ENRICHING LIVES EXPANDING HORIZONS - Maxis

96
Business Review
OUTLOOK
Economic outlook
The government stimulus package and
increased consumer spending resulted
in the Malaysian economy growing at a
steady pace despite fiscal uncertainties
in global markets. The country
recorded a GDP growth rate of 5% in
2011. A strong and resilient domestic
economy coupled with sustained
private consumption and investment
helped the Malaysian economy remain
in a positive growth trajectory. The
2012 Budget is a continuation of the
efforts being undertaken to secure
a strong future for the nation. The
Budget addresses fundamental areas of
raising investment, developing human
capital, uplifting rural areas, spreading
economic development and raising
administrative efficiency as key pillars.
The Economic Transformation Programme
(ETP) designed to spur growth across
many industries by harnessing digital
infrastructure effectively certainly augurs
well for the telecommunications industry
as a whole. At Maxis, we are keen to play
a decisive role in the ETP by providing
a technological plank to fast-track the
process.
Demand
We are in a period of continuous
change and disruption in the
telecommunications industry with a
shift from a voice-centric business to
a data-centric business. The future
growth of the industry is underpinned
by the steadily growing demand for
advanced data and broadband services,
particularly among Malaysian youth with
their pronounced appetite for social
networking, content and applications.
Traditional business models are being
challenged by newer players leveraging
shifts in consumer behaviour, increasing
ubiquity in connectivity and a proliferation
of smart mobile devices. Consumers are
more empowered through the digital
revolution and they want more speed,
mobility, simplicity and choice.
We believe the overall demand for
telecommunications services will remain
strong. Mobile internet and broadband
will be the biggest growth drivers in line
with the growing “need” to be always
connected: on-the-go, at home and
at work. Smartphone penetration in
Malaysia is already at 23% as at end of
2011 and will continue to increase driven
by technology-savvy Gen Y consumers
and declining smartphone prices. Tablets
are expected to drive the future of the
PC category and lead to a higher level
of multi-screen usage. However, internet
access will be increasingly mobile in
nature, with smartphones being the first
and only personal internet access screen
for a significant portion of the mass
market.
There are already over 17 million internet
users in Malaysia and Malaysians spend
more time online and consume more
digital content compared to Asian peers.
Social media is central to the Malaysian
digital experience, and promises to
be one of the fastest-growing mobile
activities. Smart devices will also become
central for content and service discovery
and consumption.
The increase in smart device penetration
will also drive customer service and
support needs, both for new adopters
and as the current smartphone users start
to use more sophisticated devices and
applications.
Cloud storage services are expected
to gain traction with the explosion
in personal and enterprise content.
Consumers and businesses will need
storage of and access to content across
any device. In addition, a greater
emphasis on cost and cash management
for enterprises, capex-light and
flexible business models through cloud
computing and data centre services
for SMEs and corporates will provide
attractive solutions and represent new
revenue streams for telecommunications
service providers.
Machine-to-Machine will be another
trend to watch in the future. It has many
applications from vending machines
to fleet management, security and
consumer electronics.
Competition
The operating environment remains
competitive with sustained pressure on
revenue growth and profitability. 2011
saw the resurgence of smaller mobile
and Wimax players and five new Mobile
Virtual Network Operators (MVNOs)
coming to market, taking the total
number of MVNOs to 11 as of end of
December. These new players aim to gain
market share through aggressive pricing
in voice and SMS services, and now even
in data services.
In 2011, the Malaysian mobile market
saw continued rivalry among key
mobile players especially in the wireless
broadband, mobile internet and device
bundling offers. As a result, wireless
broadband pricing has become very
affordable in Malaysia. There was a
resurgence of players like U Mobile, P1,
and the first full-year operation of Yes.
The government’s LTE plan announced
in December 2011 indicates that an
additional player could potentially be
introduced.