection with access Section 236 CMA – – 10 devices and related others 3 Spectrum Interference Reg. 34 (Spectrum – – 11 6 Regulation) Prohibition of use/sale and related others of non- Reg. 16 (Technology – – 12 1 standard communications equipment Standard) Regulation Management of Activity Section 218 CMA – – 13 1 A content applications service provider shall not provide Section 206 (3) CMA – – 14 any service except in accordance with the conditions of 2 the licence granted
Providing courier services without licence PSA 1991 – – 15 5 Prohibition on using spectrum without assignment Section 157 CMA – – 16 7 Fraudulent use of network facilities, network services Section 232 CMA – – 17 2
Total Cases Investigated 582 558 501 Note: Reg – Regulation
Source: MCMC Fig.2.31 Complaints Received According to Offences 2010 – 2012
68 IPR 2012 Shaping a Connected Future The table below summarises investigation activities by number of cases concerned and their broad category breakdown for the last three years.
Cases Inves tigated 2010 – 2012 Case Description 2010 2011 2012 SMS related cases 289 255 258 Cases related to emails or websites or blogs 133 119 94 Cases related to non compliance by licensee 158 62 72 Total 582 558 501 Source: MCMC Fig. 2.32 Cases Investigated 2010 – 2012
The breakdown of cases investigated in 2012 for offences relating to non-compliance by licensees is tabulated below:-
Non Compliance Cases Investigated in 2012 No. Type Of Offences No. of Cases 1 Breach Of ASP (C) Licence Conditions – Non Compliance to Mandatory Standard 54 2 Breach Of CASP (C) Licence Condition 2 3 Failure to deal reasonably with consumer complaints 6 4 Failure to submit audited account 10 Total 72 Source: MCMC Fig. 2.33 Non Compliance Cases Investigated in 2012
69 IPR 2012 Shaping a Connected Future C&M Industry Development in Malaysia – Reaping Opportunities
Building Foundation for 2020 and Beyond
Malaysia has a unique approach to national growth in terms of a series of cascading strategies and plans. For example, the national strategic thrusts in the 10 th Malaysia Plan are cascaded into the national budgets – aligning national growth initiatives to respective economic sectors.
In the C&M industry, all stakeholders work National Transformation Programme together to align to national goals Four Pillars To Achieve Vision 2020 accordingly. A case in point is the National Transformation Programme (NTP), which carries four pillars to boost national
growth towards achieving Vision 2020.
) Under the Economic Transformation
Programme (ETP), 12 National Key 015 2
Economic Area (NKEA) have been –
Programme 2011 Government
formulated to drive this national vision (
Performance Now and the Communications Content and Malaysia Plan Tenth 1Malaysia 1Malaysia People First
EconomicTransformation Infrastructure (CCI) goals and targets Transformation Programme have been identified to realise the initiative from the perspective of C&M 1Malaysia GTP ETP 10MP industry. Source: Economic Report 2010/2011, Ministry of Finance Fig. 2.34 National Transformation Programme
NKEAs in National Transformation Programme 12 NKEAs identified to support industry growth to achieve High Income Nation
“[To] position the nation on the right path towards attaining NKEA CCI Goals and Targets by 2020 developed nation status by 2020, with per capita income increasing to US$15,000 by the end of the decade from US$7,000 currently… 12 EPPs to double compound Creating 43,000 new jobs New Key Economic Areas (‘NKEA’) selected and will be annual growth rate from 4% 97% private funding implemented.” to 7.8% NKEA CCI YAB Prime Minister NKEA CCI GNI (USD Million) 15.1 Jobs and CAPEX
USD15.5 billion CAGR Telecommuni cations USD0.5 billion 7.8% EPP among 12 NKEAS 5.1 Private launched Public funding funding Business CAGR Opportunity Jobs Total % 4% 3.7 created CAPEX Private 6.2 2020 2010 – Funding 2020 USD9.4 B Total EPP 25,899 97% Baseline RM30.3 B 6.2 Total USD6.6 B Business 17,263 0% RM21.1 B Opportuniy
Baseline 2009 2020 Total EPP + USD16 B 43,162 97% Business RM51.5 B
Source: Adapted from Source: Economic Report 2010/2011, Ministry of Finance Fig. 2.35 NKEAs in National Transformation Programme
70 IPR 2012 Shaping a Connected Future The 10 Entry Point Projects (EPP) identified are premised on development of both supply and demand sides such as building advanced infrastructure and facilities as enablers for business and lifestyle improvements. The NKEA CCI approach is for the development of the C&M industry as supporter or enabler to other industries including the growth of the market segments within the industry are shown in Figure 2.36.
NKEA CCI Approach Three Building Blocks Driving Vision for Future 10 Entry-Point (EPP) under NKEA CCI
Serving tomorrow Pushing the Boundaries Platforms, Services, Content Industries Enablement
• Content and services are in next stage • Advanced telecoms infrastructure has of evolution, with shift to enhanced opened up significant opportunities in
side data/video utilisation on networks other industries, which other countries - – markets dominated by global players are aggressively pursuing now
• Malaysia must enhance domestic • Given size of the prize, Malaysia should Demand value-add to avoid becoming ‘dumb focus especially on: pipe’ (a) e-Learning , – attractive local opportunities with: (b) e-Healthcare , (a) MY Content Hub (c) e-Government (b) 1MY Payments (c) Connecting 1 Malaysia
Building the Foundation – Infrastructure
• Infrastructure must continuously evolve, focusing on cost/affordability, coverage/access and quality side - • Malaysia must address gaps at various points of the network: (a) Broadband as a Utility will tackle last mile access and affordability
Supply (b) Extend Reach will address sub-urban and rural gaps (c) Smart Network will improve quality and lower consumer costs at the low end (d) Regional Network will provide supply to meet demands and lower costs
Source: Adapted from Economic Report 2010/2011, Ministry of Finance Fig. 2.36 NKEA CCI Approach
NKEA CCI Highlights 2012 Entry Point Projects (EPP)
EPP #1 Nurturing Malaysia’s Creative Content • Film-in-Malaysia incentive approved in April 2012 and effective 1 January 2013. This is aimed to attract foreign investments such as foreign production houses spending a minimum of RM5 million in Malaysia would get an incentive of 30% rebate. Local production companies spending at least RM2.5 million is entitled to the same benefit. • Contributed to creation of award winning animation, ‘War of the Worlds: Goliath’ crowned as Best 3D Animated Feature Film at the Los Angeles 3D Film Festival. • The first tranche of funds for the MYCreative Ventures expected to be disbursed in first quarter 2013.
EPP #3 Connecting 1Malaysia • Aimed to fast track adoption of new value added communications services, over 100 telepresence sites established across Malaysia with the cooperation of TM subsidiary VADS Bhd and Cisco. In December 2012, an agreement was signed with AT&T to expand the number of interconnected sites across the world. • By end 2012, a total of 158 work permits were granted by local authorities nationwide for the construction of new Pay Point booths. The target is to establish 200 booths. • The rebranded GMBO project has targeted to have an online presence of 50,000 micro-entrepreneurs in 2013. • To enhance location aware services and fleet management, with new services in this area targeted to be launched in 2013.
EPP #4 Establishing eLearning for Students and Workers • Targets for all 10,000 government primary and secondary schools to have new and upgraded connections to enable high speed Internet access for six million students and educators across the nation through 1BestariNet programme. • In 2012, the tender for this programme was awarded to YTL Communications Bhd. A total of 3,238 of the 7,209 schools targeted for connection in 2012 were connected with virtual learning network in 2012. By end of 2013, a total of 10,000 schools are expected to be online the end of the two year rollout timeline. • To date, more than 800,000 netbooks (from the 2012 target of one million) have been distributed. 71 IPR 2012 Shaping a Connected Future NKEA CCI Highlights 2012 (Cont’d) Entry Point Projects (EPP)
EPP #5 Launching eHealthcare • To offer patients better access to healthcare related services and education, all medical institutions are to be connected to the Healthnet platform. This platform will provide a gateway for information sharing among healthcare providers and insurance companies. • To date with close to 3,000 health facilities connected, the rollout of cloud based health applications will enable Malaysians from all walks of life to enjoy a higher standard of service at all these facilities. A total of 3,000 public health facilities are targeted for connection to the Healthnet platform by 2015.
EPP #6 Deepening eGovernment • In 2012, in laying the foundation for an interconnected government, this EPP targeted for 50% of all intra-government transactions such as job applications and internal circulars to be completed online. A zero face-to-face target was also set with the aim for 90% of counter services involving government services to be made online. The remaining 10% is to be completed via eForms by 2020. • In 2012, a total of 28 agencies have rolled out MyMeeting, which is the Government’s first fully open source software project. The software is cloud based and is to assist users to better manage meetings, save time and improve on efficiency of the public sector. • Going forward into 2013, this EPP will also focus on addressing digital security concerns as government services become increasingly digitised.
EPP #7 Ensuring Broadband for All • In 2012, the Government set a target of 65% broadband penetration rate nationwide. This has been met end of the year at 66%. • By end of 2012, six states have gazetted the Uniform Building By Laws (UBBL) Amendment Act. They are Kelantan, Malacca, Perak, Selangor, Terengganu and Johor. By the first half of 2013, the balance states in the process of gazetting the amendment will also do so. • In 2013, this EPP will be looking at improving access to broadband at targeted minimum speed of 2Mbps for the 80% populated areas in Greater Kuala Lumpur and 30% of seven state capitals namely, Kuantan, Seremban, Bandar Melaka, Ipoh, Georgetown, Kota Kinabalu and Kuching.
EPP #8 Extending Reach • In 2012, a total of 2,489 Kampung Tanpa Wayar sites, 36 Pusat Internet 1Malaysia or PI1M (formerly known as Community Broadband Centre or CBC) and 300 Time 3 towers for wireless communications services provision were built. • Note that the minimum speed for broadband services under the Kampung Tanpa Wayar initiative has increased from 2Mbps to 4Mbps in line with government policy to improve the quality of broadband services nationwide. • To understand how users have benefitted from connected services, the MCMC together with the Ministry of Information, Communications and Culture (MICC) has launched a book entitled ‘Connected at the Roots’, which highlights various success stories of Malaysians that have economically improved their lives due to access to broadband services. • In 2013, the aim is to implement an additional 689 new Kampung Tanpa Wayar sites, 336 new Time 3 towers and launch 162 new PI1M.
EPP #9 Offering a Smart Network • In 2012, this EPP was expanded to include initiatives for the use of smart applications in everyday lives. In order to achieve this, service providers are encouraged to collaborate and provide applications that will be useful to the rakyat . This is also to attract investments. • In September 2012, the Pakej Mampu Milik Jalur Lebar 1Malaysia was launched to offer broadband packages from as low as RM20 per month in five states namely, Sabah, Sarawak, Kelantan, Terengganu and Pahang. These packages are listed on the Consumer Forum website at www.cfm.org.my.
EPP #10 Extending the Regional Network • This EPP aims to encourage the establishment of advanced data network centres to move Malaysia up the value chain of Internet services provided. • In 2012, the Batam-Dumai-Melaka Cable System started operations while the Cahaya Malaysia Cable System to Japan was completed in August. Overall, this has contributed to a reduction in bandwidth cost to the consortium of this project by 18%. • By March 2013, the Cahaya Malaysia Cable System to Hong Kong is expected to be completed.
EPP #11 Track and Trace • Focusing on the use of Radio Frequency Identification (RFID) technology to generate economic gains, this EPP has two parts, in security and trade to facilitate effective and secure clearing process within domestic ports and selected high volume routes. The second project is the swiftlet nest tracking and traceability system, jointly led by the MCMC and the Department of Veterinary Services. This project uses RFID technology to track and trace high quality and sustainable swiftlet nest production from Malaysia to high value markets. • Close to 4,000 companies have registered their interest to participate in the Edible Bird’s Nest (EBN) tracking and traceability system. In 2013, a memorandum of understanding signed with China is expected to resume to the operational stage of this project.
Source: ETP Annual Report 2012 Fig. 2.37 NKEA CCI Highlights 2012 72 IPR 2012 Shaping a Connected Future MCMC Development Role
The MCMC role in industry development since the institution of the CMA is summarised in the table below.
C&M Industry Development Formative Years 1999 to Phase 1 Migration of licences from old to new framework in the form of the new economic markets of network facilities and 2004 services; content and applications services Regulatory Development 2004 to Phase 2 Liberalisation and competition enhanced, while promoting infrastructure development and increasing access to C&M 2006 industry services 2006 Going for Growth Phase 3 to Concerted national and industry plans and initiatives to propel the industry forward in new and enhanced areas of 2008 infrastructure and services embracing opportunities from evolving technologies Solidifying the Future 2008 This is done through excellent execution of implementation plans for national coverage; broadband infrastructure Phase 4 to development – both fixed and wireless; accelerating service delivery and take up while enhancing security and 2010 affordability, without compromising on quality of service Building Foundation to 2020 and Beyond 2010 Catalysing the next round of foundation forming for sustaining growth towards developed nation status by 2020 and Phase 5 to beyond. Broadband initiatives aligned to national growth, and supporting the NKEA CCI economic transformation. 2015 These include advancing telecommunications network, and networked content and services infrastructure – along with people and industries enablement. Source: MCMC Fig. 2.38 C&M Industry Development
Noteworthy is that regulatory development is also part of the process of industry development over the years.
For example, this includes the role of MCMC in implementing the USP regulations. Such tasks ranges from the management of investments such as using USP funding to ensuring service providers supply hard-to-reach areas for national coverage and working with state local authorities in tower site acquisition for building communication towers.
In 2012, the highlights of development activities included the continued implementation initiatives for broadband expansion nationwide where quality of services provision is emphasised; community outreach programmes such as the Klik Dengan Bijak (KDB) programme; and accelerating IPv6 implementation.
73 IPR 2012 Shaping a Connected Future
Content Development
The MCMC works together with the Ministry of Information, Communications and Culture in promoting network content development. In 2011, the National Creative Industry Policy, which contains Malaysia Content Definition Guidelines were introduced. The year 2012 saw this effort further ingrained on the content production or development roadmap at grass root level.
Exploring Overseas Markets
Aside from being a catalyst to the development of local content, MCMC takes the initiative to expand the local content export revenue through global market exploration together with other government agencies such as FINAS, MDeC and local companies. Such efforts bring local content to international markets such as MIPTV, MIPCOM, Asia Media Summit, TIFFCOM and Asia Television Forum (ATF). This is expected to assist local companies to generate more revenue for the nation through sales of local content.
In 2012, the total sales value was RM155 million. This contributes directly to realising the NKEA and the National Policy Objectives for the C&M industry.
Capacity Building for National Content Industry as Economic Growth Area
In 2012, capacity building among others under MaGICCA (MCMC Grants for Innovative, Creative Content and Applications) continued with the aim to develop and sharpen skills in content development in institutions of higher learning in the country. The MCMC Grant for Innovative, Creative Content and Applications (MaGICCA), approved in 2011, is specifically for students of Higher Education Institutions (HEIs) to develop projects related to content and applications of high quality and high potential for commercialisation. Initially, the MCMC allocated RM1 million to conduct a pilot project with Multimedia University (MMU).
In July 2012, the MCMC signed a Memorandum of Understanding (MOU) with MMU and is working with the experts from the industry and MMU to select projects to be funded under this grant. MaGICCA will be extended to all HEIs in Malaysia the following year if the pilot project bears fruit as targeted.
Under the Creative Industry Development Fund MCMC (CIDF-MCMC), the MCMC allocated RM100 million for a period of three years from 2011 to 2013 to focus on the development of content for TV, mobile and the Internet. The purpose of the fund is to develop local creative content industry in line with the national policy objectives under the CMA, which targets Malaysia as a global content development hub. This facilitates Malaysian participation in the creation and production of multimedia content and encourages creativity, originality and innovation that can reap global value. Such local creative content industry development, it is hoped, can further enhance the competitiveness of the national content industry as an economic growth area.
74 IPR 2012 Shaping a Connected Future Nationwide High Speed Broadband Focus
Infrastructures built up in the previous 10 years were essential to improve and ensure basic communications services coverage nationwide, and to users of all walks of life. The users include those in urban and rural areas alike; ensuring the provision of affordable services, without leaving out the underprivileged group. The approach for Malaysia in provision of communications services is technology neutral, thus the drive to attain nationwide connectivity is via fixed line or mobile and any other appropriate platforms. This is in line with technology neutrality, which is basically provisioning the most appropriate or best fit type of technology for the location or purpose concerned.
2011 and 2012 are considered as the beginning period of the next decade for communications services growth. Already, there are increasing competitive forces urging service providers to use strategic approach in ensuring high levels of service quality. In certain quarters of business and entertainment, users are demanding quality of experience on top of service availability and reliability.
Over the last three years, broadband has been identified as a requisite pervasive communications service. The year 2012 has been an encouraging year in which the Private- Public Partnership (PPP) High Speed Broadband (HSBB) initiative has achieved rollout exceeding the target of 1.3 million for premises passed. In addition, a new project called Broadband for the General Public (BBGP) Backhaul was also implemented.
The BBGP Backhaul project objective is to expand the reach of fibre optic backhaul to rural areas in Sabah and Sarawak. Furthermore, 2012 also saw the extension of Internet service through Wi-Fi technology to more remote areas with the rollout of additional sites under Kampung Tanpa Wayar (KTW) Project.
Moreover, high speed broadband service was further stimulated through wireless broadband with the issuance of 4G-LTE spectrum in 2012. However, the service and competition will only begin after services rollout commences in 2013.
Notwithstanding the above mentioned developments, service providers are continuously investing in building more broadband infrastructure for both wired and wireless using their own expenses for economically viable areas. As for less economically viable areas, the implementation will be done in collaboration with the Government, local authorities and service providers. Erstwhile, service providers will go beyond this under the spirit of ‘win-win’ situation with the applicants or developers.
75 IPR 2012 Shaping a Connected Future Growth of Broadband Connections
The year 2010 witnessed for the first time HSPA (mobile) displacing Asymmetric Digital Subscriber Line (ADSL) as the most connected service for broadband subscribers in Malaysia. In 2012, the mobile broadband HSPA subscriptions recording over 2.5 million which almost double that of fixed ADSL line subscriptions of 1.6 million.
In 2012, high speed broadband subscriptions recorded 565,410 subscriptions, wherein those connected by TM under the brand name UniFi recorded 543,000 subscriptions. This compared favourably with 249,000 high speed broadband subscriptions posted in 2011.
The broadband services connection in 2012 was supported by various projects targeted to drive broadband demand nationwide. Among these projects were the Government driven service provision under the 1Malaysia Netbook programme and other offerings by broadband service providers both wired and wireless.
In terms of high speed fixed broadband connections, Malaysia managed to attain 66% (6.4 million), more than the household broadband penetration surpassing the target set for 2012 which is 65%. Subsequently, users are now enjoying wider service availability and a more connected lifestyle that broadband can offer.
For 2012, broadband subscriptions by fixed (wired), wireless and 1Malaysia Netbook are as shown in Figure 2.39. Overall, the milestones in broadband connections charted in Malaysia are shown in Figure 2.41.
Number of Broadband Subscriptions Broadband: Subscribers and Household 5 2012 Penetration 2007 – 2012 8 100 3.8 3.8 4 66.0% 3.4 3.6 80 6 62.3% 3 55.6% 2.3 60 2.1 2.2 2.1 4 2 31.7% 40 5.8 6.4 21.1% 4.7
Subscriptions(million) 15.2% Subscribers(million) 2 1 20 0.3 0.3 0.3 0.3 2.6 1.1 1.7 0 0 0 Household Penetration (%) Quarter 1 Quarter 2 Quarter 3 Quarter 4 2007 2008 2009 2010 2011 2012 Fixed (Wired) Wireless 1 Malaysia Netbook Total Subscribers Household Penetration (%)
Source: MCMC Source: MCMC Fig. 2.39 Number of Broadband Subscriptions 2012 Fig. 2.40 Broadband: Subscribers and Household Penetration 2007 – 2012
76 IPR 2012 Shaping a Connected Future Malaysia Broadband Milestones
Source: MCMC Fig. 2.41 Malaysia Broadband Milestones
77 IPR 2012 Shaping a Connected Future Broadband Enhancing Business Value for Users
Get Malaysian Business Online (GMBO)
With the mission to assist Malaysian businesses benefit from opportunities available over the Internet, GMBO was introduced to help businesses achieve success by leveraging on the online platform. The MCMC is the primary government agency for this initiative and together with Google have partnered various organisations such as MyNIC, SME Corp, Al-Qafilah International and iTrain.
GMBO is targeted to bring at least 50,000 Malaysian Small Medium Enterprises (SMEs) to set up websites and use online platform to widen their market and subsequently increase their sales. The programme also equips the SMEs with free and easy ways to update their website.
GMBO offers Malaysian businesses especially SMEs a free website, website development training, free web hosting and a free .com.my domain (for one year for the first 10,000 participants). Participants thereafter will receive a domain at a discounted rate of RM23 per year. In addition GMBO also provides ongoing tips and education and a RM200 free online advertising trial with Google AdWords.
GMBO was promoted through an integrated strategy such as public relations, media, direct marketing, online marketing and partner marketing. The response to GMBO was overwhelming as at the end of 2012, more than half a million unique visitors accessed the website. Out of this, almost 30,000 SMEs signed up for the programme. However, slightly less than 10,000 have developed their websites and registered domains.
In order to improve the response rate for GMBO, the programme will be rebranded to reach out to a wider base of potential entrepreneurs. The 2013 Budget encouraged more Malaysian businesses to go online, especially for women entrepreneurs. This is through a RM1,000 grant provided to those who have set up website for their businesses, on top of other criterias. The target is to have an online presence of 50,000 micro entrepreneurs by end 2013, with a total budget of RM50 million.
Source: MCMC Fig. 2.42 Launch of Get Malaysian Business Online (GMBO) 78 IPR 2012 Shaping a Connected Future Broadband Penetration Rate by State
Looking at broadband penetration rates by state, Wilayah Persekutuan Kuala Lumpur is the only state with a penetration rate of over 100%13 for three consecutive years. The penetration rate of Kuala Lumpur was at 119.4% in 2012 (2011: 107.4%).
The top five states with the highest penetration rate are Kuala Lumpur, followed by Pulau Pinang, Perlis, Selangor and Negeri Sembilan. The state broadband penetration rate for is shown as per Figures 2.43 and 2.44 below.
Broadband Penetration Rate per 100 Households by State 2012
Source: MCMC Fig. 2.43 Broadband Penetration Rate per 100 Households by State 2012
13 A penetration rate of over 100% occurs because of multiple subscriptions. 79 IPR 2012 Shaping a Connected Future Broadband Penetration Rate per 100 Households by State State 2009 2010 2011 2012 W.P. Kuala Lumpur 88.9 123.0 107.4 119.4 Pulau Pinang 43.1 75.5 82.8 83.8 Perlis 17.4 61.5 84.9 81.9 Selangor 49.1 67.3 74.8 77.6 Negeri Sembilan 26.4 66.4 76.0 73.7 Melaka 30.0 58.3 66.4 68.8 W.P. Labuan 28.7 70.1 73.1 65.2 Johor 29.3 51.5 60.7 64.1 Terengganu 17.6 49.8 58.6 57.5 Kedah 17.6 44.7 56.5 56.0 Perak 22.1 43.2 52.2 53.6 Pahang 17.4 44.5 49.0 50.7 Sarawak 19.3 40.2 47.5 48.2 Sabah 14.5 25.6 32.7 47.3 Kelantan 11.7 38.9 45.3 43.8 Malaysia 31.7 55.6 62.3 66.7 Source: MCMC Fig. 2.44 Broadband Penetration Rate per 100 Households by State
Fixed Line Broadband Services Offered by TM
In Malaysia, broadband services market demand is supported by both wired and wireless service providers. Among the most prominent in the fixed broadband services provision is the Public Private Partnership (PPP) project between TM and the Government. This involved an investment totalling RM11.3 billion, where the Government forking out RM2.4 billion and TM investing the remaining RM8.9 billion over a 10-year project development period.
2012 also was a successful year for the Government and TM on the HSBB infrastructure rollout which has exceeded the targeted rollout of 1.3 million premises passed set by end of 2012. The target was achieved in October 2012, with a total of 1.38 million premises passed in December 2012.
In addition to the completion of the premises passed, the project has also provided high speed connectivity to almost 6,000 government offices and 83 higher learning institutions. Subsequently, in order to improve ICT literacy among the public, more than 100,000 attendees were trained under the Public Training Programme in 2012 alone.
80 IPR 2012 Shaping a Connected Future In order to promote usage an d the benefits of HSBB Subscriptions broadband, six broadband events were 0.6 organised nationwide. Under the initiative to promote local content, TM has established a 0.5 content service delivery platform, My1Content which was launched in June 2012 as part of 0.4 their undertaking as per the PPP agreement. 0.3 As of end 2012, the total HSBB subscriptions 14 0.2 recorded at 543,000 which is about 39% Subscribers(million) from the total ports available. Comparatively, 0.1 this is more than 100% increase from 2011 subscriptions which was at 234,400 0 subscriptions. The growth pattern is shown in 2010 2011 2012
Figure 2.45. Source: MCMC Fig. 2.45 HSBB Subscriptions
A summary of the fixed broadband services provision is shown in Figure 2.46.
Fixed Broadband Services 2010 – 2012 Year Development Remarks Before Broadband service before High Speed Broadband (HSBB) was offered under TM started off fixed broadband service with 2010 brand name Streamyx up to 2Mbps. Streamyx in 2001. HSBB pilot project with four exchanges at Taman Tun Dr Ismail, Subang Jaya, Private Public Partnership signed on 16 September March 2010 Bangsar and Shah Alam. 2008 at RM11.3 billion over 10 years. HSBB under UniFi Brand: Government target at 1.3 million premises passed by • 48 exchanges or service coverage with 756,000 premises passed end of 2012. End 2010 • Extended to Johor and Penang • Speeds at 5, 10 or 20Mbps for Video-Internet-Phone combination TM broadband segment recorded 1.7 million customers. UniFi constituted 33,000 customers or less than 2%. HSBB exchanges available in 81 exchanges including Melaka, Kedah, Negeri This amounts to more than 1.1 million premises Sembilan and Perak, aside from the Klang Valley. passed in 2011. Together with Streamyx, broadband customers totalled 1.9 million. UniFi has 236,501 customers or more than 12% of TM total broadband customers. Out of this 15% or 2011 about 35,000 are business customers. HSBB Wholesale (Access) Service available since July 2009. By end 2011, Opened to all service providers. seven service providers signed up, including Maxis, Celcom and P1. HSBB has covered 97 exchange areas in Klang Valley, Industrial areas and 39% of the ports provided have been utilised. Iskandar Malaysia. The target of 1.3 million premises passed completed. Number of subscriptions at end 2012 was 543,000. 2012 Four service providers signed up for HSBA Service which are Maxis, Celcom, Maxis started to offer HSBB services. Currently there P1 and Redtone and 17 service providers have signed up for HSBT Services. are more than 20,000 subscriptions. The capacity provided are 88Gbps involving 199 links. Note: HSBA refers to High Speed Broadband Access; HSBT refers to High Speed Broadband Transmission
Source: TM, MCMC Fig. 2.46 Fixed Broadband Services 2010 – 2012
14 The figure is the overall HSBB subscribers nationwide. 81 IPR 2012 Shaping a Connected Future
Service Packages Offered
High speed broadband services have expanded to East Coast and East Malaysia by 2012. In terms of service packages, TM offered speeds of 5, 10 and 20Mbps for a combination of Video- Internet-Phone services. A summary of the packages provides are shown in Figure 2.47.
TM HSBB Packages Consumer Package Rate Per Month (RM) Remarks VIP5 149 Offered at respective bandwidth speeds as indicated in the VIP packages of 5, VIP10 199 10 and 20Mbps. VIP20 249 Source: TM Fig. 2.47 TM HSBB Packages
TM has in 2012 provided variation to their business packages with the objective of encouraging existing users to upgrade to higher speed plans. HSBB packages among SMEs also included higher speed plans and relatively cheaper rates.
TM Business Packages
Complimentary Products and Services of BIZ30 and BIZ50*
1 Wi-Fi 1 TM Wi-Fi ID 10GB web Add on Value Added Services (VAS) Free DECT 1 infoblast Business hosting along with 2GB option, include web storage capacity up Phone account Getaway email account to 10GB and add on fixed IP address
Benefits to SME HyppTV for Business
• Use of next generation online applications and services • Infotainment experience • Experience doing business activities over the Internet • Variety of shows in HD • Collaborate and utilise advanced online business applications • Uninterrupted transmission • TM’s IPTV service – HyppTV – making it a triple play offering
*BIZ30 and BIZ50 at high speeds of 30Mbps and 50Mbps respectively Note: For more information on the packages, log on to www.tm.com.my/sme.
Source: TM News Releases Fig.2.48 TM Business Packages
A note here is that the HSBB is an open concept where other service providers are given access to the HSBB infrastructure to deliver services to their customers. As at end 2012, four service providers have signed up for the HSBB Access (HSBA) services namely, Maxis, Celcom, Packet 1 and Redtone. On the other hand, 17 service providers have signed up for the HSBB Transmission (HSBT) services, which involve 199 links with capacity of 88Gbps.
82 IPR 2012 Shaping a Connected Future HSBB Enhanced Infrastructure Requirements
The high speed broadband services offered by TM are an end to end network service that includes local access and core together with international links. There is also provision of high speed broadband wholesale service to other service providers. In 2012, the nation’s international capacity for high speed broadband has been increased to 1.6Tbps using two existing submarine cable systems and two new submarine cables from funding under the HSBB project.
End To End High Speed Broadband Network*
Local Access
Domestic Global Central BB remote backhaul Internet office access server
HSBB Access HSBB Core HSBB International
The last mile investment, A nationwide next- The link between Malaysia and connecting homes and generation network (NGN), the world – joining the businesses to the ‘broadband acting as a ‘broadband ‘broadband superhighway’ with superhighway’, allowing fast superhighway’ and other countries through a speeds over new fibre connecting all of Malaysia network of underwater connections submarine cables
*The last mile infrastructure, a new broadband superhighway and new international links will join to provide HSBB network
Source: TM Fig. 2.49 End To End High Speed Broadband Network
83 IPR 2012 Shaping a Connected Future Mobile Broadband Services
3G Subscriptions
Overall, there has been relatively steady adoption of 3G mobile services from year to year. This is observed from 3G subscriptions which was a mere 0.4 million in 2006 to a whopping 14.5 million in 2012. The exponential growth happened the first and second year of 3G service adoptions that recorded amongst the highest growth rates of 300% and 175% respectively.
In 2012, 3G subscriptions were at 14.5 million which was an increase of 40% from 2011. Out of this figure, 10.5 million subscriptions came from prepaid, with postpaid of four million subscriptions. Hence, the ratio of prepaid to postpaid 3G subscriptions remains at 60:40. The trend of 3G subscriptions by prepaid to postpaid split is shown in Figure 2.51.
3G Subscriptions 2006 – 2012 16
14 40% 12 10 11% 26% 8 65% 6 175% 4 300%
No. of Subscriptions(million) 2 0.4 1.6 4.4 7.3 9.2 10.3 14.5 0 2006 2007 2008 2009 2010 2011 2012
Source: Industry, MCMC Fig. 2.50 3G Subscriptions 2006 – 2012
Prepaid and Postpaid 3G Subscriptions 2006 – 2012 12 10.5 10 Prepaid 8 Postpaid 6.4 6 5.6 4.4 3.9 4.0 3.6 4 3.0 2.4 2.0 2 0.7 0.8 No. of Subscriptions(million) 0.2 0.3 0 2006 2007 2008 2009 2010 2011 2012
Source: Industry, MCMC Fig. 2.51 Prepaid and Postpaid 3G Subscriptions 2006 – 2012
84 IPR 2012 Shaping a Connected Future Mobile Communications Technology
Mobile phone technology is continuously evolving with accelerating rate of innovation as well as adoption. Examining the strides taken from 1G to 4G, technology advancement has catered to user needs, creating new usage patterns, such as mobile applications and individual cloud services. The development of mobile communications in Malaysia from 1G to 4G services is briefly summarised in Figure 2.52 and Figure 2.53.
Mobile Speeds
Year Speed: 100Mbps Speed: Speed: 13.98Mbps Speed: 64Kbps – - Mobile Speed: WiMAX 9.6Kbps – 384Kbps - High Speed Data 9.6Kbps – 115Kbps - Long Term Packet Access Evolution 57.6Kbps (HSDPA) - International (LTE) - High Speed Mobile - Enhanced Data Uplink Packet - High-Speed Telecommuni- Rate for GSM access (HSUPA) Circuit cations 2000 Evolution (EDGE) Speed: Switched Data (IMT-2000) 9.6Kbps – (HSCSD)* - Universal Mobile 14.4Kbps - General Packet Telecommuni- Radio Service cations System (GPRS)** (UMTS) - Global System for Mobile Speed: Communication 9.6Kbps (GSM)
- Advanced Mobile Phone System (AMPS) - Nordic Mobile Telephony (NMT)
* Speed: 9.6Kbps – 57.6Kbps Technology ** Speed: 9.6Kbps – 115Kbps Source: Various sources Fig. 2.52 Mobile Speeds
Mobile Communications Standards Adoption Generation Technology Descriptions First • Basic mobile with analogue voice service with no data capabilities. 1G Generation • Information was retransmitted to the receiving entity. • Wireless networks from analogue to digital with advanced messaging. 2G • Global roaming and circuit switched data. • Better voice quality, higher capacity and lower power consumption. • Instantly accessible WAP (Wireless Access Protocol) and HTML (HyperText Markup Language) sites using appropriate mobile phone, PDA (Personal Digital Assistant) or notebook* Second • Extension of GSM with higher data speeds* Generation 2.5G • Higher data rates via GPRS, with high speed mobile data standard (packet switched data)** • Extension of GSM** • Always on connectivity** • Extension of GSM and faster than GPRS. 2.75G • Always on connectivity. • Data at higher speeds to open the gates for truly ‘mobile broadband’ experience. 3G Third • Global roaming and IP enabled. Generation • Five times faster than 3G technology (384Kbps). 3.5G • Users are now on social networking and have applications adoption. Fourth • Provides access to wide range of telecommunication services, including advanced mobile and fixed 4G Generation networks. *Speed at 9.6Kbps – 57.6K bps ** Speed at 9.6Kbps – 115K bps
Source: MCMC Fig. 2.53 Mobile Communications Standards Adoption 85 IPR 2012 Shaping a Connected Future The Use of Small Cell Technology
In 2012, Maxis invested RM122 million in Sabah and Sarawak by using femtocell, small, low power cellular base station typically designed for use in a home or small business to reach more rural areas. The investment was to enhance network coverage in Sabah and Sarawak in line with government programme for community broadband centres. This included a deployment of 355 nano and femto sites, which is a technology that provides improved in-house and in-office coverage; 352 enhanced 3G sites; and 100 wireless villages or Kampung Tanpa Wayar Wi-Fi sites in both states.
U Mobile is another service provider which has been working with technology partners in pilot project to use femtocell in various mobile service offerings.
Common applications of femtocells in commercial use is alerting the customer or pedestrian as he or she enters a femtocell zone in a shopping centre or public place that there is a discount, for example, being offered for certain products through their mobile phones.
At home or office, the femtocell, a small cell technology serves as a ‘personalised’ home or ‘exclusive’ small office base station. The femtocell can support two to four active users on mobile phones at home, or up to eight or 16 mobile phones in office setting.
Small Cells in the Home or SME or Community
Source: Various Fig. 2.54 Small Cells in the Home or SME or Community
The use of femtocells is currently an emerging phenomenon in Malaysia. Aside from commercial applications obvious to the end user, the femtocell allows various benefits for the service provider in their supply of network and access to areas where a macro cell site proves not as effective. 86 IPR 2012 Shaping a Connected Future For example,
1. Macro cell site, which typically covers several square kilometres, cannot be as effective in cost and energy efficiencies in areas of low population density. Femto sites is deemed easier on company operating profit margin as they work on low powered radio access points and can connect mobile devices to mobile network over a small area.
2. Service providers also reap intangible benefits as their relationship with customers improves. This can be expected from femto sites, which improve signal strength and thereby contributes to quality of services provision.
3. Femtocells also allow service providers the option to offload traffic from the macro cellular network during peak traffic periods. In this case, user experience is not affected at any time, and issues of dropped calls can be mitigated.
4. More efficient usage of spectrum results as the mobile network coverage can be extended through use of a cellular base station of smaller size and lower power output vis-à-vis a macro cell site. Further on, small cell lower energy intensiveness promotes green usage.
87 IPR 2012 Shaping a Connected Future Universal Service Provision (USP) Scope, Targets and Evolving Approach
For the Government, in areas where economic viability is a threshold that is hard to reach for the service providers working on their own, the provision of USP plays a crucial part. The USP regulations and its implementation have seen high state of constant flux of activities and much debate as these were developed and instituted over the years.
Effectively, all stakeholders within the industry or others for the sake of regional state development, to date have had a strong hand in this development. This is to ensure digital divide 15 is minimised and for all rakyat to be connected.
The ultimate goal of USP is to ensure all communities are served by mainstream ICT services. The immediate urgency is to provide necessary infrastructure and communications access to the targeted underserved areas, localities, and groups within the identified community. This access encompasses broadband and mobile services aside from fixed telephony services.
USP Essentials USP and Scope Targets Ultimate Goal Underserved Areas Ensure underserved areas connected to mainstream ICT Defines from the perspectives of network and application services services Broadband Access Objective Area where penetration rate for broadband subscribers is below national Provide communications access to targeted penetration rate or where broadband access services are not sufficiently available underserved areas, localities and groups within Public Cellular Service identified community Area with population density of 80 person per square kilometre or less or where Priorities public cellular services are not sufficiently available Collective access to basic telephone and Internet PSTN Service services followed by individual access for both services Any area where PSTN subscribers penetration rate is 20% below the national Implementation penetration rate Done by appointed service providers based on USP Underserved Groups regulations (tender process) Groups of persons in served areas without collective and/or individual access to Funding basic communication services. Rollout target 2010 – 2014 are for: USP Fund contributed by service providers based on • Person with disability • Women under rehabilitation USP regulations and licence conditions • Children under Protection • Low cost housing
Source: USP Regulations, MCMC Fig. 2.55 USP Essentials
The USP rollout in 2012 encompassed the National Broadband Initiative (NBI) as well as new initiatives under the USP Clawback programme. The scope of USP projects in 2012 included various programmes. Primarily these programmes encompassed Kampung Tanpa Wayar , Mobile Coverage Expansion Time 3, Pusat Internet 1Malaysia (PI1M) and the Komputer 1Malaysia or 1Malaysia Netbook.
15 ‘Digital divide’ refers to the gap between individuals, households, businesses and geographic areas at different socio-economic levels with regard to both their opportunities to access Information and Communication Technologies (ICTs) and to their use of the Internet for a wide variety of activities. Source: OECD definition. 88 IPR 2012 Shaping a Connected Future Kampung Tanpa Wayar (KTW)
Over the last three years, broadband infrastructure has been accelerated to provide high speed network service for users nationwide. The availability and access to this network needless to say does not reach everyone at the same time nor does everyone in certain far reaching communities away from urban development can be supported by service providers on a commercial basis.
In order to ensure that such USP designated communities or individuals are not left to the vagrancy of the digital divide, the Government has stepped in with the USP designated service providers to ensure the necessary communications services, including broadband connections are provided.
Source: MCMC Fig. 2.56 Kampung Tanpa Wayar
The programme has brought ICT facilities to the doorsteps of small communities, enabling connectivity between villages amongst others. The KTW programme provides collective wireless Internet access services (Wi-Fi) to recipients of netbooks under the 1Malaysia Netbook programme. The KTW programme aims to contribute towards creating knowledge based communities. In this way, it is possible for small businesses and villages to be connected and hence, can directly participate in activities contributing to economic boost as well.
The programme started in 2011 with the setup of 1,355 KTWs nationwide. Additional 2,489 KTWs were built in 2012 to make up a total of 3,844 KTWs in operation nationwide.
Time 3
The Time 3 programme involves rolling out communications infrastructure such as towers for wireless communications services provision. The programme is targeted at extreme rural villages and areas with a low population density of less than 80 persons per square kilometre, or uneconomic areas for service providers. Key target areas include FELDA, FELCRA and Orang Asli settlements.
The objective is to increase the national population coverage to 97%. To achieve this objective, 1,000 telecommunication towers were set to be built nationwide in several phases of implementation. As at end 2012, 664 towers have been completed.
89 IPR 2012 Shaping a Connected Future
Pusat Internet 1Malaysia (PI1M)
The PI1M, formerly known as Community Broadband Centre (CBC), functions as a knowledge hub offering basic training and access to information. The ultimate goal of setting up the PI1M programme is to ensure that the communities are connected and empowered. The programme offers a centre with high speed broadband facilities with two supervisors to run the centre and provide ICT training to the local community. As of 31 December 2012, there were 287 PI1M in operation nationwide.
Komputer 1Malaysia (1Malaysia Netbook)
The Komputer 1Malaysia programme provides netbooks to underprivileged students and low income households. This programme aims to give a boost to broadband access subscriptions per household. The availability of a netbook to recipients is expected to bring about socio-economic development in various employment sectors such as agriculture, education, health, and also to encourage, amongst others, the setting up of new businesses.
A total of one million netbooks were planned to be distributed to target recipients. Distribution to recipients started in 2010 and at the end of 2012, 856,325 netbooks were already distributed.
90 IPR 2012 Shaping a Connected Future World Broadband Comparatives
Studies and Developments
Figure 2.57 indicates that globally, mobile broadband subscriptions have grown 46% annually over the last four years and mobile broadband connections were twice as many as fixed broadband subscriptions. The same trend also occurs in Malaysia, starting 2010 when mobile broadband subscribers surpassed fixed broadband subscribers.
Global ICT Development 2001 – 2012
100 Mobile cellular telephone subscriptions 90 Individuals using the Internet 80 Fixed telephone subscriptions 70 Active mobile broadband subscriptions 60 Fixed (wired) broadband subscriptions 50 40 30
Per 100 Inhabitants 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
*Estimates by ITU
Source: “Global ICT Development 2001 – 2012” by ITU, 2012 Fig. 2.57 Global ICT Development 2001 – 2012
In another study by Akamai in its third quarter 2012 State of the Internet report, Malaysia ranks 71 st globally in terms of average Internet speed at 2.2Mbps (end 2011: 1.8Mbps – step up in term of ranking from 73 to 71). The year on year change posted a gain of 18% as indicated in Figure 2.58.
Akamai Study of the Internet 3 rd Quarter 2012 Global Country/ Region 3Q 2012 QoQ Change (%) YoY Change (%) Rank Average Speed 1 South Korea 14.7 3.3 -12 2 Japan 10.5 -2.1 18 3 Hong Kong 9.0 0.9 -14 32 Singapore 4.9 -3.5 12 39 Chinese Taipei 4.4 16 7.1 40 Australia 4.3 -2.5 19 46 New Zealand 3.9 1.8 -1.7 58 Thailand 2.9 -6.3 -14 71 Malaysia 2.2 2.0 18 94 China 1.6 11 18 112 Philippines 1.3 6.0 13 113 Vietnam 1.3 -21 -19 115 Indonesia 1.2 54 58 120 India 1.0 2.5 11 Note: Akamai study obtained broadband speeds using data collected from 2,113,813 unique IP address for Malaysia. The study in dicated that 12% of these IP have speeds above 4Mbps. The peak Internet connect speed for Malaysia was 18.2Mbps or 32% faster compared to the previous year.
Source: www.akamai.com Fig. 2.58 Akamai Study of the Internet 3 rd Quarter 2012 91 IPR 2012 Shaping a Connected Future According to ITU report on The World in 2011: ICT Facts and Figures , over the last five years, developing countries have contributed to increase in the world Internet users from 44% in 2006 to 62% in 2011. In the said report, younger people tend to be more online compared to older people and this trend is in line with the findings of Malaysia Household User of the Internet Survey (HUIS) 2011. HUIS showed that Malaysia also experienced the same trend where users below 15 years old (11%) has surpassed users of the 35-39 years old group (10.4%).
This is notable considering that this younger age group only accounted for 7.3% five years ago. On a positive side, the younger generation are get ICT savvy at a younger age. On the other hand, these children and teenagers are exposed earlier and more vulnerable to cybercrimes and online abuses. Hence, this is where endorsement of Klik Dengan Bijak (KDB) programme by the Government also requires parental and teachers’ guidance to ensure these young users are equipped with essential information to keep a safe online experience.
Home ICT Access 2011
Source: “The World in 2011: ICT Facts and Figures” by ITU, 2011 Fig. 2.59 Home ICT Access 2011
92 IPR 2012 Shaping a Connected Future
MODULE 3: COMMUNICATIONS
SERVICES
93 IPR 2012 Shaping a Connected Future
Module Content
MODULE 3: COMMUNICATIONS SERVICES 93 C&M Services Connections 95 Fixed Line Services 95 Direct Exchange Line (DEL) Connections in Malaysia 95 Wireless Fidelity (Wi-Fi) Hotspots 97 Mobile Services 98 Mobile Phone Connections 98 Growth of Prepaid and Postpaid Subscribers 100 Market Share of Mobile Phone Connections 101 Development of Mobile Virtual Network Operator (MVNO) 103 Domain Names 104 The .my Domain Registry in 2012 104 IDN by the Language Characters 105 Domain Name Statistics 105 Extending IP Addressing Availability 108 Development on IP 108 IPv6 – Urgency of Adoption 108 Status and Development of IPv6 in Malaysia 108 MCMC Efforts to Drive IPv6 Adoption in Malaysia 108 MCMC Initiatives to Drive IPv6 Adoption in 2012 109
94 IPR 2012 Shaping a Connected Future C&M Services Connections
Fixed Line Services
Direct Exchange Line (DEL) Connections in Malaysia
DEL connections have been on the decline since in 2010. In 2010, subscriptions base showed 4.4 million DEL connections, a marginal increase from the previous year 2009 at 4.3 million.
However, the number of DEL subscriptions started to decline in 2011 and this trend continued in 2012. The year 2012 saw DEL total subscriptions of 3.9 million, a decline of 0.21 million or 4.9% from 2011. The trend of decreasing DEL connections in Malaysia is in line with the current world scenario. According to the International Telecommunication Union (ITU) Statistics report, worldwide DEL connections per 100 inhabitants for 2012 had decreased by 2.3%. However, Malaysia’s penetration rate of 34.4% is well above the world’s average penetration rate.
DEL Connections per 100 Inhabitants 2002 – 2012
50
40
30
20 per 100 inhabitants 10
0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
Developed World Developing
*Estimates Note: The developed and developing country classifications are based on UN M49 which is a standard for area codes used by the United Nations for statistical purposes, developed and maintained by the United Nations Statistics Division. For more information see: http://unstats.un.org/
Source: ITU Fig. 3.1 DEL Connections per 100 Inhabitants 2002 – 2012
As in the past years, the household subscriptions continued to decline at a faster rate compared with the non household subscriptions.
95 IPR 2012 Shaping a Connected Future DEL Connections: Subscriptions and Household Penetration Rate 2008 –- 2012
4.5 42.5 50 44.0 42.3 37.3 34.4 40 4.0 30 4.4 4.3 4.3 20 3.5 4.1 3.9 PenetrationRate (%)
Subscriptions(million) 10
3.0 0 2008 2009 2010 2011 2012
Total Subscriptions Penetration Rate
Source: Industry, MCMC Fig. 3.2 DEL Connections: Subscriptions and Penetration Rate 2008 – 2012
DEL Connections: Household and Non Household Subscriptions and Growth Rate 2008 – 2012 4.0 12.0
6.7 8.0 2.0 3.7 4.0
0.0 0.0 2008 2009 2010 2011 2012 -2.4 -4.0 -6.9 GrowthRate (%) -2.0 Subscriptions(million) -6.8 -8.0 -10.7 -4.0 -12.0 Household Non-Household Household Non-Household
Source: Industry, MCMC Fig. 3.3 DEL Connections: Household and Non Household Subscriptions and Growth Rate 2008 – 2012
In respect of fixed line services market share DEL Market Share by Service Providers by service providers, Telekom Malaysia Bhd 2012 (TM) remains an incumbent service provider Maxis DiGi 0.6% with 97.1% of total market share. The TIME 0.1% balance fixed line services is contributed by 1.6% TIME (1.2%), Maxis (0.6%) and DiGi (0.1%).
TM 97.7%
Source: Industry, MCMC Fig. 3.4 DEL Market Share by Service Providers 2012 96 IPR 2012 Shaping a Connected Future Wireless Fidelity (Wi-Fi) Hotspot
The number of hotspot locations continued to increase in 2012 at a slower pace compared with the preceeding years. As at end of 2012, the number of hotspot locations was at 31,493.
Hotspot: Locations and Growth 2007 – 2012 35,000 400 30,000 25,000 300 20,000 200 15,000 10,000 100 Growth(%) 5,000 0 0 Numberof Hotspot LocationS 2007 2008 2009 2010 2011 2012 Location 1,485 1,953 2,846 12,291 21,712 31,493 Growth by Year (%) 9.4 31.5 45.7 331.9 76.6 45.0
Location Growth by Year (%)
Source: Industry, MCMC Fig 3.5 Hotspot: Locations and Growth 2007 – 2012
Pulau Pinang has the highest hotspot locations with 6,613 followed by Selangor with 4,961. A breakdown of hotspot locations by state is shown in Figure 3.6.
Hotspot Locations by State State 2005 2006 2007 2008 2009 2010 2011 2012 Pulau Pinang 88 94 120 121 139 832 2,126 6,613 Selangor 319 352 356 574 844 3,849 2,537 4,961 W.P. Kuala Lumpur 352 395 376 494 617 1,759 1,729 3,876 Johor 79 94 81 104 158 910 1,732 3,645 Sarawak 75 75 79 90 138 756 2,393 1,941 Kedah 36 31 56 64 88 448 2,371 1,706 Perak 44 43 111 186 228 415 1,975 1,591 Pahang 58 80 88 93 162 406 1,386 1,576 Terengganu 43 35 39 41 59 214 1,381 1,511 Sabah 37 44 42 37 84 1,056 1,854 1,228 Kelantan 30 30 37 47 69 352 1,123 1,184 Melaka 20 34 41 41 103 387 444 1,014 Negeri Sembilan 24 31 36 40 125 833 550 555 W.P. Putrajaya 13 11 11 11 17 56 84 77 W.P. Labuan 9 9 10 8 11 11 11 8 Perlis 0 0 2 2 4 7 16 7 Source: Industry, MCMC Fig. 3.6 Hotspot Locations by State
97 IPR 2012 Shaping a Connected Future Mobile Services
Mobile Phone Connections
The development of mobile communications services in Malaysia has been phenomenal. Since the services introduction more than 10 years ago, mobile services connections surpassed DEL connections in the year 2000; with mobile revenue generation exceeding fixed line revenue three years later in 2003.
Development of mobile services in Malaysia has been rapid over the years, aligned with other countries. Since 2009 when the penetration rate16 of mobile phone connections exceeded 100% at 105.4% then, it has hit 141.6% as of 2012. Notably, the proportion of 3G subscriptions as part of mobile subscriptions increased rapidly over the years as shown in Figure 3.8. This is partly due to intensive rollout by service providers coupled with more affordable packages.
Overall, the growth of subscriptions is expected to moderate, but to a still respectable 4% to 5% growth in the immediate future. In contrast, the growth of mobile voice traffic in Malaysia is expected to moderate to an eventual 1% to 2% growth per annum. Nevertheless, data traffic is expected to remain growing in double digits of about 25% annually going forward.
Penetration Rate and Mobile Subscribers 2001 – 2012
160 41.0 45 36.7 140 33.9 40 30.2 35 120 27.7 30 100 23.3 25 80 19.5 19.5 14.7 20 60 11.2 15 7.4 9.1 40 10 PenetrationRate (%)
20 No. of Subscribers(million) 30.8 36.9 43.9 56.5 74.1 72.3 85.1 98.9 105.4 119.2 127.7 141.6 5 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Penetration Rate Subscribers
Source: Industry, MCMC Fig. 3.7 Penetration Rate and Mobile Subscribers 2001 – 2012
16 Mobile phone penetration rate is a term generally used to describe the number of active mobile phone numbers, usually as a percentage, within a specific population. 98 IPR 2012 Shaping a Connected Future 3G Subscriptions 2006 – 2012
60
50 14.5 10.3 40 9.2 7.34 30 4.36 1.56 20 0.43
No. of Subscriptions(million) 10
0 2006 2007 2008 2009 2010 2011 2012
Cellular Mobile Subscriptions 3G Subscriptions
Source: Industry, MCMC Fig. 3.8 3G Subscriptions 2006 – 2012
A number of regulatory instruments facilitated orderly growth of mobile demand in Malaysia. These include a rationalisation of registered mobile phone users and the introduction of Mobile Number Portability (MNP).
Flashback into 2007, a rationalisation exercise was carried out starting that year to ensure legitimate subscribers under a mandatory prepaid registration exercise. It is noteworthy that the data is not adjusted for SIM cards in duplicate names across mobile players, or the level of inactive subscribers due to termination of services.
During the exercise, service providers were expected to ensure that records of their customer information were accurate based on the Malaysian MyKad, subscriber passports or other valid documents. On top of the verification processes carried out by the service providers, the MCMC also undertook independent verification with the National Registration Department (NRD).
Two years later, in 2009, mobile number portability in mobile industry was implemented. The MNP enables mobile telephone users to retain their telephone numbers when changing from one network service provider to another. Hence, the prefix of a Malaysian mobile number is no longer associated with any particular service provider. This means that one will not be able to identify which service provider network a user is on by looking at a user’s mobile number.
During its early stage of implementation in 2009, 1.52 million number of porting requests by mobile subscribers were received with 1.07 million successful in their porting request. In the second year of implementation in 2010, the number of porting request substantially reduced to 970,000 (690,000 successful porting). In 2012, the number of porting requests further decreased to 280,000 (200,000 successful porting).
99 IPR 2012 Shaping a Connected Future The reasons for unsuccessful porting request are due to:
1) Request rejected by Donor Network Operator (DNO) due to reasons such as inaccurate customer ID and unpaid bills. 2) Port request was cancelled by the customer. 3) The numbers were terminated after port request.
Figure 3.9 summarises the trend of mobile number portability requests since its implementation.
Mobile Number Portability 2009 - 2012 1,800 1,600 1.5 Number of porting requests 1,400 Successful porting 1,200 1.1 1.0 1.0 1,000 800 0.7 0.7 600 Porting ('000) 400 0.3 0.2 200 0 2009 2010 2011 2012
Source: Industry, MCMC Fig. 3.9 Mobile Number Portability 2009 – 2012
Growth of Prepaid and Postpaid Subscribers
As of 2012, Malaysia mobile market again recorded more prepaid subscribers compared to postpaid, in the ratio of 80:20. This ratio translates into 33.6 million prepaid subscribers and 7.4 million postpaid subscribers.
Prepaid and Postpaid Subscribers of Mobile Services 2000 – 2012 45 40 7.4 35 7.1 30 6.7 6.3 25 5.5 20 3.9 2.9 3.4 33.6 15 29.6 2.6 23.9 27.1 10 2.6 19.4 22.2 3.0 16.6 16.1 5 3.1 8.6 12.1 2.6 4.3 6.1 No. of Subscribers(million) 0 2.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Prepaid Postpaid
Source: Industry, MCMC Fig. 3.10 Prepaid and Postpaid Subscribers of Mobile Services 2000 – 2012
100 IPR 2012 Shaping a Connected Future Other than the mobility offered by mobile phones, plans and packages offered by the service providers also play a major role in contributing to the overall growth of mobile services connections. Prepaid packages have allowed cheaper entry points for users with starter packs as low as RM8 vis-à-vis RM30 for postpaid. High consumer demand in the mobile service market in Malaysia forces service providers to offer more affordable rates that gives value-for-money advantage back to the consumers.
Market Share of Mobile Phone Connections
The mobile scenario in Malaysia features three major service providers, and more upcoming aspirants. These big players garner roughly 30% market share each which is considered an efficient level of supply demand balance in the country.
Specifically, in 2012, Maxis has a market share of 32.2% (13.2 million subscriptions) followed by Celcom with 31.5% (12.9 million subscriptions) and DiGi third in market share with 25.6% (10.5 million). This is followed by U Mobile with 3.5 million subscriptions. As the newest player, U Mobile managed to more than double their market share to 8.7% in 2012.
In 2012 for the first time, the mobile subscriptions included MVNO companies, which amounted to 2.2% of the total market share (0.9 million subscriptions). Mobile subscriptions by service provider are shown in Figure 3.11.
Mobile Phone Subscriptions by Service Provider 2003 – 2012 16 13.4 13.3 13.2
14 12.9 12.0 12.0 11.1
12 11.2 10.5 10.4 9.9 9.7
10 8.8 8.8 8.1 7.9 7.7 7.2 8 7.1 6.9 6.4 6.0 6.1 5.3
6 5.2 4.5 4.8 4.4 3.5
4 3.2 2.2 1.5 0.9
2 0.8 0.5 0.3 No. of Subscriptions(million) 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Maxis Celcom DiGi U Mobile Others (MVNO)
Source: Industry, MCMC Fig. 3.11 Mobile Phone Subscriptions by Service Provider 2003 – 2012
101 IPR 2012 Shaping a Connected Future The mobile market share in comparison to 2011 is shown in Figure 3.12.
Mobile Phone Service by Service Providers 2003 – 2012 120 2.9 1.0 1.5 4.1 2.2 100 19.8 22.2 24.5 8.5 27.2 27.5 25.5 25.3 26.0 27.0 80 25.6 60 39.6 36.1 35.2 31.3 31.0 31.7 34.2 33.0 32.7 31.5 40
Percentage (%) 41.7 41.6 20 40.5 40.3 41.5 40.0 39.5 39.5 36.2 32.2 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Maxis Celcom DiGi U Mobile Others (MVNO)
Source: Industry, MCMC Fig. 3.12 Mobile Phone Service by Service Providers 2003 – 2012
102 IPR 2012 Shaping a Connected Future Development of Mobile Virtual Network Operator (MVNO)
There are four Mobile Network Operators (MNO) in Malaysia namely, the mobile service providers Celcom, DiGi, Maxis and U Mobile. Three out of these, that is, Celcom, DiGi and Maxis, offer their network services to licensed MVNO companies. The services offered by the eight MVNO companies are shown in the table below.
MVNO in Malaysia in 2010 – 2012 Host Licence No. MVNO Description Services Provided MNO 2010 2011 2012 1. Baraka Telecom DiGi • Mobile segment built on operating Prepaid, Core network, Open NSP(I) NSP(I) NSP(I) Sdn Bhd principle of Syariah compliance. Source Software (OSS), / ASP / ASP • Terminated their agreement with DiGi Business Support System (BSS). in 2010 and changed their business plan to become Asia’s first MVNE 17 . 2. Tune Talk Sdn Celcom • Offer prepaid services, voice, SMS and Public Cellular Services NSP(I) NSP(I) NSP(I) Bhd data services on 2.5G platform. (Prepaid and Postpaid). / ASP / ASP / ASP • Operates based on GSM, GPRS, EDGE UMTS and HSDPA technology. • Target to serve the underserved segment of the market with super low calling rates and exciting incentives. 3. XOX Com Sdn Celcom • Wireless telecommunications service Public Cellular Services NSP(I) NSP(I) NSP(I) Bhd provider. (Prepaid and Postpaid), / ASP / ASP / ASP • Engaged in offering postpaid, prepaid Messaging services. or hybrid mobile calling cards targeted to the Chinese community in Malaysia. • Based on GSM technology. 4. Magxo Sdn Bhd n.a. • Development of software and Secure solution for online NSP(I) X X consultancy services. payment. • Licence surrendered in 2011. 5. Talk Focus Sdn DiGi • Target young market segment. Public Cellular Services, NSP(I) NSP(I) NSP(I) Bhd • Offer a unique voice and data plan. Messaging Services (Prepaid / ASP / ASP and Postpaid) and Internet Access Services. 6. PP Integration n.a. n.a. n.a. X NSP(I) NSP(I) Sdn Bhd 7. Samata DiGi • Allow phone users to do much more Public Cellular Services, X X NSP(I) Communications with their mobile phones as their SIM Internet Access Services. Sdn Bhd card use Near Field Communications (NFC) technology. • Made paying bills easier through mobile payment services. 8. Ceres Telecom Celcom • Offer end to end services and highly Public Cellular Services, X X NSP(I) Sdn Bhd specialised, cutting edge technological Messaging Services (Prepaid niche solutions for wireless and fibre and Postpaid) and Internet optic telecom networks. Access Services. Note: NSP (I) – Network Service Provider (Individual), ASP – Application s Service Provider
Source: Companies website, www.prepaidmvno.com, http://www.ego2u.biz/MVNOMalaysia-EGO2U.html, MCMC Fig .3.13 MVNO in Malaysia 2010 – 2012
MVNOs typically do not own a network but lease the network of a service provider that does have a network. Notably, this business arrangement allows smaller service providers focused on specific aspects of the mobile business to offer their specialised services and enrich industry service offerings aside from optimising usage of network infrastructure.
17 Mobile Virtual Network Enabler (MVNE) is a company that provides services to mobile virtual network operators. The services can include billing, network element provisioning, administration, operations, support of business support systems and operations support systems, provision of back end network elements, and enable provision of mobile network services like cellular phone connectivity. 103 IPR 2012 Shaping a Connected Future Domain Names
The .my Domain Registry in 2012
Source: Industry, MCMC Fig. 3.14 Background of IDN in Malaysia
104 IPR 2012 Shaping a Connected Future IDN by the Language Characters
By the end of 2012, there were 1,998 registered IDN, as compared to 1,392 IDN in 2011, a growth of 43.5% year-on-year. The Chinese IDN character was the largest registered IDN generating 52.4% of total share, followed by Jawi and Tamil with 40.1% and 7.5% respectively.
In terms of growth rate in year 2012, Tamil and Chinese IDN showed a slight increase of 0.7% and 10.3% respectively. This is following a strong demand for both IDN at the time the respective IDNs were opened for registration in September 2011. On the other hand, the Jawi IDN character recorded the highest growth rate for 2012 with 172.4%, after a slow registration in 2011.
Trend in Number of IDN by the Language Characters 2011 and 2012 1,200 2011 2012 1,047 1,000 949 The demand for Chinese and 801 800 Tamil IDNs was rather strong when registration opened on September 2011 600
400 In January 2011, .my Domain 294 Numberof IDN Registry officially announced they supported IDN 149 150 200
0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jawi Chinese Tamil
Source: .my Domain Registry, MCMC Fig. 3.15 Trend in Number of IDN by the Language Characters 2011 and 2012
Domain Name Statistics Number of Domain Names
2008 – 2012 In 2012, the total number of domain names 250 208.9 stood at 208,936 compared to 145,990 in 200 2011. This represents a growth of 43.1% 146.0 year-on-year. The number and growth rate of 150 112.8 domain names by month and for respective 100 91.2 years 2008 to 2012 is shown in Figure 3.16. 80.8
Domain Names ('000) 50
0 Jul Jan Jun Oct Apr Sep Feb Dec Aug Nov Mar May 2012 2011 2010 2009 2008
Source: .my Domain Registry, MCMC Fig. 3.16 Number of Domain Names 2008 – 2012
105 IPR 2012 Shaping a Connected Future On share of domain names by categories, in 2012 the .com.my category remained the main and constituted the biggest share of domain names. This category has 111,536 registered domain names and made up 53.4% of total share. Following on is the .my with 87,488 domain names at 41.9% share.
Except for declining growth in domain names .net.my (-0.4%) and .name.my (-27.9%), other domain names experienced increase in growth rate ranging from 5.8% to 124%. The growth trend of domain names by categories for the three consecutive years 2010 to 2012 is shown in Figure 3.19.
Share of Domain Names by Categories Share of Domain Names by Categories 2012 2011 .gov.my .edu.my .mil.my .gov.my .edu.my .mil.my .org.my 0.6% 1.4% .org.my 0.7% 1.5% 0.01% 0.01% .name.my 1.3% name.my 1.8% 0.1% 0.3% .net.my .net.my 1.3% .my 1.9% .my 41.9% 26.7%
.com.my 53.4% .com.my 67.1%
Source: .my Domain Registry, MCMC Source: .my Domain Registry, MCMC Fig. 3.17 Share of Domain Names by Categories 2012 Fig. 3.18 Share of Domain Names by Categories 2011
Comparison of Domain Name Registration by Categories .my .com.my .net.my .org.my .gov.my .edu.my .mil.my .name.my 2010 23,220 81,852 2,316 2,313 1,031 1,666 7 400 2011 39,050 97,921 2,764 2,613 1,087 2,137 17 401 2012 87,488 111,536 2,752 2,765 1,158 2,923 25 289 Source: .my Domain Registry, MCMC Fig. 3.19 Comparison of Domain Name Registration by Categories
The year 2012 also saw the domain names with IPv6 DNS totalled 3,015 in number, an increase of 38% or 830 domain names. The number of domain names with DNSSEC also demonstrated significant demand with an increase of 200% to 24 domain names from eight domain names registered in 2011.
In part, government initiatives to enhance business value for broadband enterprise users have resulted in increase of domain names .my and .com.my. The urgency to use IPv6 addressing has also accelerated the demand for of IPv6 domain names.
106 IPR 2012 Shaping a Connected Future Domain Names with IPv6 DNS Domain Names with DNSSEC 2009 – 2012 3,015 30 26 27 3500 25 24 24 25 22 23 3000 2500 2,185 20 2000 15 2,009 1500 9 9 9 10 8 8 1000 5 8 8 8 8 8 8 500 208 7 7 7 7 Numberof Domain Names Numbeof Domain Names 0 0 Jul Jul Jan Jun Oct Apr Feb Sep Jan Dec Jun Aug Oct Nov Apr Feb Mar Sep Dec Aug May Nov Mar May 2012 2011 2010 2009 2012 2011
Note: IPv6 DNS started in August 2009 Source: .my Domain Registry, MCMC Fig. 3.21 Number of Domain Names with DNSSEC Source: .my Domain Registry, MCMC Fig. 3.20 Domain Names with IPv6 DNS 2009 – 2012
107 IPR 2012 Shaping a Connected Future Extending IP Addressing Availability
As the number of Internet users worldwide increase, the Internet Protocol version 4 (IPv4) addresses currently available for use are running out. Today, IPv4 is running in parallel with the new Internet Protocol version 6 (IPv6) addressing. IPv4 will eventually be replaced by IPv6.
Development on IP IP Address Protocols IPv4 IPv6 The Internet Engineering Task Force (IETF) in 1998 Deployed 1981 1999 Address size 32 bit 128 bit stipulated IPv6 as the successor to IPv4. This serves Number of 4.3 ×10 9 3.4×10 38 to mitigate the IPv4 address depletion. addresses (4.3 billion) Source: Adapted from “ Managing Internet Number Resources”, http://www.nro.net/wp- IPv6 also improves the features and brings new content/uploads/2011/02/nro_manage_resources_factsheet.pdf, capabilities that are not available in IPv4. August 2012 Fig. 3.22 IP Address Protocols
IPv6 – Urgency of Adoption
In a historical event in February 2011, the Internet Assigned Numbers Authority (IANA) responsible for coordinating global IP, handed out the last IPv4 address blocks to the Regional Internet Registries. This translates that there is no more IPv4 addresses available for allocation at the top of the addressing hierarchy. Henceforth, this urges Internet Service Providers (ISP) and other Internet community to adopt IPv6 addressing.
Status and Development of IPv6 in Malaysia
The Malaysian government affirms the IPv6 Leading Agencies and Working Group importance in the deployment of IPv6 Agencies /Working Group Description and Remarks and is preparing the country for full National IPv6 Implementation The Committee chaired by MICC, focus on Monitoring Committee the planning of migration to IPv6 for IPv6 migration by 2015. Pushing for government agencies and the industry IPv6 readiness, the Government has Malaysian Administrative Lead and monitor government agencies established the National IPv6 Modernisation and Management for the IPv6 migration Implementation Monitoring Committee Planning Unit (MAMPU) to monitor status of IPv6 Malaysian Communications & Driving private sector and industry players implementation for public and private Multimedia Commission (MCMC) sectors. The members are MICC, Ministry of Science and Technology Focus on IPv6 Research and Development (MOSTI) MCMC, MAMPU and MOSTI. Source: Ministries, MCMC Fig. 3.23 IPv6 Leading Agencies and Working Group
MCMC Efforts to Drive IPv6 Adoption in Malaysia
In order to ensure that Malaysia's ICT industry is well positioned to take advantage of new opportunities in the IPv6 world, in 2012, the MCMC has established an IPv6 Action Plan. The plan comprises various activities including promotion and awareness, human capital development together with monitoring and compliance auditing for the ISPs.
108 IPR 2012 Shaping a Connected Future The initiatives will facilitate the private sector towards implementation of IPv6 before end of 2014.
MCMC Initiatives to Drive IPv6 Adoption in 2012
IPv6 Deployment Kit IPv6 Training for Human Capital Development
MCMC has distributed 2,000 posters and 500 mini booklets to Between February and March 2012, MCMC conducted IPv6 government agencies and industries in January 2012. certification training to 80 professional IT engineers. Participants were selected from ISPs and service providers as well as government The IPv6 Deployment Kit provides practical ways of deploying IPv6. It agencies. contains basic information for identifying and resolving issues on IPv6 adoption.
IPv6 Tunnel Broker
The IPv6 Tunnel Broker which has been available since December 2012 promotes and accelerates the adoption of IPv6 amongst Internet users.
This service allows users to connect to IPv6 Tunnel Broker by using a router or end host equipment such as a PC. The IPv6 Tunnel Broker service covers 6in4 tunnelling mechanism which tunnels IPv6 packets as IPv4 data. 6in4 tunnelling enables IPv6 connectivity over explicit IPv4 virtual links for tunnel based on IP protocol 41. Under this mechanism IPv6 packets are carried inside IPv4 packets.
The public are encouraged to utilise and experiment on the IPv6 Tunnel Broker service by registering at https://www.6xs.my/.
Source: MCMC Fig. 3.24 MCMC Initiatives to Drive IPv6 Adoption in 2012
109 IPR 2012 Shaping a Connected Future
MODULE 4: CONTENT SERVICES
110 IPR 2012 Shaping a Connected Future
Module Content
MODULE 4: CONTENT SERVICES 110 Malaysian Scenario Today and Precursors to Future 112 TV Broadcast Landscape 112 Digital Terrestrial TV Service Platform 113 Development of Broadcasters 113 FTA TV Broadcasters 114 Media Prima Bhd 114 Pay TV Broadcasters 116 ASTRO 116 IPTV 116 Cable TV 116 Radio Broadcasters 117 Advertising Expenditure (Adex) 119 Global Adex 119 Adex in Malaysia 120
111 IPR 2012 Shaping a Connected Future Malaysian Scenario Today and Precursors to Future
TV Broadcast Landscape
Today, the Malaysian TV delivery is getting increasingly non linear (see Figure 4.1). Linear TV in simple terms has scheduled content broadcast on a Free-To-Air (FTA) basis. The TV experience is changing for viewers, much the same as the development of the TV landscape. This is brought about by the existing FTA and satellite Pay TV broadcasters in efforts to leverage on the Internet and mobility. This is amidst competition from non traditional service providers like those in telecommunications and Over the Top (OTT) platform.
Malaysian Scenario Today and Precursors to Future
Opportunities Abound Content Explosion Multiscreen; Video over many things (Education & mCommerce) New advertising approaches New services (Live TV on the go, paid search, Paid Apps, Location based services) Real time interactivity Connected CE Increased revenue + Decreased cost Others
Requirements Reliable network Quality of service + experience Quality of customer service Value for money Copyright/privacy Security of network/delivery/data Monetisable business models Increased talents + competitiveness Trusted partners + partnerships Others Source: MCMC Fig. 4.1 Malaysian Scenario Today and Precursors to Future
TV is certainly going beyond traditional means and competition has increased, albeit at varying pace depending on the TV landscape development. In Malaysia, the precursors to nonlinearity are exerting some pressure. Already, there is higher speed Internet availability capable of carrying high quality videos compared to yesteryears.
In view of the changing TV broadcast landscape in Malaysia, traditional broadcasters have taken up the challenge to reap the opportunities that abound using their prime assets such as premium content, archive content and content delivery systems to their advantage. This includes learning new skills and acquiring new talents be it in content creation and aggregation as well as engaging the advertisers; procuring new packaging and delivery systems.
112 IPR 2012 Shaping a Connected Future Digital Terrestrial TV Service Platform
In 2012, the FTA broadcasters aligned and positioned themselves as content providers in preparation for the upcoming digital terrestrial TV service platform slated to begin service by the second half of 2014. The infrastructure for the digital terrestrial TV services would be built and operated by a separate independent entity. This approach effectively relieves the FTA broadcasters from having to incur high capital expenditure to build transmission networks.
On the digital terrestrial platform, FTA broadcasters are planning to launch more local TV channels that come with high definition services, interactivity and lite pay services such as video on demand (VOD), pay per time, pay per view, personal recording as well as the ability to switch to broadband services with a push of a button on the set top box. Hence, this reinforces their approach to attract more viewers or retain audience market share and attract more advertisers.
Development of Broadcasters
A visual brief of the services offered in leveraging on new delivery platforms, new services creation with partners and new content provision is shown in Figure 4.2. Note that provision of online content services is common across all the three main broadcasters. These are the FTA TV service providers, namely, Media Prima Group; the Government owned Radio Televisyen Malaysia (RTM) and the satellite Pay TV service provider namely Astro Malaysia Holdings Bhd (ASTRO).
Broadcasters in Malaysia – Development to 20 12 FTA and Online Satellite and Online Commercial Government Owned Commercial Media Prima Bhd Radio Televisyen Malaysia (RTM) ASTRO TV Radio Online TV Radio RTM Online #1 Pay TV Radio Free TV IPTV VOD 4 3 www. 2 main 35 Live Streaming 156 20 18 TV Triple play Catch Up channels stations tonton. channels stations TV1, TV2, TVi, channels, themed- and service and com.my My Klik, 68 are music 19 radio Pay Per Aifm Galaksi Muzik ASTRO- stations, stations View TV3 Hot FM TV3 TV1 Asyikfm 9 radio created 9 of which Movie ntv7 channels channel are its initially Minnalfm 8TV commercial available ntv7 Fly FM TV2 Muzikfm TV9 radio to IPTV Nasionalfm #3 8TV One FM TVi Kampus stations IPTV (RTM Klasik Nasional ASTRO TV9 digital TV Traxxfm Web Stream #2 (Education ERA fm Broadband station, (Muzikfm Muzik FM platform) MIX fm Melody FM launched available only Muzik Aktif Voice on Internet) hitz.fm in VOD 2011) MY FM including local Stadium Litefm and state Special Web ASTRO Sinar stations Access THR Raaga such as THR Gegar Orchestra RTM 50 years
Interactive #1 mystream.rtm.gov.my #2http://www.rtm.gov.my/galaksimuzik/ #3 Available over FM Terrestrial, DTH satellite TV, IPTV, mobile and Internet platforms
Source: Annual Reports; Websites; News Fig. 4.2 Broadcasters Companies in Malaysia – Development to 2012
113 IPR 2012 Shaping a Connected Future FTA TV Broadcasters
Media Prima Bhd
With four TV stations, Sistem Televisyen Malaysia Bhd or TV3, NatSeven TV Sdn Bhd (ntv7), Metropolitan TV Sdn Bhd (8TV) and Ch-9 Media Sdn Bhd (TV9), the Media Prima Group is better known as an integrated FTA TV service provider. The Group also has print media through its subsidiary The New Straits Times Press (Malaysia) Bhd, radio stations under Media Prima Radio Networks and an outdoor advertising arm, Big Tree Outdoor Sdn Bhd.
As digitalisation progresses in all three mediums of which Media Prima is involved, the approach of the Group is gleaned as working to leverage content and delivery mediums for monetising the synergy.
Media Prima TV Stations TV3 ntv7 8TV TV9 Year Launched 1984 1998* 2004 2006 Target Mass market skewed towards Malaysian urban households, Young urban Malaysian, Mass market appeal, Audience Malay audience 25-45 year old, children and Chinese and 15-29 year old skewed to young semi- Chinese markets English literate viewers urban and rural Malays Channel Maintained leadership position in Making mark through content Fascinate viewers by Started prime time slot Spotlight 28 years. Audience viewing share distribution and co-production showcasing hit TV series featuring light Islamic of more than 20% on FTA and pay activities. from local as well as Asia related programmes. TV**. and Hollywood. The first Chinese New Year Three new slots for Breakthrough drama ‘Nora Elena’ telemovie from ntv7, ’The Leverage a host of new prime time were was ranked the world number 4 Superb Match Makers’, media platforms. The introduced to engage for video streaming. station’s following on social young mass Malay welcomes opportunities for media platforms. 8TV viewers.
In January 2012, ‘Anugerah Juara content to be sold overseas. engages with a generation Lagu 26’ , a song contest show, of technologically adept In 2012, TV9’s returning registered a record breaking 6.5 audience. favourite programme, million total viewership on TV ‘Skrin Di 9’ , has been and online platform. This pushed reaching more than a the boundaries on social million viewers every engagement and interaction via week. its website.
Highlights on Channel synonymous with family, Brands targeting the Malaysian Links to event related Focus on Development real life, entertainment and news urban middle to high class; broadcast such as street entertainment, drama, content leaning towards cultural image products and lifestyle. dance community locally comedy and reality proximity. and internationally. genres for target Moving forward, ntv7 will audience. Network aired many popular continue its efforts to showcase prime time shows. This together more exciting shows and Aims at providing with its magazine programmes reaching out to a larger purposeful and signature entertainment and audience through more on- entertainment with a variety shows attracted millions ground happenings and events. combination of good of viewers. moral values.
*The acquisition of ntv7 by Media Prima was completed on 30 December 2005 **Nielsen Audience Measurement
Source: Media Prima Bhd Annual Reports, website and news reports Fig. 4.3 Media Prima TV Stations
114 IPR 2012 Shaping a Connected Future Media Prima TV Networks Advertising Revenue 2011 and 2012
Advertising Revenue 2011 Advertising Revenue 2012 RM (million) RM (million)
TV9 TV9 8TV 70.9 8TV 84.5 125.7 8% 115.3 9% 15% 13% ntv7 ntv7 TV3 TV3 104.5 117.3 546.4 585.5 12% 14% 63% 66%
Note: Revenue is based on gross revenue after discount
Source: Media Prima Bhd Fig. 4.4 Media Prima TV Networks Net Advertising Revenue 2011 and 2012
In 2012, Media Prima posted a total of RM891 million advertising revenue, a 3.5% growth compared to the previous year.
TV3 maintains a leadership position in term of advertising revenue and continues to produce strong revenue growth with the largest market share above 60%. Between 2011 and 2012, TV3 and TV9 increased its revenue by 7% and 19% respectively.
115 IPR 2012 Shaping a Connected Future Pay TV Broadcasters
ASTRO
ASTRO is the only satellite Direct-To-Home (DTH) Pay TV service provider in Malaysia. Since ASTRO started broadcast in September 1996, ASTRO has become a household name along with earlier service providers in FTA terrestrial broadcast.
ASTRO together with other partner service providers have started to enable creation of a more rich entertainment environment, leveraging on digitisation and online. In 2012, ASTRO launched free satellite Pay TV and entered a 10-year partnership with Maxis for ASTRO to be the IPTV content service provider.
IPTV
IPTV services are offered mostly in partnership, that is, in content procurement if the IPTV service providers are essentially a network service provider such as TM. In contrast, ASTRO with content assets has partnered with TIME to offer IPTV services over fibre network through set top boxes that can deliver DTH satellite Pay TV and online IPTV services under the brand name of ASTRO B.yond Services. In addition, ASTRO also introduced ASTRO On-The-Go in partnership with Maxis for content across online platform and mobile devices.
Among the major companies that have strategised to offer online video, or more specifically IPTV services are as listed in Figure 4.5.
IPTV Services in Malaysia ASTRO B.yond IPTV Services TM IPTV Services: Hypp TV • Offers broadband and TV • Service offered in package with broadband service under • Interactive satellite broadcast with options for high definition brand name UniFi. viewing, video on demand and personalised video recording. • The service comprises video on demand series, pay per view options and free Live TV channels as well as interactive In the Pipeline channels such as news headlines, games and social media platform. • YTL Communications Sdn Bhd IPTV using WiMAX network in quad • play service provision. Partnered with Hong Kong’s Now TV and Warner Bros in the fourth quarter 2012 providing exclusive TV content. • Surpassed 100 channels in 2012.
Source: Industry Fig. 4.5 IPTV Services in Malaysia
Cable TV
Asian Broadcasting Network Sdn Bhd began offering trials of its digital cable services in the second quarter of 2012 in selected areas in Klang Valley. The company offered access to a bouquet of 50 channels under the brand name ‘ABN Xcess’.
116 IPR 2012 Shaping a Connected Future Radio Broadcasters
Radio is complementary service to other media and has its own advantages of reaching audiences. One significant advantage is that listeners are able to listen to radio while working in office or travelling. Radio has become available in various ways and broaden the traditional radio audience beyond car and portable mode. Through diversification of stations today, radio has evolved from mass to niche market; catering to preferences and demographic characteristics such that listeners have access to the most up to date news and specific information.
In Malaysia, there are four major radio groups capturing the largest share of listenership namely ASTRO Radio, RTM, Media Prima Radio Networks and The Star Radio Group. Notably, government-owned RTM operates six radio national stations and 29 state or local radio stations.
Commercial Radio Stations in Malaysia Radio Broadcaster Station Maestra Broadcast Sdn Bhd ERA fm, MIX fm, Melody FM
Measat Radio Communications Sdn Bhd hitz.fm, MY FM, Litefm 1 Astro Radio Sdn Bhd Perfect Excellence Waves Sdn Bhd Sinar
Radio Lebuhraya THR Raaga, THR Gegar
Synchrosound Studios Sdn Bhd Hot FM Media Prima Radio 2 One FM Radio Sdn Bhd One FM Networks Malaysia Airports (Sepang) Sdn Bhd Fly FM
Star Rfm Sdn Bhd 988 FM, Red FM The Star Radio 3 Rimakmur Sdn Bhd Suria FM Group ISY Holdings Sdn Bhd Capital FM
4 - Institut Kefahaman Islam (Malaysia) IKIMfm
5 - Husa Network Sdn Bhd ManisFM
6 - Kristal Harta Sdn Bhd Cats FM
7 - Suara Johor Sdn Bhd Best 104 FM
8 - BFM Media Sdn Bhd BFM
9 - Pertubuhan Berita Nasional (BERNAMA) BERNAMA Radio24
10 - Copyright Laureate Sdn Bhd Pi Mai FM Source: MCMC Fig. 4.6 Commercial Radio Stations in Malaysia
117 IPR 2012 Shaping a Connected Future
Total Listenership ('000) 2011 - 2012
2011 2012 3,917 3,845 3,767 ASTRO Radio Media Prima The Star Radio Radio Networks Group 2,971 2,937 2,921 2,898 2,823 2,221 2,006 1,976 1,953 1,651 1,400 1,369 1,337 765 692 654 519 503 342 315 266 258 232 225 123
Sinar Era fm THR MY FM hitz.fm Mix fm Litefm Xfresh Melody Hot FM One FM Fly FM Suria 988 FM Red FM Fm FM FM
Note: Xfresh FM stopped service with effect from 13 July 2012; Melody FM is a new monitoring since 15 August 2012; Capital FM under Star Radio Group not available for figure
Source: The Nielsen Company Fig. 4.7 Total Listenership (‘000) 2011 – 2012
Figure 4.7 compares the listenership by commercial radio stations in 2011 and 2012. Sinar radio under ASTRO Radio is the most popular Malay radio station with almost four million listeners.
Radio Surveys Highlights 2010 – 2012 Highlights Description Less station switching November Malaysia continues to lead the Asia Pacific in average number of hours spent listening to 2012 radio, with one significant result, that is, higher station loyalty among listeners as a result of less station switching.
Malaysia leads Asia Pacific Region November With average time of 21 hours and 34 minutes per week, the highest compared to five 2011 other Asia Pacific markets.
3 distinct peaks Peak periods – morning, late afternoon and evening. Morning is the most popular time to tune into the radio for majority of listeners.
Social networking becoming more Social media usage by radio listeners grew by 35% between surveys in 2011. 59% of popular listeners aged between 15 and 24 years participated in social networking.
Largest audience in the past five May 2011 The average time spent of 24 hours and 54 minutes per week, attracted 2.31 million people years at any given 15 minutes time slot in March/April 2011.
Listening device Apart from at home or in car, listeners tune to ASTRO decoder (33%), mobile phone (23%), Internet (10%) and MP3/MP4 players (7%).
Radio adex hit more than RM400 End 2010 Radio adex grew 13% compared to previous year. million
Radio Audience Measurement May 2010 Survey period extended to four weeks (previously two weeks) providing deeper insights for survey period extended advertisers to reach target audience.
Source: Nielsen Radio Audience Measurement Survey conducted in 2010, 2011 and 2012; www. adoimagazine.com; www.asiamediajournal.com; www.brandequitymagazine.com; thestar.com.my; www.theedgemalaysia.com Fig. 4.8 Radio Surveys Highlights 2010 – 2012
118 IPR 2012 Shaping a Connected Future Advertising Expenditure (Adex)
Global Adex Global Advertising Expenditure by Region USD (billion) Global advertising expenditure increased by 3.3% for the year 2012 compared to the same World 497.3 period last year. Among the regions, Asia Rest of the World 9.5 Pacific and Latin America contributed the Middle East & North Africa 4.2 Latin America highest growths with 6.1% and 7.7% 38.0 Central & Eastern Europe 26.7 respectively. Asia/Pacific 140.2 Western Europe 106.8 North America also posted significant adex North America 171.9 growth at 4.1% in 2012, with growth for US 0 100 200 300 400 500 600 alone at 4.3%. Major events included the US Presidential election. Europe remained as the USD (billion) only region to see year on year decline with Source: Zenith Optimedia Western Europe at -2.2% resulting from the Fig. 4.9 Global Advertising Expenditure by Region USD (billion) Euro Zone crisis.
Global Advertising Expenditure by Medium USD (billion) As for global adex by medium, TV holds the largest share with 40.2% followed by newspapers (18.9%) and Internet (18.0%). The lowest share Outdoor of advertising medium is cinema with only 0.6% 32.3 Internet Newspapers 6.6% 88.6 93.2 or USD2.7 billion. 18.0% 18.9% Magazines 43.2 Cinema 8.8% Projection provided by Zenith Optimedia 2.7 0.6% predicted that global adex growth is expected to Television Radio 197.6 strengthen over the next three years, rising from 34.3 40.2% 7.0% 3.3% in 2012 to 4.1% in 2013 and 5.6% in 2015.
Source: Zenith Optimedia Fig. 4.10 Global Adex by Medium
119 IPR 2012 Shaping a Connected Future Adex in Malaysia
Even though back in year 2005 Malaysia only managed to secure RM4.6 billion in advertising expenditure, in 2009, Malaysia increased the spending to RM6.6 billion (more than 40% increase).
9 Adex in Malaysia 30 8 24.0 8.2 8.3 25 7 7.7 6 6.6 20 6.2 5 16.3 16.7 5 15 4
RM (billion) 3 10 Percentage (%) 2 6.5 6.5 5 1 0 1.0 0 2007 2008 2009 2010 2011 2012
Adex (RM billion) Adex (% Change)
Source: The Nielsen Company Fig. 4.11 Adex in Malaysia
For 2012, the overall media adex for Malaysia increased by 1% to RM8.3 billion in 2012, up from RM8.2 billion in 2011. For the record, Malaysia adex for Pay TV and magazines were included starting 2010 18 . To make it comparable to previous years, adex for Pay TV and magazines were excluded as in Figure 4.12.
Adex by Medium Medium 2010 2011 2012 RM (billion) RM (billion) RM (billion) Terrestrial TV 2.89 3.01 3.17 Pay TV 1.95 2.47 2.98 Newspapers 3.89 4.36 4.31 Magazines 0.15 0.15 0.15 Radio 0.41 0.43 0.45 Cinema 0.02 0.02 0.04 Outdoor 0.12 0.12 0.14 In-Store Media 0.12 0.14 0.14 Internet 0.05 0.06 0.03 Total 9.60 10.76 11.40 Source: The Nielsen Company Fig. 4.12 Adex by Medium
As for the yearly growth, in 2011 adex grew 12.08% with the value of RM10.76 billion and increased to RM11.4 billion in 2012 with 6.04%. The print medium such as newspapers is still the first advertising medium option, with 37.8% market share or RM4.3 billion in total adex for 2012. This is followed by FTA Television (27.8%, RM3.17 billion) and Pay TV (26.1%, RM2.9 billion).
18 Source: The Nielsen Company 120 IPR 2012 Shaping a Connected Future Adex Market Share 2010 – 2012 Internet
In-Store Media
Outdoor
Cinema
Radio
Magazines
Newspapers
Pay TV
Terrestrial TV
0 5 10 15 20 25 30 35 40 45 Terrestrial TV Pay TV Newspapers Magazines Radio Cinema Outdoor In-Store Media Internet 2012 27.8 26.1 37.8 1.3 3.9 0.3 1.2 1.3 0.3 2011 28 22.9 40.5 1.4 4 0.2 1.1 1.3 0.6 2010 30.1 20.3 40.5 1.6 4.3 0.2 1.2 1.3 0.5
Source: The Nielsen Company Fig. 4.13 Adex Market Share 2010 – 2012 (%)
Combined Pay TV and FTA TV adex totalling RM6.15 billion in 2012 constitute a market share of 54.1%. Meanwhile, newspaper adex market share is 37.8% at RM4.3 billion in 2012. This shows that TV still commands the adex pie vis-à-vis other medium.
For the year 2011, Internet adex recorded RM63.7 million. For the record, for the first half of 2012, Internet adex was RM28.2 million.
Top 10 Malaysia Adex by Categories Top 10 Malaysia Adex by Advertisers RM (million) RM (million) Rank Top 10 Categories 2011 2012 Rank Top 10 Advertisers 2011 2012 1 Government Institutions - Local 399.5 556.8 1 Unilever Malaysia 384.6 388.5 2 Mobile Line Services 362.7 351.2 2 Nestle 234.9 315.9 3 Face Care - Woman 314.6 310.6 3 Procter & Gamble 284.8 284.8 4 Dairy - Kids Growing Up Milk 234.9 238.6 4 Maxis Communication Bhd 137.6 258.9 5 Fast Food Centre 233.5 232.4 5 Prime Minister Department 34.9 200.0 6 Tonic & Vitamin 183.7 221.6 6 Glaxo Smithkline 248.9 163.9 7 Hair Shampoo & Conditioner 197.7 199.5 7 DiGi Telecommunication Sdn Bhd 156.5 149.6 8 University 173.5 196.8 8 Samsung Malaysia Electronics (SME) Sdn Bhd 60.0 149.0 9 Cleaning Agent - Laundry 186.0 195.4 9 Canon Marketing (M) Sdn Bhd 181.7 143.8 10 Photography 224.3 181.1 10 Colgate - Palmolive (M) Sdn Bhd 126.2 138.1 Source: The Nielsen Company Source: The Nielsen Company Fig. 4.14 Top 10 Malaysia Advertising Spend by Categories RM (million) Fig. 4.15 Top 10 Malaysia Advertising Spend by Advertisers RM (million)
Based on Malaysia adex by categories, fast moving consumer products giants such as Unilever, Nestle and Procter & Gamble spent the most with total adex of RM388.5 million, RM315.9 million and RM284.8 million respectively. Two notable entries into the top 10 advertisers list for 2012 were the Prime Minister’s Department (RM200 million) and Samsung Malaysia Electronics (RM149 million). For mobile services, DiGi maintains its position in the top 10 list with adex of RM149.6 million.
121 IPR 2012 Shaping a Connected Future
MODULE 5: POSTAL AND COURIER
SERVICES
122 IPR 2012 Shaping a Connected Future
Module Content
MODULE 5: POSTAL AND COURIER SERVICES 122 Postal Services 124 Landscape of Change and Advancement 124 Modernisation of Postal Services Over the Years 124 Regulation of Postal Services 125 Business Units Services Description 126 Development of Pos Malaysia 126 Business in Strategic Alliance 126 Postal Operations through ICT Innovations 126 Framework of Postal Services Act 2012 127 International Participation and Development 128 UPU-Membership 128 International Development 128 Domain Name .post 129 Standards in Postal Services 129 Rural Postal Development Programme in Malaysia 130 Philately 131 Courier Services 132 Strategic Goals 132 Industry Licensing and Revenue Performance 132 Major Licenced Courier Companies in Malaysia 133
123 IPR 2012 Shaping a Connected Future Postal Services
Landscape of Change and Advancement
The universal postal service provider in Malaysia is Pos Malaysia Bhd, which is a public listed company on Bursa Malaysia. The postal services over the years are cited as one with much change. This is especially so with the emergence and development of digitalisation and ease of an electronic delivery network as provided by the Internet.
Change is also rapid in the modernisation of physical postal delivery services enabled by online and wireless. Over the years there has incorporated automation, fleet and logistics management, post office branch extensions, 24 hour services, new kiosks employment, quality of service standards and many more.
Modernisation of Postal Services Over the Years Urban and Rural
Manual and Automation
Retail /One Stop/ Quality Focus
Source: Pictures Adapted from Pos Malaysia Annual Report, MCMC Fig. 5.1 Modernisation of Postal Services Over the Years
124 IPR 2012 Shaping a Connected Future Regulation of Postal Services
Postal services are regulated by the MCMC under the Postal Services Act 1991. MCMC’s key functions include ensuring the provision of universal postal service at affordable price, promoting competition and protecting the interest of users in terms of prices, quality, and continuity. This includes regulation of postal rates, fees and commission; monitoring performance of postal financial services and the issuance of postage stamp themes.
Development from the regulatory perspective involves a service performance standard for domestic letter and parcel service for new term for the period 2011 to 2014, which was implemented in January 2011. This new standards demonstrate Pos Malaysia commitment to continuously provide quality service to the public whilst fulfilling universal service obligations.
Performance Standards for Domestic Letter Service Objective Year 2011 Year 2012 Year 2013 Year 2014 Year 2015 Speed 89.0% 89.0% 89.0% 89.0% 89.0% Reliability 99.93% 99.94% 99.95% 99.96% 99.97% Source: MCMC Fig. 5.2 Performance Standards for Domestic Letter Service
Delivery Standards for Domestic Letter Category Peninsular Malaysia Sabah an d Sarawak Intra-State Up to D+2 Up to D+3 Inter-State Up to D+3 Up to D+4 Source: MCMC Fig 5.3 Delivery Standards for Domestic Letter
Performance Standards for Domestic Parcel Service Objective Year 2011 Year 2012 Year 2013 Year 2014 Year 2015 Speed Target Levels 82.0% 82.0% 82.0% 82.0% Reliability Target Levels 99.94% 99.95% 99.96% 99.97% Source: MCMC Fig. 5.4 Performance Standards for Domestic Parcel Service
Delivery Standards for Domestic Parcel Category Peninsular Malaysia Sabah an d Sarawak Local Delivery Up to D+3 Up to D+3 Intra-State Up to D+4 Up to D+5 National Delivery Inter-State Up to D+5 Up to D+7 Note: ‘D’ means the day when the act of posting takes place before the posting cut off time on the working day. The numeral after D refers to the number of working day after the posting day to complete the deliver. Remote areas are not subject to delivery standards as shown in the table.
Source: MCMC Fig. 5.5 Delivery Standards for Domestic Parcel
In accordance with postal services standard stipulated in Performance Standard for Postal Services (Domestic Letter) 2011 – 2012, Pos Malaysia monitors the delivery of domestic letter via a standard Test Letter Monitoring System (TLMS).
125 IPR 2012 Shaping a Connected Future The monitoring exercise for Pos Malaysia domestic mail performance for year 2011 yielded the result as in Figure 5.6.
Domestic Mail Performance 2011 Standard Achievement National Average Speed 87.87% National Average Reliability 99.42% Source: MCMC Fig. 5.6 Domestic Mail Performance 2011
Domestic Parcel Performance 2011 Standard Achievement National Average Speed 82.20% National Average Reliability 99.95% Source: MCMC Fig. 5.7 Domestic Parcel Performance 2011
Business Units Services Description
Postal services in Malaysia are managed based on strategic business units in the core average postal. These are core services, that is, Pos Mel, Courier and retail product services as in Figure 5.8.
Pos Mel PosLaju Courier PosNiaga Retail • Mail provision of basic mail services for • Courier solutions by sea, air and land to • Over-the-counter services for payment corporate and individual customers and national and international destinations. of bills and certain financial products customised solutions such as Mailroom and services. Management and Direct Mail.
Source: Pos Malaysia Bhd Fig. 5.8 Business Units Services Description
Development of Pos Malaysia
Business in Strategic Alliance
The successful divestment of Khazanah Nasional Bhd 32.2% equity stake in Pos Malaysia to DRB-HICOM Bhd (DRB-HICOM) 19 on 1 July 2011 marked new beginnings for the postal services journey going forward. The resolution by Khazanah Nasional Bhd 20 to divest the stake was announced by the Prime Minister on 30 March 2010. This is part of the plans to build national competencies while encouraging investment and shareholding by private sector.
Postal Operations through ICT Innovations
In alignment with a connected world and to leverage synergies from this new delivery platform, Pos Malaysia has launched their new online shopping portal called PostMe.com.my. The provision of this service taps the avenues of availability and accessibility of Malaysian users to eCommerce and also caters to encouraging young entrepreneurship.
19 DRB-HICOM Bhd is one of Malaysian companies listed on the Main Market of Bursa Malaysia Securities Bhd 20 Khazanah Nasional Bhd is the Government of Malaysia's strategic investment fund 126 IPR 2012 Shaping a Connected Future
PostMe.com.my is open 24 hours every day. The online shopping service offers a variety of products that range from apparels, cosmetics, toys to appliances. Payment can be made through credit cards from local and international banks. The eDeduction payment service from savings accounts is also available and of course, physical payment through post office branches. Delivery of items purchased is within five to seven working days.
Five Year Strategic Plan Towards building a sustainable Pos Malaysia, the group is committed to invest in resources and people for transformation. Such planned transformation is effected through a five-year Strategic Plan 2013 – 2017 that is projected to yield double digit growth revenue each year and significantly improve profitability by 2017.
The Strategic Plan involves fundamentally redefining core businesses from the product centric focus that previously encompass mail, courier and retail businesses to four new solutions driven approach in the following business clusters:
1. Communications and Distribution Solutions 2. One-Stop Solutions 3. Supply Chain Solutions
Source: Pos Malaysia Annual Report 4. Digital Solutions Fig. 5.9 Five Year Strategic Plan
Framework of Postal Services Act 2012 (commencement on 1 April 2013 to replace Postal Services Act 1991)
Source: MCMC Fig. 5.10 Framework of Postal Service Act 2012
127 IPR 2012 Shaping a Connected Future International Participation and Development
UPU-Membership
On the international front, Pos Malaysia was elected as a Postal Operations Council (POC) member during the Universal Postal Union (UPU) Congress in Doha, Qatar held on 10 October 2012. Malaysia garnered 105 votes, placing it at 28th position amongst 60 competing countries.
The POC, which is regarded as the technical and operational mind of the UPU, consists of 40 member countries elected during the UPU Congress. It deals with the operational, economic and commercial aspects of the postal business. The body also makes recommendations to member countries on standards for technological, operational or other processes within its competence where uniform practices are essential.
International Development 21
The trend of postal services internationally is changing to include more collaborative and integrative aspects of operations. Quality of service was reiterated at the 2012 Congress wherein members committed to international priority letter post items being delivered by the J+5 standard or five working days after posting should reach 85% in 2013.
At the 2012 Universal Postal Congress, UPU member countries adopted mandatory minimum standards for mail security for the first time. The next cycle of UPU work for 2014 – 2018 is seen to involve standard electronic messaging in an integrated network of partners involving postal, aviation and customs for speeding customs clearance in cross border delivery. The infrastructure for such information sharing in international postal standards does have prerequisite in having an operational IT system linking the key partners. Furthermore, such development is envisaged to be woven into the business processes involved in clearing postal items.
Such developments stem from the increasing use of eCommerce and the need to capture opportunities in this area as postal services diversifies and changes with time. The postal services today see customers sending fewer traditional letters while there is a rise in volumes of parcels (each up to 30kg) and small packages (up to 2kg) being processed in UPU’s network. At the same time, regulatory constraints and tighter security in an increasingly globalised world are having an impact on the postal supply chain, sometimes slowing down delivery.
Specifically, the UPU is looking into standardisation of information delivery for cross border customs clearance. In order to shorten processing time, UPU partners are working with Customs to align such that timely information on the items delivered are available for requisite clearance on cross border deliveries. Postal services are working with Customs to do their job as quickly as possible so that postal customers can receive their mail as soon as possible.
The communication of information accompanying delivery for cross border process is envisaged to be a standard message that could be used for this purpose on a universal basis. This is expected as an electronic message, which eventually is mandatory for all 192 UPU member
21 Source: “Border Crossings” from Union Postale. 128 IPR 2012 Shaping a Connected Future countries. UPU is also focusing on a project to improve the express mail services through development of an interoperable IT system or Customs Declaration System that allows information sharing between both Posts and Customs. The first version is said to be ready for roll out in 2013.
Furthermore, the standard message can be used for a multiplicity or purpose. However, the key is in the customer as clearly the information needs to be accurate and correctly entered at the point of origin. In addition, there is the customer endorsement for post to share information to other parties in the supply chain.
Domain Name .post
Notably .post was launched on 10 October 2012 during the Doha Congress. MCMC believes that .post will contribute to the nation in the long run with the development of postal synergy in physical, electronic and financial dimensions in Malaysia. This is a secure global electronic postal platform which was approved by ICANN in 2009.
Standards in Postal Services
Pos Malaysia continues to strengthen its international network by focusing on quality of service and operational efficiencies. A highlight of this stance is Pos Malaysia integration of S42 22 standards into the domestic mail sorting system which enables faster processing of international mail. This improves the quality of mail across the globe.
Towards this end, Pos Malaysia has been awarded a Certificate of Recognition for successfully participating in the regional addressing project conducted by UPU. With this award, Malaysia joined 17 other countries in the world in using worldwide S42 address formatting standards.
Pos Malaysia Expedited Mail Service (EMS) was also awarded Gold level certification for their EMS quality of service. This is also an international accreditation wherein the service performance of international inbound EMS items across the country was monitored and measured by UPU and audited by an international audit body. The EMS Gold certification is indicated as a testament to the strength and efficiency of Malaysia PosLaju domestic network in supporting international courier service.
22 Addressing formatting standards conducted by UPU. 129 IPR 2012 Shaping a Connected Future
Rural Postal Development Programme in Malaysia
Development Policy
The Minister of Information, Communications and Culture launched the Postal Transformation Programme for Sabah and Sarawak (PTPSS) in Miri, Sarawak in May 2010. The PTPSS (2010 – 2012) is a two year public-private initiative through MCMC’s funding of RM10 million.
Notably the objectives are to improve the postal service in rural areas of Sabah dan Sarawak.
Source: MCMC Fig. 5.11 Launching of Postal Transformation Programme for Sabah and Sarawak
The National Postal Strategy (2010 – 2014) sets two key universal service performance indicators to be achieved by end 2014. These indicators are as follows:
(i) Mail delivery service to the home (95% of the total addresses); and (ii) Postal outlet per population ratio (15,000 people per postal outlet).
The Outcomes
By end of 2012, Pos Malaysia has created more than 450 new rural postal routes in Sabah and Sarawak through the appointment of 450 Posmen Komuniti and 600 Wakil Pos Komuniti . The initiative benefits more than a million people and has generated additional income to more than 1,000 rural folks.
Pos Malaysia has deployed 10 units of Pos-On-Wheels (POW) equipped with a modern communication technology such as VSAT to serve the rural communities in 70 villages in Sabah and Sarawak. Rural communities who normally have to travel more than 10 km to a nearby post office to pay bills, conduct ASN/ASB 23 transactions or posting a mail or a parcel have greatly benefitted from the convenience provided by the POW.
Source: MCMC Fig. 5.12 Posmen Komuniti Delivering Mail
23 An investment fund in Malaysia aimed to generate reasonable level of income distribution and capital appreciation to the unit holders through a diversified portfolio of investments. 130 IPR 2012 Shaping a Connected Future Philately
The issuance of stamps is regulated and controlled by the MCMC. The issuance of stamps in any year averaged about 16 new issues a year. In 2012, there were 17 stamp issued. Figures 5.11 and 5.12 show the stamp issuance and themes in 2012 respectively.
Stamp Issuance 2006 – 2012 20 17 17 17 17 16 16 15 14
10
No. of StampIssuance 5
0 2006 2007 2008 2009 2010 2011 2012
Source: Pos Malaysia Bhd Fig. 5.13 Stamp Issuance 2006 – 2012
Malaysian Stamp Themes 2012 Date of Issue Legacy of the Loom 12 January Yes To Life, No To Drugs 27 February Malaysian Antarctic Research Programme 8 March Underwater Life 21 March Installation of 14th DYMM SPBYDP Agong 11 April Aromatic Plants 24 May World Gas Conference 2012 4 June Traditional Livelihood 21 June Second Series of Malaysian Currency 16 July Unity Series II (Malaysia Day) 30 August Diamond Jubilee of Queen Elizabeth II 13 September Malaysian Festivals Series 2 27 September 750 Years Melaka 7 October Postman's Uniform 22 October SetemKu 5 November Children's Hobbies (BoBoi Boy) 19 November Postal History of Kedah 20 December Source: Pos Malaysia Bhd Fig. 5.14 Malaysian Stamp Themes 2012
131 IPR 2012 Shaping a Connected Future Courier Services
Strategic Goals
In 2012, foreign equity ownership of courier services companies have been liberalised to 100% beginning 1 January 2012. This is to attract new players and investment in the country. Furthermore, there was the implementation of Courier Industry Development Plan 2012 – 2014 to increase level of service in the industry. Ultimately, this is to make Malaysia a courier hub for the region.
Strategic Goals Strategic Role To create modern courier service industry that facilitates the country’s ability to compete in the global market. Economic Goal • Courier industry to grow 2% faster than the national GDP (3 years’ average). • Courier volume handling of more than 200 million items by end of 2014. • New job increase by 3,000 by end of 2014. Quality Goal • MCMC courier challenge of more than 80% by end of 2014 (current level: 69%). • Actual performance D+1 is more than 90% (self measured via track and trace system). Access Goal • Footprint of more than 93% of populated areas by end of 2014 (current level: 91%). • Number of new outlets to increase by 100 by end of 2014. Technology Goal • All licenced courier service providers (class A and B) provide track and trace features by end 2014. • At least 8 automated courier hubs by end of 2014. Source: MCMC Fig. 5.15 Strategic Goals
Industry Licensing and Revenue Performance
The courier service industry generated revenue of an estimated RM2.03 billion for the year 2011. This is the first time that the courier industry surpassed the RM2 billion mark in revenue.
As at end of 2012, there were 105 licensees compared with 108 in 2011.
No. of Courier Licences Issued 117 115 114 114 113 120 110 112 109 112 8 105 108 105 6 100 6.7 4 80 3.6 3.7 2 1.7 1.8 60 0 -1.8 -2 Growth(%) 40 -2.8 -3.6 -4 No. of CourierLicences -4.4 20 -6 -6 -7.1 0 -8 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
No. of Courier Licences Growth
Source: MCMC Fig. 5.16 No. of Courier Licences Issued 132 IPR 2012 Shaping a Connected Future Licenced courier service companies in Malaysia include both local and multinational foreign companies. The major companies for 2011 in Malaysia are shown in Figure 5.17. Noteworthy is that the top 15 companies generate nearly 99% of the courier service industry revenue.
Major Licen ced Courier Companies in Malaysia Foreign Companies Local Companies
Federal Express Services (M) Sdn Bhd (FedEx) PosLaju (Pos Malaysia Bhd) DHL Express (Malaysia) Sdn Bhd (DHL) City Link Express (M) Sdn Bhd (City Link) United Parcel Service (M) Sdn Bhd (UPS) GD Express Sdn Bhd (GD Express) TNT Express Worldwide (M) Sdn Bhd (TNT) Nationwide Express Courier Services Bhd (Nationwide) Yamato Transport (M) Sdn Bhd (Yamato) Skynet Express (M) Sdn Bhd (Skynet) Aramex (M) Sdn Bhd (Aramax) ABX Express (M) Sdn Bhd (ABX Express) Overseas Courier Service (M) Sdn Bhd Secure Express Services Sdn Bhd (Secure Express) Airpak Express (M) Sdn Bhd (Airpak Express) Source: MCMC Fig. 5.17 Licenced Courier Companies in Malaysia
Top 10 Courier Providers Revenue Market Share 2011
TNT PosLaju City Link 7% 12% 6% GD Express 5% Nationwide UPS 4% 15% Skynet 2%
FedEx DHL 24% 23% ABX 2%
Source: Companies Annual Report Fig. 5.18 Top 10 Courier Providers Revenue Market Share 2011
The courier market is considered a mature market in Malaysia where there is intense competition in the provision of services. The growing Malaysian markets in all aspects of the economy over the last decade, which has translated into relatively steady GDP growth rates, have consistently buoyed the courier business as well.
Moreover, advancing technology in logistics management and various related developments such as introduction of rugged handheld devices for use in this service has generated cost savings and operational efficiencies. Such developments also augur well for increasing demand from this sector for more networked services, especially wireless connections and devices.
133 IPR 2012 Shaping a Connected Future Over the last 10 years, revenue from the courier business has almost cons istently been on the uptrend. Figure 5.19 shows this consistent trend with the exception of 2008 – 2009 when Malaysian economy posted negative growth due to impact from the global financial crisis in 2008 – 2009. The courier market recovery thereafter was considered remarkable in line with Malaysian economy rebound in 2010 and sustained growth into the next year.
Total Revenue Top 10 Courier Providers 2001-2011 2,500 25 19.5 18.0 20 2,000 16.5 16.8 15 1,500 10.0 2,030 1,625 1,737 10 1,550 1,511 1,491 2.8 1,000 1.8 1,297 5
1,049 4.9 Growth(%) RM (million) 954 0 1,079 500 1,099 -1.3 -5 -7.0 0 -10 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total Revenue Growth
Source: Industry, MCMC Fig. 5.19 Total Revenue Top 10 Courier Providers 2001 – 2011
134 IPR 2012 Shaping a Connected Future
MODULE 6: STRATEGIC TRADE ACT
135 IPR 2012 Shaping a Connected Future
Module Content
MODULE 6: STRATEGIC TRADE ACT 135 Strategic Trade Act 2010 137 MCMC Licensing under Strategic Trade Act 2010 137 Malaysia and the Strategic Trade Act 137 Implementation and Enforcement 138 STA Framework 139 Strategic Items 140 Online Applications 140 Permits and STA Applications in 2012 140 Categories of Permits 141
136 IPR 2012 Shaping a Connected Future Strategic Trade Act 2010
In February 2012, the MCMC undertook the responsibility of permit issuance under the Strategic Trade Act from the Strategic Trade Secretariat at the Ministry of International Trade and Industry. The MCMC is also tasked with Enforcement under this Act along with other officers from Customs, Police and the Malaysian Maritime Enforcement Agency.
MCMC Licensing under Strategic Trade Act 2010
Malaysia and the Strategic Trade Act
In line with Malaysia’s international Control obligation pursuant to the United Nation Security Council Resolution 1540, the Malaysian Parliament passed the Bring in Other Brokering Export Transhipment Strategic Trade Act 2010 [ Act 708 ] (STA transit activities 2010) on 6 May 2010. The STA 2010 came into force on 1 January 2011. Goods Strategic Items Technolog y The Act provides for the legal and regulatory controls over the export, Facilitate Design, Development, transhipment, transit and brokering of Production strategic items, including arms and related materials. Also included are other Weapon of Mass activities that will or may facilitate the Destruction (WMD) & Delivery Systems design, development and production of Weapons of Mass Destruction (WMD) Source: STA 2010 and their delivery systems and other Fig. 6.1 Strategic Trade Act 2010 (STA 2010) related matters.
There are various benefits of this Act to the country. These are in terms of:
• Enhancing Malaysia‘s image and building confidence among foreign investors to invest in Malaysia;
• Facilitating and managing the exports of high technology goods and components from Malaysia to other countries;
• Protecting Malaysia and Malaysian exporters from being exploited by proliferators and those that profit from their activities without compromising legitimate trade in the strategic items; and
• Promoting Malaysia as a safe country to trade with.
Compliance with this international obligation will also enable Malaysia to contribute to the maintenance of international peace and security by combating the proliferation of WMD.
137 IPR 2012 Shaping a Connected Future Implementation and Enforcement
To enforce and implement the STA 2010, the following subsidiary legislations were enacted:
• The Strategic Trade Regulations 2010; • The Strategic Trade (United Nations Security Council Resolutions) Regulations 2010; • The Strategic Trade (Restricted End users and Prohibited End users) Order 2010; and • The Strategic Trade (Strategic Items) Order 2010.
Strategic Trade Act 2010
Consist of Six Parts:
□ Part I – Preliminary □ Part II – Appointment and powers of Strategic Trade Controller
□ Part III – Control of strategic items, unlisted items and restricted activities
□ Part IV – Permit and registration
□ Part V – Enforcement
□ Part VI – General
Source: STA 2010 Fig. 6.2 Strategic Trade Act 2010
Regulation and Orders
STA 2010
Strategic Trade (Strategic Items) Strategic Trade Regulations Order 2010 2010
Prescribes : Strategic Trade (Restricted End Users and Prohibited End Users) Order 2010 Forms Procedures
Any matter, including Payable fees enforcement
Source: STA 2010 Fig. 6.3 Regulations and Orders
138 IPR 2012 Shaping a Connected Future STA Framework
As a comprehensive legislation on export controls, the provisions of the STA 2010 have important implications for regional and global export controls and compliance. The creation of a licensing framework that regulates the export and transit of strategic items is representative of the Government’s efforts to prevent Malaysian exporters from being used as a channel for supplying illegal strategic items and curb the proliferation of WMD.
For this reason, STA 2010 applies to any person who is engaged in the activities of export, transhipment, bringing into transit or brokering of strategic items such as exporters, traders, manufacturers, brokers and others who have ownership of the strategic items when exported. This includes activities of a person who either on his own behalf or acting as an agent on behalf of another person is directly involved in the negotiation, purchase, financing, conveying, selling and supply of such items.
A Strategic Trade Controller has been appointed by the Minister in charge of International Trade and Industry (MITI) to oversee and act as the focal point for the administration of the STA 2010. To assist the Strategic Trade Controller in the performance of his duties, the MCMC together with the relevant agencies are designated as the licensing and enforcement authorities under STA 2010.
Effectively, MCMC has dual function under the STA, which is licensing or permit issue in reference to export, transit and transhipment for dual use items and the function of enforcement. The MCMC functions including outreach sessions are carried out in collaboration with the Strategic Trade Act Secretariat (STS) under MITI and other designated agencies. MCMC is also a member of the Strategic Trade Coordinating Committee (STAC) chaired by the Strategic Trade Controller. Two MCMC officers were placed at STS to receive training on the STA work scope, implementation tasks and permit processing until November 2011.
Partner Agencies
Licensing Ministry/Agencies
Strategic Trade Secretariat, Malaysian Communications and Atomic Energy Licensing Board Pharmaceutical Services Division, MITI Multimedia Commission (MCMC) (AELB) Ministry of Health
Enforcement Agencies
Other officers specified by the Controller
Royal Malaysian Royal Malaysian Malaysian Maritime Malaysian Communications and Customs Police Enforcement Agency Multimedia Commission (MCMC)
Source: STA 2010, Various Agencies Fig. 6.4 Partner Agencies
139 IPR 2012 Shaping a Connected Future Strategic Items
With effect from 16 February 2012, MCMC commenced the full operations of implementing the STA and began processing applications for permits for strategic items specifically under MCMC purview which was previously performed by the Strategic Controller’s office.
The categories of strategic items that are within the ambit of MCMC licensing powers as specified by STA 2010 are:
i. Category 4 – Computers ; ii. Category 5 – Telecommunications and information security; and iii. Non-tangible items including technology transfer.
STA 2010: Strategic Items
Source: STA 2010 Fig. 6.5 STA 2010: Strategic Items
Online Applications
Effective 1 July 2011, online permits applications were available along with compulsory self declaration for strategic items or non-strategic items concerned. As a licensing agency, the MCMC has to approve applications for permit within five working days upon complete documentation submission from the exporters.
Permits and STA Applications in 2012
Since the MCMC took over responsibility of permit issuance from the Strategic Trade Secretariat (STS) at MITI in February 2012, a total of 704 permit applications at end December 2012 were received. Out of this, 600 applications were approved. In terms of STA applications, as of 31 December 2012, a total of 630 applications were approved.
140 IPR 2012 Shaping a Connected Future Process Flows on Licensing
Permit Registration Process Flow Permit Application
DNT Registration for User ID and Password One Single System www.dagangnet.com
Get User ID and Password Pre-registration STA Registration http://www.mytradelink.gov.my Permit Application
Key -in information Single/ Multiple-use/ Bulk/ Special Permit Submit Application
Approved by MITI Rejected
Get Digital Signature Token from DNT Approved
Activation of Digital Signature Customs Applicant Permit Application
Source: MITI Source: MCMC Fig. 6.6 Permit Registration Process Flow Fig 6.7 Permit Application
Categories of Permits
The activities of export, transhipment, transit and brokering of strategic items would require permit/broker certificate under the STA 2010.
Categories of Permits
Source: STA 2010 Fig. 6.8 Categories of Permits
141 IPR 2012 Shaping a Connected Future
MODULE 7: GOING FURTHER IN
CONNECTIONS – AN OUTLOOK
142 IPR 2012 Shaping a Connected Future
Module Content
MODULE 7: GOING FURTHER IN CONNECTIONS – AN OUTLOOK 142 Malaysian Economy Supporting Investments 144 C&M Industry Infrastructure and Access 144 Improving Infrastructure Reach 144 Cross Channel in Accelerating Networked Services and Content 145 Reaping Opportunities by Working Together 145 Regulatory Development 145 Market Development 146 Reinforcing Efforts in Communications Services Provision 146
143 IPR 2012 Shaping a Connected Future Malaysian Economy Supporting Investments
While international economy proves to be cautiously optimistic, the Malaysia economy remains relatively positive for investments and growth. The Malaysia economy is expected to expand between 5% – 6% in 2013. Along with this, the C&M industry is expected to continue its investment plans, for example, for HSBB infrastructure both wired and wireless access and accordingly nurturing necessary capability in services, content and applications development.
For such success, we need to have network connectivity that is available, accessible and reliable. Thus, there is a need for building proper foundation when expanding the communications infrastructure including related information technology systems and software solutions. Of utmost importance is to build a foundation for a connected future and shaping it in a way that it facilitates sustained growth into the future. This is especially critical for the C&M industry as communications services is a pervasive enabler to the growth of other economic sectors. Connected services support delivered over an optimum operating network can pave the nation onwards to better opportunities for reaping financial as well as quality lifestyle benefits.
C&M Industry Infrastructure and Access
Improving Infrastructure Reach
As indicated in the Tenth Malaysia Plan (2011 – 2015), a pervasive broadband network and usage can extend business boundaries from local to international markets. Network advancements should indeed be delivering communications services increasingly in real time, which allows for new opportunities in various types of services provision. Hence, supply of next generation infrastructure should be timely to meet the demand for higher bandwidth over the coming years.
The C&M industry in boldly carrying across Capacity and Demand From Next Generation Infrastructure the enabling factor of high speed broadband connection for all is in step with national growth aspirations. Such timeliness opens up opportunities for all – corporate or individual users as well as industry stakeholders.
To ensure supply readiness, in 2012, the MCMC has allocated spectrum 4G-LTE high speed wireless broadband in the 2.6GHz spectrum band. Caveats to this are infrastructure sharing which is a must among the service providers, along with necessary cost based pricing. The minimum population coverage expected from service providers is 10% by 2013, with increments Source: NKEA CCI of 10% each year to reach 50% by 2017. Fig. 7.1 Trends in C&M Industry Malaysia
144 IPR 2012 Shaping a Connected Future Peak data rates would range from 86 – 73Mbps depending on spectrum bandwidth. Specifically, average data rate based on 10MHz bandwidth is 16.7Mbps while on the 20MHz bandwidth, the average data rate is 33.4Mbps
With this extent of speed in mobile data delivery, users in Malaysia can expect many new services including high definition video streaming along with real time applications using their mobile and consumer electronic devices. Businesses will benefit from the higher capacity to deliver desired content and applications service, improve operational management and many other beneficial functions for industry growth.
With high speed fixed and mobile broadband capacities accelerated as such, the Malaysian networked services scene can be further transformed to include new content and application services making use of true mobility advantages such as connected car and telematics platforms; connected healthcare such as remote patient monitoring and community eHealthcare; connected homes; businesses making full use of sensor networks and many more.
With broadband penetration rate achieved through both wired and wireless services connections, the nation is also working onwards nevertheless to expand coverage in rural areas as well and further improvement of service quality nationwide. Again the approach is that in areas where fixed infrastructure is lacking, wireless broadband 4G-LTE network can also provide necessary high capacity coverage.
In Malaysia, the approach is that both supply and demand issues are being addressed in communications service and also providing the critical supporting enabler to propel economic growth. The implementation of Digital Lifestyle Malaysia in selected focus areas is expected to be initiated in 2013 to take advantage of these new services complemented by high capacity wireless broadband access. The implementation is expected to create information sharing, collaboration, interoperability and seamless experience for all anywhere in the city or defined geographic area or unit and later to all parts of the country.
Cross Channel in Accelerating Networked Services and Content
Reaping Opportunities by Working Together
Regulatory Development
With the newest spectrum allocation to start off implementation of high capacity wireless broadband network to complement the fixed broadband infrastructure, the regulatory housekeeping also needs to be enhanced in areas of access, transparency and governance. Industry capacity building in services provision in 2013 also encompasses the implementation of accounting separation to enable licensee operational transparency.
In 2012, the MCMC has completed a cost study and has revised access price caps in the Mandatory Standards on Access Pricing to be effective from 2013 till 2015 to reflect the changing industry trend in costs in regulated services provision. In 2013, there are expected preparations to review facilities and services which may be included in the Access List. The MCMC will continue to work closely with the industry to ensure smooth execution of the Accounting Separation Guidelines over 2013 and into 2014. 145 IPR 2012 Shaping a Connected Future Market Development
With revenue generating capabilities built over the years, the latest technologies and services introduced in developed countries were able to be brought early to Malaysia shores. Prices continue to remain competitive. This ensures more digital lifestyle gadgets and devices featuring Internet connectivity including TV and games console. 2013 is expected to see more such offerings and sophistication in the devices and services.
With platform readiness and availability, the C&M industry is ready to have intra – industry collaboration and as needs be inter – industries mode to perfect a networked service. Examples are many as in content delivery, video conferencing and telepresence, eCounter, ePayment, support in healthcare, retail and other connected services.
Over the last two years, content producers or broadcasters have created various types of content for multiplatform delivery, that is, over online and mobile networks as well. There is emergence of content delivery networks for various purposes as the service providers and content producers collaborate in their efforts to leverage on next generation infrastructure and services.
The year 2012 saw implementations of such strategy by major broadcasters based on agreements signed with other service providers – wired and wireless. The year 2013 is expected to see further such collaboration and integration in services provision.
Reinforcing Efforts in Communications Services Provision
The synergy is tremendous in leveraging digital content production and delivery in its myriad forms. This is not only in entertainment, but also in supporting content and applications delivery for education, corporate training, industrial design, supply chain management purposes – just to name a few. The value add in digital content allows for customisation of content to suit various preferences of end users.
There is also more advanced high definition (HD) and three dimension (3D) formats. In 2012, there were ultra HD offerings, and multiservice set top boxes offering more channels for subscribers. In 2013, we can expect more combinations of TV while multitasking on the smartphone, or checking related content on our tablets while watching television, and many more. The options are ever increasing over time, which means more choices and options to suit user requirements to turn the wheels of economic well being for all.
These avenues for creating and introducing new networked products and services are opportunities not to be missed by any industry player, especially as broadband usage becomes more pervasive in the country. Indeed, opportunities for creating better and new content in such delivery modes is open to more players in other industries as well.
In 2011, wireless broadband speeds were 6 – 8Mbps overseas and about one to 2Mbps domestically. Meanwhile, fixed broadband speed offerings have gone from 10Mbps to as high as 30Mbps for small and medium enterprise connections in 2012. In 2013, the scenario promises to be more exciting as wired and wireless broadband continue to compete with offerings of packages based on quality and speed.
146 IPR 2012 Shaping a Connected Future Another catch is that overall price of connection and cost of connected devices including mobile are coming down. This means more demand for available access to networked enablers such as, mobile applications to facilitate work and play, and the like.
As the saying goes ‘the devil is in the details’. This spells the next 10 years of work and working pace in the C&M industry. Today, the Government and industry stakeholders are reviewing and reinforcing the foundations of the industry built over the last ten years. This is in preparing readiness for the next level of growth – optimising the use of next generation networks, providing next generation service offerings such as content and applications over multiple platforms for connected homes, connected machines, connected transport, connected healthcare and many more.
Competitive forces, be it domestic or international, is demanding enhanced efficiency and effectiveness in a globalising products and services environment that requires the best of performance in quality of service and quality of experience. The next phase of C&M growth in Malaysia is already exciting as we progress into 2013, spurring more to come as we progress towards 2020 and beyond.
147 IPR 2012 Shaping a Connected Future Quick Reference on Terms
AG’s Attorney General’s Chamber OTT Over the Top means broadband delivery of video and Chamber audio through a managed IPTV network ccTLD Country Code Top Level Domain P1 Packet One Networks (Malaysia) Sdn Bhd CE Consumer Electronics PC Personal Computer CSR Corporate Social Responsibility Proforma Refers to a set of financial statements which is based on projections DEL Direct Exchange Line QoQ “Quarter on Quarter” or “Quarter over Quarter” DL Downlink RONR Return of Net Revenue DNO Donor Network Operator RTM Radio Televisyen Malaysia DNS Domain Name System Share Split A division of shares to reduce the value of each shares, and issues more shares in the same proportion DNSSEC DNS Security Extensions SIM Subscriber Identification Module DRX Discontinuous Reception SNDRP Sensitive Names Dispute Resolution Policy E-UTRA Evolved Universal Terrestrial Radio Access The Ministry Refers to Ministry of Information, Communications and Culture E-UTRAN Evolved Universal Terrestrial Radio Access Network TIFFCOM Tokyo International Film Festival for Content Market fkm Fibre Kilometer Top 10 The top 10 list of the publicly traded companies having the Market greatest market capitalisation Capitalisation GB Gigabyte TVRO Television Received Only or Parabolic Dish GSM Global System for Mobile Communications UL Uplink HUIS Household User of the Internet Survey UGC User-Generated Content IANA Internet Assigned Numbers Authority VoD Video on Demand ICANN Internet Corporation for Assigned Names and Numbers VSAT Very Small Aperture Terminal ID Identity YoY “Year on Year” or “Year over Year” IP Internet Protocol YTL YTL Communications Bhd IPO Initial Public Offering, offer of shares to the public in a ZTE ZTE Corporation stock exchange IPO A document on detailed company information during Prospectus an IPO IPTV Internet Protocol Television, refers to content delivery over online platforms ISPs Internet Service Providers LED Light Emission Diode MAMPU Malaysian Administrative Modernisation and Management Planning Unit MB Megabyte MDeC Multimedia Development Corporation MIPCOM Refers to Marché international des Contenus Audiovisuels, The International Audiovisual Content Market Exhibition MIPTV Refers to Marché International des Programmes de Télévision, The International Market and Creative Forum MMS Multimedia Messaging Service MOSTI Ministry of Science, Technology and Innovation MTFSB Malaysian Technical Standard Forum Bhd MVNO Mobile Virtual Network Operator NBI National Broadband Initiative NEAP Numbering and Electronic Addressing Plan NFDM National Film Development Malaysia NGO Non Governmental Organisation NRD National Registration Department
148 IPR 2012 Shaping a Connected Future List of Figures
Fig. 1.1 Global World Economic Outlook Fig. 2.17 MCMC on Consumer Protection – Regulatory Approaches and Fig. 1.2 Selected Economic Indicators Beyond Fig. 1.3 Malaysia GDP Growth Fig. 2.18 Trend of Consumer Complaints 2002 – 2012 Fig. 1.4 Private Investments and Consumption Supported Quality Fig. 2.19 Complaints against Service Providers GDP Growth Fig. 2.20 Category of Complaints 2010 – 2012 Fig. 1.5 Communications Services Sector Contribution to GDP Fig. 2.21 Category of Complaints 2012 Growth Fig. 2.22 Complaints Handling Process Fig. 1.6 Communications Services Performance vis-à-vis Overall Fig. 2.23 C&M Industry Forums Services Fig. 2.24 Industry Forums in Self Regulation Fig. 1.7 Market Capitalisation – C&M Industry in Bursa Malaysia Fig. 2.25 Communications and Multimedia Consumer Forum of Malaysia Fig. 1.8 Individual C&M Companies Contribution to Bursa Malaysia (CFM) 2012 Fig. 2.26 Among CMCF Activities Fig. 1.9 C&M Companies Market Capitalisation RM (billion) Fig. 2.27 Launching of KDB Programme Fig. 1.10 C&M Market Capitalisation 2010 – 2012 Fig. 2.28 Activities during KDB Programme Fig. 1.11 Top 10 Market Capitalisation 2011 and 2012 Fig. 2.29 Print Advertisements on Klik Dengan Bijak Fig. 1.12 Licensees on ACE Market 2012 Fig. 2.30 KDB Publications Fig. 1.13 Holding Companies of Licensees – Market Listing and Fig. 2.31 Complaints Received According to Offences 2010 – 2012 Financials Fig. 2.32 Cases Investigated 2010 – 2012 Fig. 1.14 Licensees Listed on ACE Market 2012 Fig. 2.33 Non Compliance Cases Investigated in 2012 Fig. 1.15 C&M Industry Revenue Growth: Domestic compared to Fig. 2.34 National Transformation Programme Foreign Fig. 2.35 NKEAs in National Transformation Programme Fig. 1.16 C&M Industry Revenue compared to GDP Fig. 2.36 NKEA CCI Approach Fig. 1.17 C&M Industry Revenue 2010 – 2012 Fig. 2.37 NKEA CCI Highlights 2012 Fig. 1.18 Telecommunications Companies Revenue 2010 – 2012 Fig. 2.38 C&M Industry Development Fig. 1.19 Broadcast Revenue 2010 – 2012 Fig. 2.39 Number of Broadband Subscriptions 2012 Fig. 1.20 C&M Companies Financial Performance 2008 – 2012 Fig. 2.40 Broadband: Subscribers and Household Penetration 2007 – 2012 Fig. 1.21 C&M Companies EBITDA 2008 – 2012 Fig. 2.41 Malaysia Broadband Milestones Fig. 1.22 Telecommunications Companies Operating Profit Margin Fig. 2.42 Launch of Get Malaysian Business Online (GMBO) compared to EBITDA Margin 2008 – 2012 Fig. 2.43 Broadband Penetration Rate per 100 Households by State 2012 Fig. 1.23 Digital Signature Act 1997 and the Role of MCMC Fig. 2.44 Broadband Penetration Rate per 100 Households by State Fig. 1.24 Digital Certificate Revenue Fig. 2.45 HSBB Subscriptions Fig. 1.25 Development of Public Key Infrastructure in Malaysia Fig. 2.46 Fixed Broadband Services 2010 – 2012 Fig. 1.26 Services Market Segment excluding Foreign Revenue Fig. 2.47 TM HSBB Packages 2008 – 2012 Fig. 2.48 TM Business Packages Fig. 1.27 C&M Services Market Share 2008 – 2012 (%) Fig. 2.49 End To End High Speed Broadband Network Fig. 1.28 C&M Services Market Revenue and Trend Profile 2008 – Fig. 2.50 3G Subscriptions 2006 – 2012 2012 Fig. 2.51 Prepaid and Postpaid 3G Subscriptions 2006 – 2012 Fig. 1.29 Blended ARPU (RM) 2004, 2008 and 2012 Fig. 2.52 Mobile Speeds Fig. 1.30 Postpaid and Prepaid ARPU (RM) 2010 – 2012 Fig. 2.53 Mobile Communications Standards Adoption Fig. 1.31 Blended ARPU (RM) 2010 – 2012 Fig. 2.54 Small Cells in the Home or SME or Community Fig. 1.32 TM Fixed Line and Broadband ARPU 2010 – 2012 Fig. 2.55 USP Essentials Fig. 1.33 TM UniFi Blended ARPU 2011 – 2012 Fig. 2.56 Kampung Tanpa Wayar Fig. 1.34 ASTRO Pay TV Residential ARPU (RM) Fig. 2.57 Global ICT Development 2001 – 2012 Fig. 2.1 C&M Industry Capex Fig. 2.58 Akamai Study of the Internet 3 rd Quarter 2012 Fig. 2.2 The Laws – Regulatory Role Fig. 2.59 Home ICT Access 2011 Fig. 2.3 CMA – One of the Cyber Laws in Malaysia Fig. 3.1 DEL Connections per 100 Inhabitants 2002 – 2012 Fig. 2.4 The 10 National Policy Objectives for C&M Industry in Fig. 3.2 DEL Connections: Subscriptions and Penetration Rate Malaysia 2008 – 2012 Fig. 2.5 The MCMC Vision Fig. 3.3 DEL Connections: Household and Non Household Subscriptions Fig. 2.6 Functions and Working Procedure and Growth Rate 2008 – 2012 Fig. 2.7 Sectors under MCMC Jurisdiction Fig. 3.4 DEL Market Share by Service Providers 2012 Fig. 2.8 C&M Licensees (Individual) 2003 – 2012 Fig. 3.5 Hotspot: Locations and Growth 2007 – 2012 Fig. 2.9 C&M Licensees (Class) 2003 – 2012 Fig. 3.6 Hotspot Locations by State Fig. 2.10 Equity Stake (%) in Major Public Listed C&M Companies Fig. 3.7 Penetration Rate and Mobile Subscribers 2001 – 2012 2012 Fig. 3.8 3G Subscriptions 2006 – 2012 Fig. 2.11 Profile of Shareholder: C&M Licensees (Individual & Class) Fig. 3.9 Mobile Number Portability 2009 – 2012 2012 Fig. 3.10 Prepaid and Postpaid Subscribers of Mobile Services Fig. 2.12 Spectrum Monitoring is One of the Feedback Process 2000 – 2012 Fig. 2.13 Evolution of Digital Cellular Standards Fig. 3.11 Mobile Phone Subscriptions by Service Provider 2003 – 2012 Fig. 2.14 MCMC Final View From Public Inquiry Fig. 3.12 Mobile Phone Service by Service Providers 2003 – 2012 Fig. 2.15 Services Identified for Accounting Separation Fig. 3.13 MVNO in Malaysia 2010 – 2012 Fig. 2.16 Consumer Protection in Action – Roles and Approaches Fig. 3.14 Background of IDN in Malaysia
149 IPR 2012 Shaping a Connected Future Fig. 3.15 Trend in Number of IDN by the Language Characters 2011 Fig. 5.1 Modernisation of Postal Services Over the Years and 2012 Fig. 5.2 Performance Standards for Domestic Letter Service Fig. 3.16 Number of Domain Names 2008 – 2012 Fig. 5.3 Delivery Standards for Domestic Letter Fig. 3.17 Share of Domain Names by Categories 2012 Fig. 5.4 Performance Standards for Domestic Parcel Service Fig. 3.18 Share of Domain Names by Categories 2011 Fig. 5.5 Delivery Standards for Domestic Parcel Fig. 3.19 Comparison of Domain Name Registration by Categories Fig. 5.6 Domestic Mail Performance 2011 Fig. 3.20 Domain Names with IPv6 DNS 2009 – 2012 Fig. 5.7 Domestic Parcel Performance 2011 Fig. 3.21 Number of Domain Names with DNSSEC Fig. 5.8 Business Units Services Description Fig. 3.22 IP Address Protocols Fig. 5.9 Five Year Strategic Plan Fig. 3.23 IPv6 Leading Agencies and Working Group Fig. 5.10 Framework of Postal Service Act 2012 Fig. 3.24 MCMC initiatives to Drive IPv6 Adoption in 2012 Fig. 5.11 Launching of Postal Transformation Programme for Sabah Fig. 4.1 Malaysian Scenario Today and Precursors to Future and Sarawak Fig. 4.2 Broadcasters Companies in Malaysia – Development to Fig. 5.12 Posmen Komuniti Delivering Mail 2012 Fig. 4.3 Media Prima TV Stations Fig. 5.13 Stamp Issuance 2006 – 2012 Fig. 4.4 Media Prima TV Networks Net Advertising Revenue 2011 Fig. 5.14 Malaysian Stamp Theme 2012 and 2012 Fig. 5.15 Strategic Goals Fig. 4.5 IPTV Services in Malaysia Fig. 5.16 No. of Courier Licences Issued Fig. 4.6 Commercial Radio Stations in Malaysia Fig. 5.17 Licenced Courier Companies in Malaysia Fig. 4.7 Total Listenership (‘000) 2011 – 2012 Fig. 5.18 Top 10 Courier Providers Revenue Market Share 2011 Fig. 4.8 Radio Surveys Highlights 2010 – 2012 Fig. 5.19 Total Revenue Top 10 Courier Providers 2001 – 2011 Fig. 4.9 Global Advertising Expenditure by Region USD (billion) Fig. 6.1 Strategic Trade Act 2010 (STA 2010) Fig. 4.10 Global Adex by Medium Fig. 6.2 Strategic Trade Act 2010 Fig. 4.11 Adex in Malaysia Fig. 6.3 Regulations and Orders Fig. 4.12 Adex by Medium Fig. 6.4 Partner Agencies Fig. 4.13 Adex Market Share 2010 – 2012 (%) Fig. 6.5 STA 2010: Strategic Items Fig. 4.14 Top 10 Malaysia Advertising Spend by Categories Fig. 6.6 Permit Registration Process Flow RM (million) Fig. 6.7 Permit Application Fig. 4.15 Top 10 Malaysia Advertising Spend by Advertisers Fig. 6.8 Categories of Permits RM (million) Fig. 7.1 Trends in C&M Industry Malaysia
150 IPR 2012 Shaping a Connected Future HEAD OFFICE
MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION Off Persiaran Multimedia 63000 Cyberjaya, Selangor Telephone: +60 3 86 88 80 00 Facsimile: +60 3 86 88 10 00 E-mail: [email protected] Website: www.mcmc.gov.my Aduan MCMC: 1-800-888-030 Aduan MCMC SMS: 15888
SATELLITE OFFICES
PRIMA1 OFFICE MCMC KL OFFICE Malaysian C&M Commission Enforcement & Investigation Department Prima Avenue One Malaysian C&M Commission Block 3507, Jalan Teknokrat 5 1st & 2nd Floor, Block C 63000 Cyberjaya Bangunan Sultan Abdul Samad (BSAS) Selangor Darul Ehsan Jalan Raja, 50610 Kuala Lumpur Malaysia Malaysia Tel: +60 3 8688 8488 Tel: +60 3 2630 5555 Fax: +60 3 8688 1051 Fax: +60 3 2697 8128
REGIONAL OFFICES
NORTHERN REGIONAL OFFICE CENTRAL REGIONAL OFFICE Tingkat 1, Bangunan Tabung Haji Level 17, WisMa SunwayMas Jalan Bagan Luar 1, Jalan Tengku Ampuan Zabedah C9/C 12000 Butterworth, Pulau Pinang Section 9 Tel: +60 4 32 38 228 40100 Shah Alam, Selangor Darul Ehsan Fax: +60 4 32 39 448 Tel: +60 3 55 18 77 01 Fax: +60 3 55 18 77 10
EASTERN REGIONAL OFFICE SOUTHERN REGIONAL OFFICE B8004 Tingkat 1 Suite 7A, Level 7 Sri Kuantan Square Menara Ansar Jalan Telok Sisek Jalan Trus 25200 Kuantan, Pahang 80000 Johor Bahru, Johor Tel: +60 9 51 21 100 Tel: +60 7 22 66 700 Fax: +60 9 51 57 566 Fax: +60 7 22 78 700
SARAWAK REGIONAL OFFICE MIRI BRANCH OF THE SARAWAK REGIONAL Level 5 (North), Wisma STA OFFICE 26, Jalan Datuk Abang Abdul Rahim Lot 1385 (1st Floor), Block 10 93450 Kuching, Sarawak Centre Point Commercial Centre Tel: +60 82 33 190 0 Phase II Fax: +60 82 33 1901 98000 Miri, Sarawak Tel: +60 85 41 79 00/6 00 Fax: +60 85 41 74 00
SABAH REGIONAL OFFICE SANDAKAN BRANCH OF THE 6-10-10, 10th Floor SABAH REGIONAL OFFICE No. 6 Menara MAA Lot No.7, Block 30 Lorong Api-Api 1, Api Api Centre Bandar Indah Phase 6 88000 Kota Kinabalu, Sabah Batu 4, Jalan Utara Tel: +60 88 27 05 50 90000 Sandakan, Sabah Fax: +60 88 25 32 05 Tel: +60 8 9 22 73 50 Fax: +60 8 9 22 73 52
151 IPR 2012 Shaping a Connected Future