KUCHING: Analysts unanimously remained neutral on the recent launch of YTL Communications Sdn Bhd’s (YTL Communications) 4G WiMAX service named ‘Yes’ as it was still too early to determine its impact towards the telecommunications sector.
ECM Libra Capital Sdn Bhd (ECM Libra) head analyst Bernard Ching opined that the group’s entry into the telco business would not cause any immediate or irrational increase in competition.
“Constrained by a lack of variety of popular smartphones, we expect the initial take-up rate of Yes’ mobile voice and SMS services to be limited,” he added. “Until more 4G WiMAX smartphones are available in the market, Yes is likely to be just a pure data play and not yet a quad-play service.”
RHB Research Sdn Bhd’s (RHB Research) telecommunications analyst shared this opinion, believing it unlikely that customers would flock to YTL Communications’ Yes service in a big way as having to buy new devices represented an additional cost to potential clients.
“We find the voice rates quite competitive but the SMS rates are not. As for broadband, the rates by Yes may appeal to light users, but heavy users will find the costs rather prohibitive despite the rebates thrown in,” the analyst said.
“Mobile phones running on GSM/3G networks today in Malaysia are not compatible with YTL Communications’ WiMAX network, due to differences in technology. As none of Yes devices use the traditional SIM card that Malaysian users are accustomed to, a new Yes user cannot simply switch to any of the incumbent mobile operators in the future without buying yet another mobile phone,” he highlighted.
Meanwhile, the research team at OSK Research Sdn Bhd (OSK Research) were of the view that Yes could potentially pose a threat to other mobile operators in the market with its cheaper rates over the medium term.
“We do not rule out the possibility of Yes instigating a price war given that its bundled ‘all- in- tariff’ (voice, data & SMS) is significantly below the current headline voice tariffs in the market,” said OSK Research analysts.
“Its attractive data/SMS rates could compel broadband service providers to up the ante on access prices and throw in sweeteners to retain customers, which pose more downside risks on margins.”
“Hence, we think Yes could appeal to light data users, with our analysis suggesting that the inflection point lies between data usage of 1.5 to two gigabytes per month, upon which mobile subscribers would be better off with the incumbents,” they concurred.