Malaysia - Telecom 

The Malaysian telecommunications market is a thriving mobile market with four large network operators, an incumbent fixed-line provider with near-monopoly and the overall market underpinned by strong economic fundamentals, albeit some political uncertainties.

The author forecasts that mobile subscriptions will continue to grow in the 2021-26 period and fixed broadband subscribers will also continue to grow and increase its household penetration over the same period. The ratio of the telecommunications sector revenue to GDP is declining from a peak in 2010, sliding down every year since then.

Mobile subscribers numbers and revenue are growing strongly and the back of population growth and the market shift to postpaid. The publisher forecasts 15.5m 5G subscribers by 2026.

Overall telecoms revenue is expected to grow through to 2026 after a marked slow down in 2019 and 2020 due to legacy voice revenue pressure partially offset by mobile data growth in the addition to the COVID-19 pandemic impact.

Mobile Subscribers and Revenue

Over the last five years, the market shifted to postpaid as subscribers move to with increased data allowances. Overall, the number of prepaid subscribers decreased significantly. Mobile network operators are facing competitive pressure with the market shifting to legacy prepaid voice and SMS to data-centric usage increasingly becoming the sole offering differentiator.

Broadband Subscribers - FTTH Push and Fixed Wireless

The Jendela initiative is a Malaysian government program of building full-fibre networks to homes, businesses and government buildings covering 98% of the population by the end of 2025 as well as providing 100% 4G coverage with minimum speeds of 100Mbps.

The broadband market is now experiencing strong growth mostly driven by competition by TIME, Celcom, Maxis and DiGi with Telekom Malaysia still the dominant fixed broadband incumbent.

Households growth and new investments by Maxis, TIME dotCom and YTL will drive up the fixed-broadband subscribers.

Telecom Tower Infrastructure getting a boost from the Jendela initiative

The Malasian telecom towers is reaching an estimated 33,700 towers in 2020. The largest tower company (towerco) is edotco, the infrastructure arm of Axiata also the owner of Celcom, one of the original Malaysian mobile network operators. edotco grew out of the original carve-out of from Celcom.

The remaining share of the towerco market is relatively fragmented with 42% still owned by mobile operators, Maxis, DiGi, Celcom, U Mobile and Telekom Malaysia. Over 16% of the telecom towers are controlled by the 13 State-backed telecommunications infrastructure companies controlling a large swath of regional coverage, leaving only 4% for private independent towercos.

Thematics - Telecoms Infrastructure / 5G / M&A / e-Commerce

Infrastructure funds, pension funds and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with real industry examples and EV/EBITDA comparatives and benchmarks.