Tuesday, December 30, 2008

Telenor banks on its Asian experience to grow India

TELENOR ASA - which has been in Asia for more than 10 years - is banking on its Asian experience to grow its India business.

The company said it will embark on three main strategies on its mobile business in India, pretty much like how it transformed DiGi.Com Bhd into the country's fastest growing mobile company.

Head of the Telenor Asia opeartions Sigve Brekke said:

"Firstly, is to form a company which has a very unique culture.

"Secondly, is to take on the attacker's mindset -- never being happy with what you have, always try to improve and do things better.

"Thirdly, is to be close with the customers.

For the full story, pls check this out:

Omsk appeals court in favour of Telenor... but is this the end of the legal battles?

NORWAY'S biggest phone company Telenor ASA said that a Siberian court has overturned a rulling that could have cost Telenor US$2.8 billion in damages.

In August, a court in Khanty-Mansiysk, also in Siberia, found Telenor liable for damages after delaying OAO VimpelCom's takeover of a Ukrainian mobile operator. The Omsk appeals court canceled the decision by the Khanty-Mansiysk court yesterday, on the grounds of gross violations of the Russion law.

The court will reconsider the case on February 19.

The case is one of several court battles between Alfa Groupand Telenor ranging from New York to Siberia over control at ZATKyivstar GSM and VimpelCom.

The claim in Khanty-Mansiysk was filed by Farimex Products Inc.,which owns 0.002 percent of VimpelCom. Telenor has said Farimex is a front for Russian Oligarch Mikhail Fridman’s Alfa Group

Telenor controls 56.5 percent of Kyivstar and 29.9 percent of VimpelCom. In 2001, Telenor formed a partnership with Fridman,who controls the rest of Kyivstar and 44 percent of VimpelCom.

ZATKyivstar is Ukraine’s biggest mobile-phone company, while VimpelCom is the second-largest wireless provider in Russia.

Thursday, December 25, 2008

Celcom-Tune Talk pact won't threaten rivals, said OSK.

Following are some of the highlights in the research note:

"The investment in Tune by Celcom confirms market talk months ago and represents a direct
investment in a MVNO."

"Tune was slated to launch commercial service in 2Q08, but the launch was reportedly postponed pending the award of a Network Services Provider (NSP) licence from the Malaysian Communications and Multimedia Commission (MCMC)."

"Overall, we are neutral on the investment given that MVNOs have very patchy track record overseas and are not likely to be a major threat to incumbent operators."

"The launch by Tune will raise competition up a notch, putting further pressure on operators’ margins, which are already crimped with the introduction of MNP in October. We expect sentiment on TMI to continue to be weak on protracted concerns over the potential dilution from a value destructive equity exercise. Investors are advised to adopt a longer term view on the stock and accumulate on weakness as value emerges."

You can also check out the newsreport here:

Wednesday, December 24, 2008

Celcom to invest in Tune Talk

Celcom (Malaysia) Bhd, wholly-owned by TM International Bhd, will invest over RM2.6 million on Tune Talk.

Celcom also has the option to increase its stake to 16 per cent within three years of commercial launch or when Tune Talk has over 1.5 million customers, which ever comes first.

With the higher stakes in Tune, Celcom is able to increase board representation to 4 from 2 of the
7 board seats.

Both companies have been in talks for over a year.

Currently, Celcom also has MVNO arrangement with XOX and Merchantrade. However, it does not own stakes in those MVNOs.

Monday, December 22, 2008

DiGi CEO talks about industry competition and its outlook for 2009.

Mobile phone operator DiGi.Com Bhd - the company behind the ever popular DiGi Yellow Coverage Man - expects competition to remain stiff next year, and expects further pressure on prepaid tariffs.

It has yet to see any impact on new entrants, such as U Mobile.

I met up with the CEO Johan Dennelind last week and following are the excerpts of the Business Times interview:

Q: Have you seen any impact on new entrant?

Dennelind: I have seen a lot of adex (advertising expenditure) and share of voice, but I have seen very little impact on the revenue market share, none basically. If you count SIM cards, yeah, maybe it's noticeable. But, so far very much according to what I expected. It is very hard (for the new entrants) to come into the market, which currently has three very strong players, and many positions have been taken.

Q: What can investors expect from DiGi next year? Will there be weaker earnings?

Dennelind: We have our guidance, and that still stands, which is clearly in these days, it is a very tough guidance, I must say.

Q: Is it true that DiGi is the number one player in terms of foreign worker market segment?

Dennelind: Probably. We are well close related with great value for money.

Q: Lately, your rivals lowered call rates, one on the prepaid segment while the other on the foreign worker segment, what is DiGi going to do about it?

Dennelind: We'll fight for the value proposition day and night. If someone slashes rates, we will make sure that we stay competitive. We won't let go of that.

Q: Do you see price wars in 2009?

Dennelind: We don't have price war. But I expect continuous price pressure. I hope we avoid price war.

Q: What's the difference between price war and price pressure?

Dennelind: Price war is when you completely deteriorate the market and everybody undercuts on a big scale. That's not good for the consumers, not good for the operators, consumers will get bad quality eventually, because you trigger a lot of traffic. And the operators will not be able to sustain the quality of service in eroding margins. I hope we can be rationale about it, which we have been.

DiGi CEO on 3G and Mobile Broadband

Below are excerpts of the interview with DiGi CEO Johan Dennelind:

Q: When are you going to launch 3G? Will it be early Q1 or late Q1?

Dennelind: The sooner the better. But, I don't want to rush it. I want to make sure we have a solid go-to-market strategy.

Q: So, you don't want to rush it (to launch 3G). Does it mean 3G launch could be dragged until Q2?

No. Then that will be very disappointing.

Q: Do you think DiGi can be the number one in mobile broadband space in three years?

When that happens, I think we should rent one of the twin towers and have a huge party. That's not going to happen. We are realistic, but ambitious. We want to have a fair share in the mobile broadband market, and overtime, we are aiming for one-third of that market. Whether that is number one or number two in the market, that remains to be seen. We shouldn't be far away from that.
To get a third of the mobile broadband market share is going to take more than three years, but we are here to stay.
I hope where we go in, we can surprise positively and deliver on their expectations. To do that, it's going to be a momentum driver, that's why we are not rushing and taking our time to launch.

Q: What can you promise potential DiGi 3G users?

Dennelind: I promise that we will try as hard as we can to live up to the expectations.

DiGi a net gainer in MNP

NOT surprising at all.

DiGi.Com Bhd, Malaysia's third largest mobile operator, said it is a net gainer in the mobile number portability (MNP) race so far.

Its chief executive officer Johan Dennelind, in a Business Times interview last week, said the net gain is still "insignificant" so far, it is more of a "morale booster" for the company and is not expected to have a significant reaction on the market.

He also squashed rumours about signing up 5,000 customers from rival operators, saying that daily net gains is in the range of hundreds, not thousands.

Below are the excerpts of the interview:

Q: Any surprises on Mobile Number Portability (MNP), so far?

Dennelind: Back tracking a bit first, just to remind you, leading to mobile number portability, there were no awareness campaigns done by us or anyone. Basically, when we launch, there was very little awareness among the public. We didn't expect a quick pick-up. So, what surprised me was that actually people were porting and changing, and they were trying out new operators. This has given us the opportunity to prove to our existing customers and new customers that we are a good choice. That has pushed us to really deliver on our value proposition. What has surprised me a little bit is that people really appreciate the quality enhancement that DiGi has made over the past years. We have invested close to RM1 billion this year. To have invested heavily on network has paid off on the quality side. So, people porting in are saying: "Wow! Your quality is really better than where I came from." That's the good news, and maybe we should start talking more about our quality than we have done in the past.

Q: How did DiGi perform since MNP was launched?

Dennelind: So far so good, I would say. In terms of numbers, we are net gainers. I'm not going into the details of the numbers, because I still feel it's early days, but we are encouraged by the net gaining position. It's not by much, but it still feels good to know and it's a morale boost for the organisation. Being a net gainer means more people porting into DiGi than leaving DiGi. We won't take any customers for granted, we have to make sure we own the trust of the customers. Every port in is a success, every port out is a failure to us. So, when we are a net gainer, it is more a morale booster.

Q: There are rumours that as many as 5,000 subscribers from other operators port into DiGi daily. Is that true?

Dennelind: It's not true. Those numbers were way too high. We don't port in thousands, we port in hundreds, per day.

Q: Do you think MNP has changed the mobile industry landscape?

Dennelind: It's too early to tell. But, I still think MNP can change the way operators treat its customers, it's a trigger for that. Because we are doing more for our customers now, we are treating them better, we are giving them better service, given them better quality and given them better touch-point experience with us. And, that should pay off. I think indirectly MNP is pushing the industry to be better.

Q: Do you think MNP will be the main play for DiGi to gain market share?

Dennelind: Well, it definitely removes the last barrier for the postpaid segment. Postpaid has been tough for us, because we came in late, and number savvy people want to keep their numbers. I think we don't have that barrier anymore. I hope it will increase our revenue market share for postpaid, and I have seen some encouraging signs in that direction. So, if we do everything correctly over the next few years, and the others don't, we can gain market share (via MNP).Nevertheless, there are still a lot of virgin users out there, people who want to leave prepaid and move to postpaid. A lot of companies using fixed line, they want to go mobile. The penetration rate is not saturated yet, there's still growth in the market.

For more details on his views on other areas such as 3G, 2009 outlook and competition landscape, pls read it at:

Wednesday, December 17, 2008

China to issue 3G licenses as early as year-end.

The head of China's Ministry of Industry and Information Technology Li Yizhong said it will issue three third-generation (3G) licences as early as this month, or in early 2009.

This will trigger at least 200 billion yuan of spending in 2009 as operators upgrade networks to offer faster services.

Green Packet Bhd, which earnings got hurt partly due to lower sales in China, should see its revenue in China to pick up again, once licenses are issued.

Green Packet chief executive officer Puan Chan Cheong, during one of the media briefing few months back, said income from China took a beating as Chinese mobile operators are putting their capex on hold as their are awaiting for the government to issue the high-speed mobile phone licenses.

Tuesday, December 16, 2008

Industry news update

Below are the some of the top industry news during the first two weeks of December.

Dec 1: Indonesian mobile operator PT Mobile-8 Telecom had its credit rating cut by Moody's Investors Service to Ca, from Caa2, after bondholders rejected a debt revamp plan.

"The downgrade reflects the fact that Mobile-8's current liquidity sources are not sufficient to cover early repayment of the notes and therefore a default on the notes after the grace period looks unavoidable," Moody said in a statement.

Dec 3: Italy's biggest phone company Telecom Italia SpA cuts its revenue growth forecast for a fifth time in three years, because of deteriorating economy. It also said it will cut another 4,000 jobs in Italy, to help reduce cost.

In March, it expects 2009 sales to grow by 1-2 per cent. Now, it expects sales to be "in-line" with 2008.

It also added that it may sell as much as 3 billion euros of assets in Europe and Cuba, while keeping its Brazilian mobile-phone company.

Dec 5: Motorola Inc had its credit rating lowered by two levels to BB+ by Standard & Poor's because its declining handset business is eating into its profits.

Motorola's mobile phone business has lost about US$2.8 billion in operating income since the start of 2007.

Motorola lost its top ranking in the US mobile phone market, the world's biggest market, to Samsung last quater. It had a 21.1 market share while Samsung had 22.4 per cent.

Dec 10: South Korea will abolish the Wireless Internet Platform for Interoperability, or WIPI, requirement on mobile phones from April next year.

The WIPI requirement was implemented since April 2005.

This means mobile phones in Korea need not to be embedded with platform, paving the way for Apple Inc, to sell its iPhones in the country next year.

Overseas handset makers have been restricted from selling their products in South Korea because of the WIPI, a wireless Internet platform developed to help content providers avoid additional investment to provide services to different carriers.

Friday, December 12, 2008

How is Indonesia's mobile industry taking shape?

Came across an article from a research house few hours ago. The report, published in November, contains some vital information on Indonesia's mobile industry.

The report was prepared by IE Market Research Corp's research associate Wency Yee.

Below are some of the points Yee highlighted:
1. "ARPU in second quarter 2008 was US$5.64, among the lowest in the world and ARPU declines accelerated to 22.1 per cent year-on-year, compared to 15.7 per cent year-on-year in first quarter 2008."

2. "At 11 per cent, Indonesia has by far the highest level of churn among the 200+ mobile operators we cover."

3. "This makes Indonesia's mobile operator environment one of the most challenging in the world, with operators caught in a low-ARPU, high churn market environment."

4. "However, despite this environment, Ebitda margins among Indonesian mobile operators are some of the highest in the world with reported Ebitda margins at 56 per cent in Q2 2008."

The research house predicts that operators in Indonesia will hit Ebitda margins of 63.8 per cent in 2010. Subscriber base is also expected to increase from 116.4 million in Q208 to 130.9 million in 2010.

For more info, check out www.researchandmarkets.com

Thursday, December 11, 2008

Maxis cut prepaid call rates to defend market share...

The price war continues.

Market leader Maxis Communications Bhd - with more than 40 per cent mobile subscriber market share - has slashed its prepaid tariff by about 10 per cent, from 36 sen to 33 sen, for calls to all networks.

Currently, DiGi's prepaid call rates is at 36 sen a minute. Celcom's XPax and Prabayar Celcom Blue is offering 35 sen and 45 sen a minute.

Let's look at the rates in detail:

1. Maxis Hotlink -- 33 sen a minute.
What's the catch? Answer: Must top up RM30.

2. DiGi -- 36 sen a minute. **DiGi 1-Low-Flat-Rate
What's the catch? Answer: Must use more than RM30, before the rates can be adjusted from 48 sen to 36 sen.

***2A. DiGi's new Prepaid I like -- 36 sen a minute, without automatic adjusted rate feature.

3. Celcom XPAX -- 35 sen a minute
What's the catch? Answer: Only for calls within Celcom networks. For calls made to non Celcom networks, rates can go as high as RM2.60 a minute (depending on where the calls are made to).

4. Prabayar Celcom Blue -- 45 sen a minute.
What's the catch? Answer: paying 45 sen a minute and there's still a catch?!

5. U Mobile Prepaid -- 48 sen a minute.
No catch. Per second billing, each second cost 0.8 sen. Pretty much more suitable for people who likes to keep the conversation short.

Update (Dec 19) : The rates for DiGi was referring to DiGi's 1-Low-Flat-Rate prepaid tariff, which comes with adjustable rate features. Thank you reader for pointing this out.

Wednesday, December 10, 2008

P1 expands its coverage

Keeping to its words, Packet One Networks (Malaysia) Sdn Bhd (P1) - a unit of Green Packet Bhd - has expanded its coverage in Klang Valley for its P1 WiMAX services.

P1 wants to make its wireless services available and accessible to 25 per cent of population by end of this year.

The company - which launched its wireless broadband services in Johor recently - will now also offer its services to areas like:

1. Taman Sentul Jaya, Taman Datuk Senu, Bandar Baru Sentul (all three in Sentul),

2. Taman Air Panas and Danau Kota in Setapak, Taman Sri Rampai in Wangsa Maju,

3. Taman Bukit Maluri, Bandar Menjalara,

4. Subang Hi-Tech Park, Subang Jaya and Subang USJ.

5. Klang, namely Taman Bunga Melor, Taman Botanic, Bukit Tinggi, Taman Perindustrian Pandamaran, Taman Chi Liung, Jalan Bukit Kuda, Port Klang’s town centre, Taman Selatan, and Taman Emas.

6. PJ's SS3, Paramount Garden and Sungei Way SS9.

7. Bangsar’s Telawi area.

8. Kampung Baru in Kuala Lumpur.

9. Selected parts of KL’s city centre including Jalan Chan Sow Lin and Jalan Peel, Taman Bamboo in Segambut, the Crystal Crown area in Jinjang and Taman Lawa (also in Jinjang).

It will rollout its services in Penang and other parts of Johor next year.

P1 W1MAX’ promotional subscription starts at RM89 monthly for the 1.2Mbps package and RM199 for the 2.4Mbps package.

Wednesday, December 3, 2008

Malaysian mobile operators competiting on foreign workers market

Yesterday, Celcom launched its "Celcom Prabayar Sukses", a prepaid plan that is specially made for the Indonesian foreign worker segment.

Sukses customers can call XL subscribers for as low as 35 sen. More than 50 per cent cheaper than what Hotlink and DiGi are offering.

Its CEO Datuk Seri Shazalli Ramly believes the new plan is the answer to overtake DiGi.Com, which he believes is the current market leader in terms of IDD market. Celcom is currently in third place, behind Maxis and DiGi.

Here's for comparison:

35 sen a minute to 5 favorite XL users.
45 sen a minute to other XL users
38 sen a minute to fixed line in Indonesia
48 sen a minute to other mobile phone users in Indonesia (9pm to 9am, off peak)
58 sen a minute to other mobile phone users in Indonesia (9am to 9pm, peak)

Hotlink and DiGi
71 sen a minute to mobile phone users in Indonesia
39 sen a minute to fixed line users in Indonesia

TM's iTalk
45 sen a minute to either fixed or mobile lines in Indonesia
55 sen a minute to both fixed and mobile if customers chose mobile call back service

Clearly, Sukses rates are significantly more attractive than Hotlink and DiGi's -- users can save at least 18 per cent if they call to any mobile phone users in Indonesia. Marginal savings when users call fixed line numbers .. (who calls fixed line numbers these days anyway? ;-))

At the same time, its pricing does not really impose a threat on sister company TM's iTalk IDD cards.

It will be interesting to see how DiGi and Maxis Hotlink react to this....

Thursday, November 27, 2008

Sri Lanka Telecom earnings fell 31 per cent on stiff competition

Sri Lanka Telecom Ltd (SLT) - which Malaysian billionaire T. Ananda Krishnan indirectly controls more than 35 per cent - saw its Q3 net profit down by almost one-third after reducing call rates at its mobile phone unit (Mobitel).

Mobitel is trying to close its gap with Dialog Telekom Ltd (controlled by TM International), by offering cheaper packages for state workers.

It is also investing heavily to expand its network. In September, it borrowed US$45 million, part of it will be used to fund its high-speed network expansion outside Colombo.

Net profit dropped to 1.24 billion rupees during the quarter, against 1.8 billion rupees a year ago.

Global Telecommunications Holdings NV, a subsidiary of Usaha Tegas Sdn Bhd, owns over 35 per cent in SLT. The Sri Lankan government also owns 49.5 per cent in SLT.

Analysts' reaction on TMI

While most of the bad news (such as the higher finance cost, losses in Sri Lanka and Bangladesh operations, lower Ebitda margin) have been factored-in by analysts and investors, they are still cautious on how TMI's new capital structure would be.

Among main concerns: will the new structure result in any dilution? if yes, by how much? will the new structure be able to accommodate its expansion plan in Iran?

TMI - which just announced that it has received the green light to bid for a mobile license in Iran via a consortium - said it will announce the structure early next year.

Several analysts have either lowered its target price or downgraded its recommendation. Citigroup, for example, has cut TMI's target price from RM5.40 to RM4.50. Target price ranges from RM3.49 (Affin) to RM7.50 (credit suisse).

Wednesday, November 26, 2008

TMI third quarter net profit fell ...

TMI's Q3 net profit fell by more than 25 per cent, mainly due to the lack of one-off gains and higher finance cost.

No foreign exchange losses for TMI
Unlike sister company TM, TMI's weaker Q3 numbers were not due to foreign exchange losses, thanks to its hedging policy (at subsidiary level).

TMI, at group level, does not have any foreign debt. Its subsidiary PT Excelcomindo (XL) has USD debts, it was understood that half of XL debts are hedged.

Celcom vs DiGi in Q3 and YTD.

Q3 Revenue: Celcom RM1.42 billion (+10% yoy), DiGi RM1.22 billion (+10% yoy).
9-month Revenue: Celcom RM4.135 billion (+10% yoy), DiGi RM3.58 billion (+12.5 % yoy).

Q3 Net Profit: Celcom RM327m (+25% yoy), DiGi RM270m (-1% yoy)
9-month Net Profit: Celcom RM958m (+28% yoy), DiGi RM858.4m (+11.5% yoy)

Q3 Net Addition: Celcom +360k (+126k postpaid, +234k prepaid), DiGi +166k (+126k postpaid, 40k prepaid)
9-month Net Addition: Celcom +1.05m (+309k postpaid, +742k prepaid) DiGi +394k (+270k postpaid, +124k prepaid)
YTD subscriber growth: Celcom + 14%, DiGi +6%
YTD postpaid subscriber growth: Celcom +24%, DiGi +38%

Ebitda margin: Celcom 45.3%, DiGi 42.7%

Postpaid ARPU: Celcom RM102, DiGi RM89
Prepaid ARPU: Celcom RM47, DiGi RM54

Finalising capital structure

Currently, TMI’s balance sheet carries short term debts amounting to RM10.45 billion which is due in 2009. This includes the RM6.45 billion bridging loan for the acquisition of Idea and the RM4 billion outstanding to TM. TMI has decided on a two-pronged approach to address this via a short term solution and a longer term one.

The Group will prepay RM2 billion in respect of amount owed to TM via a new banking facility that matures at the end of 2011. The remaining RM2 billion will be repaid via internally generated funds in accordance with the terms of the demerger due in April 2009, which will also result in lower interest cost for the Group.

The RM4.85 billion bridging loan has been converted to a 3 year term loan, maturing in 2012. The Group is currently in negotiations to term out the remaining USD500 million (RM1.6 billion) to 2012. The Group has been able to address the short term refinancing risks despite current weak credit market.

With the terming out of the short term debts, TMI is concurrently looking to achieve an optimal capital structure through equity or equity like instruments. It is the intention of TMI Group to utilise the new capital to reduce the overall debt position within the 3 year period. Due to the multiple options available to TMI the Group expects to finalise the structure by 1Q 2009.

Sunday, November 23, 2008

Market penetration rate in Asia Pacific and Middle East.

Came across two maps as I was going through the brochures I collected during Mobile Asia Congress 2008. The maps highlighted the Asia Pacific's and Middle East's mobile coverage (for both 2G and 3G). As in turn out, most of the countries in AsiaPac are still on 2G network.

Below are the mobile subscriber base and market penetration details on countries in AsiaPac and Middle East's:

Asia Pac
1. Australia 22.45m (108 per cent)
2. Bangladesh 47m (29 per cent)
3. Bhutan 0.13m (5 per cent)
4. Brunei 0.37m (94 per cent)
5. Cambodia 3.19m (20 per cent)
6. China 611.05m (46 per cent)
7. Cocos (Keeling) Islands <0.01m
8. Cook Island 0.01m
9. Fiji 0.63m (72 per cent)
10. French Polynesia 0.19m (72 per cent)
11. Guam 0.14m (80 per cent)
12. Hong Kong SAR 9.13m (125 per cent)
13. India 318.4m (28 per cent)
14. Indonesia 116.52m (50 per cent)
15. Japan 104.85m (82 per cent)
16. Kiribati <0.01m (1 per cent)
17. Laos 0.83m (13 per cent)
18. Macau SAR 0.93m (178 per cent)
19. Malaysia 24.38m (88 per cent)
20. Maldives 0.33m (89 per cent)
21. Marshall Islands <0.01m
22. Fed' Stats of Micronesia 0.02m
23. Mongolia 1.3m (49 per cent)
24. Myanmar 0.08m (0 per cent)
25. Nepal 1.93m (7 per cent)
26. New Caledonia 0.12m (49 per cent)
27. New Zealand 4.63m (111 per cent)
28. North Korea <0.01m
29. Northen Mariana Islands 0.04m (52 per cent)
30. Pakistan 92.62m (54 per cent)
31. Palau <0.01m
32. Papua New Guinea 0.08m (1 per cent)
33. Philippines 65.86m (74 per cent)
34. Samoa 0.05m (26 per cent)
35. Singapore 6.31m (173 per cent)
36. Solomon Islands 0.02m (4 per cent)
37. South Korea 45.38m (94 per cent)
38. Sri Lanka 9.93m (50 per cent)
39. Taiwan 23.38m (101 per cent)
40. Thailand 60.6m (95 per cent)
41. Timor-Leste 0.12m
42. Tonga 0.04m (33 per cent)
43. Vanuatu 0.03m (15 per cent)
44. Vietnam 53.29m (62 per cent)

Middle East
1. Algeria 31.09m (91 per cent)
2. Bahrain 1.1m (138 per cent)
3. Comoros 0.63m (72 per cent)
4. Djibouti 0.07m (10 per cent)
5. Egypt 36.73m (51 per cent)
6. Iran 44.39m (61 per cent)
7. Iraq 14.63m (51 per cent)
8. Jordan 4.99m (82 per cent)
9. Kuwait 2.92m (108 per cent)
10. Lebanon 1.37m (35 per cent)
11. Libya 9.56m (157 per cent)
12. Mauritania 1.81m (55 per cent)
13. Morocco 23.89m (73 per cent)
14. Oman 3.06m (94 per cent)
15. Palestinian Territory 1.29m (21 per cent)
16. Qatar 1.2m (184 per cent)
17. Saudi Arabia 31.55m (120 per cent)
18. Somalia 0.3m (3 per cent)
19. Sudan 9.91m (27 per cent)
20. Syria 0.95m (35 per cent)
21. Tunisia 8.71m (84 per cent)
22. UAE 9.45m (186 per cent)
23. Yemen 5.5m (23 per cent)

Stats provided by Wireless Intelligence, as at Q3 2008.

Thursday, November 20, 2008

Malaysians spend a lot on voice call and text messages. Myth or Truth?

Well, well, well. It turns out average Malaysians spend more on phone bills and reload coupons, as compared against users in China, Thailand, Indonesia, the Phillipines.

Based on Wireless Intelligence stats, Malaysia ranks 9th in terms of ARPU (average revenue per user) in Asia Pacific, probably ranks 2nd behind Singapore. Average mobile phone users in the country spend US$15.34 a month, on phone bills and reload coupons.

So, which Asian country has the highest ARPU? Here's the top 10:

1. Japan US$50.76
2. South Korea US$43.58
3. Australia US$37.34
4. Singapore US$30.30
5. Macau US$27.43
6. New Zealand US$22.98
7. Taiwan US$22.62
8. Hong Kong US$19.08
9. Malaysia US$15.34
10. China US$9.15

Here's an interesting finding: Japan and South Korea, the two highest ARPU countries in Asia Pacific, are mainly made up of postpaid subscribers. In Japan, 97.6 per cent of users are on postpaid, while in Korea, is 99.3 per cent!

As for Macau, which ranks 5th, with an ARPU of US$27.43 (about 35 per cent more than Malaysia ARPU), is mainly made up of prepaid users. 87.6 per cent of Macau mobile users are on prepaid. I believe, the fact that Macau, being one of the top tourists' destination, does help drive higher ARPU and prepaid segment.

I was in Macau for 6 days, and i have spent almost US$90 on a prepaid starter pack, reload coupons. Prepaid registration is not implemented in Macau, making tourist's life much easier when comes to purchasing a prepaid starter pack. I bought mine for HK$100, it comes with HK$130 worth of credit.

Enough about Macau for now. Back to the Asia Pacific findings.

Overall, ARPU in Asia is declining, as competition forced mobile operators to lower their tariff. Asia Pacific ARPU was about US$25 in Q1 2006, today, it is below US$20 in Q4 2007. ARPU sank further in 2008, by another 10-15 per cent so far this year.

At first, I thought that another reason that could reduce ARPU is that consumers are cutting down on voice calls and SMS, as a result of lower disposable income. However, the stats showed otherwise, Asia Pacific AMPU (Average minute per user) has grown by about 10 per cent between Q106 and Q407. Asia Pac AMPU for 2008 is not available.

A glimpse of the Asia Pacific mobile industry

Below are some key Wireless Intelligence stats of most Asian countries' telecommunications sector, in particularly the mobile industry.

As at Q308:

1. Japan
mobile subscribers: 104.696 million
Ebitda margin: 36.2 per cent

2. South Korea
mobile subscribers: 45.429 million
Ebitda margin 22 per cent

3. Australia
mobile subscribers: 22.45 million
Ebitda margin 29.5 per cent

4. Singapore
mobile subscribers: 6.307 million
Ebitda margin: 34.5 per cent

5. New Zealand
mobile subscribers: 4.628 million
Ebitda margin - N/A

6. Macau
mobile subscribers: 928k
Ebitda margin: 42.7 per cent.

7. China
mobile subscribers: 611.054 million
market penetration: 45.5 per cent

8. India
mobile subscribers: 313.793 million
market penetration: 27.5 per cent

9. Pakistan
mobile subscribers: 92.616 million
market penetration: 53.8 per cent

10. Vietnam
mobile subscribers: 53.294 million
market penetration: 61.5 per cent

11. Bangladesh
mobile subscribers: 47.001 million
market penetration: 29.3 per cent

12. Thailand
mobile subscribers: 60.598 million.
market penetration: 94.9 per cent

Market Insights

Here's some key stats on the mobile industry as of Q3 2008. I must admit that some of these numbers are surprising.

Let's start with the net additions for the key Asian countries. China and India signed up 25.7 million and 22.1 million new subscribers during the third quarter 2008, they now have 611.1 million and 313.8 million mobile customers respectively. Penetration rate is about 45.5 per cent (China) and 27.5 per cent (India).

Pakistan, Vietnam, Bangladesh makes up the top five net additions market -- with 5.9 million, 4.2 million and 3.3 million respectively.

Thailand, Philippines, Japan, Sri Lanka, South Korea added 2.6 million, 2.3 million, 1 million, 668k and 446k new users respectively.

In terms of year on year subscriber growth rate, Vietnam tops the list with 56 per cent growth, followed by India (48 per cent), Bangladesh (48 per cent), Cambodia (39 per cent), Sri Lanka (39 per cent), Indonesia (38 per cent), Pakistan (32 per cent) Laos (30 per cent) Philippines (29 per cent) and Samoa (29 per cent).

Malaysia - thanks to all the stiff competition among Maxis, Celcom and DiGi, resulting to lower call rates and affordable prepaid starter packs - ranks 9 in terms of mobile penetration rate, with about 88 per cent, ahead of Japan (82 per cent), Vietnam (61.5 per cent), Pakistan (53.8 per cent), and Bangladesh (29.3 per cent).

Macau ranks number 1 with a mobile penetration rate of 176 per cent, followed by Singapore (173 per cent), Hong Kong (125 per cent), New Zealand (111 per cent), Australia (108 per cent), Taiwan (101 per cent), Thailand (95 per cent), South Korea (94 per cent).

Clearly, there's still plenty of room to grow for the Malaysian telecommunications industry. These stats are provided by Wireless Intelligence.


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