Radio Adex 16 Adex by Sector: Communication 17 Communications Sector Adex: Main Telcos Advertising and Telecommunications Companies Advertisement 17
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C&M3Q 140308.qxd 3/28/08 10:57 PM Page 1 CONTENTS FOREWORD 2 SUMMARY HIGHLIGHTS 3 C&M Market Strong Recovery from Market Dip 4 C&M Market Capitalisation Down Slightly 5 Individual C&M Companies Contribution to Bursa Malaysia 6 C&M Companies Share Price Movements 7 C&M Amongst Other Heavyweights 8 Local C&M versus Overseas by Market Capitalisation in US$ 9 C&M Economics C&M Companies Revenue Snapshot and Revenue Market Share 10 Malaysian Economic Snapshot 11 C&M Adex Trends Adex in Malaysia – 3Q 2007 Review General Observations of Adex 13 Adex Comparison 13 Adex Month-to-Month Trend 14 Market Share and Ringgit Comparison 14 Free-to-Air TV Adex 15 Radio Adex 16 Adex by Sector: Communication 17 Communications Sector Adex: Main Telcos Advertising and Telecommunications Companies Advertisement 17 C&M Developments Malaysia Initiatives for Mobility in TV 18 Network Platforms for Mobile TV 18 Malaysian Mobile TV Trials 18 System Comparisons 19 Conclusion 19 The Market in Mobile TV 20 Trends in Demand for Mobile TV 20 Mobile TV Deemed as Emergent Market: Appeal; User Experience; Advertising; and Pervasive as Traditional TV 21 Content Providers are Platform Agnostic 24 Concluding Word 26 Trends in IT Impacting Telecoms Services Delivery and Conclusion 26 Brief on VoIP Trends 28 Japan, Korea, China and Malaysia 28 Business VoIP Poised for Growth 30 SIP Trend and Conclusion 30 3G Development Trend – A Snapshot 31 WiMAX as IMT-2000 Technology Standard 32 The Malaysian 3G Development, 3G Packages and 3G Services 33 Conclusion 35 GLOSSARY 36 CONTACT US 1 C&M3Q 140308.qxd 3/28/08 10:58 PM Page 2 FOREWORD On behalf of the Malaysian Communications and Multimedia Commission (SKMM), it is my pleasure to present to our readers the Communications and Multimedia Market and Financial Review for the third quarter of the year 2007. The Review discusses communications and multimedia (C&M) market trends and performance, including relative market trends and company performances through comparatives and analysis. This report provides a snapshot of the economic status of the country, and the market and financial position of the C&M industry. The report also comprises a discussion on advertising expenditure of the country; a snapshot of 3G services development and trend, including a discussion of the status in Malaysian context and an article on Malaysia initiatives for Mobility in television. Also discussed are the market and consumer requirements for mobile television; the trends in IT impacting telecoms services delivery; and a brief on latest considerations in the VoIP service industry. If you wish to refer to this and previous issues of the quarterly publication, these can be obtained from the SKMM’s website at: http://www.mcmc.gov.my/what_we_do/Research/financial_review.asp I trust the publication will be useful to all our stakeholders including the Government, Industry Players, Educators, Consumers and the Public. To improve this publication in the future, we welcome any comments, enquiries, suggestions and feedback on the information presented in this Bulletin. Please send them to [email protected] Thank you. Datuk Dr. Halim Shafie Chairman Malaysian Communications and Multimedia Commission (SKMM) 2 C&M3Q 140308.qxd 3/28/08 10:58 PM Page 3 SUMMARY HIGHLIGHTS Strong Recovery From Market Dip (pg 4) pectively from the same period last year, The KLCI achieved a high at 1,392.2 on 24 July arriving at adex of RM19.5 million and RM178.1 2007 – a high for the year 2007 so far. This is million respectively. In the radio segment, AMP due to overall positive sentiments on govern- channels leads at 67% in market share; Media ment RM200 billion five year development Prima and STAR RFM tie at 13%; followed by plan, high commodity prices and pro business RTM channels at 7%. measures. Malaysia on Trials for Mobile TV (pg 18) C&M Market Capitalisation Down (pg 5) Mobile TV standard in Malaysia is not yet ascer- C&M market capitalisation as at 3Q-07 was tained. Trials are underway for the standards lower at 6.1% or RM63 billion compared to T-DMB, MediaFLO and DVB-H. South Korea and 6.5% or RM68 billion (excluded Maxis for com- Japan have proven that adopting a single parison purposes) reported in 1H-07. Overall, technology reaped benefits for their mobile TV this may be due to the share price declines for market. Telekom, ASTRO, Pos Malaysia and DiGi in the period concern. The Market for Mobile TV (pg 20) Mobile TV is in its infancy. There is need to Time Share Second Best after DiGi (pg 7) grow it via an ecosystem of operator, content Time was the best performer based on share provider and handset maker.Mobile TV is seen price gain of 13.3% or RM0.1 from RM0.8 per eventually as pervasive as traditional TV – com- share in June 2007. This is second to DiGi that plementary segments of “mobile” and “fixed” has share price gain of 27% from RM0.7 per TV. Content providers are learning new delivery share at end 2006 to RM0.9 at end September platforms for opportunities such as CNN that 2007. keeps up with new technology; partnerships in ecosystem from news generation to handset C&M Sector 3Q-07 Revenue at RM26.4 Billion (pg 10) makers. Overall, the C&M sector revenue grew 11.2% from RM23.8 billion in 3Q-06 to RM26.4 billion Trends In IT Impacting Telecoms Delivery (pg 26) for 3Q-07. Telcos command lion’s share of 87% Telecoms companies are undergoing a para- (RM23.0 billion); broadcasting 8.7% (RM2.3 digm shift in their strategy from acquisition of billion); postal 2.5% (RM0.6 billion); others assets such as hardware, software and services 1.8% (RM0.5 billion). Total overall revenue esti- from IT perspective, to acquisition of access in mated at RM35.2 billion after annualising terms of content, storage and network. The (FY2006:RM31.7 billion). offering of technology products as a service is seen as IT companies adapting to the changing Domestic Demand Steady (pg 11) telecoms environment. Favourable domestic economic conditions lend resilience to cushion the softening external VoIP Trends (pg 28) demand. GDP growth for 3Q-07 is expected to Asia Pacific is expected to drive future VoIP sustain at pace of 2Q-07 at 5.7%. Near term growth, with the bulk of the subscribers in outlook is positive given private consumption Japan, Korea and China. Meantime, industry and domestic demand robust on strong services analysts forecast Malaysia VoIP revenue growth sector. Consumer sentiment and business con- as between 16% and 20% in the year 2006 to fidence are positive while cautious. 2011. Malaysian Adex 3Q-07 at RM3.9 billion (pg 13) 3G Developments – A Snapshot (pg 31) Adex grew 12.3% from RM3.5 billion in The 3G space on global basis is excited with the 3Q-06 to RM3.9 billion in 3Q-07. Adex in third developments of Femtocells that is expected to quarter 2007 was RM1.5 billion (2006 at RM1.3 introduce significant cost savings on 3G delivery billion). This was due to the country’s 50th to the homezone. WiMAX going under the Independence Merdeka celebration nationwide umbrella of IMT 2000 technology has implica- in August. tions, especially in Europe in terms of more spectrum availability. In Malaysia, enhanced 3G Cinema and Outdoor Highest Revenue Gainers services in HSDPA are propelling new dimen- for 3Q-07; Media Prima and Star RFM Tie in sions to the 3G business, albeit at a relatively terms of Market Share (pg 14) sedate pace. The Malaysian target is to achieve Cinema and the radio mediums both recorded five million 3G subscribers by 2010 (3Q-07: 1.06 the highest growth of 36.4% and 31.4% res- milion subscribers). 3 C&M3Q 140308.qxd 3/28/08 10:58 PM Page 4 C&M MARKET Strong Recovery from Market Dip The Malaysian market barometer, the Kuala Lumpur Composite Index (KLCI), achieved a high at 1,392.2 on 24 July 2007, which is also a high for the year 2007 so far. This was supported by overall positive sentiments such as the government RM200 billion five-year development activities, high commodity prices and pro business measures. However, the local market took a hefty dip towards mid-August and on 17 August 2007 posting a low of 1,191.6 points (down 14% or 200.6 points from the recent high) due to global credit market uncertainty. Fortunately, the local market recovery was speedy upon strong local fundamentals and the U.S. Federal Reserve unexpectedly cutting the US discount rate on 20 August 2007. Overall, the performance of overseas markets still factor as a sensitive concern on local trade. One of the main reasons for this is the underlying concern of losses from the US sub-prime mortgage market loans. The Malaysian market over the longer term has support from positive factors such as the government seeing to rolling out projects under the Ninth Malaysia Plan under an expansionary fiscal budget, spreading economic development throughout the country via the Iskandar Development Region – the new main southern development corridor in Johor and the Northern Corridor Economic Region for socio-economic and industrial development in Kelantan, Terengganu and Pahang. KLCI 1Q to 3Q 2007 KLCI 3Q 2007 1,450 1,450 Index 1,400 1,400 Last Price 1,336.30 1,350 High 24/07/07 1,392.18 Average 1,317.63 1,300 1,350 Low 11/01/07 1,191.55 1,250 1,300 Index 1,200 Index Index 1,150 Last Price 1,336.30 1,250 High 24/07/07 1,392.18 1,100 Average 1,284.95 Low 11/01/07 1,106.06 1,200 1,050 1,000 1,150 Jan Feb Mar Apr May Jun Jul Aug Sep Jul Aug Sep Source: Bloomberg, SKMM Bursa Malaysia % Market Indicators Dec-06 3Q-07 Change New Listings 2006 to 3Q 2007 KL Composite 1,096.2 1,3336.3 22 25 Second Board 92.0 105.8 15 22 MESDAQ 119.9 122.9 3 20 Average Daily Turnover Volume (million units) 801.1 1,618.3 102 Value (RM million) 1,017.4 2,321.6 128 15 12 Market Capitalisation 10 (RM billion) 848.7 1,031.3 22 9 10 8 No.