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1145569-cover-B145569-cover-B1 112-7.ai2-7.ai 663.2566.67770.71360.267571 llpipi 771.57°118.43°00.00°445.00°18.5.054073°0° 116/7/07116/7/0766//77//0077 110:23:11110:23:1100::2233::111 AAMAAMMM PProcessrocess CCyanyanPProcessrocess MMagentaagentaPProcessrocess YYellowellowPProcessrocess BBlacklack C M Y CM MY CY CMY K Cover Rationale The cover symbolises the uniqueness of the magnificent Rafflesia, the world’s largest flower that can be found in Malaysia’s tropical forests. With a diameter reaching 100cm and weighing 10kg, this cross-pollinated flora draws many forms of lives together – the insects, human and flowers themselves. Likewise, this publication draws together the many developments toward the convergence of communications, multimedia and content, and assists to bring Malaysian communications stakeholders to cross pollinate ideas and work together. ' Malaysian Communications and Multimedia Commission 2007 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. The permission to reproduce does not extend to any information or material the copyright of which belongs to any other person, organisation or third party. Authorisation or permission to reproduce such information or material must be obtained from the copyright holders concerned. Malaysian Communications and Multimedia Commission Off Persiaran Multimedia, 63000 Cyberjaya, Selangor Darul Ehsan, Malaysia. Tel: (603) 8688 8000 Fax: (603) 8688 1000 Freephone Number: 1-800-888-030 http://www.mcmc.gov.my CONTENTS FOREWORD 2 SUMMARY HIGHLIGHTS 3 C&M Market Market Traded Volatile in 1Q-07 4 C&M Sector Contribution to Bursa Malaysia 5 Individual C&M Companies Contribution to Bursa Malaysia 5 C&M Companies Share Price Movements 6 C&M Amongst Other Heavyweights 7 Local C&M versus Overseas by Market Capitalisation in US Dollar 8 MESDAQ 1Q-07 9 C&M Economics C&M Companies Revenue 10 Malaysian Economic Snapshot 11 BNM Prospects for 2007 – A C&M Perspective 13 SMS Trends 15 Global SMS/MMS Traffic Volume & Growth 16 Global SMS/MMS Revenue & Growth 16 Alternative to SMS 17 C&M Adex Trends Adex Q1 2007 – A Positive Beginning 18 Adex Comparison by Medium 19 Free-To-Air Television Advertising 20 Radio Adex 21 Top Adex Sectors 22 Communications Sector: Advertisements 23 C&M Development Broadband Wireless Access Wired Broadband Access and the Entry of Broadband Wireless 24 Portable Internet Technologies 24 Cellular Access 24 Efforts to Alleviate Limitations of Broadband Wireless Access 25 IEEE 802.16 Standards Overview 25 Sprint Nextel – Wireless Broadband Network 27 Asia-Pacific Comparatives & Latin America 28 TV As We Know It 30 Commercial Launches 30 Broadcast Mobile TV Trials 30 Standards & Comparison of Service Delivery Platforms for Handhelds 31 Developments in the Industry & Challenges 32 Commercial Mobile TV Launches 33 GLOSSARY 34 CONTACT US 36 1 FOREWORD On behalf of the Malaysian Communications and Multimedia Commission (MCMC), it is my pleasure to present the Communications and Multimedia Malaysia Market and Financial Review for the first quarter of 2007. This Bulletin provides an insight into various aspects of the performance of the communications and multimedia (C&M) industry and related country economic developments, including other market segments under the scope of MCMC. In this Bulletin there are several highlights and analysis, which include a discussion on television broadcast over a mobile platform; the trend of Short Messaging Service (SMS); an update of the C&M MESDAQ companies, and a discussion on broadband wireless access with a focus on WiMax. This and previous issues of this publication can be obtained from MCMC’s website at: http://www.mcmc.gov.my/what_we_do/Research/financial_review.asp The MCMC envisages for the publication to be useful to all our stakeholders including the government, industry players, educators, and the consumers. We therefore welcome any comments, enquiries, suggestions and feedback to improve further on the information presented in this Bulletin. Please send them to [email protected]. Thank you. YBhg. Datuk Dr. Halim Shafie Chairman Malaysian Communications and Multimedia Commission 2 SUMMARY HIGHLIGHTS Local Market Traded Volatile in 1Q-07 (pg 4) BNM Prospects for 2007: C&M Perspective (pg 13) Bursa Malaysia experienced volatile trade, albeit Prospects for 2007 are positive. BNM anticipates gains were on positive factors such as upbeat economic growth drivers as the resilient domestic buying as retailers herald in the new year. Losses demand, private sector investment, and public were due to volatile overseas market trade, such as, sector development expenditure especially Ninth sharp declines in China exchanges. The KLCI gained Malaysia Plan. C&M sector is a direct beneficiary of 16% on the uptrend, lost 14% on downswing, but a growing economy, positive business and towards end March 2007, recovered to close the consumer sentiments. quarter at 1,246.9 points – up an encouraging 13.7%. 1Q-07 Adex at RM1.108 Billion (pg 18) Adex grew 8.1% in 1Q-07 to RM1.026 billion, C&M Sector 9.5% of Bursa Malaysia (pg 5) registering the highest adex for period of 2003- Local market capitalisation was RM985 billion as at 2006. Main contribution was possibly due to the 1Q-07. C&M sector market capitalisation gained 8% Visit Malaysia Year promotions held this year. to RM94 billion (2006: RM87 billion). Print and TV Captures 65% and 27% of Adex (pg 19) DiGi still Best Share Price Performer (pg 6) Print and FTA TV witnessed highest growth within DiGi once again topped gainers list with share price 2003-2006. 1Q-07 growth is 8.1% and 5.2% up 23% to RM18.70 in 1Q-07. Talks of capital respectively, translating to RM719.9 million and repayment may have supported gains. RM291.8 million adex respectively. Operationally, DiGi has introduced “Fu-Yoh!” package with one low flat rate voice tariff directed Two New Channels Boost Radio Adex (pg 21) at youths and standardized SMS and MMS rates. Nielsen Media inclusion of Media Prima’s Hot FM and Fly FM into its database increased overall radio MESDAQ 1Q-07: One C&M Related (pg 9) ad revenue to RM51.4 million (1Q-06: RM44.4 Out of three MESDAQ companies listed in 1Q-07, million). Top radio is Era FM with RM3.6 million; only MY EG Services Bhd is C&M related. MCMC second is My FM with adex at RM2.3 million. licensee, Green Packet gained most by market capitalisation – up 19% and is top amongst Top 10 Broadband Wireless Access (pg 24) MESDAQ companies in trade performance while Globally, Internet users number more than one N2N Connect Bhd features as number four. billion and mobile users more than two billion. This is one incentive driving operators to provide C&M Sector Revenue at RM8.5 Billion (pg 10) broadband wireless service, which have various Overall, the C&M sector revenue grew 13.8% from delivery platforms from mobile side as well as fixed RM7.5 billion in 1Q-06. Telcos command bulk at wireless and mobile broadband side. These are at 87% (RM7.4 billion); broadcasting at 8% (RM2.7 best complements and at worst rivals depending billion); and postal at 3% (RM0.8 billion). on market. Mobile broadband access is promising in many ways, but there is a need to plan carefully SMS Trends (pg 15) for cost effectiveness and excellent service SMS service is expected to continue to post provision to tap the masses. substantive growth in the next few years. MMS is another non-voice service that is slower to take-off TV As We Know It (pg 30) but will overtake SMS in terms of revenue Some say true mobile TV is the broadcast type. eventually. SMS substitutes include mobile e-mail Others view it as three variants – broadcast; and instant messaging. streamed mobile TV; and download mobile TV. Last two years witnessed many trials but few Steady 5.3% GDP Growth in 1Q-07 (pg 11) commercial launches. Many standards are Malaysian economy outlook remains positive on available to support delivery. Mobile TV offers back of resilient domestic demand. Stronger avenue for celcos to provide TV services to their ringgit has lowered import costs. Inflation is to subscribers, and for broadcasters to tap on mobile average between 2% and 2.5% in 2007. subscribers. The equation to this potential is close co-operation between celcos and broadcasters. Also marketing hype needs to be moderated, with perfect planning and excellent delivery. 3 C & M MARKET Market Trade Volatile in 1Q-07 The local market experienced volatile trade in 1Q-07 with the Kuala Lumpur Composite Index (KLCI) hitting a high at 1,283.5 on 23 February 2007 from a low of 1,106.1 on 11 January 2007 – up 16%. The better sentiment early in the year was in part due to upbeat buying by investors, especially retailers after the Chinese New Year holidays. This catapulted the market to reach levels not seen in 14 years in terms of trading volume. Some proposed acquisitions also boosted market sentiment, for example, Bank of Tokyo-Mitsubishi buying a stake in Bumiputra-Commerce Holdings for more than a billion ringgit. Nevertheless, the market declined 14% from its 1Q-07 high to 1,109.56 on 3 March 2007. This was due to turbulence from overseas market trading, e.g., sharp decline on China’s exchanges. On an encouraging note, rapid recovery saw the local market close 1Q-07 at 1,246.9 points – up 13.7% from end 2006.