KUCHING: Competition in the fixed broadband and postpaid segments are expected to heat up next year, analysts project, while the prepaid segment’s revenue will continue to dwindle.
According to the research arm of MIDF Amanah Investment Bank Bhd’s (MIDF Research) 2019 outlook report on the telecommunications sector, to further boost connectivity and spur greater competition, more fixed broadband players are expected to enter the market.
MIDF Research noted that Tenaga Nasional Bhd (TNB) has initiated a pilot project in Melaka to assess the technical, safety and commercial viability of using the group’s electrical infrastructure for the government’s National Fibre Connectivity Plan (NFCP) that will allow faster, cheaper and wider internet accessibility.
“Meanwhile, the government is also in talks with several foreign companies to potentially allow them to offer broadband services,” the research arm said.
“With the anticipation of a number of new entrants into the broadband market, it could be difficult for existing broadband provider to meaningfully grow their respective customer base.”
On the postpaid segment, MIDF Research noted that revenue across the three main mobile service providers continues to grow steadily.
“This was mainly due to strong take-up rate, continued acquisition momentum in entry level postpaid plans as well as prepaid to postpaid conversions.
“As a result, the postpaid subscriber base continues expand,” it said, adding that the postpaid average revenue per user (ARPU) remained relatively stable.
As such, MIDF Research expected the mobile service providers will continue to offer attractive postpaid proposition to entice more entry-level postpaid subscribers.
“Concurrently, they will also entice existing postpaid subscribers to upgrade the postpaid plan.”
Moving forward, MIDF expected the competition in the postpaid realm to intensify as unifi Mobile unveils new postpaid plans ranging from RM19 per month to RM59 per month.
Based on the price-point, the research arm viewed that Digi.Com Bhd and U Mobile Sdn Bhd would face the greatest threat.
As for the prepaid segment, MIDF Research said that revenue seems to stabilise in the recent quarterly earnings.
“This was mainly anchored by stronger internet revenue mix and better profit margin. Meanwhile, prepaid ARPU remains resilient.
“Moving forward, we expect the prepaid revenue to continue to dwindle, albeit slower pace. This will be driven by attractive internet proposition.”