Friday, November 22, 2002
Malaysia sees 16 pc jump in cellphone subscribers
Reuters Kuala Lumpur, November 22
Malaysia said mobile phone subscribers grew 16 per cent to 8.6 million in the first nine months of this year, boosted by competition between its five carriers as they fight for share in a fast-consolidating market.
Analysts, who expect cellular coverage to hit 50 per cent of the population by 2004, said the rise was in line with their forecasts but would not ring in much extra revenue for the phone operators.
"Revenue gain won't be much, while average revenue per user will still decline because of on-going price wars for customers," said Dennis Lee, an analyst at local brokerage TA Securities.
Leo Moggie, Malaysia's communications and multimedia minister, said cellular coverage now reached about 36 per cent of the country's 24 million population – the second highest mobile penetration in Southeast Asia after Singapore.
He said subscribers totalled 8.57 million in September, up from 7.4 million at the end of 2001.
"One of the main driving forces behind the development of the cellular market has been competition, which has resulted in rapid growth in the market and has been instrumental in bringing more competitive prices for products and services," Moggie told a conference."
Shares of Malaysia's top three cellular firms closed mixed on Friday. Maxis Communications Bhd was down 0.4 per cent to 5.75 ringgit and Celcom (Malaysia) Bhd down 0.8 per cent to 2.39 ringgit, which third-ranking DiGi.Com Bhd added one cent to 2.69 ringgit.
Consolidation ahead
Malaysia has been prodding its crowded mobile sector to consolidate ahead of the planned commercial launch of costly, high-speed third-generation (3G) technology in 2004.
The nine billion ringgit ($2.4 billion) cellular market is seen heading towards two large groups, led by current leader Maxis and state-controlled Telekom Malaysia Bhd.
Maxis is in the midst of buying its smallest rival, Time dotCom's mobile arm, while dominant fixed-line operator Telekom is finalising a takeover of Celcom, the second largest player.
A telco analyst said the next two years would be tough for the Malaysian mobile sector, given the high costs of mergers and consolidation. "But they have little choice," the analyst at the foreign research house said. "The market is too small to support more than two or three players." TA's Lee said he would keep his "long-term buy" on Maxis and "hold" recommendation on Celcom and DiGi.
($1 = 3.8 ringgit)
© Hindustan Times Ltd. 2002. Reproduction in any form is prohibited without prior permission To send your feedback, via web click here or email feedback at hindustantimes.com