Industry Performance Report For 2012

IPR 2012 Shaping a Connected Future
1


1
CHAIRMANS NOTE 3
EXECUTIVE SUMMARY 6

MODULE 1: ECONOMIC PERFORMANCE OF THE INDUSTRY 11
Malaysian Economic Performance Overview for the Year 2012 13
Global and Malaysian GDP Growth 13
Communications Services Contribution to Growth 14
C&M Industry Performance Overview 2012 16
Contribution of the C&M Industry to Bursa Malaysia 16
Bursa Malaysia ACE Market An Overview of Licensees 19
Holding Companies of Licensees on ACE Market Market Listing and Financials 20
C&M Industry Financial Performance Overview 22
Telecommunications Companies 24
Broadcasters 24
Trends of C&M Companies Financial Performance 25
Digital Signature 28
C&M Revenue by Services Market Segment 30
ARPU Comparison 32

MODULE 2: INDUSTRY REGULATORY AND DEVELOPMENT 35
Dual Role of MCMC in the Malaysian C&M Industry 37
C&M Industry Open to Investments 37
MCMC Regulatory Role 38
Licensing of the C&M Industry 41
Shareholding Structure 42
Individual and Class Licensee Ownership 43
Technical Regulation in Spectrum Usage 44
Management of Spectrum in Malaysia 46
Long Term Evolution (LTE) 47
Economic Regulation 49
Access Pricing 49
Accounting Separation 49
Consumer Protection and Beyond 54
Mandatory Standards in Consumer Protection 55
Consumer Protection Mechanisms and Market Surveillance 56
Consumer Complaints 57
Industry Forums and Self Regulation 61
Enforcement 68
C&M Industry Development in Malaysia Reaping Opportunities 70
Building Foundation for 2020 and Beyond 70
MCMC Development Role 73
Nationwide High Speed Broadband Focus 75
Growth of Broadband Connections 76
Mobile Broadband Services 84
3G Subscriptions 84
Mobile Communications Technology 85
The Use of Small Cell Technology 86
Universal Service Provision (USP) Scope, Targets and Evolving Approach 88
World Broadband Comparatives 91
Studies and Developments 91

MODULE 3: COMMUNICATIONS SERVICES 93
C&M Services Connections 95
Fixed Line Services 95
Wireless Fidelity (Wi-Fi) Hotspots 97
Mobile Services 98
Domain Names 104
Extending IP Addressing Availability 108

IPR 2012 Shaping a Connected Future IPR 2012 Shaping a Connected Future 3 2
CHAIRMANS NOTE
The successful implementation of government policies and private sector
investments over the last ten years has seen the industry revenue has quadrupled
to RM51 billion from RM12 billion in the late 1990s. This is on the back of a sound
market capitalisation of RM190 billion, which has also grown significantly from
RM50 billion. Notably in 2011 and 2012 alone, capex for the telecommunications
sector reached unprecedented RM9 billion levels. We believe these reflect investors
confidence in various the private-public partnerships in building-up infrastructure
such as the High Speed Broadband (HSBB). In addition, we also see the
contribution of the Universal Service Provision (USP) towards extending coverage.
In 2012, an additional 2,489 Kampung Tanpa Wayar were added to make up a total
of 3,844 in operation nationwide and a total of 664 towers deployed to bridge the
digital divide.
Given the momentum that we saw in the industry during 2012, we are optimistic
with the opportunities that are in store for us in 2013, especially innovations in the
areas of content and applications, which is crucial to ensure sustainable returns on
investment as well as to continue to act as the enabler and catalyst for the
economic growth. We believe the market will continue to grow with the evolving
environment of our industry demands that we constantly challenge, renew and
improve our approaches.
Acting as a catalyst to network content development, the MCMC is also involved in
exploring global markets to assist in sales of local content generated. In 2012, the
MCMC together with other government agencies and local companies have garnered
a total sales value of RM155 million. This contributes directly to realising the
National Key Economic Area on Communications, Content and Infrastructure (NKEA
CCI) of nurturing Malaysias creative content.
In the past ten years, mobile devices have become pivotal to the business and our
personal lives. Facilitating the new wave of digital lifestyle, there is a major
transitional shift from traditional (voice) mobile devices to Internet-enabled
smartphone devices. On average, 20% starting to use data-intensive applications
related to video, TV and navigation since purchasing their device. Globally, the
penetration rate of smartphone is about 1 in 7 users. For comparison, in Malaysia
the penetration stands at 1 in 4. We believe smartphone ownership in Malaysia will
reach a critical mass in 2013 supported by an initiative under Budget 2013 where
the Government provides RM200 rebate for purchase of smartphones to eligible
youths.


2
MODULE 4: CONTENT SERVICES 111
Malaysian Scenario Today and Precursors to Future 113
TV Broadcast Landscape 113
Digital Terrestrial TV Service Platform 114
Development of Broadcasters 114
FTA TV Broadcasters 115
Media Prima Bhd 115
Pay TV Broadcasters 117
ASTRO 117
IPTV 117
Cable TV 117
Radio Broadcasters 118
Advertising Expenditure (Adex) 120
Global Adex 120
Adex in Malaysia 121

MODULE 5: POSTAL AND COURIER SERVICES 123
Postal Services 125
Landscape of Change and Advancement 125
Regulation of Postal Services 126
Business Units Services Description 127
Development of Pos Malaysia 127
Business in Strategic Alliance 127
Postal Operations through ICT Innovations 127
International Participation and Development 129
Philately 132
Courier Services 133
Strategic Goals 133
Industry Licensing and Revenue Performance 133

MODULE 6: STRATEGIC TRADE ACT 137
Strategic Trade Act 2010 139
MCMC Licensing Under Strategic Trade Act 2010 139
Malaysia and the Strategic Trade Act 139
Implementation and Enforcement 140
STA Framework 141
Strategic Items 142
Online Applications 142
Permits and STA Applications in 2012 142
Categories of Permits 143

MODULE 7: GOING FURTHER IN CONNECTIONS AN OUTLOOK 145
Malaysian Economy Supporting Investments 147
C&M Industry Infrastructure and Access 147
Improving Infrastructure Reach 147
Cross Channel in Accelerating Networked Services and Content 148
Reaping Opportunities by Working Together 148
Reinforcing Efforts in Communications Services Provision 149

QUICK REFERENCE ON TERMS 151
LIST OF FIGURES 152
CONTACT US 154
To a certain extent, this will encourage growth in mobile broadband penetration and
also data usage. For the service providers, potential revenue is expected to be
multiplied as smartphones are able to generate up to 35 times the level of data
traffic that a basic feature phone would use. Going forward, we foresee attractive
packages with good Internet access and superior quality to support applications are
the main reasons for consumers to use smartphones. This is the nexus of a
connected digital lifestyle ecosystem.
The efforts in communications service provision needs to be reinforced such that
challenges ahead can also be turned to opportune business manoeuvres. Towards
this end, the Government has allocated the spectrum for 4G-LTE (Long Term
Evolution) in step for the service providers to provide all IP-based 4G services. The
main focus will be on capacity and the quality of service, hence, the timely rollout
of 4G-LTE is scheduled in 2013 with an estimated 10% population coverage,
reaching 50% by 2017.
There are a lot of positives in the use of Internet, but also there is a need to
heighten the level of awareness of the risk posed by the abuse of Internet to the
public, especially children. Accordingly, the MCMC had in 2012 launched a
nationwide outreach programme on the safe usage of the Internet through Klik
dengan Bijak initiative. It is designed to inculcate the culture of positive use of the
Internet based on the principles of the Rukun Negara amongst Malaysian users. Its
logo or tagline serves as a reminder to users to be careful and to think before they
respond or interact when accessing and using the Internet. Furthermore, the term
Klik is an applicable action on all digital devices and is a term that can be easily
understood by all. The programme targets mainly children and youth as they are
most vulnerable to cybercrimes and online abuses.
Therefore, in order to ensure sustainable and orderly growth of the industry, for the
MCMC and other stakeholders, there is much groundwork to cover. This includes
paving a sound basis in shaping a connected future in this new decade of growth.
Hence, the MCMCs task remains one of dual role of industry regulator as well as
industry growth promoter.
From the regulatory perspective, the implementation of the revised Access Pricing
for the period 2013 to 2015 and Accounting Separation is the next milestone in
enhancing competition in the communications market. Competition itself will
promote efficiency, i.e. in terms of technical, productivity and allocation of
resources. It is therefore a powerful tool to further enhance the industry
performance and attract new investments.

In 2012, the MCMC has also enhanced market surveillance for communications
equipment and devices through strict compliance with safety standard and technical
regulations to ensure consumer protection.
Notably, the year 2012 is one of setting the stage for paving the foundation for
growth and hence, in shaping a connected future. It is my pleasure to present to
the Industry Performance Report 2012.

Dato Mohamed Sharil Tarmizi
Chairman, MCMC

6

Executive Summary
In 2012, there was continued cautious optimism in the global economic scene as the US economy
steadied while the Euro Zone remained in marginal negative growth. In contrast, the Malaysian
economy performed better than expected, recording a growth of 5.6% for 2012 (2011: 5.1%).
The Malaysian economic growth was driven by resilient domestic demand through quality growth from
private sector consumption and investment activities. In a facilitative investment environment for
capital spending, the growth amongst others of the services sectors, including the communications
services, continued into 2012. In the C&M industry, the Governments collaborative efforts in building
broadband or 4G infrastructure also contributed to investments in fixed and mobile
telecommunications, and in digitised media. This is aside from the Entry Point Projects (EPP) in the
National Key Economic Area Communications and Content Infrastructure (NKEA CCI) under the
Economic Transformation Programme (ETP).
Specifically in 2012, fixed and mobile service providers, including broadcasters, invested a total of
RM10 billion in the ratio of 25:68:7. Investments were in new technology for product diversification
and new growth areas of telecommunications such as in broadband telecommunications equipment
and expansion, as well as improvement in broadcast systems and delivery of content.
The C&M Industry in 2012
On Bursa Malaysia, the C&M industry collectively captured RM190.9 billion market capitalisation, which
is based on the market valuations of the major C&M companies in telecommunications, broadcasting
and postal services. This represented 13% of Bursa Malaysia market capitalisation in 2012 (2011:
RM138.5 billion or 10.8%). The C&M industry market capitalisation was supported by positive market
sentiment and their solid financial performance in the year 2012.
On the other hand, the C&M industry revenue performance in 2012 recorded a 6.5% increase to an
aggregate total of RM51 billion. The composition of industry revenue is 85.1% from
telecommunications; 10.4% from broadcasting and 2.4% from postal services. Out of the RM43.4
billion in revenue garnered by the telecommunications companies (2011: RM40.5 billion or 84.6%), the
fixed line revenue constituted 24.9% or RM10.8 billion while the mobile sector constituted 75.1% or
RM32.6 billion.
The broadcasting sector comprising Direct-to-Home (DTH) satellite Pay TV service and Free-To-Air
(FTA TV) service garnered a combined revenue of RM5.3 billion, which is an increase of 10.4% (2011:
RM4.8 billion). Notably, the FTA TV and Pay TV services make up 2.2% and 8.2% respectively of the
total C&M industry revenue.
The postal services sector as represented by Pos Malaysia Bhd contributed RM1.23 billion or 2.4% to
industry revenue in 2012.
The 19 licensees listed through holding companies on the ACE Bursa Malaysia market garnered
revenue of RM1.1 billion in 2012. The digital signature market segment remained relatively small with
revenue of RM29.5 million on the back of more than five million digital certificates issued between the
two digital signature issuing companies.

On communications connections services, the various categories of offerings in the market have overall
increased over the years. New services connections such as wired and wireless broadband have
accelerated in Malaysia aside from the traditional fixed line and cellular mobile phone connections.
The demand for broadband in Malaysia has a strong complement from wireless technology services
with over 3.8 million subscribers compared to fixed (wired) service with 2.3 million subscribers. In
2012, the broadband household penetration rate was 66% (2011: 62.3%) which met the Government
target of 65%. This augurs well for Malaysia towards achieving the target of 75% broadband
penetration nationwide by 2015 as indicated in the Tenth Malaysia Plan.
Notably, the High Speed Broadband (HSBB) infrastructure rollout has exceeded the Government target
of 1.3 million premises passed in October 2012. There were 543,000 HSBB subscriptions by end of
2012 (2011: 234,400 subscriptions). In support of broadband take up the number of Wi-Fi hotspot
locations has accelerated, with a total of 31,493 locations in 2012 (2011: 21,712 locations).
Fixed line service as represented by Direct Exchange Line (DEL) subscriptions posted penetration rate
of 34.4% per 100 household. This contrasts with mobile phone penetration rate of 141.6% in 2012.
Malaysia features more prepaid subscriptions in the ratio of prepaid to postpaid at 80:20. This
translates to 33.6 million prepaid and 7.4 million postpaid subscriptions. The growth rates for prepaid
and postpaid over the years have fluctuated, but the overall ratio to total subscriptions have remained
constant. Notably, 3G mobile subscriptions comprise about a third of the 41 million mobile
subscriptions in the country, with 3G prepaid to postpaid ratio at 60:40.
Telekom Malaysia Bhd (TM) remains an incumbent service provider in the fixed line market with 97.1%
market share. On the other hand, market share for cellular mobile services based on subscribers saw
Maxis leading with 32.2% (13.2 million subscriptions), followed by Celcom at 31.5% (12.9 million
subscriptions), DiGi at 25.6% (10.5 million subscriptions) and U Mobile at 8.5% (3.5 million
subscriptions).
In 2012, the Mobile Virtual Network Operators (MVNO) in Malaysia complementing the cellular mobile
network owners, garnered 0.9 million subscriptions, or 2.2% of the 41 million mobile subscriptions in
the country.

IPR 2012 Shaping a Connected Future 7
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8
Furthermore, the MCMC monitoring the outcome of such surveillances done periodically with its
certifying agent SIRIM Bhd
1
can facilitate further initiatives for conducive investment climate in
the C&M industry.
In 2012, the MCMC implemented Klik dengan Bijak Campaign, an outreach programme that was
launched in Pulau Pinang on 1 July 2012. The programme targets those most vulnerable to
cybercrimes and online abuses, mainly children and youth to empower Internet users in Malaysia
with the knowledge and precautionary measures when they are online.
On the Universal Service Provision front, the MCMC scope of work continues with projects
supporting the goals of the National Broadband Initiative such as Kampung Tanpa Wayar, Time
3, Pusat Internet 1Malaysia, and the Komputer 1Malaysia or 1Malaysia Netbook programmes.
On the industry development front, aside from being a catalyst to the development of local
content, the MCMC is also involved in the initiative to expand local content export revenue
through global market exploration together with FINAS, MDeC and local companies. Such efforts
bring local content to the international markets. This is expected to assist the local companies to
generate more revenue for the nation. The total sales value was RM155 million. This programme
contributes directly to realising the NKEA CCI EPP#1.
Outlook for the C&M Industry in Malaysia in 2013
The continued resilient domestic demand in the local economy, with signs of recovery in certain
advanced economies while regional economies remain stable augur well for communications
services. The C&M industry growth in 2013 is expected to track local economic growth.
Collaborative efforts between the Government and industry stakeholders have brought the
industry to the status and standard in 2012. Going forward, the MCMC will continue to monitor
and press ahead to ensure projects started in 2012 are completed as targeted for 2013. The
projects with specific timelines in 2013 include the Get Malaysian Business Online (GMBO)
project, with the target for online presence of 50,000 micro entrepreneurs in 2013 and the Klik
dengan Bijak outreach programme set to be launched at state level in Sabah and Terengganu in
January and February 2013 respectively, with other states to follow suit into the year.
The MCMC will continue to work with service providers according to the planned timescale
schedule to implement Accounting Separation vis--vis industry working groups meeting at
regular intervals throughout 2013 to discuss and resolve issues along the way. Also plans are in
the pipeline to carry out market accessment to ascertain dominance in the market. The meeting
proceedings will need to be broken into practical modules, to be tackled during the year, such as
cost drivers or documentation, so that by the end of 2013 all major issues are resolved.
The implementation of 4G-LTE services to meet the target minimum population coverage of 10%
for the year 2013 will be monitored for compliance.
The MCMC will continue to work closely with the industry and relevant stakeholders to ensure
projects and initiatives underway are expedited and facilitated for execution.

1
Note: eComM or Online Certification for Communication and Multimedia is a platform for online application on certification and directory of
certified equipment that meets Malaysian regulatory requirements. The link is at www.sirim.my


8
Furthermore, the MCMC monitoring the outcome of such surveillances done periodically with its
1
can facilitate further initiatives for conducive investment climate in
the C&M industry.
In 2012, the MCMC implemented Klik dengan Bijak Campaign, an outreach programme that was
launched in Pulau Pinang on 1 July 2012. The programme targets those most vulnerable to
cybercrimes and online abuses, mainly children and youth to empower Internet users in Malaysia
with the knowledge and precautionary measures when they are online.
On the Universal Service Provision front, the MCMC scope of work continues with projects
supporting the goals of the National Broadband Initiative such as Kampung Tanpa Wayar, Time
3, Pusat Internet 1Malaysia, and the Komputer 1Malaysia or 1Malaysia Netbook programmes.
On the industry development front, aside from being a catalyst to the development of local
content, the MCMC is also involved in the initiative to expand local content export revenue
through global market exploration together with FINAS, MDeC and local companies. Such efforts
bring local content to the international markets. This is expected to assist the local companies to
generate more revenue for the nation. The total sales value was RM155 million. This programme
contributes directly to realising the NKEA CCI EPP#1.
Outlook for the C&M Industry in Malaysia in 2013
The continued resilient domestic demand in the local economy, with signs of recovery in certain
advanced economies while regional economies remain stable augur well for communications
services. The C&M industry growth in 2013 is expected to track local economic growth.
Collaborative efforts between the Government and industry stakeholders have brought the
industry to the status and standard in 2012. Going forward, the MCMC will continue to monitor
and press ahead to ensure projects started in 2012 are completed as targeted for 2013. The
projects with specific timelines in 2013 include the Get Malaysian Business Online (GMBO)
project, with the target for online presence of 50,000 micro entrepreneurs in 2013 and the Klik
dengan Bijak outreach programme set to be launched at state level in Sabah and Terengganu in
January and February 2013 respectively, with other states to follow suit into the year.
The MCMC will continue to work with service providers according to the planned timescale
schedule to implement Accounting Separation vis--vis industry working groups meeting at
regular intervals throughout 2013 to discuss and resolve issues along the way. Also plans are in
the pipeline to carry out market accessment to ascertain dominance in the market. The meeting
proceedings will need to be broken into practical modules, to be tackled during the year, such as
cost drivers or documentation, so that by the end of 2013 all major issues are resolved.
The implementation of 4G-LTE services to meet the target minimum population coverage of 10%
for the year 2013 will be monitored for compliance.
The MCMC will continue to work closely with the industry and relevant stakeholders to ensure
projects and initiatives underway are expedited and facilitated for execution.

1

Industry Regulatory and Development Management in 2012
The C&M industry in Malaysia as of 2012 shows the impact of the convergence law in Malaysia, which
is the Communications and Multimedia Act 1998 (CMA). The CMA created an open telecommunications
market since 1999, enabling new development and creating more opportunities.
In this journey of transformation, the MCMC as the regulator for the converging C&M industry in
Malaysia is aptly tasked with the dual role of industry regulation (including licensing) as well as
industry development. The MCMC is working with all stakeholders, existing service providers and new
entrants or cross industry for the next leap of competitive growth.
Notably, the regulatory and industry development aspects for the networked economy are also aligned
to and guided by the national development programmes under ETP vis--vis the NKEA CCI projects.
In national broadband network development, the National Broadband Initiative has driven broadband
connections, subscriptions and usage of the service through various programmes, which included
direct access to business premise or home, or community based access. Broadband to enhance
business value to users is highlighted through the Get Malaysian Business Online (GMBO) project. In
2012, almost 30,000 SMEs signed up for GMBO, with about 10,000 registered website domains.
From the licensing profile in 2012 we can see growing numbers and type of businesses under the
respective licence categories of provision of network facilities, network services, and content and
applications services. The increases in Individual licences have moderated, but the Class licence
categories in the Application Service Providers or ASP (C) recorded 941 licences at year end.
On the regulatory front, the MCMC completed a cost study in 2012 and subsequently implemented the
Mandatory Standards on Access Pricing for the period 2013 to 2015 effective 1 January 2013. In order
to ensure transparency in service provider operations, the Guidelines on Implementation of Accounting
Separation was issued on 21 December 2012, which sets the basis for service providers to prepare
regulatory financial statements starting 2013. Such financial statements would report different
wholesale and retail business units, as if they were separate businesses, and are prepared over and
above the statutory accounts.
The MCMC in 2012 allocated the spectrum for high speed wireless broadband of 4G-LTE in the 2.6GHz
spectrum band. Infrastructure sharing is a must among the service providers, along with necessary
cost based pricing. The minimum population coverage expected from service providers in this case is
10% by 2013, with increments of 10% each year to reach 50% by 2017.
In 2012, the MCMC enhanced market surveillance for communications equipment and devices widely
available in Malaysia. This includes checking certification marks or labels for fraud and counterfeit. The
purpose is to ensure communications equipment and devices in the Malaysian market comply with
requisite safety standards and technical regulations. The ultimate goals are to ensure consumer
protection and also facilitate trade in telecommunications equipment within ASEAN and globally.

1
can facilitate further initiatives for conducive investment climate in the C&M industry.By end 2012, the total number of companies
listed on Bursa Malaysia ACE
2
at 85.1% or RM43.4 billion (2011: 84.6% or RM40.5 billion). This is followed by broadcasting
3
In 2012, the Axiata group posted
revenue increase of 8.6% to RM17.7 billion from RM16.3 billion
4
inARPU
5
ComparisonServices Act 2012
6
andincluding certifying agencies
7
network
8
. Also known as
4G-LTE, the original specification of this standard was that the speed must exceed 100Mbps
9
.Yota
10
.Bhd
11
can facilitate further initiatives for conducive investment
climate in the C&M industry.The smart network project
12
aimswith a penetration rate of over 100%
13
for recorded at 543,00
14
which This is to ensure digital divide
15

is when the penetration rate
16
of mobile Asias first MVNE
17
. starting 2010
18
HICOM Bhd (DRB-HICOM)
19
on 1 July 2011 marked new beginnings for the postal
services journey going forward. The resolution by Khazanah Nasional Bhd
20
International Development
21
Malaysia integration of S42
22
standards conduct
ASN/ASB
23
transactions

1
Note: eComM or Online Certification for Communication and Multimedia is a platform for online application on certification and directory of certified equipment
that meets Malaysian regulatory requirements. The link is at www.sirim.my

2
Bursa Malaysia ACE market is an alternative market open to companies of all sizes and from all economic sectors similar to the previous MESDAQ market.

3
Excludes Media Prima print revenue.

4
Axiata restated revenue from RM16.5 billion.

5
Average Revenue per User (ARPU) is calculated by dividing number of subscribers by the total revenue within a given timeframe. ARPU is usually quoted as a
monthly figure.
6
Supercedes the repealed Postal Services Act 1991

7
For example, the MCMC has appointed SIRIM Bhd as its product certifying agency (type approval agency) to provide certification approval for telecommunications
products in Malaysia. This is to ensure that imported telcommunications products comply with technical standards set by the MCMC. In other words, any company
intending to sell an imported telecommunications product in Malaysia has to apply for a mandatory SIRIM certified label.

8
LTE Technology Overview, http://www.home.agilent.com/agilent/editorial.jspx?cc=MY&lc=eng&ckey=1803101&id=1803101.
9
The ITU-R organisation specified the IMT-Advanced (International Mobile Telecommunications Advanced) requirements for 4G standards, setting peak speed
requirements for 4G service at 100Mbps for high mobility communication (such as from trains and cars) and 1Gbps for low mobility communication (such as
pedestrians and stationary users).

10
A Russian mobile broadband services provider and smartphone manufacturer.

11

12
Framework for Smart Network, MTSFB 010: 2011

13
A penetration rate of over 100% occurs because of multiple subscriptions.

14
The figure is the overall HSBB subscribers nationwide.

15
Digital divide refers to the gap between individuals, households, businesses and geographic areas at different socio-economic levels with regard to both their
opportunities to access Information and Communication Technologies (ICTs) and to their use of the Internet for a wide variety of activities. Source: OECD
definition.

16
Mobile phone penetration rate is a term generally used to describe the number of active mobile phone numbers, usually as a percentage, within a specific
population.

17
Mobile Virtual Network Enabler (MVNE) is a company that provides services to mobile virtual network operators. The services can include billing, network
element provisioning, administration, operations, support of business support systems and operations support systems, provision of back end network elements,
and enable provision of mobile network services like cellular phone connectivity.

18
Source: The Nielsen Company

19
DRB-HICOM Bhd is one of Malaysian companies listed on the Main Market of Bursa Malaysia Securities Bhd
20
Khazanah Nasional Bhd is the Government of Malaysia's strategic investment fund

21
Source: Border Crossings from Union Postale.
22
Addressing formatting standards conducted by UPU.

23
An investment fund in Malaysia aimed to generate reasonable level of income distribution and capital appreciation to the unit holders through a diversified
portfolio of investments.
8

MODULE 1: ECONOMIC
PERFORMANCE OF THE INDUSTRY


12
Malaysian Economic Performance Overview for the Year 2012

Global and Malaysian GDP Growth

In 2012, there was continued cautious optimism
in the global economic scene as the US economy
steadied while the Euro Zone remained in
marginal negative growth. In contrast, the
Malaysian economy performed better than
expected, recording a growth of 5.6% for 2012
(2011: 5.1%).

The better Malaysian economy growth was driven
by resilient domestic demand. This is quality
growth from private sector consumption and
investment activities. In the C&M industry, the
Governments collaborative efforts in building
broadband or 4G infrastructure also contributed
to more investments in consumer related services
of telecommunications, mobile and digitised
media. This is aside from the mostly private
sector projects from the NKEA CCI under the
Economic Transformation Programme (ETP).

According to Bank Negara Malaysia Annual Report
2012, the Malaysian economy is projected to
experience a solid and steady growth of between
5% and 6% in 2013. Better than expected
growth in advanced economies is expected to
boost the Malaysian economy in 2013 as exports
improve.
Global World Economic Outlook
Real GDP Growth
(%)
Inflation
(%)
2012e 2013f 2012e 2013f
World Growth 3.2 3.5 - -
World Trade 2.8 3.8 - -
Advanced
Economies

US 2.2 2.0 2.1 1.8
Japan 2.0 1.2 -0.1 -0.2
Euro Zone -0.6 -0.2 2.5 1.6
UK 0.2 1.0 2.8 1.9
Developing Asia 6.6 7.1 - -
Asian NIEs
#1
1.7 - 2.6 3.0
Korea 2.0 3.6 2.2 2.7
Chinese Taipei 1.3 3.9 1.9 2.0
Singapore 1.3 2.9 4.6 4.2
Hong Kong
#2
1.4 3.5 4.1 3.0
The Peoples
Republic of China
7.8 8.2 2.6 3.0
ASEAN 4 6.2 - 3.3 -
Malaysia 5.6 5 ~ 6 1.6 2 ~ 3
Thailand 6.4 6.0 3.0 3.3
Indonesia 6.2 6.3 4.3 5.1
Philippines 6.6 4.8 3.1 4.5
India
#3
4.0 5.9 7.5 -
#1
Newly Industrialised Economies
#2
Inflation refers to composite price index
#3
Newly Industrialised Economies
e Estimate
f Forecast

Source: International Monetary Fund, National Authorities and Bank
Negara estimates
Fig. 1.1 Global World Economic Outlook

Selected Economic Indicators
Selected Economic Indicators 2009 2010 2011 2012 (e) 2013 (f)
Gross Domestic Product (GDP)
#1
(2005 real prices) -1.5 7.2 5.1 5.6 5.0 ~ 6.0
Consumer Price Index (CPI)
#2
(2010 = 100) 0.6 1.7 3.2 1.6 2.0 ~ 3.0
Producer Price Index (PPI)
#3
(2005 = 100) -7.1 5.6 9.0 0.1 -
Unemployment Rate 3.7 3.3 3.1 3.0 3.1
Overall Deficit/ Surplus as % of GDP -6.7 -5.4 -4.8 -4.5 -4.0
Per Capita Income by Purchasing Power Parity (USD) 11,781 15,190 15,676 16,368 -
#1
Beginning 2012, real GDP has been rebased to 2005 prices, from 2000 prices previously.
#2
Effective from 2011, the Consumer Price Index has been revised to the new base year 2010 = 100, from 2005 = 100 previously.
#3
Effective from 2010, the Producer Price Index has been revised to the new base year 2005 = 100, from 2000 = 100 previously.

Source: Bank Negara Malaysia, Ministry of Finance, Department of Statistics Malaysia
Fig. 1.2 Selected Economic Indicators


11

Module Content

MODULE 1: ECONOMIC PERFORMANCE OF THE INDUSTRY 11
Malaysian Economic Performance Overview for the Year 2012 13
Global and Malaysian GDP Growth 13
Communications Services Contribution to Growth 14
C&M Industry Performance Overview 2012 16
Contribution of the C&M Industry to Bursa Malaysia 16
Bursa Malaysia ACE Market An Overview of Licensees 19
Holding Companies of Licensees on ACE Market Market Listing and Financials 20
C&M Industry Financial Performance Overview 22
Telecommunications Companies 24
Broadcasters 24
Trends of C&M Companies Financial Performance 25
Digital Signature 28
Development of Public Key Infrastructure in Malaysia 29
C&M Revenue by Services Market Segment 30
ARPU Comparison 32
Mobile 32
Fixed Line 33
Pay TV 33


Communications Services Contribution to Growth

The Malaysia economic growth in 2012 was also supported by a resilient financial sector and a well
developed domestic bond market. The conducive financing environment in the banking sector and the
capital market facilitated funding for capital spending, which was widespread across the economic
sectors, particularly in the services, manufacturing and mining sectors. Strong investment performance
was supported by new and existing infrastructure projects, including those under the Economic
Transformation Programme (ETP) and the regional growth corridors.

Source: Bank Negara Annual Report 2012
Fig. 1.4 Private Investments and Consumption Supported Quality GDP Growth

The facilitative investment climate in Malaysia remains intact. In 2012, private investment posted a
growth of 22%. This includes capital spending from consumer oriented services sector such as
communications and wholesale and retail sectors as these expanded and upgraded existing
infrastructure and services. Investments also were in new technology for product diversification and
new growth areas of telecommunications such as in broadband telecommunications equipment.

Domestic oriented sectors such as the C&M industry continue to be buoyed by strong domestic
demand. Private consumption continued to drive the Malaysia economy since late 2006. On the other
hand private investments have contributed more to GDP growth since 2011.

4.8
-1.5
7.2
5.1
5.6
5-6%
-6
-4
-2
0
2
4
6
8
10
12
2008 2009 2010 2011 2012p 2013f
C
o
n
t
r
i
b
u
d
o
n

t
o

G
r
o
w
t
h

(
%
)

Private Investments and Consumpdon Supported Quality GDP Growth
Private Investment Private Consumphon Public Investment
Public Consumphon Net Export Change in Stocks
GDP
}


13
Malaysia GDP Growth
Malaysia GDP Growth 2011 (%) 2012 (%) 2013f (%) Forecast
Bank Negara Malaysia (BNM) 5.1 5.6 5.0 ~ 6.0 March 2013
Malaysian Institute of Economic Research (MIER) 5.1 5.1 5.6 December 2012
Economic Intelligence Unit (EIU) - 5.6 4.6 March 2013
Malaysian Rating Corporation (MARC) 5.1 5.6 5.3 February 2013
Rating Agency Malaysia (RAM) 5.1 5.2 5.3 January 2013
Source: As indicated
Fig. 1.3 Malaysia GDP Growth

Communications Services Contribution to Growth

The Malaysia economic growth in 2012 was also supported by a resilient financial sector and a
well developed domestic bond market. The conducive financing environment in the banking
sector and the capital market facilitated funding for capital spending, which was widespread
across the economic sectors, particularly in the services, manufacturing and mining sectors.
Strong investment performance was supported by new and existing infrastructure projects,
including those under the Economic Transformation Programme (ETP) and the regional growth
corridors.

Fig. 1.4 Private Investments and Consumption Supported Quality GDP Growth

The facilitative investment climate in Malaysia remains intact. In 2012, private investment
posted a growth of 22%. This includes capital spending from consumer oriented services sector
such as communications and wholesale and retail sectors as these expanded and upgraded
existing infrastructure and services. Investments also were in new technology for product
diversification and new growth areas of telecommunications such as in broadband
telecommunications equipment.

Domestic oriented sectors such as the C&M industry continue to be buoyed by strong domestic
demand. Private consumption continued to drive the Malaysia economy since late 2006. On the
other hand private investments have contributed more to GDP growth since 2011.

4.8
-1.5
7.2
5.1
5.6
5-6%
-6
-4
-2
0
2
4
6
8
10
12
2008 2009 2010 2011 2012p 2013f
C
o
n
t
r
i
b
u
d
o
n

t
o

G
r
o
w
t
h

(
%
)

Private Investments and Consumpdon Supported Quality GDP Growth
Private Investment Private Consumphon Public Investment
Public Consumphon Net Export Change in Stocks
GDP
}


14
Communications Services Sector Contribution to GDP Growth

*Constant 2005 price

Fig. 1.5 Communications Services Sector Contribution to GDP Growth

Domestic demand is expected to continue to
anchor growth in 2013. The sustained
investments in various segments, including
telecommunications, are expected to be
driven by infrastructure upgrading and
continued capacity expansion.

In areas where there is perceived gaps in
access and availability of communications
services in the C&M industry, the public-
private sector collaborative efforts is
employed using funding from the Universal
Service Provision or USP. This is especially so
in ensuring pervasive broadband coverage
and service quality.

Source: Bank Negara Annual Report
Fig. 1.6 Communications Services Performance vis--vis Overall Services Sector

-5
0
5
10
2009 2010 2011 2012p 2013f
C
o
n
t
r
i
b
u
d
o
n

t
o

G
r
o
w
t
h

(
%
)

Real GDP by Economic Acdvity
Contribudon to Growth
Agriculture Mining & Quarrying
Manufacturing Construchon
Services
7.9
7.1
4.9
9.1
2012 Services Sector Performance*
Annual Change (%)
Final Services
Finance & Insurance
Real Estate & Business Sevices
Transport & Storage
Final
Services
Intermediate
Services
8.6
2.9
7.2
7
6.4
8
6.2
9.1
7.6
9.1
0
2
4
6
8
10
2008 2009 2010 2011 2012p
A
n
n
u
a
l

C
h
a
n
g
e

(
%
)

Communicadon Services Performance
vis-a-vis Overall Services Sector
Overall Services Communicahon


15
C&M Industry Performance Overview 2012

Contribution of the C&M Industry to Bursa Malaysia

The positive performance of Bursa Malaysia in 2012 was buoyed by favourable domestic
economic outlook. At end of 2012, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM
KLCI) gained 10.3% to close at 1,689 points (2011: 0.8%). In line with a respectably growing
domestic economy supporting low unemployment rates and stable household income streams,
the C&M companies posted relatively strong stock market performance.

The C&M industry as represented by major public listed companies in telecommunications,
broadcasting and postal sectors in Bursa Malaysia captured RM190.9 billion in market
capitalisation (2011: RM138.5 billion). This constitutes 13% of the Bursa Malaysia market
capitalisation of RM1,465.7 billion in 2012.

Source: Bloomberg, MCMC
Fig. 1.7 Market Capitalisation C&M Industry in Bursa Malaysia

In 2012, the market capitalisation of C&M industry increased by 37.8% compared with an
increase of 17.4% in 2011. The increase was mainly due to higher market capitalisation posted
by DiGi, that is, from RM30.2 billion in 2011 to RM41.1 billion in 2012 (up 36.1%). This is in part
due to perceived potential from products and services innovation and plans for 3G expansion to
further enhance the quality and performance of their network. Axiata also added on RM12.6
billion market capitalisation by value as the group continued to reap growing regional and local
earnings.

Meanwhile, Pos Malaysias market capitalisation stood at RM1.9 billion in 2012, which is an
increase of 35.7%. As part of the DRB-HICOM Group, Pos Malaysia is seeking to offer beyond
postal services in order to leverage its postal assets such as post office locations and extensive
network in supply chain logistics to stay ahead in a demanding landscape of increasing digital
connections.
579.1
640.8 621.6
761.4
1,036.7
615.3
896.0
1,157.3 1,146.0
1,274.7
60.9
81.2
73.7
87.3
69.5
48.5
103.4
118.0 138.5
190.9
0
200
400
600
800
1,000
1,200
1,400
1,600
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Others on Bursa Malaysia C&M
R
M

(
b
i
l
l
i
o
n
)

Market Capitalisadon C&M Industry in Bursa Malaysia


16
By respective C&M companies, two major service providers namely Axiata and Maxis contributed
a significant amount of market capitalisation by 3.8% and 3.4% respectively to the Bursa
Malaysia market capitalisation. The respective individual C&M companies contribution to Bursa
Malaysia by percentage in 2012 is shown in Figure 1.8.

Note: ASTRO Malaysia was listed on 19 October 2012

Fig. 1.8 Individual C&M Companies Contribution to Bursa Malaysia 2012

C&M Companies Market Capitalisation RM (billion)
Companies 2010 2011 2012
% Change
(2010 2011)
% Change
(2011 2012)
Axiata 40.1 43.5 56.1 8.5 29.0
Maxis 39.8 41.1 49.9 3.3 21.4
DiGi 19.1 30.2 41.1 58.1 36.1
TM 12.6 17.7 21.6 40.5 22.0
TIME 2.0 1.8 2.2 -10.0 22.2
Pos Malaysia 1.8 1.4 1.9 -22.2 35.7
ASTRO* n.a. n.a. 15.6 n.a. n.a.
Media Prima 2.6 2.8 2.5 7.7 -10.7
Total 118.0 138.5 190.9 17.4 37.8

*ASTRO All Asia Networks plc was privatised and delisted on 14 June 2010. Newly listed ASTRO Malaysia Holdings Bhd on 19 October 2012
Note: Telekom Malaysia Bhd (TM), Axiata Group Bhd (Axiata), Maxis Bhd (Maxis), DiGi.Com Bhd (DiGi), ASTRO Malaysia Holdings Bhd (ASTRO), Pos Malaysia Bhd
(Pos Malaysia), TIME dotCom Bhd (TIME), Media Prima Bhd (Media Prima)

Fig. 1.9 C&M Companies Market Capitalisation RM (billion)

Specifically, the market capitalisation of individual C&M companies saw Axiata, Maxis and DiGi
posting above RM40 billion levels. This also records these service providers as among the top ten
market capitalisation companies in Bursa Malaysia. In contrast, only Axiata and Maxis were
amongst the top ten in 2011.

DiGi
2.8%
Pos Malaysia
0.1%
TIME
0.2%
Media Prima
0.2%
ASTRO
1.1%
TM
1.5%
Axiata
3.8%
Maxis
3.4% Others on
Bursa Malaysia
87.0%
13.0%
Individual C&M Companies Contribudon to Bursa Malaysia 2012

Fig. 1.10 C&M Market Capitalisation 2010 2012

Fig. 1.11 Top 10 Market Capitalisation 2011 and 2012

Noteworthy is that ASTRO Malaysia Holdings Bhd was a major new listing of C&M companies on Bursa
Malaysia in 2012, with 1.5 billion shares offered to public at a total valuation of RM4.5 billion. This
relisting of ASTRO follows from the privatisation of the previous ASTRO All Asia Networks plc on 14
June 2010. As at end 2012, the market capitalisation of ASTRO on Bursa Malaysia was RM15.6 billion.

5
6
.
1

4
9
.
9

4
1
.
1

2
1
.
6

2
.
2

1
.
9

1
5
.
6

2
.
5

4
3
.
5

4
1
.
1

3
0
.
2

1
7
.
7

1
.
8

1
.
4

2
.
8

4
0
.
1

3
9
.
8

1
9
.
1

1
2
.
6

2
.
0

1
.
8

2
.
6

0
10
20
30
40
50
60
Axiata Maxis DiGi TM TIME Pos Malaysia ASTRO* Media Prima
R
M

(
b
i
l
l
i
o
n
)

C&M Market Capitalisadon 2010 2012
2012 2011 2010
32.2
34.6
40.9
41.1
43.5
47.3
49.6
55.3
55.3
65.5
0 20 40 60 80
TNB
IOI Corp
Genhng
Maxis
Axiata
Public Bank
Petronas Chemicals
Sime Darby
CIMB Group
Maybank
Market Capitalisadon RM (billion)
Top 10 Market Capitalisadon 2011
38.5
38.6
41.1
49.9
51.2
56.1
56.7
57.2
57.5
77.6
0 20 40 60 80 100
TNB
Petronas Gas
DiGi
Maxis
Petronas Chemicals
Axiata
CIMB Group
Sime Darby
Public Bank
Maybank
Market Capitalisadon RM (billion)
Top 10 Market Capitalisadon 2012

Bursa Malaysia ACE Market An Overview of Licensees

By end 2012, the total number of companies listed on Bursa Malaysia ACE
2
market was 112, where 19
of these or 17% are holding companies whose subsidiaries are licensees under the CMA and the Postal
Services Act 1991. The licensees indicated are mostly under the category of Applications Service
Provider (Class) or ASP (C) licensees.

Licensees Listed on ACE Market 2012
Holding Company (ACE Listed) Licensee Type of Licences*
Asia Media Group Bhd Asia Media Sdn Bhd ASP (C)
Diversified Gateway Solutions Bhd Diversified Gateway Bhd ASP (C)
DVM Technology Bhd DVM Intellisource Sdn Bhd ASP (C)
Extol MSC Bhd Extol Ventures Sdn Bhd ASP (C)
GD Express Carrier Bhd GD Express Sdn Bhd Courier
Instacom Group Bhd iZZinet Sdn Bhd NFP (I), NSP (I)
M3 Technologies (Asia) Bhd M3 Technologies (Asia) Bhd ASP (C)
Mexter Technology Bhd
Ezymobile International Sdn Bhd ASP (C)
Mexcomm Sdn Bhd ASP (C)
M-Mode Bhd
M-Mode Mobile Sdn Bhd ASP (C)
M-Mode Systems Sdn Bhd ASP (C)
Mobile Multimedia Sdn Bhd ASP (C)
MNC Wireless Bhd
MNC Wireless Bhd ASP (C)
Moblife.TV Sdn Bhd ASP (C)
mTouche Technology Bhd
IdotTV Sdn Bhd ASP (C)
Mobile Touchetek Sdn Bhd ASP (C)
N2N Connect Bhd N2N Connect Bhd ASP (C)
Nextnation Communication Bhd
Dubaitech Marketing Sdn Bhd ASP (C)
Nextnation Network Sdn Bhd ASP (C)
OCK Group Bhd OCK Setia Engineering Sdn Bhd NFP (I)
Privasia Technology Bhd
IPSAT Sdn Bhd ASP (C), NFP (I), NSP (I)
Privanet Sdn Bhd NFP (I), NSP (I)
Redtone International Bhd
DE Multimedia Sdn Bhd CASP (I)
Redtone-CNX Broadband Sdn Bhd ASP (C), NFP (I), NSP (I)
Redtone Marketing Sdn Bhd ASP (C), NFP (I), NSP (I)
Redtone Mobile Sdn Bhd ASP (C)
Redtone Mytel Sdn Bhd ASP (C)
Redtone Telecommunications Sdn Bhd ASP (C), ASP (I)
Smartag Solutions Bhd Smartag Technologies Sdn Bhd ASP (C)
XOX Bhd
XOX Com Sdn Bhd ASP (C), NSP (I)
XOX Media Sdn Bhd ASP (C)
XOX Mobile Sdn Bhd ASP (C)
YTL e-Solutions Bhd
Airzed Broadband Sdn Bhd NFP (I), NSP (I)
Y-Max Networks Sdn Bhd NFP (I), NSP (I)
*ASP Applications Service Provider; CASP Content Applications Service Provider; NSP Network Service Provider; NFP Network Facilities Provider
I Individual; C Class

Source: Bursa Malaysia ACE Market, Industry
Fig. 1.12 Licensees on ACE Market 2012

2
Bursa Malaysia ACE market is an alternative market open to companies of all sizes and from all economic sectors similar to the previous
MESDAQ market.
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Holding Companies of Licensees on ACE Market Market Listing and Financials

The proceeds garnered in the respective IPO exercises and the offer or issue prices are as cited in
Figure 1.13.

Referring to Figure 1.14, most of the licensees on the ACE market are categorised under
telecommunications services. The other business categories observed includes software research and
development, computer services, mobile content and value added services.

The presence of licensees in ACE market shows the development of the C&M industry in new areas of
products and services. This is in line with the growing presence and potential of SME companies to the
overall C&M industry growth.

Holding Companies of Licensees Market Listing and Financials
Holding Company Date Listed on ACE
IPO Proceeds
RM (million)
Offer/ Issue Price
RM
Asia Media Group Bhd 11 January 2011 22.5 0.23
Diversified Gateway Solutions Bhd 2 August 2006 16.9 0.41
DVM Technology Bhd 2 January 2004 20.7 0.40
Extol MSC Bhd 20 March 2006 7.8 0.30
GD Express Carrier Bhd 17 May 2005 10.5 0.30
Instacom Group Bhd 18 January 2005 7.7 0.43
M3 Technologies (Asia) Bhd 27 January 2003 10.1 0.45
Mexter Technology Bhd 12 April 2005 13.9 0.40
M-Mode Bhd 6 December 2004 9.2 0.45
MNC Wireless Bhd 25 October 2005 7.7 0.48
mTouche Technology Bhd 21 July 2005 9.0 0.60
N2N Connect Bhd 28 November 2005 8.4 0.70
Nextnation Communication Bhd 26 August 2005 25.0 0.78
OCK Group Bhd 17 July 2012 27.0 0.36
Privasia Technology Bhd 27 April 2006 15.6 0.60
Redtone International Bhd 9 January 2004 29.5 0.95
Smartag Solutions Bhd 18 April 2011 17.7 0.31
XOX Bhd 10 June 2011 37.4 0.80
YTL e-Solutions Bhd 2 July 2002 38.5 1.10
Source: Bursa Malaysia ACE Market, Industry
Fig. 1.13 Holding Companies of Licensees Market Listing and Financials
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Licensees Listed on ACE Market 2012

Fig. 1.14 Licensees Listed on ACE Market 2012


By sector revenue, the telecommunications companies held a major share of the C&M industry revenue
3

companies with 10.4% or RM5.3 billion in 2012 (2011: 10.0% or RM4.8 billion).

The postal services revenue showed improvement based on annualised revenue of RM1.23 billion in
2012 (2011: RM1.17 billion from RM1.01 billion in 2010).

C&M Industry Revenue 2010 2012

C&M Industry Revenue by Sector 2010 2012

Source: Industry, MCMC
Fig. 1.17 C&M Industry Revenue 2010 2012

3
0
10
20
30
40
50
60
2010 2011 2012
45.4
47.9
51.0
R
M

(
b
i
l
l
i
o
n
)

C&M Industry Financial Performance Overview

The C&M industry in 2012 recorded a total aggregate revenue of RM51 billion, an increase of 6.5%
from RM47.9 billion in 2011. This is based on the financial accounts of the C&M industry revenue from
the telecommunications, broadcasting, postal services and digital signature.

The aggregate domestic revenue was RM39.7 billion, which is a growth of 5.9% from RM37.5 billion in
2011. Meanwhile, the foreign revenue was RM11.3 billion representing an increase of 8.7%. The
improved performance is due to better regional economic performance in 2012.

The foreign revenue was mainly contributed by the Axiata Group, which has continued to fortify its
presence in the regional telecommunications markets. The Group has controlling interest in mobile
communication operations in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia as well as
strategic stakes in other countries such as India, Singapore and Pakistan.

Fig.1.15 C&M Industry Revenue Growth: Domestic compared to Foreign

Fig. 1.16 C&M Industry Revenue compared to GDP

0
10
20
30
40
50
60
2008 2009 2010 2011 2012
30.9
(79.6%)
32.2
(78.2%)
34.9
(76.9%)
37.5
(78.3%)
39.7
(77.8%)
7.9
(20.4%)
9.0
(21.8%)
10.5
(23.1%)
10.4
(21.7%)
11.3
(22.2%)
R
M

(
b
i
l
l
i
o
n
)

C&M Industry Revenue Growth: Domesdc compared to Foreign
Domeshc Foreign
+ 13.9% Foreign
+ 4.2% Domesdc
+16.7% Foreign
+8.4% Domesdc
-1.0% Foreign
+7.4% Domesdc
+8.7% Foreign
+5.9% Domesdc
30.9
32.2
34.9
37.5
39.7
4.8
5.1 5.2 5.3 5.3
0
2
4
6
8
10
0
10
20
30
40
2008 2009 2010 2011 2012
R
e
v
e
n
u
e

a
s

%

o
f

G
D
P

R
M

(
b
i
l
l
i
o
n
)

C&M Industry Revenue compared to GDP
C&M Industry Revenue Revenue as % of GDP

Telecommunications Companies

Fig. 1.18 Telecommunications Companies Revenue 2010 2012
In 2012, the telecommunications sector
revenue grew by 7.2% to RM43.4 billion
(2011: up 3.8% to RM40.5 billion). This is
based on aggregated revenue for major
telecommunications service providers namely,
Axiata, Maxis, TM, DiGi and TIME.

The respective market shares of the companies
were relatively consistent over the last three
years as shown in Figure 1.18.

Broadcasters

Note: Excludes Media Prima Print Revenue

Fig. 1.19 Broadcast Revenue 2010 2012
The broadcasting services sector comprises
mainly four Free-To-Air television (FTA TV)
channels owned by Media Prima Bhd (Media
Prima), two Government channels run by
Radio Televisyen Malaysia (RTM), and a
subscription-based multichannel satellite TV
service provider, ASTRO.

The trend of total broadcasting revenue over
the last three years is shown in Figure 1.19.

0
20
40
60
80
100
2012 2011 2010
40.7% 40.2% 40.0%
23.0% 22.6% 22.5%
20.7% 21.7% 22.7%
14.7% 14.7% 13.9%
1.0% 0.8% 0.8%
P
e
r
c
e
n
t
a
g
e

C
o
n
t
r
i
b
u
d
o
n

(
%
)

Telecommunicadons Companies Revenue
2010 2012
TIME DiGi Maxis TM Axiata
RM40.5 billion RM39 billion RM43.4 billion
0
20
40
60
80
100
2012 2011 2010
80.0% 79.2% 79.1%
18.4% 19.1% 19.1%
1.6% 1.7% 1.8%
P
e
r
c
e
n
t
a
g
e

C
o
n
t
r
i
b
u
d
o
n

(
%
)

Broadcasdng Revenue
2010 2012
RTM Media Prima ASTRO
RM4.8 billion RM4.6 billion RM5.3 billion

Trends of C&M Companies Financial Performance

Overall, the C&M companies in telecommunications, broadcasting and postal have recorded a growing
trend in revenue. However, operating profit margins have fluctuated as the companies plough back
revenue for investments as they continue to invest heavily in infrastructure for various purposes such
as network modernisation, coverage expansion and new IT infrastructure investments to meet demand
and improve profitability.

The EBITDA margins are contrasted to show the varying degree of capitalised asset investments
undertaken by the various service providers. With the available data, it can be seen that whilst other
service providers show steady investment trend, TIME spots relative volatile margin performances.
This is in view of the recent restructuring in the group and Mergers & Acquisitions activities
undertaken.

Nevertheless, based on revenue, TIME posted the highest revenue growth of 33.3% among
telecommunications service providers, driven by global bandwidth sales, data centre and growth in
fixed line business.

C&M Companies Financial Performance 2008 2012
Companies
Revenue RM (billion)
#1
Operating Profit Margin (%)
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
TM 8.7 8.6 8.8 9.2 10.0 8.4 12.4 14.8 13.6 11.9
TIME - 0.3 0.3 0.3 0.4 - - 11.2 22.4 17.5
Axiata
(including
Celcom)
11.3 13.3 15.6 16.3 17.7 17.5 24.1 22.1 24.6 23.1
Maxis 8.4 8.6 8.9 8.8 9.0 38.0 35.5 37.7 36.7 31.9
DiGi 4.8 4.9 5.4 6.0 6.4 31.9 28.4 30.1 26.8 25.1
ASTRO
#2
- - 3.6 3.8 4.2 - - 28.8 26.0 19.0
Media Prima
#3
0.8 0.7 1.5 1.6 1.7 20.4 38.1 20.8 18.9 17.8
Pos Malaysia 0.9 0.9 1.0 1.2 1.2
#4
9.4 9.1 8.2 12.4 12.1
#1
Including revenue from foreign operations
#2
Newly listed ASTRO Malaysia Holdings Bhd on 19 October 2012. Revenue adjusted for calendar year
#3
Includes Print Revenue. Media Prima completed acquisition of The New Straits Times Press (Malaysia) Bhd (NSTP) in 2010
#4
Adjusted for calendar year. Change of financial year end from 31 December to 31 March effective year 2012

Fig. 1.20 C&M Companies Financial Performance 2008 2012


C&M Companies EBITDA 2008 2012
Companies
EBITDA RM (billion) EBITDA Margin (%)
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
TM 2.8 3.1 3.3 3.4 3.2 31.6 33.2 31.5 32.5 30.7
TIME - 0.1 0.1 0.1 0.1 - 21.9 27.0 40.3 32.8
Axiata 4.3 6.1 7.4 7.2 7.4 38.1 46.1 47.3 44.2 42.0
Celcom - 2.7 3.0 3.1 3.4 - 43.8 43.9 43.7 43.7
Maxis 4.4 3.4 4.4 4.4 4.2 52.1 39.6 49.5 49.8 47.1
DiGi 2.2 2.1 2.4 2.8 2.9 45.1 43.3 44.4 46.4 46.0
Pos Malaysia 0.1 0.1 0.1 - 0.2 13.7 14.5 13.8 - 19.4
#3

Media Prima
#1
0.2 0.3 0.4 0.4 0.4 26.3 44.9 27.3 24.9 23.8

FYE Jan
2009
FYE Jan
2010
FYE Jan
2011
FYE Jan
2012
FYE Jan
2013
FYE Jan
2009
FYE Jan
2010
FYE Jan
2011
FYE Jan
2012
FYE Jan
2013
ASTRO
#2
- 1.0 1.4 1.7 1.7 - 30.4 37.4 44.0 40.2
#1
Includes Print. Media Prima completed acquisition of The New Straits Times Press (Malaysia) Bhd (NSTP) in 2010
#2
FYE 31 January
#3
12 months FYE 31 March 2013

Fig. 1.21 C&M Companies EBITDA 2008 2012

Note: Celcom operating profit margin not available

Fig. 1.22 Telecommunications Companies Operating Profit Margin compared to EBITDA Margin 2008 2012

TM revenue gained a solid 8.7% increase to RM10 billion in 2012 from RM9.2 billion recorded in 2011,
driven by Internet and data services. TM charts stable EBITDA margins of over 30% over the years
while operating margin averaged 14% over the last three years. TM is steadily rolling out High Speed
Broadband or HSBB services nationwide alongside extending Internet access beyond homes and
offices through Wi-Fi hotspots. In 2012, besides network upgrades, TM invested and built the Asia
Pacific Gateway (APG) submarine cable system, which will provide fibre connectivity to eight countries
in the Asia Pacific region to meet rising demand in data.

8
38
32 32
52
45
12
35
28
33
22
40
43 44
15
11
38
30
32
27
50
44 44
14
22
37
27
33
40
50
46
44
12
17
32
25
31
33
47
46
44
0
10
20
30
40
50
60
M
a
r
g
i
n

(
%
)

Telecommunicadons Companies Operadng Prot Margin compared to EBITDA Margin
2008 2012
Operahng Prot Margin (%) EBITDA Margin (%)
TM TIME Maxis DiGi
2008 2009 2010 2011 2012 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2008 2009 2010 2011 2012
Celcom

Mobile service providers show EBITDA margins above 40%. This is the same for both service providers
operating domestically and internationally. Essentially, mobile service providers are expanding and
strengthening their existing mobile network and coverage along with preparation for the next
generation mobile network efficiencies that LTE (Long Term Evolution) or 4G services can offer.

In 2012, the Axiata group posted revenue increase of 8.6% to RM17.7 billion from RM16.3 billion
4
in
2011. This growth was driven by data services and strong performance from all operations both
domestic and foreign. Domestically, Celcom shows the highest infrastructure investments over the last
two years.

Maxis revenue for 2012 stood at RM9 billion, an increase of 2.3%, mainly driven by growth in all its
business segments, including non voice services (2011: RM8.8 billion). Maxis continued its investments
in network infrastructure and focused on provision of future digital services. In 2012, Maxis entered
into infrastructure sharing partnerships with U Mobile and Redtone to meet user demand for data
access and higher speeds.

Furthermore, Maxis is leveraging on provision of home fibre Internet services now available to more
than 1.3 million homes in the Klang Valley, selected areas of Pulau Pinang, Johor, Perak, Melaka,
Negeri Sembilan and Kedah. This is offered through a combination of their own fibre optic
infrastructure and the HSBB initiative. Maxis introduced Internet speeds of 10Mbps, 20Mbps or 30Mbps
catering to consumer needs. Mobile customers are offered rebates with the home fibre Internet
subscription.

Meanwhile, DiGi revenue in 2012 was RM6.4 billion, an increase of 6.7% (2011: RM6 billion or an
increase of 11.1%). The growth was driven primarily by strong demand for mobile Internet services
and growing demand for smartphone plans and packages. DiGi provision of data services include
broadband plans with upload and download speeds over DiGi 3G network at 14.4Mbps. Solutions
offered include services for individual and business use as well as machine to machine solutions.

DiGi transformation investment plans continued in optimising its 3G network for more consistent
speeds and better mobile Internet experience. DiGi is also investing in network infrastructure to spur
mobile Internet business aside from preparation into rollout of the upcoming 4G-LTE network and
accompanying services.

All mobile service providers also offer smart packages that cater to customer needs, such as
addressing affordability and quality of service. These have various offerings by price level and length
of use, such as fees on daily, weekly and monthly basis.

4
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Note: DigiCert revenue adjusted for calendar year 2011 and 2012 due to change of financial year end from 31 December to 31 March effective year 2011

Fig. 1.24 Digital Certificate Revenue

Development of Public Key Infrastructure in Malaysia

Source: MCMC
Fig. 1.25 Development of Public Key Infrastructure in Malaysia

25.3
19.3
26.0
21.3
23.6
5.4 4.6 3.9 5.6 5.9
0
5
10
15
20
25
30
2008 2009 2010 2011 2012
R
M

(
m
i
l
l
i
o
n
)

Digital Cerdcate Revenue
DigiCert MSC Trustgate


27
Digital Signature

Under the Digital Signature Act 1997, the MCMC has a licensing and regulatory role of the
certifying agencies. In 2012, there are two licensees issuing digital signatures, namely MSC
Trustgate.com (Trustgate) and DigiCert Sdn Bhd (DigiCert). These certifying agencies posted
combined revenue of RM29.5 million in 2012 (2011: RM26.9 million). This represents an increase
in revenue of RM2.6 million or 9.7% from 2011.

Out of the total digital signature revenue for 2012, Trustgate posted RM5.9 million or 20%
market share. This is an increase of 5.4% from RM5.6 million in 2011. Meanwhile, DigiCert
recorded revenue of RM23.6 million which is an increase of 10.8% from 2011. This is in line with
a higher take up of eFiling for tax return submission under the Inland Revenue Board.

Digital Signature Act 1997 and the Role of MCMC

Source: MCMC
Fig. 1.23 Digital Signature Act 1997 and the Role of MCMC


C&M Revenue by Services Market Segment

The C&M services market segment excluding revenue from foreign operations shows the significant
impact of mobile revenues contributing close to 60% of C&M industry revenue as a whole. However,
there is a slowing industry revenue trend averaging 7% over the last three years mainly due to a more
established market in mobile services in Malaysia in terms of service connections.

In this mobile case, the investments in 4G-LTE going into 2013 is expected to boost mobile data
capacity constraints and reap opportunities from new mobile services that can be provided over based
network.

Services Market Segment excluding Foreign Revenue 2008 2012
Services Market
Segment
(Public Listed
Companies)
2008 2009 2010 2011 2012 Contribution to the C&M Industry (%)
(RM
billion)
(RM
billion)
(RM
billion)
(RM
billion)
(RM
billion)
2008 2009 2010 2011 2012
Fixed Line 8.1 8.0 8.2 8.6 9.6 26.2 24.8 23.5 22.9 24.2
Mobile 17.8 18.8 20.5 21.6 22.6 57.6 58.4 58.7 57.6 56.9
Subscription TV
#1
2.9^ 3.2 3.6 3.8 4.2 9.4 9.9 10.3 10.1 10.6
Free-To-Air TV
#2
0.8 0.8 0.9 1.0 1.1 2.6 2.5 2.6 2.7 2.8
Postal (excluding courier)
#3
0.9 0.9 1.0 1.2 1.2 2.9 2.8 2.9 3.2 3.0
Others
#4
0.4 0.5 0.7 1.3 1.0 1.3 1.6 2.0 3.5 2.5
Total 30.9 32.2 34.9 37.5 39.7 100 100 100 100 100
Growth (%) - 4.2% 8.4% 7.5% 5.9%
#1
ASTRO Malaysia Holdings Bhd only ^ ASTRO All Asia Networks plc
#2
Media Prima Bhd (excluding print revenue) and Radio Televisyen Malaysia (RTM)
#3
Pos Malaysia Bhd only
#4
ACE market and digital signature market

Fig. 1.26 Services Market Segment excluding Foreign Revenue 2008 2012

In 2012, the fixed line revenue market segment recorded double digit growth of 11.6%, as the
incumbent service provider accelerated the public- private partnership high speed broadband rollout
over recent years. Open access to this network by other service providers augurs well for growth in
revenue and profit in fixed line services.

Broadcasting sector is derived from advertising expenditure or adex, with Pay TV operator deriving
revenue from subscription fees as well. Both Free-To-Air TV (FTA TV) and Pay TV sectors posted
revenue growth of 8.2% and 11.3% respectively. FTA TV growth is expected to remain relatively stable
in 2013 as the expected growth for adex in the country is a positive one.

Pay TV is also expected to benefit from positive adex forecast as well as growth due to increase in
connections as a result of a strategic approach to diversify earnings through making use of content and
distribution network assets.

The domestic C&M services market revenue and trend profile along with market shares are shown in
Figures 1.27 and 1.28 respectively.

excl. excluding

Fig. 1.27 C&M Services Market Share 2008 2012 (%)

C&M Services Market Revenue and Trend Profile 2008 2012

Note: This chart is not drawn according to scale

Fig. 1.28 C&M Services Market Revenue and Trend Profile 2008 2012
0 10 20 30 40 50 60
Fixed Line
Mobile
Subscriphon TV
Free-To-Air TV
Postal (excl. courier)
Others
Fixed Line Mobile Subscriphon TV Free-To-Air TV Postal (excl. courier) Others
2012 24.2 56.9 10.6 2.8 3.0 2.5
2011 22.9 57.6 10.1 2.7 3.2 3.5
2010 23.5 58.7 10.3 2.6 2.9 2.0
2009 24.8 58.4 9.9 2.5 2.8 1.6
2008 26.2 57.6 9.4 2.6 2.9 1.3
C&M Services Market Share 2008 2012 (%)

ARPU
5
Comparison

Mobile

In 2012, three major mobile telecommunications service providers namely Celcom, DiGi and Maxis
recorded approximately 80% or 28 million prepaid subscriptions and the balance are postpaid
subscribers.
Service Provider Blended ARPU (RM)
2004 2008 2012
Celcom 73 57 50
DiGi 60 59 48
Maxis 85 59 53
Source: Company Annual Reports; Analyst Briefing and Presentation
Fig. 1.29 Blended ARPU (RM) 2004, 2008 and 2012
Figure 1.29 shows a three years (that is, 2004, 2008
and 2012) comparison of the declining number in
blended ARPU. Price reductions were for, amongst
others, prepaid starter pack and SMS.
The decline in ARPU is offset by an increase in new subscriptions, which translated into reasonably
stronger profitability for the service providers. The industry benefited from higher connections of new
subscribers over a wider income group.

Figure 1.30 shows that overall postpaid ARPU is about two to three times higher than prepaid ARPU
across the service providers. This trend is common in the mobile sector and effective for service
provider profitability as prepaid is a cash business and is a driver to increasing demand for mobile
services. Overall, the demand for mobile Internet and other data service continues to support
profitability across all service providers.

5
Average Revenue per User (ARPU) is calculated by dividing number of subscribers by the total revenue within a given timeframe. ARPU is
usually quoted as a monthly figure.

Fig. 1.30 Postpaid and Prepaid ARPU (RM) 2010 2012
Fig 1.31 Blended ARPU (RM) 2010 2012
39
36
36
92
94
94
46
43
41
83
84
84
36
36
37
104
108
107
2010
2011
2012
2010
2011
2012
P
r
e
p
a
i
d

P
o
s
t
p
a
i
d

Postpaid & Prepaid ARPU (RM)
2010 2012
Celcom DiGi Maxis
52
50
50
52
50
48
50
52
53
2010
2011
2012
Blended ARPU (RM)
2010 2012
Celcom DiGi Maxis
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23
32


32
Fixed Line

Fig. 1.32 TM Fixed Line and Broadband ARPU 2010 2012
Fig. 1.33 TM UniFi Blended ARPU 2011 2012

ARPU for TM fixed line and Streamyx broadband are relatively consistent across three years from
2010 to 2012. ARPU for UniFi saw at RM182 in 2012 likely due to various discounts provided
especially for the SMEs that year in comparison to 2011.

Pay TV

The subscription based multichannel satellite TV service provider namely ASTRO has increased
ARPU from RM85 to RM93 between FY12 and FY13. This was driven by higher demand for value
added products and services offered, that is, the HD B.yond set top box upgrade.

Broadcast Pay TV Residential ARPU (RM)
FY11 FY12 FY13
ASTRO* 85 89 93.2
*
Based on accounts for the year ended 31 January

Source: ASTRO prospectus; ASTRO 4
th
Quarter and unaudited full
year results
Fig. 1.34 ASTRO Pay TV Residential ARPU (RM)
Notably, demand for B.yond HD and Super Pack has
increased by 64% and 109% respectively between FY12
and FY13. For each new HD service subscription, ASTRO
garners an incremental RM20 per subscriber.

Super Pack packages offered at a starting price of
RM125 also provides marked contributed to ARPU
growth.

35 34 34
80 78 80
0
20
40
60
80
100
2010 2011 2012
A
R
P
U

(
R
M
)

TM Fixed Line and Broadband ARPU
2010 2012
Fixed Line Broadband
184
182
180
181
182
183
184
185
2011 2012
B
l
e
n
d
e
d

A
R
P
U

(
R
M
)

TM UniFi Blended ARPU
2011 2012

MODULE 2: INDUSTRY REGULATORY
AND DEVELOPMENT

Dual Role of MCMC in the Malaysian C&M Industry

C&M Industry Open to Investments
The adoption of a convergence law by the Government for the C&M industry in the late 1990s has
accelerated the growth of the industry over the last 12 years. The implementation of Communications
and Multimedia Act 1998 (CMA) had the impact of managing liberalisation and convergence of the
C&M industry then, and today creating the basis for building next generation converged infrastructure,
network facilities and services, including content and application services over the network.
Specifically, the telecommunications industry investment profile in terms of capital expenditure show
increasing trend over the years. This stems from a yearly spending of approximately RM0.5 billion for
infrastructure before 1990, to RM3.5 billion on average when mobile was introduced in the
1990s. Notably, the 10 years since the introduction of the CMA saw spending on infrastructure
escalate to a yearly average of nearly RM5 billion. 2011 and 2012 saw capex at RM9 billion levels.
Infrastructure growth in a developing country like Malaysia is critical. The business climate in Malaysia
remains condusive for investment and the C&M industry is one which has thrived on domestic
investments in a fast growing domestic demand supported economy. The regulatory stance for the
C&M industry is also encourages new investments, especially in the Class licence category.

Source: MCMC
Fig. 2.1 C&M Industry Capex

The CMA as gleaned from the 10 National Policy Objectives also drives an overarching pro investment
stance. In view of propelling growth of the C&M industry from the regulatory and development points
of view, the MCMC as a converged regulator is aptly tasked with a dual role of industry regulator and
promoter.

0.1 0.1 0.1
0.2 0.2 0.2
0.4
0.5
0.7
2.5
2.2
2.6
2.4
2.0
2.5
2.7 2.7
2.5
1.7
1.3
1.8 1.9
2.6
2.8
3.0
6.0
6.7
0
1
2
3
4
5
6
7
8
2004 2005 2006 2007 2008 2009 2010 2011 2012
R
M

(
b
i
l
l
i
o
n
)

C&M Industry Capex
Broadcashng Fixed line Mobile


35
Module Content

MODULE 2: INDUSTRY REGULATORY AND DEVELOPMENT 35
Dual Role of MCMC in the Malaysian C&M Industry 37
C&M Industry Open to Investments 37
MCMC Regulatory Role 38
Licensing of the C&M Industry 41
Licensing Profile over the Years 41
Shareholding Structure 42
Equity Stake in Major Public Listed Telecommunications and Broadcasters 42
Individual and Class Licensee Ownership 43
Technical Regulation in Spectrum Usage 44
Management of Spectrum in Malaysia 44
Long Term Evolution (LTE) 47
Economic Regulation 49
Access Pricing 49
Accounting Separation 49
A Review of Access Pricing in Malaysia 50
Implementation of Accounting Separation in Malaysia 52
Consumer Protection and Beyond 54
Mandatory Standards in Consumer Protection 55
Consumer Protection Mechanisms and Market Surveillance 56
Consumer Complaints 57
A Note on MCMC Complaints Handling Process 59
Industry Forums and Self Regulation 61
Community Outreach Empowering Users 65
Klik Dengan Bijak (KDB) Campaign 65
Enforcement 68
C&M Industry Development in Malaysia Reaping Opportunities 70
Building Foundation for 2020 and Beyond 70
National Transformation Programme 70
NKEAs in National Transformation Programme 70
NKEA CCI Approach 71
NKEA CCI Highlights 2012 71
MCMC Development Role 73
Content Development 74
Nationwide High Speed Broadband Focus 75
Growth of Broadband Connections 77
Broadband Enhancing Business Value for Users 78
Broadband Penetration Rate by State 79
Fixed Line Broadband Services Offered by TM 80
Service Packages Offered 82
HSBB Enhanced Infrastructure Requirements 83
Mobile Broadband Services 84
3G Subscriptions 84
Mobile Communications Technology 85
The Use of Small Cell Technology 86
Universal Service Provision (USP) Scope, Targets and Evolving Approach 88
Kampung Tanpa Wayar (KTW) 89
Time 3 89
Pusat Internet 1Malaysia (PI1M) 90
Komputer 1Malaysia (1Malaysia Netbook) 90
World Broadband Comparatives 91
Studies and Developments 91


The MCMC work programme and activities are in accordance with the principles of the CMA,
transparency, national interest and self regulation. The MCMC vision for the future of the C&M industry
is as follows:

The Malaysian laws governing the C&M industry are provisioned in such a way that while long term
development is the ultimate goal, the regulatory and industry development aspects for the networked
economy guided by the national development plans is at best an implement-review-reshape
process. This allows for dynamic changes to be made over time as the networked economy emerges,
and reinforces our lives in work and play from corporates to individuals alike. In this phased way, the
infrastructure, services, and content and applications have developed in a manageable manner.
In time, as envisioned by the National Policy Objectives for the C&M industry, as the influence of the
Internet or a connected life reaches the very roots of society in the home as well as our thoughts
the ultimate is for the nurturing of a well-informed and self-restrained society.
The dynamics of the process leading to this ultimate scenario are shown in Figure 2.6 as the functions
and working procedure of the MCMC. The ecosystem of feedback process through complaints from
consumers and the workings with the service providers and the self regulation industry Forums are
presented in Figure 2.6.
The industry sectors in which the MCMC has jurisdiction is shown in Figure 2.7.

With this vision, it is obvious then that the dual role of
MCMC in regulatory and development are apt. The
MCMC regulatory powers and functions stem from
Section 16 of the MCMCA while the industry decision
making process involves all stakeholders, including the
highest reporting level for the nation.
The MCMC Vision

A globally competitive, efficient and
increasingly self-regulating C&M
industry generating growth to meet
the economic and social needs of
Malaysia.

Source: MCMC
Fig. 2.5 The MCMC Vision

MCMC Regulatory Role

The MCMC regulatory role covers the CMA, the Postal
Services Act 2012
6
and Digital Signature Act 1997 as the
latter two duties were subsumed over the years to
generate effective industry growth. The duties of the
MCMC under the Strategic Trade Act 2010 were assumed
effective 16 February 2012.
The Laws Regulatory Role
CMA
1998
MCMCA*
1998
Postal
Services Act
2012
Digital
Signature Act
1997
* Malaysian Communications and Multimedia Commission Act

Source: MCMC
Fig. 2.2 The Laws Regulatory Role
The CMA and the Digital Signature Act are part of the national policy objectives to develop Malaysia
towards a developed nation status as envisioned in Vision 2020. Other cyber laws to this effect so far
are as follows:
CMA One of the Cyber Laws in Malaysia

Source: CMA Section 3(2)
Fig. 2.3 CMA One of the Cyber Laws in Malaysia

The 10 National Policy Objectives for C&M Industry in Malaysia
1. Creating a Global Hub
To establish Malaysia as a major centre for C&M information
6. Promote Access and Equity
To ensure equitable provision of affordable services over
ubiquitous national infrastructure
2. Building a Civil Society
To promote a civil society where information based services
will provide a basis for continuing enhancements and quality
of work and play
7. Creating Robust Applications Environment
To create a robust applications environment for end users
3. Nurturing Local Content and Culture
To grow and nurture local information resources and cultural
representation that facilitate the national identity and global
diversity
8. Facilitating Efficient Allocation of Resources
To facilitate the efficient allocation of resources such as skilled
labour, capital, knowledge and national assets
4. Ensuring Long Term Benefits for End Users
To regulate for the long term benefits of end users
9. Developing Industry Capabilities
To promote the development of capabilities and skills within
Malaysias convergence industries
5. Nurturing User Confidence
To promote a high level of consumer confidence in service
delivery from the industry
10. Promoting Secure and Safe Networking
To ensure information security and network reliability and
integrity
Source: CMA section 3(2)
Fig. 2.4 The 10 National Policy Objectives for C&M Industry in Malaysia

6

Scope of copyright protection
widened to cover communications
to public through wired or
wireless means
Covers offences relating to misuse
of computers
To facilitate the practice of
Telemedicine
Purpose
Existing Cyber
Laws
The Computer
Crimes Act 1997
The Copyright
(Amendment) Act
1997
The Telemedicine
Act 1997
To regulate and facilitate the
development of converging
communications and multimedia
industry
To regulate the use of digital
signatures
To provide necessary legal certainty
for transactions and remove
procedural and administrative
impediments for eGovernment
activities
Purpose
Existing Cyber
Laws
Digital
Signature Act
1997
Communications
and Multimedia Act
1998
Electronic
Commerce Act
2006 and
eGovernment
Activities Act 2007
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Licensing of the C&M Industry

Prior to enacting the CMA, licensing was demarcated by way of technology and sector, that is,
telecommunications or broadcasting. The converged licences under the CMA are technology neutral
and are designed to allow services crossing into sub-segment markets. For example, provision of Pay
TV service can be through satellite or through fibre for IPTV to residential high rise buildings.

There are two types of licences, Individual or Class. There are four categories of licences, namely
Network Facilities, Network Services, Applications Services (Class licence only) and Content
Applications Services Licences. Activities are mapped into either Individual or Class type.

Licensing Profile over the Years

From the licensing profile as at 2012, growth can be observed in the numbers and types of businesses
under the respective licence categories of provision of network facilities, network services applications
and content services. Licences issued by MCMC under the CMA have their profile in numbers as in
Figure 2.8 and Figure 2.9.

As is the case, based on the continuum of more to less regulation and the nature of business
landscape developing in Malaysia, the ASP (Class or C) licensees outnumber all the other categories.

Overall, the number of Class licence are expected to increase much faster over the years in view of
such services making full use of available networked infrastructure as well as hitting thresholds in
terms of user connections and usage conditions.

Source: MCMC
Fig. 2.8 C&M Licensees (Individual) 2003 2012

2
8
3
6

5
5
6
3

6
8

8
0

8
3

1
0
1

1
1
2

1
2
2

3
0

4
2

6
1

6
8

7
5

8
7

8
7

1
0
3

1
1
4

1
1
8

1
9

1
9

1
9

2
0

2
3

2
4

2
4
3
5

3
7

3
7

0
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

L
i
c
e
n
s
e
e
s

C&M Licensees (Individual) 2003 2012
NFP (I) NSP (I) CASP (I)

Functions and Working Procedure
Communications & Multimedia Act 1998 and Postal Service Act 2012

Source: MCMC
Fig. 2.6 Functions and Working Procedure

Sectors under MCMC Jurisdiction

Source:MCMC
Fig. 2.7 Sectors under MCMC Jurisdiction


Source: MCMC
Fig. 2.9 C&M Licensees (Class) 2003 2012

Shareholding Structure

Equity Stake in Major Public Listed Telecommunications and Broadcasters

Based on the major public listed C&M companies, the equity stakes in these companies are mostly
local shareholders. The exception is DiGi, which has majority foreign equity stake.

2
4

2
9

2
9

3
3

2
8

2
3

2
4

2
9

2
5

2
2

2
3

2
9

3
2

3
5

2
9

2
3

2
4

3
0

2
7

2
4

1
9

1
3

2
8

1
8

3
0

2
6
9
6
1
5
1

3
9
5

3
7
2

3
6
8

4
0
1

3
9
4

5
2
6

7
1
2

9
4
1

0
100
200
300
400
500
600
700
800
900
1,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

L
i
c
e
n
s
e
e
s

C&M Licensees (Class) 2003 2012
NFP (C) NSP (C) CASP (C) ASP (C)
Equity Stake (%) in Major Public Listed C&M Companies 2012
Telcos
Substantial Shareholders Non
Substantial
Shareholders
Total No. of
Shares
(billion)
Foreign
Local
Others Bumiputera
Maxis 3 79 8 10 7
Axiata 14 57 8 21 9
DiGi 54 27 5 14 8
TM 4 63 12 21 4
TIME 3 72 - 25 1
Broadcast
Media Prima 50 1 24 25 1
ASTRO 13* 71 12 4 5
Note: Based on Annual Report 2012
*Includes Malaysian and foreign institutional and selected investors as per ASTRO IPO prospectus

Source: MCMC
Fig. 2.10 Equity Stake (%) in Major Public Listed C&M Companies 2012


42

Individual and Class Licensee Ownership

In 2012, there were an accumulative total of 277 licensees in the Individual category. Close to
96% of these licensees are locally owned, with detailed breakdown as shown in Figure 2.11. The
remaining 4% or 10 licensees are majority foreign owned, that is, eight licensees of NSP (I) and
two licensees of NFP (I). A similar profile is seen in the Class Licences.

Type of Licence
Types of Shareholder
Total Local
Foreign
Bumiputera Non Bumiputera GLC Others*
Individual
Percentage (%) 43 25 13 16 4

Total Number of Licensees 118 70 36 43 10 227
Class
Percentage (%) 49 35 2 8 6

Total Number of Licensees 496 355 20 81 61 1,013

Note: Categories profile is based on more than 50% ownership
*Mixed shareholding, no particular type of shareholder having a controlling interest in the company

Source: MCMC
Fig. 2.11 Profile of Shareholder: C&M Licensees (Individual & Class) 2012

43
25
13
16
4
49
35
2
8
6
0
10
20
30
40
50
60
Bumiputera Non-Bumiputera GLC Others* Foreign
P
e
r
c
e
n
t
a
g
e

o
f

C
o
m
p
a
n
i
e
s

b
y

B
u
m
i
p
u
t
e
r
a
,

N
o
n

B
u
m
i
p
u
t
e
r
a
,

G
L
C
,

O
t
h
e
r
s

a
n
d

F
o
r
e
i
g
n

(
%
)

Prole of Shareholder: C&M Licensees (Individual & Class) 2012
Individual (277)
Class (1,013)


44

Management of Spectrum in Malaysia (Contd)

Spectrum Plan

The Spectrum Plan is a vital document which contains radio
frequency allocation for various wireless services in Malaysia and
accompanying notes on constraints when using the frequencies
The Spectrum Plan is used as a:
Fundamental document to manage the allocation and assignment of
our national band
Reference for the ITU approved allocation
Reference to the availability of services using the frequency and the
conditions to use them

The latest National Spectrum Plan was issued in September 2011 and
superseded the November 2006 edition.

Standard Radio System Plan (SRSP)

SRSP Objectives
To guide on the use of spectrum which is allocated based on the Spectrum Plan

Main Use of SRSP
The SRSP provides information on:
Minimum technical requirements for the efficient use of allocated frequency bands
The equipment characteristics and minimum specifications, frequency channelling and
coordination initiatives required in order to ensure efficient and interference-free
deployment of radio systems
Radio systems and device specification and classification


43

Technical Regulation in Spectrum Usage
The Technical Regulations provision of the CMA covers spectrum assignment, technical standards
including certifying agencies
7
and technical forum, and numbering and electronic addressing
aspects.
Specifically, the regulations prohibit the use of spectrum without an assignment of spectrum.
This is to safeguard and ensure efficient usage of spectrum, which is a finite national asset. In
this respect, the MCMC is tasked with assigning spectrum, including reissue of spectrum
assignment (refarming), apparatus and class assignment which has to comply with the Spectrum
Plan.
The MCMC also monitors interference in spectrum usage, and the feedback issuance is need to
enhance efficiency in spectrum usage and policy development.

Management of Spectrum in Malaysia

The Mission of Spectrum Management

To ensure that spectrum usage is efficient and in line with provisions of the CMA
To create the environment for the use of radio spectrum in the present and for the
future in Malaysia
Spectrum is One of the National Assets

Spectrum Policy and Management
Main Functions:
Spectrum policy and management over
the long term
National spectrum regulations and
allocation
Maintain international relationships within
the context of spectrum management
Capacity building of experts in the field of
spectrum management
Ensure readiness of computerised
spectrum management devices

Objective of Spectrum Management
Develop and adopt best practices from the
perspectives of administration, regulation and
technical support to achieve:

Efficient spectrum usage
Minimising interference (ITU-R Radio
Regulation (RR) Article 15)
Harmonising spectrum usage (domestic and
international)
Coordination (ITU-R Radio Regulation (RR)
Article 9)
Notification (ITU-R Radio Regulation (RR)
Article 11)

7
For example, the MCMC has appointed SIRIM Bhd as its product certifying agency (type approval agency) to provide certification approval for
telecommunications products in Malaysia. This is to ensure that imported telcommunications products comply with technical standards set by the
MCMC. In other words, any company intending to sell an imported telecommunications product in Malaysia has to apply for a mandatory SIRIM
certified label.


Management of Spectrum in Malaysia (Contd)

Spectrum Monitoring

- Part of the Feedback Process for Spectrum Planning and Policy Management

Source: MCMC
Fig. 2.12 Spectrum Monitoring is One of the Feedback Process

Spectrum Monitoring
- Guided by Spectrum Monitoring Plan

Types of spectrum monitoring:
- Field strength reception (BS)
- Quality reception (MS)
- Occupancy level
Analysis of illegal spectrum usage
Enforcement action for illegal spectrum usage
Maintenance (preventive/repairs)
Timely calibration to ensure accuracy during measurement
Procure test/monitoring equipment

Long Term Evolution (LTE)

Long Term Evolution (LTE) is a high performance radio interface for 4
th
generation mobile
communications systems. Developed by the Third Generation Partnership Project (3GPP), LTE is the
evolution of the Universal Mobile Telecommunications System (UMTS) towards an all IP broadband
network
8
. Also known as 4G-LTE, the original specification of this standard was that the speed must
exceed 100Mbps
9
. However, none of the current technologies meet those specifications but it is still
marketed as 4G as they represent substantial improvement over 3G.

Source: Adapted from http://www.answers.com/topic/w-cdma-umts
Fig.2.13 Evolution of Digital Cellular Standards

Work on LTE standards began in 2004. The first completed LTE standard which is based on 3GPP
Release 8 specification was published in March 2009. LTE standards development was then continued
with 3GPP Release 9, with the specification completion in December 2009. The first commercial LTE
services were launched in Sweden and Norway in December 2009 based on 3GPP Release 8

followed
by the United States and Japan in 2010.

LTE is expected to fulfil the wireless industry needs for a decade or more. In order to meet the ITU
IMT-Advanced requirements for a 4G technology, 3GPP (Third Generation Partnership Programme) is
developing LTE Advanced, defined in 3GPP Release 10 and beyond.

In October 2009, LTE Advanced (for systems beyond 3GPP Release 10) was submitted to the ITU as
an IMT-Advanced or LTE Advanced and was finalised by 3GPP in March 2011.

8
9
The ITU-R organisation specified the IMT-Advanced (International Mobile Telecommunications Advanced) requirements for 4G standards,
setting peak speed requirements for 4G service at 100Mbps for high mobility communication (such as from trains and cars) and 1Gbps for low
mobility communication (such as pedestrians and stationary users).
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

The technology received its first commercial implementation in October 2012 by Russian network,
Yota
10
.

According to the definition set by the ITU Radio Communication Sector (ITU-R), International Mobile
Telecommunications-Advanced (IMT Advanced) systems are mobile systems that include new
capabilities of IMT that go beyond those of IMT-2000. Such systems which sometimes also referred to
as LTE Advanced systems, provide access to a wide range of telecommunications services including
advanced mobile services, supported by mobile and fixed networks.

The main features of an LTE Advanced system are ability to support low to high mobility applications
and a wide range of data. This is to meet users and service demands in multiple environments. It
boosts faster data rates than its predecessors. LTE Advanced and WiMAX Release 2 will be the first
real 4G networks.

Although it has the same mobility features as LTE, LTE Advanced has two times the cell edge user
throughout. It also adapts well to several network loads and can collect up to five carriers. This means
LTE Advanced can allocate resources when the network gets busy, which translates to faster data
rates.
The LTE technology can be used in a number of frequency bands. In the Asia Pacific region, the
1800MHz and 2.6GHz spectrum bands have been earmarked for LTE.

In Malaysia, several companies have conducted LTE technology trials since 2010. In December 2012,
the MCMC announced the allocation of 2.6GHz spectrum for LTE. With the allocation of this spectrum
band, fully commercial LTE networks are expected to proliferate in Malaysia starting 2013.

Economic Regulation

10
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Economic Regulation
Economic regulation under the CMA is divided into three key chapters, namely licensing, general
competition practices and access to services. The purpose of the licensing chapter is to control and
monitor the entry of service providers into the market, while the competition chapter provides power
to the MCMC to act against licensees who engage in anti-competitive conduct. The third chapter
under economic regulation, namely access to services is mainly to promote any-to-any connectivity
and ensure fair and non-discriminatory access to facilities and services.
Exercising its powers provided for under economic regulation, the MCMC had carried out two major
regulatory initiatives in 2012, namely the review of access pricing and implementation of accounting
separation.
Access Pricing
In order to ensure access is provided in a fair, transparent and non-discriminatory manner, it is
essential to ensure that both the pricing and non-pricing terms and conditions are equitable to both
access seekers and access providers. On one hand, terms and conditions that are not favourable to
access seekers will result in access seekers opting to build, rather than buy and such situation does
not augur well for a country as infrastructure is duplicated and resources are inefficiently allocated.
On the other hand, if terms and conditions are not fair for access providers, it will reduce their
incentive to invest in infrastructure. In determining access prices, the MCMC has to carefully balance
the interest of both access seekers and access providers that will facilitate competition in the market
with consumers being the ultimate beneficiaries.
In line with the provisions under the chapter on access to services, the MCMC had carried out a study
using industry data to calculate access prices for facilities and services listed on the access list. The
aim of the study is determine wholesale prices paid by one service provider to another service provider
for a particular facility or service.
In December 2012, the MCMC issued a public inquiry report, setting out its views on whether access
prices for facilities or services will be regulated and the manner in which it will regulate those prices.
The report was followed out the issuance of Mandatory Standard on Access Pricing, which determines
access prices for facilities and services that the MCMC has decided to regulate.
Accounting Separation
In December 2012, the MCMC released the Guidelines on Implementation of Accounting Separation in
Malaysia. The Guidelines set out the basis on which the telecommunications service providers are
required to prepare regulatory financial statements for the wholesale and retail services identified by
the MCMC starting from 2013.
Accounting separation will reduce information asymmetry between regulators and service providers.
As a result of the requirement imposed by the MCMC, service providers will maintain detailed data and
records in order to produce the regulatory financial statements and this will enhance visibility that
could be beneficial to both the MCMC and services providers. The MCMC can use regulatory financial
statements to investigate and resolve competition complaints, while service providers can use the
information to develop strategies for their companies.



49
A Review of Access Pricing in Malaysia

Price regulation of wholesale services is important in order to promote sustainable competition in
the industry for the long-term benefit of end users of telecommunications services. Cost-based
wholesale prices will also provide appropriate signals for investment and new entry into the
market. Therefore, the MCMC ensured that there is balance between the needs of Access
Providers and Access Seekers for the beneficial and efficient supply of telecommunications
services. Wholesale services referred to in this context are the facilities and services that MCMC
has listed on the Access List. There are currently 19 wholesale services regulated on the Access
List, and this review will determine which services should have their prices regulated, and at
what rate.

Recognising the impact that setting wholesale prices could have on the service providers,
consumers and on the industry, since October 2011, the MCMC has embarked on a study to
determine the costs to provide those services. This involved an extensive exercise to collect data
from the service providers and then to build five economic cost models. There has also been
extensive consultation with the service providers, in order to obtain feedback on the five
economic cost models, as part of the process.

The MCMC then carried out a Public Inquiry in accordance with sections 58 and 61 of the
Communications and Multimedia Act 1998 from 1 October to 14 November 2012. The purpose of
this Public Inquiry is to foster a robust consultative process before the MCMC makes a decision
on setting prices for regulated wholesale services for the period of 2013 2015. This approach
was designed to promote certainty and transparency in the exercise of the MCMCs powers.

At the close of the Public Inquiry, the MCMC received 14 submissions. After considering the
submissions, the MCMC published the Public Inquiry Report that set out the findings on 14
December 2012.

In the Public Inquiry Report, MCMC noted that industry self regulation through commercial
negotiation is preferable in most cases. There are circumstances, however, in which commercial
negotiation is unlikely to produce an outcome for the long term benefits of end users and, in
these circumstances, criteria for intervention by the MCMC are necessary.

Based on the feedback received during the Public Inquiry, MCMC will intervene in the market
through ex ante regulation in the following circumstances:

The presence of non-transitory high barriers to entry;
The continuing absence of a trend towards effective competition; and
Ex post regulatory controls are unlikely to be sufficient to address concerns regarding
access to fair and reasonable access prices.

The table below summarises the MCMCs decision.

MCMC Final View from Public Inquiry
Service MCMC Final View
Fixed Network Origination Service Price regulation. Separate prices for IP-based origination.
Fixed Network Termination Service Price regulation. Separate prices for IP-based termination.
Mobile Network Origination Service Price regulation for mobile and WiMAX voice services
Mobile Network Termination Service Price regulation for mobile and WiMAX voice services
Interconnect Link Service Price regulation based on transmission prices
Wholesale Local Leased Circuit Service Price regulation based on transmission prices
Infrastructure Sharing No price regulation
Domestic Connectivity to International Services,
specifically connection services to the submarine
cable system
Price regulation based on transmission prices and co-location facilities
Network Co-Location Service
Price regulation for access to physical space provided by Network
Service Providers
No price regulation for other co-location prices
Full Access Service No price regulation
Line Sharing Service No price regulation
Bitstream Services, including
(a) Bitstream with Network Service; and
(b) Bitstream without Network Service
No price regulation for bitstream services

Sub-loop Service No price regulation
Digital Subscriber Line Resale Service No price regulation
Digital Terrestrial Broadcasting Multiplexing Service No price regulation. [Not included in the study.]
Wholesale Line Rental Service No price regulation
HSBB Network Service with QoS
HSBB Network Service without QoS
No price regulation
Transmission Service Price regulation of common transmission types
Source: MCMC
Fig. 2.14 MCMC Final View From Public Inquiry

For some services, the MCMC had adopted glide paths to provide greater stability for the industry.
Although there are several methods by which glide paths can be calculated, MCMC has adopted a
linear glide path over a three year period. The MCMC adopted glide paths to set prices for fixed
origination service, fixed termination service, mobile origination service and mobile termination
service.

Subsequently, on 21 December 2012, the MCMC issued a Mandatory Standard on Access Pricing,
which sets out prices for some of the above mentioned services for the period 2013 to 2015.


Implementation of Accounting Separation in Malaysia

The MCMC has taken steps to implement accounting separation in Malaysia. Accounting separation is
a regulatory tool, which involves matters such as accounting standards and methodologies, audit
procedures, transparency of cost attribution to different services and reconciliation with statutory
accounts. In other words, accounting separation is not a set of rules about how to organise an
operators business, rather it is a system for recording and reporting accounting information for
certain types of regulatory purposes.

Accounting separation aims to provide greater transparency and is a tool used to assess anti-
competitive conducts such as price discrimination, cross subsidisation, price squeeze and margin
squeeze in order to promote competition in the C&M industry.

There are many forms of separation measures that can be undertaken, that is, functional separation,
structural separation and divestiture. However, comparing these stated measures, accounting
separation is the least intrusive and burdensome but nevertheless meets the MCMC objectives.

Accounting separation has various benefits. To the regulator, it enhances transparency and reduces
information asymetry which enables detection of potential anti competitive conduct and provides full
visibility of market profitability and rebalancing. To operators, it provides strategic benefits in
understanding the unit cost and profitability of different services that they are offering, as well as the
impact of technological change on profitability when current costs are used. To consumers, in the
long run, accounting separation will enhance competition in the market, leading to more choices at
affordable rates.

Accounting separation is usually imposed on vertically integrated operators who have upstream
services that are used by that operator as well as competitors to provide downstream services.

Implementing accounting separation in Malaysia marks a major undertaking for the service providers
and MCMC, requiring both time and resources. Recognising the impact that accounting separation
would have on the service providers and consumers, the MCMC carried out a public inquiry from 7
September to 31 October 2012. The purpose of the inquiry was to foster a robust consultative
process before the MCMC made a decision on service providers who will be subjected to accounting
separation and the services for which regulatory financial statements are required to be prepared.
Subsequently, a Public Inquiry Report was issued on 30 November 2012.

Specifically, an assessment was carried out in the C&M industry. It was observed that only fixed and
mobile networks have upstream services that are used by their own retailers and other competitors
to provide downstream services. As such, only vertically integrated licensees providing fixed network
services and mobile network services are required to provide separate accounts for the services
identified by the MCMC. An overview of these services are shown in the tables following.

The implementation of accounting separation will begin in 2013. Service providers are required to
prepare a set of regulatory financial statements for regulatory purposes at the level of different
wholesale and retail business units, as if they were separate businesses. The regulatory financial
statements are prepared over and above the statutory accounts and would detail costs, revenues,
assets and liabilities by type of services determined by the MCMC.

Accounting separation will be implemented in a phased manner whereby service providers are
required to submit regulatory financial statements based on historic cost for the first two years starting
from 2013. This is followed by current cost basis begining 2015 and onwards. Audited regulatory
financial statements are to be submitted to the MCMC nine months from the end of each financial
year.

In order not to burden smaller service providers, the MCMC has set the threshold limit where
operators with revenue and/or total assets below RM3 billion will be required to only produce
abbreviated regulatory financial statements showing income and net assets at a less granular level.
Smaller service providers are only required to submit a compliance statement endorsed by the
company.

Analysing these regulatory financial reports will provide the MCMC with more detailed and reliable
financial information on revenue, cost, capital employed, profitability and financial returns of
telecommunication products and services in Malaysia for both fixed and mobile services. This
information will enable the MCMC to make informed decisions on competition issues and the
framework will allow complaints to be dealt with in a more rigorous and timely manner. However, in
view of concerns expressed on confidentiality of licensee information that could harm their business,
the MCMC has decided not to publish such information.

Service Identified for Accounting Separation
Fixed Network Services Mobile Network Services
Market Services Market Services
Wholesale Wholesale exchange lines
Wholesale local access copper
Wholesale local access fibre
Wholesale broadband access
Wholesale leased lines
Backhaul services
Call origination
Call termination
Transit services
Interconnection circuits
Other
Wholesale Call origination
Call termination
MVNO access
National roaming
International roaming
RAN sharing
Backhaul services
Other
Retail Retail exchange lines business
Retail exchange lines residential
Local calls
National calls
International calls
Calls to mobiles
Leased lines
Broadband
Other
Retail Connections and subscription
Voice
SMS
Data
International roaming
Other
Other n.a. Other n.a.
Note: The Guidelines on Accounting Separation in Malaysia as at 21 December 2012 can be viewed at
http://www.skmm.gov.my/skmmgovmy/media/General/pdf/AS-guidelines.pdf

Source: MCMC
Fig. 2.15 Services Identified for Accounting Separation


Consumer Protection and Beyond

There is a provision in the CMA safeguarding the users in the supply and demand of C&M services in
Malaysia. Therefore, legislation supports the MCMC and the industry stakeholders including the
consumers in their roles to play.
The MCMC has a balancing role in that it implements the CMA provisions through various legislative
and persuasive means. This approach involves the MCMC in the development of role as well. For
example, the MCMC working with others in supporting the service provider(s) to build a critical shared
communication tower in a remote location so that communication services coverage is available.
Over the years, the standards to which the service providers adhere to have been established with the
industry such as mandatory standards in the quality of service provided. This also involves ensuring
necessary certification and codes for various purposes. The service providers in this way have a
conducive environment for their investments safeguarded by standards or guidelines in providing
supply to consumers. Thus, they are relatively assured of orderly development and recouping of
investment over time. Roles and overall approaches to consumer protection are shown in the figure
below.

Among factors sought to be established are competitive pricing, wide choice, quality of service in
products and services provided, including suitable networked content. Consumers play a crucial role in
ensuring results of consumer protection approaches. They provide feedback for improving
infrastructure, products and services instantly and over time.

Consumer Protection in Action Roles and Approaches

Consumer Protection Safeguard the User

Source: MCMC
Fig. 2.16 Consumer Protection in Action Roles and Approaches
Avenues for Consumer Complaints
www.complaint.cfm.org.my
http://aduan.skmm.gov.my
Certification/Codes e.g. Consumer
Equipment Certification or Codes
Implemented by Self Regulating Forums
Mandatory Standards on Quality of
Service (Implemented by MCMC)
CMA and Subsidiary
Legislation


54
Mandatory Standards in Consumer Protection
The detailed regulatory mechanisms in consumer protection to achieve these deliverables include
mandatory standards on quality of service, and regular customer satisfaction surveys to
ascertain and monitor the level of satisfaction of consumers with the services provided by the
licensees.
MCMC on Consumer Protection Regulatory Approaches and Beyond

Regulatory Mechanism in Consumer Protection

Source: MCMC
Fig. 2.17 MCMC on Consumer Protection Regulatory Approaches and Beyond

The regulatory mechanisms have been instituted and reviewed over time to ensure that the
regulatory implementation keeps up with the changing industry microcosm. This is to amend
necessary provisions to ensure dynamism in the regulations, reflecting reality in aspects of
regulations compared to industry developments.
Another example is the mandatory standards on quality of service, which were developed and
later instituted effective 2003. Over time various other services which have previously not
available have been included. In this case, these are the services for broadband access. In 2010,
services involving mobile content, predominantly involving mobile messaging services, were
subject to quality of service provisions under the CMA.

QoS
Mandatory
Standards
Dial up
Internet
Access
Digital
Lease Line
Services
Public
Cellular
Services
Public
Switched
Telephone
Network

Public
Payphone
Broadband
Access
Services
Mobile
Content
Services
(latest 2010)
Content
Applications
Services
CMA

Promote & protect
consumer interest in
use of C&M services
QoS
- Mandatory standards
- Consumer Satisfaction
Survey
Rates Regulation
(Fixed Telephony
Services only)
- Monitoring
Enforcement
Required Applications Services
Complaint Bureau
Prepaid Registration
Others
- Mobile Content Services
(Mobile Content Services
effective 1 July 2010)
- Monitoring

Consumer Protection Mechanisms and Market Surveillance

The CMA has various provisions for technical standards such as requirements for safety and
interoperability of network facilities and its certification aside from the establishment of technical
standards forum to achieve a high level of technical competencies and service delivery through
mandatory and self regulatory technical codes. All these provisions along with quality conformity
assessment systems need to be enforced for effectiveness so as to ensure consumer and business
confidence in their use and investment.
In 2012, besides the consumer protection mechanisms that are in place, another mechanism was
established on market surveillance for customer communications equipment and devices that are
widely distributed in Malaysia. This includes checking certification marks or labels for fraud and
counterfeit.
Examples of product categories identified for verification of required technical specifications are hand
phones, Bluetooth products, Wi-Fi products, walkie talkies, short range devices, single line phones,
facsimile and ADSL modems.
The purpose is to ensure that communications equipment and devices in the Malaysian market comply
with the requisite safety standards and technical regulations. The ultimate goals are to ensure
consumer protection and also facilitate trade in telecommunications equipment.
Furthermore, the outcome of such surveillances done periodically with its appointed partner SIRIM
Bhd
11
can facilitate further initiatives for conducive investment climate in the C&M industry.

11
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Consumer Complaints
The MCMC established the Consumer Complaints Bureau (CCB) in 2007 to handle complaints from the
public and other stakeholders. The information on CCB and the process to lodge a complaint is
available at http://aduan.skmm.gov.my. In 2012, a total of 9,826 complaints were received against
9,222 complaints in 2011. This represents an increase of 6.5%.

Source: MCMC
Fig. 2.18 Trend of Consumer Complaints 2002 2012

Among the type of complaints received, 70% of them were against service providers. These centred
on issues such as poor service delivery or performance mainly on service disruption and quality of
Internet connection; billing and charging; SMS service particularly on mobile content services; the
absence of or poor service coverage; misrepresentation of service; false or fraud registration; unfair
practices; postal and courier; and dispute on terms and conditions.
The remaining 30% of the complaints received were relating to content (new media, SMS, TV and
radio); services provided at Kampung Tanpa Wayar (KTW); cybercrimes such as phishing; spectrum
interference; Komputer 1Malaysia; telecommunication structure and radiation; illegal installation of
TVRO parabolic dish or non standard equipment; and other miscellaneous issues.
As in the previous year 2011, there were also complaints received that are not under MCMC
jurisdiction such as non delivery of item purchased online; investment or quick cash scheme; copyright
issues; and others. These were referred to the relevant authorities for resolution.
Out of the 9,826 complaints, 95% of these were resolved or noted for suggestions and views. On
average, 21% of 9,826 complaints have been resolved within 72 working hours, which exceeded 20%
target of the Key Performance Index for 2012 of the Honorable Minister.

190 343 369 370
664
2,147
4,289
6,178
8,013
9,222
9,826
0
2000
4000
6000
8000
10000
12000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

C
o
m
p
l
a
i
n
t
s

Trend of Consumer Complaints
2002 2012
CCB was
set up

Figure 2.19 shows complaints by service providers. For reference the trend of complaints received in
2012 in comparison to 2011 is shown in Figure 2.20.
Complaints against Service Providers

Source: MCMC
Fig. 2.19 Complaints Against Service Providers

Category of Complaints 2010 2012
No. Category 2010 2011 2012
2010 2011
Change (%)
2011 2012
Change (%)
1. Unlicenced service provider 1 2 15 - Small base
2. Radio amateur/apparatus assignment 20 17 22 10 29
3. Dispute on Terms and Conditions (T&C) 37 19 22 -40 16
4. TV parabola/non standard equipment 56 51 62 11 22
5. Telecommunication structure/radiation 44 53 64 45 21
6. Komputer 1Malaysia 28 71 64 154 -10
7. Postal/courier 68 56 65 -18 16
8. Unfair practices 57 318 100 75 -69
9. False/fraud registration 76 96 141 86 47
10. Not under MCMC 164 131 199 21 52
11. Misrepresentation of service 140 218 238 70 9
12. Miscellaneous 143 207 243 42 17
13. Spectrum interference 62 108 346 458 220
14. Cybercrimes 233 397 424 82 7
15. Kampung Tanpa Wayar (KTW) - 71 466 - Small base
16. Service coverage/availability 573 680 835 46 25
17. Short Messaging Service (SMS) 826 1,052 1,175 42 12
18. Billing and charging 835 1,228 1,513 81 23
19. Content 1,205 1,627 1,578 31 -3
20. Poor service 3,445 2,820 2,254 -35 -20
Total 8,013 9,222 9,826 23 7
Source: MCMC
Fig. 2.20 Category of Complaints 2010 2012

TM
1,999
U Mobile
133
Maxis
1,380
YTL
78
DiGi
711
P1
217
Celcom
1,137
ASTRO
527
Others
97
Pos
Malaysia
29
Izzinet
39
2011
TM
1,544
U Mobile
188
Maxis
1,158
YTL
106
DiGi
836
P1
285
Celcom
1,587
ASTRO
246
Others
122
Pos
Malaysia
36
OCESB
35
2012

Source: MCMC
Fig. 2.21 Category of Complaints 2012

A Note on MCMC Complaints Handling Process
It is pertinent to highlight that a complaint against a licensee should be referred to the licensee first.
This accords the licensee the first opportunity to resolve the complaint. The other alternative should
the complaint is not resolved is to lodge the complaint to the industry Forum. This is to the
Communications and Multimedia Consumer Forum of Malaysia (CFM) and the Communications and
Multimedia Content Forum of Malaysia (CMFM).
However, in situations where resolution of the complaint is still not satisfactory, then the complainant
can lodge a complaint with the MCMC. A Guideline for MCMC Complaints Handling is available at:
http://www.skmm.gov.my

2,254
1,578
1,513
1,175
835
466
424
346
243
238
199
141
100
65
64
64
62
22
22
15
0 500 1,000 1,500 2,000 2,500
Poor Service
Content
Bill and charging
Short Messaging Service (SMS)
Service coverage/availability
Kampung Tanpa Wayar (KTW)
Cybercrimes
Spectrum interference
Miscellaneous
Misrepresentahon of service
Not under MCMC
False/fraud registrahon
Unfair prachce
Postal/Courier
Telecommunicahon structure/ radiahon
Komputer 1 Malaysia
TV parabola/non standard equipment
Radio amateur/apparatus assignment
Dispute on Terms and Condihons (T&C)
Unlicensed serivce provider
Number of Complaints
Category of Complaints 2012

2,254
1,578
1,513
1,175
835
466
424
346
243
238
199
141
100
65
64
64
62
22
22
15
0 500 1,000 1,500 2,000 2,500
Poor Service
Content
Bill and charging
Short Messaging Service (SMS)
Service coverage/availability
Cybercrimes
Spectruminterference
Miscellaneous
Misrepresentation of service
Not under MCMC
False/fraud registration
Unfair practice
Postal/Courier
Telecommunication structure/ radiation
Komputer 1 Malaysia
TV parabola/non standard equipment
Radio amateur/apparatus assignment
Dispute on Terms and Conditions (T&C)
Unlicensed serivce provider
Number of Complaints
Category of Complaints 2012

Complaints Handling Process

Source: MCMC
Fig. 2.22 Complaints Handling Process

Industry Forums and Self Regulation

The self regulatory process was established by MCMC over the years in terms of initial funding and in
the eventual designation of respective industry forums in the C&M industry. The four Forums in
Malaysia and what they do are shown in Figure 2.23. The Forums have evolved in various ways in the
last 10 years. Among these are changes in management structure, solidifying and enhancing their
respective objectives, and enriching discussion aside from developing voluntary industry codes,
guidelines and best practices.

C&M Industry Forums
Forums Designation Website Objectives and Function
Communications and
Multimedia Consumer
Forum of Malaysia (CFM)
March 2001 www.cfm.org.my Draft, develop and prepare codes that protect the rights of the
consumers including review and amendment over time; provide an
avenue and channel for lodging complaints, disputes and grievances;
and enhance consumers confidence through the promotion and
encouragement of high standards of service, conduct and
performance throughout the C&M industry.
Communications and
Multimedia Content Forum
of Malaysia (CMCF)
March 2001 www.cmcf.my Committed to maintain and promote industry self regulation.
Monitor content and related issues under the Malaysian
Communications and Multimedia Content Code.
Malaysia Access Forum
Bhd (MAFB)
March 2003 www.mafb.com.my

To develop, formulate and recommend a voluntary access code and
make recommendation on the access list; and to provide a common
working platform for user and provider on access issues.
Malaysian Technical
Standards Forum Bhd
(MTSFB)
October 2004 www.mtsfb.org.my Responsible for the preparation and maintenance of technical codes
which includes, the requirements for network interoperability and
promotion of network facility safety.
Source: Respective Industry Forums, MCMC
Fig. 2.23 C&M Industry Forums

Industry Forums in Self Regulation

Source: Industry Forums, MCMC
Fig. 2.24 Industry Forums in Self Regulation

C&M Industry Forums in Malaysia
CFM, CMCF, MTFSB, MAFB
ForumMembers

Consumers

Service Providers

Public Interest Groups

NGOs

Other Stakeholders
Self Regulation Tasks and Duties for Various Purposes

Produce voluntary industry codes
Monitor respective areas vis--vis codes
Deal with issues and complaints vis--vis codes
Advisory (to drive service development and improvement)
Educate, create awareness, and disseminate industry information as
related
Advocate professionalismin industry conduct
Conduct R&D as related
Others
Highest Standards of
Business Ethics

Codes and guidelines are
industry based, abides
to laws and regulations

Industry best practices

Platform
for
Discussion
For the benefit of consumers and
service providers

Among highlights to the work of the Forums to date are the CFM deepening their services to enhance
consumer awareness and creating a CFM complaints portal at www.complaint.cfm.org.my. The MTSFB
highlights its work on smart network for Malaysia. In the meantime, the MAFB is working on the
voluntary access code, while the CMCF has myriads of activities to ensure responsibility in online
content creation and usage.
Specifically, the MTSFB was assigned the task with scopes as advisory and technical support as well as
recommendations on smart network initiative to the MCMC. The smart network is the ninth Entry Point
Project (EPP) of the National Key Economic Area (NKEA) of Content, Communications and
Infrastructure (CCI) under the National Economic Transformation Programme. The MTSFB platform for
industry discussion and dialogue on both the technical and commercial aspects of the smart network
could eventually facilitate the introduction of smart packages using this network. The smart network
project
12
aims to address affordability and quality of service and to sponsor a streamlined
implementation of smart network features by network providers.
Notably, the smart aspects of the network provides control over the broadband service delivery
channel. This then allows end to end visibility from the servers handling customer care and billing,
through the core and radio networks, to end consumer devices in order to create and deliver
differentiated services profitably. Such control enables Internet service providers to offer differentiated
service packages, providing best value to consumers with pricing alternatives and more varied
broadband packages.
As for the MAFB, the Forum has been working on the access code and advisory responsibilities.
Notably, the MAFB as of 2012 has 24 members, consisting of major licensees. In 2012, the MAFB
submitted an Access Code dated 3 March 2012 to the MCMC for registration under section 95 of CMA.
The MCMC did not register the Access Code and notified the MAFB of the decision and the reasons for
the decision, as required under the CMA.
In addition, the Wireless and Regulatory Initiative Working Group appointed MAFB to conduct a study
under the National Key Economic Area/Entry Point Project for Broadband for All (NKEA/EPP/BBFA) on
the relevant regulatory and access framework and international best practices in relation to access to
poles, ducts and manholes. MAFB appointed Analysys Mason to conduct the study, and the report was
presented to the MCMC in 2012. After receiving feedback, MAFB has continued its work in relations to
access to poles, ducts and manholes.
The CFM comprises members from the C&M industry on both the supply and demand sides which
ensures consumers unbiased decision making process to solving issues and problems. In promoting
the growth of the C&M industry and protection of consumer interests, the CFM fosters the
highest standards of business ethics and behaviour through industry self governance. Note that
the CFM has launched a new consumer portal at the end of 2012, which is at this link
http://www.consumerinfo.my/.
As a platform for the industry and consumer or public to voice constructive contributions to service
improvements the CFM enables all stakeholders to work collaboratively.

12
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Communications and Multimedia Consumer Forum of Malaysia (CFM)

Consumer Awareness: Safeguards Feature by CFM

Keep your personal data safe: How can identity be stolen?

Know your voice mail charges: How to activate and deactivate your voice
mail

Make sure your phone is genuine: Why do I need to have a certified
mobile phone

Track your mobile prepaid spending: Register with your mobile service
provider (Information on prepaid service at mobile prepaid section of
www.consumerinfo.my)

Cancel or stop all the services you do not need: How do I stop SMS spam
on my mobile?

Do you need data roaming service? For example: How to turn off iPhone
data connection

I want to keep my number: Mobile Number Portability
(Check your mobile number is from the same network at website
http://mnpack.skmm.gov.my)

The CFM Complaint Channels

www.complaint.cfm.org.my
Email: complaint@cfm.org.my
Customer Hotline 1800 18 222
Fax +603 2693 2288
Walk in or Write to:
Communications and Multimedia
Consumer Forum of Malaysia
6-02, 6
th
Floor, Wisma Straits Trading
No. 2, Lebuh Pasar Besar
50050 Kuala Lumpur

Type of Complaints on Services
TV, Internet, Radio, Mobile and Fixed Line
Billing Services SMS Information
Privacy
Others
Membership
www.cfm.org.my/membership-overview

Source: CFM
Fig. 2.25 Communications and Multimedia Consumer Forum of Malaysia (CFM)

As for the Communications and Multimedia Content Forum of Malaysia (CMCF), the Forum governs
content by self regulation in line with the Malaysian Communications and Multimedia Content Code
(Content Code). The Content Code is a voluntary one, which the CMCF has developed and registered
with the MCMC on 1 September 2004. This contains guidelines and procedures for good practice and
standards of content disseminated for public consumption by service providers in the C&M industry.
Effectively, the CMCF works in the context of the Content Code to resolve issues on offensive and
objectionable content aside from creating awareness to content providers on the obligations of
creating content within the context of social values in Malaysia.
The CMCF also sees to the ongoing administration of the Content Code. This is to ensure effectiveness
in the following areas:
1. Promoting public and industry awareness of the Code and compliance requirements
2. Financial and sanctions administration
3. Monitoring for Code compliance
4. Reporting and reviews
5. Amendments of the Code
Note that further details are available at http://www.cmcf.my/overview. Essentially, the CMCF activities
in 2012 are elaborated in Figure 2.26.



63
Among CMCF Activities

Source: CMCF
Fig. 2.26 Among CMCF Activities

Complaints Handling
CMCF handle complaints on inappropriate
content including online, TV/radio, SMS, or
other such as billboard and MMS.
Going Forward
News and Events
Seminar on Content Code and Internet
safety
National Population and Family Development Board (LPPKN)
Schools and higher learning institutions
Klik dengan Bijak programme
School cluster programme
Aimed to inform students on multimedia content code and to educate themon
the good values of content to be shared on the Internet.
Government agencies and industry stakeholders
In-house Content Code training
Participants comprised organisations and companies involved in electronic
networked medium content industry
Radio Awareness advertisements Radio ads in Malay and English on topics of violent TV, ex-MMS and chat horror
Launched a quarterly newsletter
Reaching Out
Downloadable from CMCF website in Bahasa Malaysia and English
A community outreach programme
Launch a set of mascots
Uphold social values and push for self regulation

Community Outreach Empowering Users

In addition to consumer protection safeguards from mandatory and persuasive angles involving service
providers and Forums, the MCMC also seek to empower the end users through the Klik Dengan Bijak
Campaign.

The Malaysian Internet users who are now mostly young people including underaged children. Hence,
all users need to be aware of the lurking dangers of the abuse of the Internet and therefore ensure its
safe usage.

The Klik Dengan Bijak Campaign was launched on 1 July 2012 and seeks to empower users with the
knowledge of the negative elements of the Internet and what measures in terms of prevention and
other related precautionary matters users can exercise when they click to go online. The overriding
aim is to ensure that not only does the user practice self guidance, but also to nurture parental
guidance and ensure appropriate social vigilance is mobilised to be safe while on the Internet.

Klik Dengan Bijak (KDB) Campaign

The programme is designed to inculcate the culture of positive use of the Internet based on the
principles of the Rukun Negara amongst Malaysian users. The logo or tagline used serves as a reminder
to users to be careful and to think before they access and use the Internet. Furthermore, the term
Klik is an applicable action on all digital device and is a term that can be easily understood by all.

The program targets those most vulnerable to cybercrimes and online abuses, mainly children and
youth. The campaign serves to equip parents, guardians and other caregivers with necessary
information to keep their chidlrens online experience safe. It is also hoped that the educational content
of the KDB programme will be able to stop people from becoming victims of cybercrimes and online
abuse.

This programme is also endorsed by the Ministry of Information, Communications and Culture; Ministry
of Education; Ministry of Science, Innovation and Technology; Ministry of Women, Family and
Community Development; Ministry of Youth and Sports; Royal Malaysian Police and the Communications
and Multimedia Content Forum of Malaysia.

2012 Activities for the KDB

The KDB programme was officially launched at the national level on 1 July 2012. Since the national
launch, 136 follow-up events on KDB were held.



65

Source: MCMC
Fig. 2.27 Launching of KDB Programme

Source: MCMC
Fig. 2.28 Activities during KDB Programme

Awareness on KDB was further enhanced through a series of print advertisements published
in major Bahasa Malaysia, English and vernacular newspapers.

Source: MCMC
Fig. 2.29 Print Advertisements on Klik Dengan Bijak

In order to support the educational component of the KDB programme, several publications
were developed including the following as in Figure 2.30 for easy reference.


66

KDB Publications
Internet Safety Booklet

The booklet, aimed at school children, covers tips and
precautions needed when using chatting applications,
email, online forum, social networking websites, file
sharing applications, online games and blogs.

Brochure on Internet Safety

The brochure covers cautionary and preventive tips on general
use of social networking websites, blogs, chat rooms and
emails.

KDB Information Kit

The Kit consists of five brochures that provide
information and tips to help the public (adults) to be
safe online.

Leaflet on KDB

The leaflet provides brief information on KDB and highlights
important messages concerning online safety.

Source: MCMC
Fig: 2.30 KDB Publications

It is hoped that through the KDB programme, public perception of the MCMCs role as the
regulator for the C&M industry can be further enhanced and expanded. Apart from an
enforcement role, the MCMC also takes proactive steps to educate the public on the use of the
Internet in a safe and positive way. This is in addition to enhancing their awareness of risks
and online threats.

Source: MCMC
Fig. 2.28 Actvites during KDB Programme

The table below summarises investigation activities by number of cases concerned and their broad
category breakdown for the last three years.

Cases Investigated 2010 2012
Case Description 2010 2011 2012
SMS related cases 289 255 258
Cases related to emails or websites or blogs 133 119 94
Cases related to non compliance by licensee 158 62 72
Total 582 558 501
Source: MCMC
Fig. 2.32 Cases Investigated 2010 2012

The breakdown of cases investigated in 2012 for offences relating to non compliance by licensees is
tabulated below:-

Non Compliance Cases Investigated in 2012
No. Type Of Offences No. of Cases
1 Breach of ASP (C) Licence Conditions Non Compliance to Mandatory Standard 54
2 Breach of CASP (C) Licence Condition 2
3 Failure to deal reasonably with consumer complaints 6
4 Failure to submit audited account 10
Total 72
Source: MCMC
Fig. 2.33 Non Compliance Cases Investigated in 2012

Enforcement

MCMC enforcement role is mobilised in cases of violation to compliance requirements of the various
laws under its jurisdiction. Also, there were intense training programmes for the MCMC enforcement
team and related stakeholders, thus deepening knowledge to face the changing scenarios of the C&M
industry landscape.
Cases involve a wide range of offences committed under the Communications and Multimedia Act 1998
(CMA), Postal Services Act 1991, Digital Signature Act 1997, and accompanying subsidiary legislations.
In 2012, enforcement actions by MCMC were taken out against 501 cases. The statistics summary of
enforcement over the last three years is as follows:
Complaints Received According to Offences 2010 2012

No.

Cases

Law
No. of Complaints
2010 2011 2012
1
Sending offensive, obscene, indecent, menacing or false
Short Messaging Services (SMS)
Section 233 (1)(a) CMA
289 255 258
2
Sending/Posting offensive, obscene, indecent, menacing
emails/websites/blogs or social network
Section 233 (1)(a) CMA
133 119 94
3
Breach of Licence Condition Section 242 CMA
28 62 56
4
Providing network facilities, network services or
applications services without a valid licence
Section 126 CMA
4 2 4
5 Possession of non standard equipment/devices Section 239 CMA 44 27 47
6
Failure to submit Return of Net Revenue (USP) & Audited
Account
Reg. 29 & 33 C&M (USP)
Regulations
Reg. 33A C&M (Licensing)
Regulations
64 22 10
7
Obligation of a designated universal service provider Reg. 11 C&M (USP)
Regulations
11
8
Failure to deal reasonably with consumer complaint Section 188 CMA
4 1 6
9
Not within jurisdiction (under Computer Crimes Act 1997) Refer Other Agencies (ROA)
59 15
10
Fraud and related activity in connection with access
devices and related others
Section 236 CMA
3
11
Spectrum Interference Reg. 34 (Spectrum)
Regulation

6
12
Prohibition of use/sale and related others of non-
standard communications equipment
Reg. 16 (Technology
Standard) Regulation

1
13
Management of Activity Section 218 CMA
1
14
A content applications service provider shall not provide
any service except in accordance with the conditions of
the licence granted
Section 206 (3) CMA
2

15
Providing courier services without licence Postal Services Act 1991
5

16
Prohibition on using spectrum without assignment Section 157 CMA
7

17
Fraudulent use of network facilities, network services Section 232 CMA
2

Total Cases Investigated 582 558 501
Note: Reg Regulation

Source: MCMC
Fig.2.31 Complaints Received According to Offences 2010 2012


The 10 Entry Point Projects (EPP) identified are premised on development of both supply and demand
sides such as building advanced infrastructure and facilities as enablers for business and lifestyle
improvements. The NKEA CCI approach is for the development of the C&M industry as supporter or
enabler to other industries including the growth of the market segments within the industry are shown
in Figure 2.36.

NKEA CCI Approach
Three Building Blocks Driving Vision for Future

10 Entry Point (EPP) under NKEA CCI

Source: Adapted from Economic Report 2010/2011, Ministry of Finance
Fig. 2.36 NKEA CCI Approach

NKEA CCI Highlights 2012
Entry Point Projects (EPP)

EPP #1 Nurturing Malaysias Creative Content
Film-in-Malaysia incentive approved in April 2012 and effective 1 January 2013. This is aimed to attract foreign investments such as
foreign production houses spending a minimum of RM5 million in Malaysia would get an incentive of 30% rebate. Local production
companies spending at least RM2.5 million is entitled to the same benefit.
Contributed to creation of award winning animation, War of the Worlds: Goliath crowned as Best 3D Animated Feature Film at the
Los Angeles 3D Film Festival.
The first tranche of funds for the MYCreative Ventures expected to be disbursed in first quarter 2013.

EPP #3 Connecting 1Malaysia
Aimed to fast track adoption of new value added communications services, over 100 telepresence sites established across Malaysia
with the cooperation of TM subsidiary VADS Bhd and Cisco. In December 2012, an agreement was signed with AT&T to expand the
number of interconnected sites across the world.
By end 2012, a total of 158 work permits were granted by local authorities nationwide for the construction of new Pay Point
booths. The target is to establish 200 booths.
The rebranded GMBO project has targeted to have an online presence of 50,000 micro-entrepreneurs in 2013.
To enhance location aware services and fleet management, with new services in this area targeted to be launched in 2013.

Building the Foundation Infrastructure
Infrastructure must continuously evolve, focusing on cost/affordability,
coverage/access and quality
Malaysia must address gaps at various points of the network:
(a) Broadband as a Utility will tackle last mile access and affordability
(b) Extend Reach will address sub-urban and rural gaps
(c) Smart Network will improve quality and lower consumer costs at the low end
(d) Regional Network will provide supply to meet demands and lower costs
Serving tomorrow
Platforms, Services, Content
Content and services are in next stage
of evolution, with shift to enhanced
data/video utilisation on networks
markets dominated by global players

Malaysia must enhance domestic
Value add to avoid becoming dumb
pipe
attractive local opportunities with:
(a) MY Content Hub
(b) 1MY Payments
(c) Connecting 1Malaysia
Pushing the Boundaries
Industries Enablement
Advanced telecoms infrastructure has
opened up significant opportunities in
other industries, which other
countries are aggressively pursuing
now

Given size of the prize, Malaysia
should focus especially on:
(a) e-Learning,
(b) e-Healthcare,
(c) e-Government
D
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m
a
n
d
s
id
e

S
u
p
p
ly
s
id
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69

C&M Industry Development in Malaysia Reaping Opportunities

Building Foundation for 2020 and Beyond

Malaysia has a unique approach to national growth in terms of a series of cascading strategies
and plans. For example, the national strategic thrusts in the 10
th
Malaysia Plan are cascaded into
the national budgets aligning national growth initiatives to respective economic sectors.

In the C&M industry, all stakeholders work
together to align to national goals
accordingly. A case in point is the National
Transformation Programme (NTP), which
carries four pillars to boost national
growth towards achieving Vision 2020.

Under the Economic Transformation
Programme (ETP), 12 National Key
Economic Area (NKEA) have been
formulated to drive this national vision
and the Communications Content and
Infrastructure (CCI) goals and targets
have been identified to realise the
initiative from the perspective of C&M
industry.

National Transformation Programme

Source: Economic Report 2010/2011, Ministry of Finance
Fig. 2.34 National Transformation Programme

NKEAs in National Transformation Programme
12 NKEAs identified to support industry growth to achieve High Income Nation

[To] position the nation on the right path towards attaining developed
nation status by 2020, with per capita income increasing to USD15,000
by the end of the decade from USD7,000 currently 12 New Key
Economic Areas (NKEA) selected and will be implemented.
YAB Prime Minister

NKEA CCI Goals and Targets by 2020
EPPs to double compound
annual growth rate from 4%
to 7.8%
Creating 43,000 new jobs
97% private funding

Jobs
created
2020
Total Capex
2010 2020
(billion)
% Private
Funding
Total EPP 25,899
USD9.4
RM30.3
97%
Total Business
Opportunity
17,263
USD6.6
RM21.1
0%
Total EPP +
Business
43,162
USD16
RM51.5
97%

Source: Adapted from Source: Economic Report 2010/2011, Ministry of Finance
Fig. 2.35 NKEAs in National Transformation Programme
6.2
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Telecommunications
among 12 NKEAS
launched
Baseline
6.2
EPP
5.1
Business
Opportunity
3.7
15.1
CAGR
4%
CAGR
7.8%
Baseline 2009

2020
NKEA CCI
GNI (USD Million)
Public funding
Private
funding
USD15.5 billion
USD0.5 billion
NKEA CCI
Jobs and Capex

MCMC Development Role
The MCMC role in industry development since the institution of the CMA is summarised in the table
below.
C&M Industry Development
Phase 1
1999 to
2004
Formative Years
Migration of licences from old to new framework in the form of the new economic markets of network facilities
and services; content and applications services
Phase 2
2004 to
2006
Regulatory Development
Liberalisation and competition enhanced, while promoting infrastructure development and increasing access to
C&M industry services
Phase 3
2006
to
2008
Going for Growth
Concerted national and industry plans and initiatives to propel the industry forward in new and enhanced areas of
infrastructure and services embracing opportunities from evolving technologies
Phase 4
2008
to
2010
Solidifying the Future
This is done through excellent execution of implementation plans for national coverage; broadband infrastructure
development both fixed and wireless; accelerating service delivery and take up while enhancing security and
affordability, without compromising on quality of service
Phase 5
2010
to
2015
Building Foundation to 2020 and Beyond
Catalysing the next round of foundation forming for sustaining growth towards developed nation status by 2020
and beyond. Broadband initiatives aligned to national growth, and supporting the NKEA CCI economic
transformation. These include advancing telecommunications network, and networked content and services
infrastructure along with people and industries enablement.
Source: MCMC
Fig. 2.38 C&M Industry Development

Noteworthy is that regulatory development is also part of the process of industry development over
the years.
For example, this includes the role of MCMC in implementing the USP regulations. Such tasks ranges
from the management of investments such as using USP funding to ensuring service providers supply
hard-to-reach areas for national coverage and working with state local authorities in tower site
acquisition for building communication towers.
In 2012, the highlights of development activities included the continued implementation initiatives for
broadband expansion nationwide where quality of services provision is emphasised; community
outreach programmes such as the Klik Dengan Bijak (KDB) programme; and accelerating IPv6
implementation.


71
NKEA CCI Highlights 2012 (Contd)
Entry Point Projects (EPP)

EPP #5 Launching eHealthcare
To offer patients better access to healthcare related services and education, all medical institutions are to be connected to the
Healthnet platform. This platform will provide a gateway for information sharing among healthcare providers and insurance companies.
To date with close to 3,000 health facilities connected, the rollout of cloud based health applications will enable Malaysians from all
walks of life to enjoy a higher standard of service at all these facilities. A total of 3,000 public health facilities are targeted for connection
to the Healthnet platform by 2015.

EPP #6 Deepening eGovernment
In 2012, in laying the foundation for an interconnected government, this EPP targeted for 50% of all intra-government transactions such
as job applications and internal circulars to be completed online. A zero face-to-face target was also set with the aim for 90% of counter
services involving government services to be made online. The remaining 10% is to be completed via eForms by 2020.
In 2012, a total of 28 agencies have rolled out MyMeeting, which is the Governments first fully open source software project. The
software is cloud based and is to assist users to better manage meetings, save time and improve on efficiency of the public sector.
Going forward into 2013, this EPP will also focus on addressing digital security concerns as government services become increasingly
digitised.

EPP #7 Ensuring Broadband for All
In 2012, the Government set a target of 65% broadband penetration rate nationwide. This has been met end of the year at 66%.
By end of 2012, six states have gazetted the Uniform Building By Laws (UBBL) Amendment Act. They are Kelantan, Malacca, Perak,
Selangor, Terengganu and Johor. By the first half of 2013, the balance states in the process of gazetting the amendment will also do so.
In 2013, this EPP will be looking at improving access to broadband at targeted minimum speed of 2Mbps for the 80% populated areas in
Greater Kuala Lumpur and 30% of seven state capitals namely, Kuantan, Seremban, Bandar Melaka, Ipoh, Georgetown, Kota Kinabalu
and Kuching.

EPP #8 Extending Reach
In 2012, a total of 2,489 Kampung Tanpa Wayar sites, 36 Pusat Internet 1Malaysia or PI1M (formerly known as Community Broadband
Centre or CBC) and 300 Time 3 towers for wireless communications services provision were built.
Note that the minimum speed for broadband services under the Kampung Tanpa Wayar initiative has increased from 2Mbps to 4Mbps
in line with government policy to improve the quality of broadband services nationwide.
To understand how users have benefitted from connected services, the MCMC together with the Ministry of Information,
Communications and Culture (MICC) has launched a book entitled Connected at the Roots, which highlights various success stories of
Malaysians that have economically improved their lives due to access to broadband services.
In 2013, the aim is to implement an additional 689 new Kampung Tanpa Wayar sites, 336 new Time 3 towers and launch 162 new PI1M.

EPP #9 Offering a Smart Network
In 2012, this EPP was expanded to include initiatives for the use of smart applications in everyday lives. In order to achieve this, service
providers are encouraged to collaborate and provide applications that will be useful to the rakyat. This is also to attract investments.
In September 2012, the Pakej Mampu Milik Jalur Lebar 1Malaysia was launched to offer broadband packages from as low as RM20 per
month in five states namely, Sabah, Sarawak, Kelantan, Terengganu and Pahang. These packages are listed on the Consumer Forum
website at www.cfm.org.my.

EPP #10 Extending the Regional Network
This EPP aims to encourage the establishment of advanced data network centres to move Malaysia up the value chain of Internet
services provided.
In 2012, the Batam-Dumai-Melaka Cable System started operations while the Cahaya Malaysia Cable System to Japan was completed in
August. Overall, this has contributed to a reduction in bandwidth cost to the consortium of this project by 18%.
By March 2013, the Cahaya Malaysia Cable System to Hong Kong is expected to be completed.

EPP #11 Track and Trace
Focusing on the use of Radio Frequency Identification (RFID) technology to generate economic gains, this EPP has two parts, in security
and trade to facilitate effective and secure clearing process within domestic ports and selected high volume routes. The second project
is the swiftlet nest tracking and traceability system, jointly led by the MCMC and the Department of Veterinary Services. This project
uses RFID technology to track and trace high quality and sustainable swiftlet nest production from Malaysia to high value markets.
Close to 4,000 companies have registered their interest to participate in the Edible Birds Nest (EBN) tracking and traceability system. In
2013, a memorandum of understanding signed with China is expected to resume to the operational stage of this project.

Source: ETP Annual Report 2012
Fig. 2.37 NKEA CCI Highlights 2012

Nationwide High Speed Broadband Focus

Infrastructures built up in the previous 10 years were essential to improve and ensure basic
communications services coverage nationwide, and to users of all walks of life. The users include those
in urban and rural areas alike; ensuring the provision of affordable services, without leaving out the
underprivileged group. The approach for Malaysia in provision of communications services is
technology neutral, thus the drive to attain nationwide connectivity is via fixed line or mobile and any
other appropriate platforms. This is in line with technology neutrality, which is basically provisioning
the most appropriate or best fit type of technology for the location or purpose concerned.
2011 and 2012 are considered as the beginning period of the next decade for communications services
growth. Already, there are increasing competitive forces urging service providers to use strategic
approach in ensuring high levels of service quality. In certain quarters of business and entertainment,
users are demanding quality of experience on top of service availability and reliability.
Over the last three years, broadband has been identified as a requisite pervasive communications
service. The year 2012 has been an encouraging year in which the Private-Public Partnership (PPP)
High Speed Broadband (HSBB) initiative has achieved rollout exceeding the target of 1.3 million for
premises passed. In addition, a new project called Broadband for the General Public (BBGP) Backhaul
was also implemented.
The BBGP Backhaul project objective is to expand the reach of fibre optic backhaul to rural areas in
Sabah and Sarawak. Furthermore, 2012 also saw the extension of Internet service through Wi-Fi
technology to more remote areas with the rollout of additional sites under Kampung Tanpa Wayar
(KTW) Project.
Moreover, high speed broadband service was further stimulated through wireless broadband with the
issuance of 4G-LTE spectrum in 2012. However, the service and competition will only begin after
services rollout commences in 2013.
Notwithstanding the above mentioned developments, service providers are continuously investing in
building more broadband infrastructure for both wired and wireless using their own expenses for
economically viable areas. As for less economically viable areas, the implementation will be done in
collaboration with the Government, local authorities and service providers. Erstwhile, service providers
will go beyond this under the spirit of win-win situation with the applicants or developers.

Content Development

The MCMC works together with the Ministry of Information, Communications and Culture in
promoting network content development. In 2011, the National Creative Industry Policy, which
contains Malaysia Content Definition Guidelines were introduced. The year 2012 saw this effort
further ingrained on the content production or development roadmap at grass root level.
Exploring Overseas Markets
Aside from being a catalyst to the development of local content, MCMC takes the initiative to
expand the local content export revenue through global market exploration together with other
government agencies such as FINAS, MDeC and local companies. Such efforts bring local content
to international markets such as MIPTV, MIPCOM, Asia Media Summit, TIFFCOM and Asia
Television Forum (ATF). This is expected to assist local companies to generate more revenue for
the nation through sales of local content.
In 2012, the total sales value was RM155 million. This contributes directly to realising the NKEA
and the National Policy Objectives for the C&M industry.
Capacity Building for National Content Industry as Economic Growth Area
In 2012, capacity building among others under MaGICCA (MCMC Grants for Innovative, Creative
Content and Applications) continued with the aim to develop and sharpen skills in content
development in institutions of higher learning in the country. The MCMC Grant for Innovative,
Creative Content and Applications (MaGICCA), approved in 2011, is specifically for students of
Higher Education Institutions (HEIs) to develop projects related to content and applications of high
quality and high potential for commercialisation. Initially, the MCMC allocated RM1 million to
conduct a pilot project with Multimedia University (MMU).
In July 2012, the MCMC signed a Memorandum of Understanding (MoU) with MMU and is working
with the experts from the industry and MMU to select projects to be funded under this grant.
MaGICCA will be extended to all HEIs in Malaysia the following year if the pilot project bears fruit
as targeted.
Under the Creative Industry Development Fund MCMC (CIDF-MCMC), the MCMC allocated RM100
million for a period of three years from 2011 to 2013 to focus on the development of content for
TV, mobile and the Internet. The purpose of the fund is to develop local creative content industry
in line with the national policy objectives under the CMA, which targets Malaysia as a global
content development hub. This facilitates Malaysian participation in the creation and production of
multimedia content and encourages creativity, originality and innovation that can reap global
value. Such local creative content industry development, it is hoped, can further enhance the
competitiveness of the national content industry as an economic growth area.


Growth of Broadband Connections

The year 2010 witnessed for the first time HSPA (mobile) displacing Asymmetric Digital Subscriber Line
(ADSL) as the most connected service for broadband subscribers in Malaysia. In 2012, the mobile
broadband HSPA subscriptions recording over 2.5 million which almost double that of fixed ADSL line
subscriptions of 1.6 million.

In 2012, high speed broadband subscriptions recorded 565,410 subscriptions, wherein those
connected by TM under the brand name UniFi recorded 543,000 subscriptions. This compared
favourably with 249,000 high speed broadband subscriptions posted in 2011.

The broadband services connection in 2012 was supported by various projects targeted to drive
broadband demand nationwide. Among these projects were the Government driven service provision
under the 1Malaysia Netbook programme and other offerings by broadband service providers both
wired and wireless.

In terms of high speed fixed broadband connections, Malaysia managed to attain 66% (6.4 million),
more than the household broadband penetration surpassing the target set for 2012 which is 65%.
Subsequently, users are now enjoying wider service availability and a more connected lifestyle that
broadband can offer.

For 2012, broadband subscriptions by fixed (wired), wireless and 1Malaysia Netbook are as shown in
Figure 2.39. Overall, the milestones in broadband connections charted in Malaysia are shown in Figure
2.41.

Source: MCMC
Fig. 2.39 Number of Broadband Subscriptions 2012
Source: MCMC
Fig. 2.40 Broadband: Subscribers and Household Penetration 2007 2012

2.1 2.1 2.2
2.3
3.4 3.6
3.8 3.8
0.3 0.3 0.3 0.3
0
1
2
3
4
5
Quarter 1 Quarter 2 Quarter 3 Quarter 4
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(
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Number of Broadband Subscripdons
2012
Fixed (Wired) Wireless
1.1
1.7
2.6
4.7
5.8
6.4
15.2%
21.1%
31.7%
55.6%
62.3%
66.0%
0
20
40
60
80
100
0
2
4
6
8
2007 2008 2009 2010 2011 2012
H
o
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s
e
h
o
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d

P
e
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e
t
r
a
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o
n

(
%
)

S
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(
m
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)

Broadband: Subscribers and Household
Penetradon 2007 2012
Total Subscribers
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Malaysia Broadband Milestones

Source: MCMC
Fig. 2.41 Malaysia Broadband Milestones


Broadband Enhancing Business Value for Users
Get Malaysian Business Online (GMBO)

With the mission to assist Malaysian businesses benefit from opportunities available over the
Internet, GMBO was introduced to help businesses achieve success by leveraging on the online
platform. The MCMC is the primary government agency for this initiative and together with Google
have partnered various organisations such as MyNIC, SME Corp, Al-Qafilah International and iTrain.
GMBO is targeted to bring at least 50,000 Malaysian Small Medium Enterprises (SMEs) to set up
websites and use online platform to widen their market and subsequently increase their sales. The
programme also equips the SMEs with free and easy ways to update their website.
GMBO offers Malaysian businesses especially SMEs a free website, website development training,
free web hosting and a free .com.my domain (for one year for the first 10,000 participants).
Participants thereafter will receive a domain at a discounted rate of RM23 per year. In addition
GMBO also provides ongoing tips and education and a RM200 free online advertising trial with
Google AdWords.

GMBO was promoted through an integrated strategy such as public relations, media, direct
marketing, online marketing and partner marketing. The response to GMBO was overwhelming as at
the end of 2012, more than half a million unique visitors accessed the website. Out of this, almost
30,000 SMEs signed up for the programme. However, slightly less than 10,000 have developed their
websites and registered domains.
In order to improve the response rate for GMBO, the programme will be rebranded to reach out to a
wider base of potential entrepreneurs. The 2013 Budget encouraged more Malaysian businesses to
go online, especially for women entrepreneurs. This is through a RM1,000 grant provided to those
who have set up website for their businesses, on top of other criterias. The target is to have an
online presence of 50,000 micro entrepreneurs by end 2013, with a total budget of RM50 million.

Source: MCMC
Fig. 2.42 Launch of Get Malaysian Business Online (GMBO)

Broadband Penetration Rate by State

Looking at broadband penetration rates by state, Wilayah Persekutuan Kuala Lumpur is the only state
with a penetration rate of over 100%
13
for three consecutive years. The penetration rate of Kuala
Lumpur was at 119.4% in 2012 (2011: 107.4%).

The top five states with the highest penetration rate are Kuala Lumpur, followed by Pulau Pinang,
Perlis, Selangor and Negeri Sembilan. The state broadband penetration rate for is shown as per Figure
2.43 and Figure 2.44 below.

Broadband Penetration Rate per 100 Households by State 2012

Source: MCMC
Fig. 2.43 Broadband Penetration Rate per 100 Households by State 2012

13

In order to promote usage and the benefits of
broadband, six broadband events were organised
nationwide. Under the initiative to promote local
content, TM has established a content service
delivery platform, My1Content which was launched
in June 2012 as part of their undertaking as per the
PPP agreement.

As of end 2012, the total HSBB subscriptions
recorded at 543,00
14
which is about 39% from the
total ports available. Comparatively, this is more
than 100% increase from 2011 subscriptions which
was at 234,400 subscriptions. The growth pattern is
shown in Figure 2.45.

Source: MCMC
Fig. 2.45 HSBB Subscriptions

A summary of the fixed broadband services provision is shown in Figure 2.46.
Fixed Broadband Services 2010 2012
Year Development Remarks
Before
2010
Broadband service before High Speed Broadband (HSBB) was offered
under brand name Streamyx up to 2Mbps.
TM started off fixed broadband service with
Streamyx in 2001.
March 2010
HSBB pilot project with four exchanges at Taman Tun Dr Ismail, Subang
Jaya, Bangsar and Shah Alam.
Private Public Partnership signed on 16 September
2008 at RM11.3 billion over 10 years.
End 2010

HSBB under UniFi Brand:
48 exchanges or service coverage with 756,000 premises passed
Extended to Johor and Penang
Speeds at 5, 10 or 20Mbps for Video-Internet-Phone combination
Government target at 1.3 million premises passed by
end of 2012.
TM broadband segment recorded 1.7 million customers. UniFi constituted 33,000 customers or less than 2%.
HSBB exchanges available in 81 exchanges including Melaka, Kedah,
Negeri Sembilan and Perak, aside from the Klang Valley.
This amounts to more than 1.1 million premises
passed in 2011.
2011
Together with Streamyx, broadband customers totalled 1.9 million. UniFi has 236,501 customers or more than 12% of
TM total broadband customers. Out of this 15% or
about 35,000 are business customers.
HSBB Wholesale (Access) Service available since July 2009. By end 2011,
seven service providers signed up, including Maxis, Celcom and P1.
Opened to all service providers.
2012
HSBB has covered 97 exchange areas in Klang Valley, Industrial areas
and Iskandar Malaysia. The target of 1.3 million premises passed
completed.
39% of the ports provided have been utilised.
Number of subscriptions at end 2012 was 543,000.
Four service providers signed up for HSBA Service which are Maxis,
Celcom, P1 and Redtone and 17 service providers have signed up for
HSBT Services.
Maxis started to offer HSBB services. Currently there
are more than 20,000 subscriptions. The capacity
provided are 88Gbps involving 199 links.
Note: HSBA refers to High Speed Broadband Access; HSBT refers to High Speed Broadband Transmission

Source: TM, MCMC
Fig. 2.46 Fixed Broadband Services 2010 2012

14
0
0.1
0.2
0.3
0.4
0.5
0.6
2010 2011 2012
S
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HSBB Subscripdons
1
2
3
4
inARPU
5
6
7
network
8
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9
.Yota
10
.Bhd
11
12
13
14
15

16
17
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18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Broadband Penetration Rate per 100 Households by State
State 2009 2010 2011 2012
W.P. Kuala Lumpur 88.9 123.0 107.4 119.4
Pulau Pinang 43.1 75.5 82.8 83.8
Perlis 17.4 61.5 84.9 81.9
Selangor 49.1 67.3 74.8 77.6
Negeri Sembilan 26.4 66.4 76.0 73.7
Melaka 30.0 58.3 66.4 68.8
W.P. Labuan 28.7 70.1 73.1 65.2
Johor 29.3 51.5 60.7 64.1
Terengganu 17.6 49.8 58.6 57.5
Kedah 17.6 44.7 56.5 56.0
Perak 22.1 43.2 52.2 53.6
Pahang 17.4 44.5 49.0 50.7
Sarawak 19.3 40.2 47.5 48.2
Sabah 14.5 25.6 32.7 47.3
Kelantan 11.7 38.9 45.3 43.8
Malaysia 31.7 55.6 62.3 66.7
Source: MCMC
Fig. 2.44 Broadband Penetration Rate per 100 Households by State

Fixed Line Broadband Services Offered by TM

In Malaysia, broadband services market demand is supported by both wired and wireless service
providers. Among the most prominent in the fixed broadband services provision is the Public Private
Partnership (PPP) project between TM and the Government. This involved an investment totalling
RM11.3 billion, where the Government forking out RM2.4 billion and TM investing the remaining RM8.9
billion over a 10-year project development period.

2012 also was a successful year for the Government and TM on the HSBB infrastructure rollout which
has exceeded the targeted rollout of 1.3 million premises passed set by end of 2012. The target was
achieved in October 2012, with a total of 1.38 million premises passed in December 2012.

In addition to the completion of the premises passed, the project has also provided high speed
connectivity to almost 6,000 government offices and 83 higher learning institutions. Subsequently, in
order to improve ICT literacy among the public, more than 100,000 attendees were trained under the
Public Training Programme in 2012 alone.



81

Service Packages Offered

High speed broadband services have expanded to East Coast and East Malaysia by 2012. In
terms of service packages, TM offered speeds of 5, 10 and 20Mbps for a combination of Video-
Internet-Phone services. A summary of the packages provides are shown in Figure 2.47.

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TM has in 2012 provided variation to their business packages with the objective of encouraging
existing users to upgrade to higher speed plans. HSBB packages among SMEs also included
higher speed plans and relatively cheaper rates.

A note here is that the HSBB is an open concept where other service providers are given access
to the HSBB infrastructure to deliver services to their customers. As at end 2012, four service
providers have signed up for the HSBB Access (HSBA) services namely, Maxis, Celcom, Packet 1
and Redtone. On the other hand, 17 service providers have signed up for the HSBB Transmission
(HSBT) services, which involve 199 links with capacity of 88Gbps.
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Mobile Communications Technology

Mobile phone technology is continuously evolving with accelerating rate of innovation as well as
adoption. Examining the strides taken from 1G to 4G, technology advancement has catered to user
needs, creating new usage patterns, such as mobile applications and individual cloud services. The
development of mobile communications in Malaysia from 1G to 4G services is briefly summarised in
Figure 2.52 and Figure 2.53.

Mobile Speeds

Source: Various sources
Fig. 2.52 Mobile Speeds

Mobile Communications Standards Adoption
Generation Technology Descriptions
First
Generation
1G
Basic mobile with analogue voice service with no data capabilities.
Information was retransmitted to the receiving entity.
Second
Generation
2G
Wireless networks from analogue to digital with advanced messaging.
Global roaming and circuit switched data.
Better voice quality, higher capacity and lower power consumption.
2.5G
Instantly accessible WAP (Wireless Access Protocol) and HTML (HyperText Markup Language) sites
using appropriate mobile phone, PDA (Personal Digital Assistant) or notebook*
Extension of GSM with higher data speeds*
Higher data rates via GPRS, with high speed mobile data standard (packet switched data)**
Extension of GSM**
Always on connectivity**
2.75G
Extension of GSM and faster than GPRS.
Always on connectivity.
Third
Generation
3G
Data at higher speeds to open the gates for truly mobile broadband experience.
Global roaming and IP enabled.
3.5G
Five times faster than 3G technology (384Kbps).
Users are now on social networking and have applications adoption.
Fourth
Generation
4G
Provides access to wide range of telecommunication services, including advanced mobile and fixed
networks.
*Speed at 9.6Kbps 57.6Kbps **Speed at 9.6Kbps 115Kbps

Source: MCMC
Fig. 2.53 Mobile Communications Standards Adoption

Year
- Advanced
Mobile Phone
System (AMPS)
- Nordic Mobile
Telephony (NMT)
- Global System
for Mobile
Communication
(GSM)
Speed:
9.6Kbps
Speed:
9.6Kbps
14.4Kbps
Speed:
9.6Kbps
57.6Kbps
- High-Speed
Circuit
Switched Data
(HSCSD)*
- General Packet
Radio Service
(GPRS)**
Speed:
9.6Kbps
115Kbps
- Enhanced Data
Rate for GSM
Evolution (EDGE)
Speed:
64Kbps
384Kbps
- International
Mobile
Telecommuni-
cations 2000
(IMT-2000)
- Universal Mobile
Telecommuni-
cations System
(UMTS)
Speed:
13.98Mbps
- High Speed Data
Packet Access
(HSDPA)
- High Speed
Uplink Packet
access (HSUPA)
Speed:
100Mbps
- Mobile
WiMAX
- Long Term
Evolution
(LTE)
Technology * Speed: 9.6Kbps 57.6Kbps
** Speed: 9.6Kbps 115Kbps


83
Mobile Broadband Services

3G Subscriptions

Overall, there has been relatively steady adoption of 3G mobile services from year to year. This
is observed from 3G subscriptions which was a mere 0.4 million in 2006 to a whopping 14.5
million in 2012. The exponential growth happened the first and second year of 3G service
adoptions that recorded amongst the highest growth rates of 300% and 175% respectively.

In 2012, 3G subscriptions were at 14.5 million which was an increase of 40% from 2011. Out of
this figure, 10.5 million subscriptions came from prepaid, with postpaid of four million
subscriptions. Hence, the ratio of prepaid to postpaid 3G subscriptions remains at 60:40. The
trend of 3G subscriptions by prepaid to postpaid split is shown in Figure 2.51.

Fig. 2.50 3G Subscriptions 2006 2012

Fig. 2.51 Prepaid and Postpaid 3G Subscriptions 2006 2012
0.2
0.7
2.4
4.4
5.6
6.4
10.5
0.3
0.8
2.0
3.0
3.6
3.9 4.0
0
2
4
6
8
10
12
2006 2007 2008 2009 2010 2011 2012
N
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Prepaid and Postpaid 3G Subscripdons
2006 2012
Prepaid
Postpaid
0.4 1.6 4.4 7.3 9.2 10.3 14.5
0
2
4
6
8
10
12
14
16
2006 2007 2008 2009 2010 2011 2012
N
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f

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3G Subscripdons 2006 2012
300%
175%
65%
26%
11%
40%

For example,

1. Macro cell site, which typically covers several square kilometres, cannot be as effective in cost
and energy efficiencies in areas of low population density. Femto sites is deemed easier on
company operating profit margin as they work on low powered radio access points and can
connect mobile devices to mobile network over a small area.

2. Service providers also reap intangible benefits as their relationship with customers improves.
This can be expected from femto sites, which improve signal strength and thereby contributes
to quality of services provision.

3. Femtocells also allow service providers the option to offload traffic from the macro cellular
network during peak traffic periods. In this case, user experience is not affected at any time,
and issues of dropped calls can be mitigated.

4. More efficient usage of spectrum results as the mobile network coverage can be extended
through use of a cellular base station of smaller size and lower power output vis--vis a macro
cell site. Further on, small cell lower energy intensiveness promotes green usage.

The Use of Small Cell Technology

In 2012, Maxis invested RM122 million in Sabah and Sarawak by using femtocell, small, low power
cellular base station typically designed for use in a home or small business to reach more rural areas.
The investment was to enhance network coverage in Sabah and Sarawak in line with government
programme for community broadband centres. This included a deployment of 355 nano and femto
sites, which is a technology that provides improved in-house and in-office coverage; 352 enhanced 3G
sites; and 100 wireless villages or Kampung Tanpa Wayar Wi-Fi sites in both states.

U Mobile is another service provider which has been working with technology partners in pilot project
to use femtocell in various mobile service offerings.

Common applications of femtocells in commercial use is alerting the customer or pedestrian as he or
she enters a femtocell zone in a shopping centre or public place that there is a discount, for example,
being offered for certain products through their mobile phones.

At home or office, the femtocell, a small cell technology serves as a personalised home or exclusive
small office base station. The femtocell can support two to four active users on mobile phones at
home, or up to eight or 16 mobile phones in office setting.

Small Cells in the Home or SME or Community

Source: Various
Fig. 2.54 Small Cells in the Home or SME or Community

The use of femtocells is currently an emerging phenomenon in Malaysia. Aside from commercial
applications obvious to the end user, the femtocell allows various benefits for the service provider in
their supply of network and access to areas where a macro cell site proves not as effective.



Over the last three years, broadband infrastructure has been accelerated to provide high speed
network service for users nationwide. The availability and access to this network needless to say does
not reach everyone at the same time nor does everyone in certain far reaching communities away
from urban development can be supported by service providers on a commercial basis.

In order to ensure that such USP designated communities or individuals are not left to the vagrancy of
the digital divide, the Government has stepped in with the USP designated service providers to ensure
the necessary communications services, including broadband connections are provided.

Source: MCMC
Fig. 2.56 Kampung Tanpa Wayar

The programme has brought ICT facilities to the doorsteps of small communities, enabling connectivity
between villages amongst others. The KTW programme provides collective wireless Internet access
services (Wi-Fi) to recipients of netbooks under the 1Malaysia Netbook programme. The KTW
programme aims to contribute towards creating knowledge based communities. In this way, it is
possible for small businesses and villages to be connected and hence, can directly participate in
activities contributing to economic boost as well.

The programme started in 2011 with the setup of 1,355 KTWs nationwide. Additional 2,489 KTWs
were built in 2012 to make up a total of 3,844 KTWs in operation nationwide.

Time 3

The Time 3 programme involves rolling out communications infrastructure such as towers for wireless
communications services provision. The programme is targeted at extreme rural villages and areas
with a low population density of less than 80 persons per square kilometre, or uneconomic areas for
service providers. Key target areas include FELDA, FELCRA and Orang Asli settlements.

The objective is to increase the national population coverage to 97%. To achieve this objective, 1,000
telecommunication towers were set to be built nationwide in several phases of implementation. As at
end 2012, 664 towers have been completed.

Universal Service Provision (USP) Scope, Targets and Evolving Approach
For the Government, in areas where economic viability is a threshold that is hard to reach for the
service providers working on their own, the provision of USP plays a crucial part. The USP regulations
and its implementation have seen high state of constant flux of activities and much debate as these
were developed and instituted over the years.
Effectively, all stakeholders within the industry or others for the sake of regional state development, to
date have had a strong hand in this development. This is to ensure digital divide
15
is minimised and for
all rakyat to be connected.
The ultimate goal of USP is to ensure all communities are served by mainstream ICT services. The
immediate urgency is to provide necessary infrastructure and communications access to the targeted
underserved areas, localities, and groups within the identified community. This access encompasses
broadband and mobile services aside from fixed telephony services.

USP Essentials
USP and Scope
Ultimate Goal
Ensure underserved areas connected to mainstream
ICT services
Objective
Provide communications access to targeted
underserved areas, localities and groups within
identified community
Priorities
Collective access to basic telephone and Internet
services followed by individual access for both
services
Implementation
Done by appointed service providers based on USP
regulations (tender process)
Funding
USP Fund contributed by service providers based on
USP regulations and licence conditions
Targets
Underserved Areas
Defines from the perspectives of network and application services
Broadband Access
Area where penetration rate for broadband subscribers is below national
penetration rate or where broadband access services are not sufficiently
available
Public Cellular Service
Area with population density of 80 person per square kilometre or less or
where public cellular services are not sufficiently available
PSTN Service
Any area where PSTN subscribers penetration rate is 20% below the national
penetration rate
Underserved Groups
Groups of persons in served areas without collective and/or individual access
to basic communication services. Rollout target 2010 2014 are for:
Person with disability Women under rehabilitation
Children under Protection Low cost housing
Source: USP Regulations, MCMC
Fig. 2.55 USP Essentials

The USP rollout in 2012 encompassed the National Broadband Initiative (NBI) as well as new initiatives
under the USP Clawback programme. The scope of USP projects in 2012 included various
programmes. Primarily these programmes encompassed Kampung Tanpa Wayar, Mobile Coverage
Expansion Time 3, Pusat Internet 1Malaysia (PI1M) and the Komputer 1Malaysia or 1Malaysia
Netbook.

15
Digital divide refers to the gap between individuals, households, businesses and geographic areas at different socio-economic levels with
regard to both their opportunities to access Information and Communication Technologies (ICTs) and to their use of the Internet for a wide
variety of activities. Source: OECD definition.
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

World Broadband Comparatives

Studies and Developments

Figure 2.57 indicates that globally, mobile broadband subscriptions have grown 46% annually over the
last four years and mobile broadband connections were twice as many as fixed broadband
subscriptions. The same trend also occurs in Malaysia, starting 2010 when mobile broadband
subscribers surpassed fixed broadband subscribers.

*Estimates by ITU

Source: Global ICT Development 2001 2012 by ITU, 2012
Fig. 2.57 Global ICT Development 2001 2012

In another study by Akamai in its third quarter 2012 State of the Internet report, Malaysia ranks 71
st

globally in terms of average Internet speed at 2.2Mbps (end 2011: 1.8Mbps step up in term of
ranking from 73 to 71). The year on year change posted a gain of 18% as indicated in Figure 2.58.

Akamai Study of the Internet 3
rd
Quarter 2012
Global
Rank
Country/ Region 3Q 2012
Average Speed
QoQ Change (%) YoY Change (%)
1 South Korea 14.7 3.3 -12
2 Japan 10.5 -2.1 18
3 Hong Kong 9.0 0.9 -14
32 Singapore 4.9 -3.5 12
39 Chinese Taipei 4.4 16 7.1
40 Australia 4.3 -2.5 19
46 New Zealand 3.9 1.8 -1.7
58 Thailand 2.9 -6.3 -14
71 Malaysia 2.2 2.0 18
94 China 1.6 11 18
112 Philippines 1.3 6.0 13
113 Vietnam 1.3 -21 -19
115 Indonesia 1.2 54 58
120 India 1.0 2.5 11
Note: Akamai study obtained broadband speeds using data collected from 2,113,813 unique IP address for Malaysia. The study indicated that 12% of these IP
have speeds above 4Mbps. The peak Internet connect speed for Malaysia was 18.2Mbps or 32% faster compared to the previous year.

Source: www.akamai.com
Fig. 2.58 Akamai Study of the Internet 3
rd
Quarter 2012

0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
P
e
r

1
0
0

I
n
h
a
b
i
t
a
n
t
s

Global ICT Development 2001 2012
Mobile cellular telephone subscriphons
Individuals using the Internet
Fixed telephone subscriphons
Achve mobile broadband subscriphons
Fixed (wired) broadband subscriphons

Pusat Internet 1Malaysia (PI1M)

The PI1M, formerly known as Community Broadband Centre (CBC), functions as a knowledge hub
offering basic training and access to information. The ultimate goal of setting up the PI1M programme
is to ensure that the communities are connected and empowered. The programme offers a centre with
high speed broadband facilities with two supervisors to run the centre and provide ICT training to the
local community. As of 31 December 2012, there were 287 PI1M in operation nationwide.

Komputer 1Malaysia (1Malaysia Netbook)

The Komputer 1Malaysia programme provides netbooks to underprivileged students and low income
households. This programme aims to give a boost to broadband access subscriptions per household.
The availability of a netbook to recipients is expected to bring about socio-economic development in
various employment sectors such as agriculture, education, health, and also to encourage, amongst
others, the setting up of new businesses.

A total of one million netbooks were planned to be distributed to target recipients. Distribution to
recipients started in 2010 and at the end of 2012, 856,325 netbooks were already distributed.


According to ITU report on The World in 2011: ICT Facts and Figures, over the last five years,
developing countries have contributed to increase in the world Internet users from 44% in 2006 to
62% in 2011. In the said report, younger people tend to be more online compared to older people and
this trend is in line with the findings of Malaysia Household User of the Internet Survey (HUIS) 2011.
HUIS showed that Malaysia also experienced the same trend where users below 15 years old (11%)
has surpassed users of the 35-39 years old group (10.4%).
This is notable considering that this younger age group only accounted for 7.3% five years ago. On a
positive side, the younger generation are get ICT savvy at a younger age. On the other hand, these
children and teenagers are exposed earlier and more vulnerable to cybercrimes and online abuses.
Hence, this is where endorsement of Klik Dengan Bijak (KDB) programme by the Government also
requires parental and teachers guidance to ensure these young users are equipped with essential
information to keep a safe online experience.
Home ICT Access 2011

Source: The World in 2011: ICT Facts and Figures by ITU, 2011
Fig. 2.59 Home ICT Access 2011

MODULE 3: COMMUNICATIONS
SERVICES


94

C&M Services Connections

Fixed Line Services

Direct Exchange Line (DEL) Connections in Malaysia

DEL connections have been on the decline since in 2010. In 2010, subscriptions base showed 4.4
million DEL connections, a marginal increase from the previous year 2009 at 4.3 million.

However, the number of DEL subscriptions started to decline in 2011 and this trend continued in
2012. The year 2012 saw DEL total subscriptions of 3.9 million, a decline of 0.21 million or 4.9%
from 2011. The trend of decreasing DEL connections in Malaysia is in line with the current world
scenario. According to the International Telecommunication Union (ITU) Statistics report,
worldwide DEL connections per 100 inhabitants for 2012 had decreased by 2.3%.

*Estimates
Note: The developed and developing country classifications are based on UN M49 which is a standard for area codes used by the United Nations for statistical
purposes, developed and maintained by the United Nations Statistics Division. For more information see: http://unstats.un.org/

Source: ITU
Fig. 3.1 DEL Connections per 100 Inhabitants 2002 2012

However, Malaysias penetration rate of 34.4% is well above the worlds average penetration
rate. As in the past years, the household subscriptions continued to decline at a faster rate
compared with the non household subscriptions.

0
10
20
30
40
50
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012*
p
e
r

1
0
0

i
n
h
a
b
i
t
a
n
t
s

DEL Connecdons per 100 Inhabitants
2002 2012

Developed World Developing


93

Module Content

MODULE 3: COMMUNICATIONS SERVICES 93
C&M Services Connections 95
Fixed Line Services 95
Direct Exchange Line (DEL) Connections in Malaysia 97
Wireless Fidelity (Wi-Fi) Hotspots 98
Mobile Services 98
Mobile Phone Connections 98
Growth of Prepaid and Postpaid Subscribers 100
Market Share of Mobile Phone Connections 101
Development of Mobile Virtual Network Operator (MVNO) 103
Domain Names 104
The .my Domain Registry in 2012 104
IDN by the Language Characters 105
Domain Name Statistics 105
Extending IP Addressing Availability 108
Development on IP 108
IPv6 Urgency of Adoption 108
Status and Development of IPv6 in Malaysia 108
MCMC Efforts to Drive IPv6 Adoption in Malaysia 108
MCMC Initiatives to Drive IPv6 Adoption in 2012 109


Wireless Fidelity (Wi-Fi) Hotspot

The number of hotspot locations continued to increase in 2012 at a slower pace compared with the
preceeding years. As at end of 2012, the number of hotspot locations was at 31,493.

Fig 3.5 Hotspot: Locations and Growth 2007 2012

Pulau Pinang has the highest hotspot locations with 6,613 followed by Selangor with 4,961.
A breakdown of hotspot locations by state is shown in Figure 3.6.

Hotspot Locations by State
State 2005 2006 2007 2008 2009 2010 2011 2012
Pulau Pinang 88 94 120 121 139 832 2,126 6,613
Selangor 319 352 356 574 844 3,849 2,537 4,961
W.P. Kuala Lumpur 352 395 376 494 617 1,759 1,729 3,876
Johor 79 94 81 104 158 910 1,732 3,645
Sarawak 75 75 79 90 138 756 2,393 1,941
Kedah 36 31 56 64 88 448 2,371 1,706
Perak 44 43 111 186 228 415 1,975 1,591
Pahang 58 80 88 93 162 406 1,386 1,576
Terengganu 43 35 39 41 59 214 1,381 1,511
Sabah 37 44 42 37 84 1,056 1,854 1,228
Kelantan 30 30 37 47 69 352 1,123 1,184
Melaka 20 34 41 41 103 387 444 1,014
Negeri Sembilan 24 31 36 40 125 833 550 555
W.P. Putrajaya 13 11 11 11 17 56 84 77
W.P. Labuan 9 9 10 8 11 11 11 8
Perlis 0 0 2 2 4 7 16 7
Fig. 3.6 Hotspot Locations by State

Mobile Services
2007 2008 2009 2010 2011 2012
Locahon 1,485 1,953 2,846 12,291 21,712 31,493
Growth by Year (%) 9.4 31.5 45.7 331.9 76.6 45.0
0
100
200
300
400
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
G
r
o
w
t
h

(
%
)

N
u
m
b
e
r

o
f

H
o
t
s
p
o
t

L
o
c
a
d
o
n
S

Hotspot: Locadons and Growth
2007 2012
Locahon Growth by Year (%)

Fig. 3.2 DEL Connections: Subscriptions and Penetration Rate 2008 2012

Fig. 3.3 DEL Connections: Household and Non Household Subscriptions and Growth Rate 2008 2012

In respect of fixed line services market share
by service providers, Telekom Malaysia Bhd
(TM) remains an incumbent service provider
with 97.1% of total market share. The
balance fixed line services is contributed by
TIME (1.2%), Maxis (0.6%) and DiGi (0.1%).

Fig. 3.4 DEL Market Share by Service Providers 2012

44.0
42.3
42.5
37.3
34.4
0
10
20
30
40
50
3.0
3.5
4.0
4.5
2008 2009 2010 2011 2012
P
e
n
e
t
r
a
d
o
n

R
a
t
e

(
%
)

S
u
b
s
c
r
i
p
d
o
n
s

(
m
i
l
l
i
o
n
)

DEL Connecdons: Subscripdons and Household Penetradon Rate
2008 - 2012
Total Subscriphons Penetrahon Rate
-6.9
3.7
-10.7
-6.8
6.7
-2.4
-12.0
-8.0
-4.0
0.0
4.0
8.0
12.0
-4.0
-2.0
0.0
2.0
4.0
2008 2009 2010 2011 2012 G
r
o
w
t
h

R
a
t
e

(
%
)

S
u
b
s
c
r
i
p
d
o
n
s

(
m
i
l
l
i
o
n
)

DEL Connecdons: Household and Non Household Subscripdons and Growth Rate
2008 2012
Household Non-Household Household Non-Household
TM
97.7%
TIME
1.6%
Maxis
0.6%
DiGi
0.1%
DEL Market Share by Service Providers
2012

Fig. 3.8 3G Subscriptions 2006 2012

A number of regulatory instruments facilitated orderly growth of mobile demand in Malaysia. These
include a rationalisation of registered mobile phone users and the introduction of Mobile Number
Portability (MNP).

Flashback into 2007, a rationalisation exercise was carried out starting that year to ensure legitimate
subscribers under a mandatory prepaid registration exercise. It is noteworthy that the data is not
adjusted for SIM cards in duplicate names across mobile players, or the level of inactive subscribers
due to termination of services.

During the exercise, service providers were expected to ensure that records of their customer
information were accurate based on the Malaysian MyKad, subscriber passports or other valid
documents. On top of the verification processes carried out by the service providers, the MCMC also
undertook independent verification with the National Registration Department (NRD).

Two years later, in 2009, mobile number portability in mobile industry was implemented. The MNP
enables mobile telephone users to retain their telephone numbers when changing from one network
service provider to another. Hence, the prefix of a Malaysian mobile number is no longer associated
with any particular service provider. This means that one will not be able to identify which service
provider network a user is on by looking at a users mobile number.

During its early stage of implementation in 2009, 1.52 million number of porting requests by mobile
subscribers were received with 1.07 million successful in their porting request. In the second year of
implementation in 2010, the number of porting request substantially reduced to 970,000 (690,000
successful porting). In 2012, the number of porting requests further decreased to 280,000 (200,000
successful porting).

0.43
1.56
4.36
7.34
9.2
10.3
14.5
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

S
u
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s
c
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p
d
o
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s

(
m
i
l
l
i
o
n
)

3G Subscripdons 2006 2012
Cellular Mobile Subscriphons 3G Subscriphons

Mobile Services

Mobile Phone Connections

The development of mobile communications services in Malaysia has been phenomenal. Since
the services introduction more than 10 years ago, mobile services connections surpassed DEL
connections in the year 2000; with mobile revenue generation exceeding fixed line revenue three years
later in 2003.

Development of mobile services in Malaysia has been rapid over the years, aligned with other
countries. Since 2009 when the penetration rate
16
of mobile phone connections exceeded 100% at
105.4% then, it has hit 141.6% as of 2012. Notably, the proportion of 3G subscriptions as part of
mobile subscriptions increased rapidly over the years as shown in Figure 3.8. This is partly due to
intensive rollout by service providers coupled with more affordable packages.

Fig. 3.7 Penetration Rate and Mobile Subscribers 2001 2012

Overall, the growth of subscriptions is expected to moderate, but to a still respectable 4% to 5%
growth in the immediate future. In contrast, the growth of mobile voice traffic in Malaysia is expected
to moderate to an eventual 1% to 2% growth per annum. Nevertheless, data traffic is expected to
remain growing in double digits of about 25% annually going forward.

16
Mobile phone penetration rate is a term generally used to describe the number of active mobile phone numbers, usually as a percentage,
within a specific population.
30.8 36.9 43.9 56.5 74.1 72.3 85.1 98.9 105.4 119.2 127.7 141.6
7.4
9.1
11.2
14.7
19.5 19.5
23.3
27.7
30.2
33.9
36.7
41.0
0
5
10
15
20
25
30
35
40
45
0
20
40
60
80
100
120
140
160
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

S
u
b
s
c
r
i
b
e
r
s

(
m
i
l
l
i
o
n
)

P
e
n
e
t
r
a
d
o
n

R
a
t
e

(
%
)

Penetradon Rate and Mobile Subscribers
2001 2012
Penetrahon Rate Subscribers
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Other than the mobility offered by mobile phones, plans and packages offered by the service providers
also play a major role in contributing to the overall growth of mobile services connections. Prepaid
packages have allowed cheaper entry points for users with starter packs as low as RM8 vis--vis RM30
for postpaid. High consumer demand in the mobile service market in Malaysia forces service providers
to offer more affordable rates that gives value-for-money advantage back to the consumers.

Market Share of Mobile Phone Connections

The mobile scenario in Malaysia features three major service providers, and more upcoming aspirants.
These big players garner roughly 30% market share each which is considered an efficient level of
supply demand balance in the country.

Specifically, in 2012, Maxis has a market share of 32.2% (13.2 million subscriptions) followed by
Celcom with 31.5% (12.9 million subscriptions) and DiGi third in market share with 25.6% (10.5
million). This is followed by U Mobile with 3.5 million subscriptions. As the newest player, U Mobile
managed to more than double their market share to 8.7% in 2012.

In 2012 for the first time, the mobile subscriptions included MVNO companies, which amounted to
2.2% of the total market share (0.9 million subscriptions). Mobile subscriptions by service provider are
shown in Figure 3.11.

Fig. 3.11 Mobile Phone Subscriptions by Service Provider 2003 2012

4
.
5
6
.
0

7
.
9

8
.
1
9
.
7
1
1
.
1

1
2
.
0

1
3
.
4

1
3
.
3

1
3
.
2

4
.
4

5
.
2
6
.
9

6
.
1
7
.
2
8
.
8
1
0
.
4

1
1
.
2

1
2
.
0

1
2
.
9

2
.
2

3
.
2
4
.
8

5
.
3
6
.
4

7
.
1

7
.
7

8
.
8
9
.
9

1
0
.
5

0
.
8

0
.
3

0
.
5
1
.
5

3
.
5

0
.
9

0
2
4
6
8
10
12
14
16
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

S
u
b
s
c
r
i
p
d
o
n
s

(
m
i
l
l
i
o
n
)

Mobile Phone Subscripdons by Service Provider
2003 2012
Maxis Celcom DiGi U Mobile Others (MVNO)

The reasons for unsuccessful porting request are due to:

1) Request rejected by Donor Network Operator (DNO) due to reasons such as inaccurate
customer ID and unpaid bills.
2) Port request was cancelled by the customer.
3) The numbers were terminated after port request.

Figure 3.9 summarises the trend of mobile number portability requests since its implementation.

Fig. 3.9 Mobile Number Portability 2009 2012

Growth of Prepaid and Postpaid Subscribers

As of 2012, Malaysia mobile market again recorded more prepaid subscribers compared to postpaid, in
the ratio of 80:20. This ratio translates into 33.6 million prepaid subscribers and 7.4 million postpaid
subscribers.

Fig. 3.10 Prepaid and Postpaid Subscribers of Mobile Services 2000 2012

1.5
1.0 1.0
0.3
1.1
0.7 0.7
0.2
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2009 2010 2011 2012
P
o
r
d
n
g

(
'
0
0
0
)

Mobile Number Portability
2009 2012
Number of porhng requests
Successful porhng
2.5
4.3
6.1
8.6
12.1
16.6 16.1
19.4
22.2
23.9
27.1
29.6
33.6
2.6
3.1
3.0
2.6
2.6
2.9 3.4
3.9
5.5
6.3
6.7
7.1
7.4
0
5
10
15
20
25
30
35
40
45
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

S
u
b
s
c
r
i
b
e
r
s

(
m
i
l
l
i
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n
)

Prepaid and Postpaid Subscribers of Mobile Services
2000 2012
Prepaid Postpaid
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

The mobile market share in comparison to 2011 is shown in Figure 3.12.

Fig. 3.12 Mobile Phone Service by Service Providers 2003 2012

40.5 41.7 40.3 41.5 41.6 40.0 39.5 39.5 36.2
32.2
39.6 36.1 35.2 31.3 31.0 31.7 34.2 33.0
32.7
31.5
19.8 22.2 24.5 27.2 27.5 25.5 25.3 26.0
27.0
25.6
2.9 1.0 1.5 4.1
8.5
2.2
0
20
40
60
80
100
120
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
P
e
r
c
e
n
t
a
g
e

(
%
)

Mobile Phone Service by Service Providers
2003 2012
Maxis Celcom DiGi U Mobile Others (MVNO)


102

Development of Mobile Virtual Network Operator (MVNO)

There are four Mobile Network Operators (MNO) in Malaysia namely, the mobile service providers
Celcom, DiGi, Maxis and U Mobile. Three out of these, that is, Celcom, DiGi and Maxis, offer their
network services to licensed MVNO companies. The services offered by the eight MVNO
companies are shown in the table below.

MVNO in Malaysia in 2010 2012
No. MVNO
Host
MNO
Description Services Provided
Licence
2010 2011 2012
1. Baraka Telecom Sdn
Bhd
DiGi Mobile segment built on operating
principle of Syariah compliance.
Terminated their agreement with DiGi in
2010 and changed their business plan to
become Asias first MVNE
17
.
Prepaid, Core network, Open
Source Software (OSS), Business
Support System (BSS).
NSP(I) /
ASP
NSP(I) /
ASP
NSP(I)
2. Tune Talk Sdn Bhd Celcom Offer prepaid services, voice, SMS and
data services on 2.5G platform.
Operates based on GSM, GPRS, EDGE
UMTS and HSDPA technology.
Target to serve the underserved segment
of the market with super low calling rates
and exciting incentives.
Public Cellular Services (Prepaid
and Postpaid).
NSP(I) /
ASP
NSP(I) /
ASP
NSP(I) /
ASP
3. XOX Com Sdn Bhd Celcom Wireless telecommunications service
provider.
Engaged in offering postpaid, prepaid or
hybrid mobile calling cards targeted to
the Chinese community in Malaysia.
Based on GSM technology.
Public Cellular Services (Prepaid
and Postpaid), Messaging
services.
NSP(I) /
ASP
NSP(I) /
ASP
NSP(I) /
ASP
4. Magxo Sdn Bhd n.a. Development of software and
consultancy services.
Licence surrendered in 2011.
Secure solution for online
payment.
NSP(I) X X
5. Talk Focus Sdn Bhd DiGi Target young market segment.
Offer a unique voice and data plan.
Public Cellular Services,
Messaging Services (Prepaid and
Postpaid) and Internet Access
Services.
NSP(I) /
ASP
NSP(I) /
ASP
NSP(I)
6. PP Integration Sdn
Bhd
n.a. n.a. n.a. X NSP(I) NSP(I)
7. Samata
Communications
Sdn Bhd

DiGi Allow phone users to do much more with
their mobile phones as their SIM card use
Near Field Communications (NFC)
technology.
Made paying bills easier through mobile
payment services.
Public Cellular Services, Internet
Access Services.
X X NSP(I)
8. Ceres Telecom Sdn
Bhd

Celcom Offer end to end services and highly
specialised, cutting edge technological
niche solutions for wireless and fibre
optic telecom networks.
Public Cellular Services,
Messaging Services (Prepaid and
Postpaid) and Internet Access
Services.
X X NSP(I)
Note: NSP (I) Network Service Provider (Individual), ASP Applications Service Provider

Source: Companies website, www.prepaidmvno.com, http://www.ego2u.biz/MVNOMalaysia-EGO2U.html, MCMC
Fig .3.13 MVNO in Malaysia 2010 2012
MVNOs typically do not own a network but lease the network of a service provider that does
have a network. Notably, this business arrangement allows smaller service providers focused on
specific aspects of the mobile business to offer their specialised services and enrich industry
service offerings aside from optimising usage of network infrastructure.

17
Mobile Virtual Network Enabler (MVNE) is a company that provides services to mobile virtual network operators. The services can include billing,
network element provisioning, administration, operations, support of business support systems and operations support systems, provision of back
end network elements, and enable provision of mobile network services like cellular phone connectivity.

Domain Names

The .my Domain Registry in 2012

Fig. 3.14 Background of IDN in Malaysia


Note: IPv6 DNS started in August 2009

Source: .my Domain Registry, MCMC
Fig. 3.20 Domain Names with IPv6 DNS 2009 2012
Fig. 3.21 Number of Domain Names with DNSSEC

0
500
1000
1500
2000
2500
3000
3500
J
a
n

F
e
b

M
a
r

A
p
r

M
a
y

J
u
n

J
u
l

A
u
g

S
e
p

O
c
t

N
o
v

D
e
c

N
u
m
b
e
r

o
f

D
o
m
a
i
n

N
a
m
e
s

Domain Names with IPv6 DNS
2009 2012
2012 2011 2010 2009
2,185
2,009
208
3,015
9
8
9
8
9
22
26
25
27
23
24 24
7 7
8 8
7 7
8 8 8 8
0
5
10
15
20
25
30
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
N
u
m
b
e

o
f

D
o
m
a
i
n

N
a
m
e
s

Domain Names with DNSSEC
2012 2011

On share of domain names by categories, in 2012 the .com.my category remained the main and
constituted the biggest share of domain names. This category has 111,536 registered domain names
and made up 53.4% of total share. Following on is the .my with 87,488 domain names at 41.9%
share.

Except for declining growth in domain names .net.my (-0.4%) and .name.my (-27.9%), other domain
names experienced increase in growth rate ranging from 5.8% to 124%. The growth trend of domain
names by categories for the three consecutive years 2010 to 2012 is shown in Figure 3.19.

Fig. 3.17 Share of Domain Names by Categories 2012
Fig. 3.18 Share of Domain Names by Categories 2011

The year 2012 also saw the domain names with IPv6 DNS totalled 3,015 in number, an increase of
38% or 830 domain names. The number of domain names with DNSSEC also demonstrated significant
demand with an increase of 200% to 24 domain names from eight domain names registered in 2011.

In part, government initiatives to enhance business value for broadband enterprise users have resulted
in increase of domain names .my and .com.my. The urgency to use IPv6 addressing has also
accelerated the demand for of IPv6 domain names.

.my
41.9%
.com.my
53.4%
.net.my
1.3%
.org.my
1.3%
.gov.my
0.6%
.edu.my
1.4%
.mil.my
0.01%
name.my
0.1%
Share of Domain Names by Categories
2012
.my
26.7%
.com.my
67.1%
.net.my
1.9%
.org.my
1.8%
.gov.my
0.7%
.edu.my
1.5%
.mil.my
0.01%
.name.my
0.3%
Share of Domain Names by Categories
2011
Comparison of Domain Name Registration by Categories
.my .com.my .net.my .org.my .gov.my .edu.my .mil.my .name.my
2010 23,220 81,852 2,316 2,313 1,031 1,666 7 400
2011 39,050 97,921 2,764 2,613 1,087 2,137 17 401
2012 87,488 111,536 2,752 2,765 1,158 2,923 25 289
Fig. 3.19 Comparison of Domain Name Registration by Categories

The initiatives will facilitate the private sector towards implementation of IPv6 before end of 2014.

MCMC Initiatives to Drive IPv6 Adoption in 2012

IPv6 Deployment Kit

MCMC has distributed 2,000 posters and 500 mini booklets to
government agencies and industries in January 2012.

The IPv6 Deployment Kit provides practical ways of deploying
IPv6. It contains basic information for identifying and resolving
issues on IPv6 adoption.

IPv6 Training for Human Capital Development

Between February and March 2012, MCMC conducted IPv6
certification training to 80 professional IT engineers. Participants
were selected from ISPs and service providers as well as government
agencies.

IPv6 Tunnel Broker

The IPv6 Tunnel Broker which has been available since December 2012 promotes and accelerates the adoption of IPv6 amongst Internet
users.

This service allows users to connect to IPv6 Tunnel Broker by using a router or end host equipment such as a PC. The IPv6 Tunnel Broker
service covers 6in4 tunnelling mechanism which tunnels IPv6 packets as IPv4 data. 6in4 tunnelling enables IPv6 connectivity over explicit IPv4
virtual links for tunnel based on IP protocol 41. Under this mechanism IPv6 packets are carried inside IPv4 packets.

The public are encouraged to utilise and experiment on the IPv6 Tunnel Broker service by registering at https://www.6xs.my/.

Source: MCMC
Fig. 3.24 MCMC Initiatives to Drive IPv6 Adoption in 2012

Extending IP Addressing Availability

As the number of Internet users worldwide increase, the Internet Protocol version 4 (IPv4) addresses
currently available for use are running out. Today, IPv4 is running in parallel with the new Internet
Protocol version 6 (IPv6) addressing. IPv4 will eventually be replaced by IPv6.

Development on IP

The Internet Engineering Task Force (IETF) in 1998
stipulated IPv6 as the successor to IPv4. This serves
to mitigate the IPv4 address depletion.

IPv6 also improves the features and brings new
capabilities that are not available in IPv4.

IP Address Protocols
IPv4 IPv6
Deployed 1981 1999
Address size 32 bit 128 bit
Number of
addresses
4.3 10
9

(4.3 billion)
3.410
38

Source: Adapted from Managing Internet Number Resources,
http://www.nro.net/wp-
content/uploads/2011/02/nro_manage_resources_factsheet.pdf,
August 2012
Fig. 3.22 IP Address Protocols

IPv6 Urgency of Adoption

In a historical event in February 2011, the Internet Assigned Numbers Authority (IANA) responsible for
coordinating global IP, handed out the last IPv4 address blocks to the Regional Internet Registries.
This translates that there is no more IPv4 addresses available for allocation at the top of the
addressing hierarchy. Henceforth, this urges Internet Service Providers (ISP) and other Internet
community to adopt IPv6 addressing.

Status and Development of IPv6 in Malaysia

MCMC Efforts to Drive IPv6 Adoption in Malaysia

In order to ensure that Malaysia's ICT industry is well positioned to take advantage of new
opportunities in the IPv6 world, in 2012, the MCMC has established an IPv6 Action Plan. The plan
comprises various activities including promotion and awareness, human capital development together
with monitoring and compliance auditing for the ISPs.

The Malaysian government affirms the
importance in the deployment of IPv6 and
is preparing the country for full IPv6
migration by 2015. Pushing for IPv6
readiness, the Government has established
the National IPv6 Implementation
Monitoring Committee to monitor status of
IPv6 implementation for public and private
sectors. The members are MICC, MCMC,
MAMPU and MOSTI.
IPv6 Leading Agencies and Working Group
Agencies/Working Group Description and Remarks
National IPv6 Implementation
Monitoring Committee
The Committee chaired by
MICC, focus on the planning of
migration to IPv6 for
government agencies and the
industry
Malaysian Administrative
Modernisation and Management
Planning Unit (MAMPU)
Lead and monitor government
agencies for the IPv6 migration
Malaysian Communications &
Multimedia Commission (MCMC)
Driving private sector and
industry players
Ministry of Science and Technology
(MOSTI)
Focus on IPv6 Research and
Development
Source: Ministries, MCMC
Fig. 3.23 IPv6 Leading Agencies and Working Group
108

MODULE 4: CONTENT SERVICES

Malaysian Scenario Today and Precursors to Future

TV Broadcast Landscape
Today, the Malaysian TV delivery is getting increasingly non linear (see Figure 4.1). Linear TV in simple
terms has scheduled content broadcast on a Free-To-Air (FTA) basis. The TV experience is changing
for viewers, much the same as the development of the TV landscape. This is brought about by the
existing FTA and satellite Pay TV broadcasters in efforts to leverage on the Internet and mobility. This
is amidst competition from non traditional service providers like those in telecommunications and Over
the Top (OTT) platform.

TV is certainly going beyond traditional means and competition has increased, albeit at varying pace
depending on the TV landscape development. In Malaysia, the precursors to nonlinearity are exerting
some pressure. Already, there is higher speed Internet availability capable of carrying high quality
videos compared to yesteryears.

In view of the changing TV broadcast landscape in Malaysia, traditional broadcasters have taken up
the challenge to reap the opportunities that abound using their prime assets such as premium content,
archive content and content delivery systems to their advantage. This includes learning new skills and
acquiring new talents be it in content creation and aggregation as well as engaging the advertisers;
procuring new packaging and delivery systems.

Malaysian Scenario Today and Precursors to Future

Opportunities Abound
Content Explosion
Multiscreen; Video over many things
(Education & mCommerce)
New advertising approaches
New services
(Live TV on the go, paid search,
Paid Apps, Location based services)
Real time interactivity
Connected CE
Increased revenue + Decreased cost
Others
Requirements
Reliable network
Quality of service + experience
Quality of customer service
Value for money
Copyright/privacy
Security of network/delivery/data
Monetisable business models
Increased talents + competitiveness
Trusted partners + partnerships
Others
Source: MCMC
Fig. 4.1 Malaysian Scenario Today and Precursors to Future


111

Module Content

MODULE 4: CONTENT SERVICES 111
Malaysian Scenario Today and Precursors to Future 113
TV Broadcast Landscape 113
Digital Terrestrial TV Service Platform 114
Development of Broadcasters 114
FTA TV Broadcasters 115
Media Prima Bhd 115
Pay TV Broadcasters 117
ASTRO 117
IPTV 117
Cable TV 117
Radio Broadcasters 118
Advertising Expenditure (Adex) 120
Global Adex 120
Adex in Malaysia 121


FTA TV Broadcasters
Media Prima Bhd
With four TV stations, Sistem Televisyen Malaysia Bhd or TV3, NatSeven TV Sdn Bhd (ntv7),
Metropolitan TV Sdn Bhd (8TV) and Ch-9 Media Sdn Bhd (TV9), the Media Prima Group is better
known as an integrated FTA TV service provider. The Group also has print media through its subsidiary
The New Straits Times Press (Malaysia) Bhd, radio stations under Media Prima Radio Networks and an
outdoor advertising arm, Big Tree Outdoor Sdn Bhd.

As digitalisation progresses in all three mediums of which Media Prima is involved, the approach of the
Group is gleaned as working to leverage content and delivery mediums for monetising the synergy.

Media Prima TV Stations
TV3 ntv7 8TV TV9
Year
Launched
1984 1998* 2004 2006
Target
Audience
Mass market skewed towards
Malay audience
Malaysian urban households,
25-45 year old, children and
Chinese markets
Young urban Malaysian,
Chinese and 15-29 year old
English literate viewers
Mass market appeal,
skewed to young
semi-urban and rural
Malays
Channel
Spotlight

Maintained leadership position
in 28 years. Audience viewing
share of more than 20% on FTA
and pay TV**.

Breakthrough drama Nora
Elena was ranked the world
number 4 for video streaming.

In January 2012, Anugerah
Juara Lagu 26, a song contest
show, registered a record
breaking 6.5 million total
viewership on TV and online
platform. This pushed the
boundaries on social
engagement and interaction via
its website.
Making mark through content
distribution and co-production
activities.

The first Chinese New Year
telemovie from ntv7, The
Superb Match Makers,
welcomes opportunities for
content to be sold overseas.
Fascinate viewers by
showcasing hit TV series from
local as well as Asia and
Hollywood.

Leverage a host of new media
platforms. The stations
following on social media
platforms. 8TV engages with
a generation of
technologically adept
audience.
Started prime time
slot featuring light
Islamic related
programmes.

Three new slots for
prime time were
introduced to engage
young mass Malay
viewers.

In 2012, TV9s
returning favourite
programme, Skrin Di
9, has been reaching
more than a million
viewers every week.
Highlights on
Development

Channel synonymous with
family, real life, entertainment
and news content leaning
towards cultural proximity.

Network aired many popular
prime time shows. This
together with its magazine
programmes and signature
entertainment and variety
shows attracted millions of
viewers.

Brands targeting the Malaysian
urban middle to high class;
image products and lifestyle.

Moving forward, ntv7 will
continue its efforts to showcase
more exciting shows and
reaching out to a larger
audience through more on-
ground happenings and events.

Links to event related
broadcast such as street
dance community locally and
internationally.
Focus on
entertainment,
drama, comedy and
reality genres for
target audience.

Aims at providing
purposeful
entertainment with a
combination of good
moral values.
*The acquisition of ntv7 by Media Prima was completed on 30 December 2005
**Nielsen Audience Measurement

Source: Media Prima Bhd Annual Reports, website and news reports
Fig. 4.3 Media Prima TV Stations


113
Digital Terrestrial TV Service Platform

In 2012, the FTA broadcasters aligned and positioned themselves as content providers in
preparation for the upcoming digital terrestrial TV service platform slated to begin service by the
second half of 2014. The infrastructure for the digital terrestrial TV services would be built and
operated by a separate independent entity. This approach effectively relieves the FTA
broadcasters from having to incur high capital expenditure to build transmission networks.

On the digital terrestrial platform, FTA broadcasters are planning to launch more local
TV channels that come with high definition services, interactivity and lite pay services such as
video on demand (VOD), pay per time, pay per view, personal recording as well as the ability to
switch to broadband services with a push of a button on the set top box. Hence, this reinforces
their approach to attract more viewers or retain audience market share and attract more
advertisers.

Development of Broadcasters

A visual brief of the services offered in leveraging on new delivery platforms, new services
creation with partners and new content provision is shown in Figure 4.2. Note that provision of
online content services is common across all the three main broadcasters. These are the FTA TV
service providers, namely, Media Prima Group; the Government owned Radio Televisyen
Malaysia (RTM) and the satellite Pay TV service provider namely Astro Malaysia Holdings Bhd
(ASTRO).

Broadcasters in Malaysia Development to 2012
FTA and Online Satellite and Online
Commercial Government Owned Commercial
Media Prima Bhd Radio Televisyen Malaysia (RTM) ASTRO
TV Radio Online TV Radio RTM Online
#1
Pay TV Radio Free TV IPTV VOD
4
channels
3
stations

www.
tonton.
com.my

TV3
ntv7
8TV
TV9

2 main
channels
35
stations

Aifm
Asyikfm
Minnalfm
Muzikfm
Nasionalfm
Klasik Nasional
Traxxfm
(Muzikfm
available only
on Internet)

including local
and state
stations
Live Streaming
TV1, TV2, TVi,
My Klik,
Galaksi Muzik
9 radio
channels
156
channels,
68 are
ASTRO-
created
channel
20
themed-
music
stations,
9 of which
are its
commercial
radio
stations
#3

ERA fm
MIX fm
Melody FM
hitz.fm
MY FM
Litefm
Sinar
THR Raaga
THR Gegar

18 TV
and
19 radio
stations
Triple play
service

Catch Up
and
Pay Per
View
Movie
initially
available
to IPTV

TV3 Hot FM

TV1
ntv7

Fly FM

TV2

8TV

One FM

TVi
(RTM
digital TV
station,
launched
in
2011)
Kampus
ASTRO
(Education
platform)
IPTV

TV9

Web Stream
#2

Muzik FM
Muzik Aktif
Broadband

Voice
VOD
Stadium
ASTRO

Special Web
Access
such as
Orchestra RTM
50 years
Interactive
#1
mystream.rtm.gov.my
#2
http://www.rtm.gov.my/galaksimuzik/
#3
Available over FM Terrestrial, DTH satellite TV, IPTV, mobile and Internet platforms

Source: Annual Reports; Websites; News
Fig. 4.2 Broadcasters Companies in Malaysia Development to 2012

Pay TV Broadcasters

ASTRO

ASTRO is the only satellite Direct-To-Home (DTH) Pay TV service provider in Malaysia. Since ASTRO
started broadcast in September 1996, ASTRO has become a household name along with earlier service
providers in FTA terrestrial broadcast.

ASTRO together with other partner service providers have started to enable creation of a more rich
entertainment environment, leveraging on digitisation and online. In 2012, ASTRO launched free
satellite TV and entered a 10-year partnership with Maxis for ASTRO to be the IPTV content service
provider.

IPTV

IPTV services are offered mostly in partnership, that is, in content procurement if the IPTV service
providers are essentially a network service provider such as TM. In contrast, ASTRO with content
assets has partnered with TIME to offer IPTV services over fibre network through set top boxes that
can deliver DTH satellite Pay TV and online IPTV services under the brand name of ASTRO B.yond
Services. In addition, ASTRO also introduced ASTRO On-The-Go in partnership with Maxis for content
across online platform and mobile devices.

Among the major companies that have strategised to offer online video, or more specifically IPTV
services are as listed in Figure 4.5.

IPTV Services in Malaysia
ASTRO B.yond IPTV Services
Offers broadband and TV
Interactive satellite broadcast with options for high definition
viewing, video on demand and personalised video recording.
TM IPTV Services: Hypp TV
Service offered in package with broadband service under
brand name UniFi.
The service comprises video on demand series, pay per view
options and free Live TV channels as well as interactive
channels such as news headlines, games and social media
platform.
Partnered with Hong Kongs Now TV and Warner Bros in the
fourth quarter 2012 providing exclusive TV content.
Surpassed 100 channels in 2012.
In the Pipeline
YTL Communications Sdn Bhd IPTV using WiMAX network in
quad play service provision.
Source: Industry
Fig. 4.5 IPTV Services in Malaysia

Cable TV

Asian Broadcasting Network Sdn Bhd began offering trials of its digital cable services in the second
quarter of 2012 in selected areas in Klang Valley. The company offered access to a bouquet of 50
channels under the brand name ABN Xcess.

Media Prima TV Networks Advertising Revenue 2011 and 2012

Note: Revenue is based on gross revenue after discount

Source: Media Prima Bhd
Fig. 4.4 Media Prima TV Networks Net Advertising Revenue 2011 and 2012

In 2012, Media Prima posted a total of RM891 million advertising revenue, a 3.5% growth compared
to the previous year.

TV3 maintains a leadership position in term of advertising revenue and continues to produce strong
revenue growth with the largest market share above 60%. Between 2011 and 2012, TV3 and TV9
increased its revenue by 7% and 19% respectively.

TV3
546.4
63% ntv7
117.3
14%
8TV
125.7
15%
TV9
70.9
8%
Adverdsing Revenue 2011
RM (million)
TV3
585.5
66%
ntv7
104.5
12%
8TV
115.3
13%
TV9
84.5
9%
Adverdsing Revenue 2012
RM (million)

Radio Broadcasters

Radio is complementary service to other media and has its own advantages of reaching audiences.
One significant advantage is that listeners are able to listen to radio while working in office or
travelling. Radio has become available in various ways and broaden the traditional radio audience
beyond car and portable mode. Through diversification of stations today, radio has evolved from mass
to niche market; catering to preferences and demographic characteristics such that listeners have
access to the most up to date news and specific information.

In Malaysia, there are four major radio groups capturing the largest share of listenership namely
ASTRO Radio, RTM, Media Prima Radio Networks and The Star Radio Group. Notably, government-
owned RTM operates six radio national stations and 29 state or local radio stations.

Commercial Radio Stations in Malaysia
No. Radio Broadcaster Station
1 Astro Radio Sdn Bhd
Maestra Broadcast Sdn Bhd ERA fm, MIX fm, Melody FM
Measat Radio Communications Sdn Bhd hitz.fm, MY FM, Litefm
Perfect Excellence Waves Sdn Bhd Sinar
Radio Lebuhraya THR Raaga, THR Gegar
2
Media Prima Radio
Networks
Synchrosound Studios Sdn Bhd Hot FM
One FM Radio Sdn Bhd One FM
Malaysia Airports (Sepang) Sdn Bhd Fly FM
3
The Star Radio
Group
Star Rfm Sdn Bhd 988 FM, Red FM
Rimakmur Sdn Bhd Suria FM
ISY Holdings Sdn Bhd Capital FM
4 - Institut Kefahaman Islam (Malaysia) IKIMfm
5 - Husa Network Sdn Bhd ManisFM
6 - Kristal Harta Sdn Bhd Cats FM
7 - Suara Johor Sdn Bhd Best 104 FM
8 - BFM Media Sdn Bhd BFM
9 - Pertubuhan Berita Nasional (BERNAMA) BERNAMA Radio24
10 - Copyright Laureate Sdn Bhd Pi Mai FM
Source: MCMC
Fig. 4.6 Commercial Radio Stations in Malaysia


118

Note: Xfresh FM stopped service with effect from 13 July 2012; Melody FM is a new monitoring since 15 August 2012; Capital FM under Star Radio Group not available
for figure

Fig. 4.7 Total Listenership (000) 2011 2012

Figure 4.7 compares the listenership by commercial radio stations in 2011 and 2012. Sinar radio
under ASTRO Radio is the most popular Malay radio station with almost four million listeners.

Radio Surveys Highlights 2010 2012
Highlights Description
Less station switching November
2012
Malaysia continues to lead the Asia Pacific in average number of hours spent listening to
radio, with one significant result, that is, higher station loyalty among listeners as a result
of less station switching.
Malaysia leads Asia Pacific Region

3 distinct peaks

Social networking becoming
more popular
November
2011

With average time of 21 hours and 34 minutes per week, the highest compared to five
other Asia Pacific markets.

Peak periods morning, late afternoon and evening. Morning is the most popular time to
tune into the radio for majority of listeners.

Social media usage by radio listeners grew by 35% between surveys in 2011. 59% of
listeners aged between 15 and 24 years participated in social networking.
Largest audience in the past five
years

Listening device
May 2011

The average time spent of 24 hours and 54 minutes per week, attracted 2.31 million
people at any given 15 minutes time slot in March/April 2011.

Apart from at home or in car, listeners tune to ASTRO decoder (33%), mobile phone
(23%), Internet (10%) and MP3/MP4 players (7%).
Radio adex hit more than RM400
million

End 2010 Radio adex grew 13% compared to previous year.
Radio Audience Measurement
survey period extended
May 2010 Survey period extended to four weeks (previously two weeks) providing deeper insights
for advertisers to reach target audience.
Source: www.adoimagazine.com; www.asiamediajournal.com; www.brandequitymagazine.com; thestar.com.my; www.theedgemalaysia.com
Fig. 4.8 Radio Surveys Highlights 2010 2012

3
,
7
6
7

2
,
9
2
1

2
,
8
9
8

1
,
9
5
3

1
,
6
5
1

5
0
3

3
1
5

2
3
2

2
,
9
7
1

6
5
4

6
9
2

2
,
0
0
6

1
,
4
0
0

2
6
6

3
,
9
1
7

3
,
8
4
5

2
,
9
3
7

1
,
9
7
6

1
,
3
6
9

3
4
2

2
5
8

1
2
3

2
,
8
2
3

7
6
5

5
1
9

2
,
2
2
1

1
,
3
3
7

2
2
5

Sinar Era fm THR MY FM hitz.fm Mix fm Litefm Xfresh
Fm
Melody
FM
Hot FM One FM Fly FM Suria
FM
988 FM Red FM
Total Listenership ('000) 2011 2012
2011 2012
ASTRO Radio Media Prima
Radio Networks
The Star Radio
Group
120

Advertising Expenditure (Adex)

Global Adex
Global advertising expenditure increased by
3.3% for the year 2012 compared to the
same period last year. Among the regions,
Asia Pacific and Latin America contributed
the highest growths with 6.1% and 7.7%
respectively.
North America also posted significant adex
growth at 4.1% in 2012, with growth for US
alone at 4.3%. Major events included the
US Presidential election. Europe remained as
the only region to see year on year decline
with Western Europe at -2.2% resulting
from the Euro Zone crisis.

Source: Zenith Optimedia
Fig. 4.9 Global Advertising Expenditure by Region USD (billion)

As for global adex by medium, TV holds the largest
share with 40.2% followed by newspapers (18.9%)
and Internet (18.0%). The lowest share of
advertising medium is cinema with only 0.6% or
USD2.7 billion.

Projection provided by Zenith Optimedia predicted
that global adex growth is expected to strengthen
over the next three years, rising from 3.3% in 2012
to 4.1% in 2013 and 5.6% in 2015.
Source: Zenith Optimedia
Fig. 4.10 Global Adex by Medium

171.9
106.8
140.2
26.7
38.0
4.2
9.5
497.3
0 100 200 300 400 500 600
North America
Western Europe
Asia/Pacic
Central & Eastern Europe
Lahn America
Middle East & North Africa
Rest of the World
World
USD (billion)
Global Adverdsing Expenditure by Region
USD (billion)
Newspaper
s
93.2
18.9%
Magazines
43.2
8.8%
Television
197.6
40.2%
Radio
34.3
7.0%
Cinema
2.7
0.6%
Outdoor
32.3
6.6%
Internet
88.6
18.0%
Global Adverdsing Expenditure by Medium
USD (billion)

Adex in Malaysia

Even though back in year 2005 Malaysia only managed to secure RM4.6 billion in advertising
expenditure, in 2009, Malaysia increased the spending to RM6.6 billion (more than 40% increase).

Source: Nielsen Advertising Information Services (AIS)
Fig. 4.11 Adex in Malaysia

For 2012, the overall media adex for Malaysia increased by 1% to RM8.3 billion in 2012, up from
RM8.2 billion in 2011. For the record, Malaysia adex for Pay TV and magazines were included starting
2010
18
. To make it comparable to previous years, adex for Pay TV and magazines were excluded as in
Figure 4.11.
Adex by Medium
Medium 2010
RM (billion)
2011
RM (billion)
2012
RM (billion)
Terrestrial TV 2.89 3.01 3.17
Pay TV 1.95 2.47 2.98
Newspapers 3.89 4.36 4.31
Magazines 0.15 0.15 0.15
Radio 0.41 0.43 0.45
Cinema 0.02 0.02 0.04
Outdoor 0.12 0.12 0.14
In-Store Media 0.12 0.14 0.14
Internet 0.05 0.06 0.03
Total 9.60 10.76 11.40
Fig. 4.12 Adex by Medium

As for the yearly growth, in 2011 adex grew 12.08% with the value of RM10.76 billion and increased
to RM11.4 billion in 2012 with 6.04%. The print medium such as newspapers is still the first
advertising medium option, with 37.8% market share or RM4.3 billion in total adex for 2012. This is
followed by FTA Television (27.8%, RM3.17 billion) and Pay TV (26.1%, RM2.9 billion).

18
5
6.2
6.6
7.7
8.2 8.3
16.3
24.0
6.5
16.7
6.5
1.0
0
5
10
15
20
25
30
0
1
2
3
4
5
6
7
8
9
2007 2008 2009 2010 2011 2012
P
e
r
c
e
n
t
a
g
e

(
%
)

R
M

(
b
i
l
l
i
o
n
)

Adex (RM billion) Adex (% Change)
Adex in Malaysia certifying agent SIRIM Bhd
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

MODULE 5: POSTAL AND COURIER
SERVICES

Fig. 4.13 Adex Market Share 2010 2012 (%)

Combined Pay TV and FTA TV adex totalling RM6.15 billion in 2012 constitute a market share of
54.1%. Meanwhile, newspaper adex market share is 37.8% at RM4.3 billion in 2012. This shows that
TV still commands the adex pie vis--vis other medium.

For the year 2011, Internet adex recorded RM63.7 million. For the record, for the first half of 2012,
Internet adex was RM28.2 million.
Top 10 Malaysia Adex by Categories
RM (million)
Rank Top 10 Categories 2011 2012
1 Government Institutions - Local 399.5 556.8
2 Mobile Line Services 362.7 351.2
3 Face Care - Woman 314.6 310.6
4 Dairy - Kids Growing Up Milk 234.9 238.6
5 Fast Food Centre 233.5 232.4
6 Tonic & Vitamin 183.7 221.6
7 Hair Shampoo & Conditioner 197.7 199.5
8 University 173.5 196.8
9 Cleaning Agent - Laundry 186.0 195.4
10 Photography 224.3 181.1
Fig. 4.14 Top 10 Malaysia Advertising Spend by Categories RM (million)

Top 10 Malaysia Adex by Advertisers
RM (million)
Rank Top 10 Advertisers 2011 2012
1 Unilever Malaysia 384.6 388.5
2 Nestle 234.9 315.9
3 Procter & Gamble 284.8 284.8
4 Maxis Communication Bhd 137.6 258.9
5 Prime Minister Department 34.9 200.0
6 Glaxo Smithkline 248.9 163.9
7 DiGi Telecommunication Sdn Bhd 156.5 149.6
8 Samsung Malaysia Electronics (SME) Sdn Bhd 60.0 149.0
9 Canon Marketing (M) Sdn Bhd 181.7 143.8
10 Colgate - Palmolive (M) Sdn Bhd 126.2 138.1
Fig. 4.15 Top 10 Malaysia Advertising Spend by Advertisers RM (million)
Based on Malaysia adex by categories, fast moving consumer products giants such as Unilever, Nestle
and Procter & Gamble spent the most with total adex of RM388.5 million, RM315.9 million and
RM284.8 million respectively. Two notable entries into the top 10 advertisers list for 2012 were the
Prime Ministers Department (RM200 million) and Samsung Malaysia Electronics (RM149 million). For
mobile services, DiGi maintains its position in the top 10 list with adex of RM149.6 million.

0 5 10 15 20 25 30 35 40 45
Terrestrial TV
Pay TV
Newspapers
Magazines
Radio
Cinema
Outdoor
In-Store Media
Internet
Terrestrial TV Pay TV Newspapers Magazines Radio Cinema Outdoor In-Store Media Internet
2012 27.8 26.1 37.8 1.3 3.9 0.3 1.2 1.3 0.3
2011 28 22.9 40.5 1.4 4 0.2 1.1 1.3 0.6
2010 30.1 20.3 40.5 1.6 4.3 0.2 1.2 1.3 0.5
Adex Market Share 2010 2012 (%)


121


Combined Pay TV and FTA TV adex totalling RM6.15 billion in 2012 constitute a market share of
54.1%. Meanwhile, newspaper adex market share is 37.8% at RM4.3 billion in 2012. This shows
that TV still commands the adex pie vis--vis other medium.

For the year 2011, Internet adex recorded RM63.7 million. For the record, for the first half of
2012, Internet adex was RM28.2 million.
Top 10 Malaysia Adex by Categories
RM (million)
Rank Top 10 Categories 2011 2012
1 Government Institutions - Local 399.5 556.8
2 Mobile Line Services 362.7 351.2
3 Face Care - Woman 314.6 310.6
4 Dairy - Kids Growing Up Milk 234.9 238.6
5 Fast Food Centre 233.5 232.4
6 Tonic & Vitamin 183.7 221.6
7 Hair Shampoo & Conditioner 197.7 199.5
8 University 173.5 196.8
9 Cleaning Agent - Laundry 186.0 195.4
10 Photography 224.3 181.1
Fig. 4.14 Top 10 Malaysia Advertising Spend by Categories RM (million)

Top 10 Malaysia Adex by Advertisers
RM (million)
Rank Top 10 Advertisers 2011 2012
1 Unilever Malaysia 384.6 388.5
2 Nestle 234.9 315.9
3 Procter & Gamble 284.8 284.8
4 Maxis Communication Bhd 137.6 258.9
5 Prime Minister Department 34.9 200.0
6 Glaxo Smithkline 248.9 163.9
7 DiGi Telecommunication Sdn Bhd 156.5 149.6
8 Samsung Malaysia Electronics (SME) Sdn Bhd 60.0 149.0
9 Canon Marketing (M) Sdn Bhd 181.7 143.8
10 Colgate - Palmolive (M) Sdn Bhd 126.2 138.1
Fig. 4.15 Top 10 Malaysia Advertising Spend by Advertisers RM (million)
Based on Malaysia adex by categories, fast moving consumer products giants such as Unilever,
Nestle and Procter & Gamble spent the most with total adex of RM388.5 million, RM315.9 million
and RM284.8 million respectively. Two notable entries into the top 10 advertisers list for 2012
were the Prime Ministers Department (RM200 million) and Samsung Malaysia Electronics
(RM149 million). For mobile services, DiGi maintains its position in the top 10 list with adex of
RM149.6 million.

0 5 10 15 20 25 30 35 40 45
Terrestrial TV
Pay TV
Newspapers
Magazines
Radio
Cinema
Outdoor
In-Store Media
Internet
Terrestrial TV Pay TV Newspapers Magazines Radio Cinema Outdoor In-Store Media Internet
2012 27.8 26.1 37.8 1.3 3.9 0.3 1.2 1.3 0.3
2011 28 22.9 40.5 1.4 4 0.2 1.1 1.3 0.6
2010 30.1 20.3 40.5 1.6 4.3 0.2 1.2 1.3 0.5
Adex Market Share 2010 2012 (%)

Postal Services

Landscape of Change and Advancement

The universal postal service provider in Malaysia is Pos Malaysia Bhd, which is a public listed company
on Bursa Malaysia. The postal services over the years are cited as one with much change. This is
especially so with the emergence and development of digitalisation and ease of an electronic delivery
network as provided by the Internet.

Change is also rapid in the modernisation of physical postal delivery services enabled by online and
wireless. Over the years there has incorporated automation, fleet and logistics management, post
office branch extensions, 24 hour services, new kiosks employment, quality of service standards and
many more.

Modernisation of Postal Services Over the Years
Urban and
Rural

Manual and
Automation

Retail /One
Stop/
Quality
Focus

Source: Pictures Adapted from Pos Malaysia Annual Report, MCMC
Fig. 5.1 Modernisation of Postal Services Over the Years


123

Module Content

MODULE 5: POSTAL AND COURIER SERVICES 123
Postal Services 125
Landscape of Change and Advancement 125
Modernisation of Postal Services Over the Years 125
Regulation of Postal Services 126
Business Units Services Description 127
Development of Pos Malaysia 127
Business in Strategic Alliance 127
Postal Operations through ICT Innovations 127
Framework of Postal Services Act 2012 128
International Participation and Development 129
UPU-Membership 129
International Development 129
Domain Name .post 130
Standards in Postal Services 130
Rural Postal Development Programme in Malaysia 131
Philately 132
Courier Services 133
Strategic Goals 133
Industry Licensing and Revenue Performance 133
Major Licenced Courier Companies in Malaysia 134


The monitoring exercise for Pos Malaysia domestic mail performance for year 2011 yielded the result
as in Figure 5.6.

Domestic Mail Performance 2011
Standard Achievement
National Average Speed 87.87%
National Average Reliability 99.42%
Source: MCMC
Fig. 5.6 Domestic Mail Performance 2011

Domestic Parcel Performance 2011
Standard Achievement
National Average Speed 82.20%
National Average Reliability 99.95%
Source: MCMC
Fig. 5.7 Domestic Parcel Performance 2011

Business Units Services Description

Postal services in Malaysia are managed based on strategic business units in the core average postal.
These are core services, that is, Pos Mel, Courier and retail product services as in Figure 5.8.

Pos Mel
Mail provision of basic mail services for
corporate and individual customers
and customised solutions such as
Mailroom Management and Direct
Mail.

PosLaju Courier
Courier solutions by sea, air and land
to national and international
destinations.

PosNiaga Retail
Over-the-counter services for
payment of bills and certain
financial products and services.

Source: Pos Malaysia Bhd
Fig. 5.8 Business Units Services Description

Development of Pos Malaysia

Business in Strategic Alliance

The successful divestment of Khazanah Nasional Bhd 32.2% equity stake in Pos Malaysia to DRB-
19
on 1 July 2011 marked new beginnings for the postal services journey
going forward. The resolution by Khazanah Nasional Bhd
20
to divest the stake was announced by the
Prime Minister on 30 March 2010. This is part of the plans to build national competencies while
encouraging investment and shareholding by private sector.

Postal Operations through ICT Innovations

In alignment with a connected world and to leverage synergies from this new delivery platform, Pos
Malaysia has launched their new online shopping portal called PostMe.com.my. The provision of this
service taps the avenues of availability and accessibility of Malaysian users to eCommerce and also
caters to encouraging young entrepreneurship.

19
20
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Regulation of Postal Services

Postal services are regulated by the MCMC under the Postal Services Act 1991. MCMCs key functions
include ensuring the provision of universal postal service at affordable price, promoting competition
and protecting the interest of users in terms of prices, quality, and continuity. This includes regulation
of postal rates, fees and commission; monitoring performance of postal financial services and the
issuance of postage stamp themes.

Development from the regulatory perspective involves a service performance standard for domestic
letter and parcel service for new term for the period 2011 to 2014, which was implemented in January
2011. This new standards demonstrate Pos Malaysia commitment to continuously provide quality
service to the public whilst fulfilling universal service obligations.

Performance Standards for Domestic Letter Service
Objective Year 2011 Year 2012 Year 2013 Year 2014 Year 2015
Speed 89.0% 89.0% 89.0% 89.0% 89.0%
Reliability 99.93% 99.94% 99.95% 99.96% 99.97%
Source: MCMC
Fig. 5.2 Performance Standards for Domestic Letter Service

Performance Standards for Domestic Parcel Service
Objective Year 2011 Year 2012 Year 2013 Year 2014 Year 2015
Speed Target Levels 82.0% 82.0% 82.0% 82.0%
Reliability Target Levels 99.94% 99.95% 99.96% 99.97%
Source: MCMC
Fig. 5.4 Performance Standards for Domestic Parcel Service

In accordance with postal services standard stipulated in Performance Standard for Postal Services
(Domestic Letter) 2011 2012, Pos Malaysia monitors the delivery of domestic letter via a standard
Test Letter Monitoring System (TLMS).

Delivery Standards for Domestic Letter
Category Peninsular Malaysia Sabah and Sarawak
Intra-State Up to D+2 Up to D+3
Inter-State Up to D+3 Up to D+4
Source: MCMC
Fig 5.3 Delivery Standards for Domestic Letter
Delivery Standards for Domestic Parcel
Category Peninsular Malaysia Sabah and Sarawak
Local Delivery Up to D+3 Up to D+3
National Delivery
Intra-State Up to D+4 Up to D+5
Inter-State Up to D+5 Up to D+7
Note: D means the day when the act of posting takes place before the posting cut off time on the working day. The numeral after D refers to the number of
working day after the posting day to complete the deliver. Remote areas are not subject to delivery standards as shown in the table.

Source: MCMC
Fig. 5.5 Delivery Standards for Domestic Parcel

International Participation and Development

UPU-Membership

On the international front, Pos Malaysia was elected as a Postal Operations Council (POC) member
during the Universal Postal Union (UPU) Congress in Doha, Qatar held on 10 October 2012. Malaysia
garnered 105 votes, placing it at 28th position amongst 60 competing countries.

The POC, which is regarded as the technical and operational mind of the UPU, consists of 40 member
countries elected during the UPU Congress. It deals with the operational, economic and commercial
aspects of the postal business. The body also makes recommendations to member countries on
standards for technological, operational or other processes within its competence where uniform
practices are essential.

21

The trend of postal services internationally is changing to include more collaborative and integrative
aspects of operations. Quality of service was reiterated at the 2012 Congress wherein members
committed to international priority letter post items being delivered by the J+5 standard or five
working days after posting should reach 85% in 2013.

At the 2012 Universal Postal Congress, UPU member countries adopted mandatory minimum standards
for mail security for the first time. The next cycle of UPU work for 2014 2018 is seen to involve
standard electronic messaging in an integrated network of partners involving postal, aviation and
customs for speeding customs clearance in cross border delivery. The infrastructure for such
information sharing in international postal standards does have prerequisite in having an operational IT
system linking the key partners. Furthermore, such development is envisaged to be woven into the
business processes involved in clearing postal items.

Such developments stem from the increasing use of eCommerce and the need to capture opportunities
in this area as postal services diversifies and changes with time. The postal services today see
customers sending fewer traditional letters while there is a rise in volumes of parcels (each up to 30kg)
and small packages (up to 2kg) being processed in UPUs network. At the same time, regulatory
constraints and tighter security in an increasingly globalised world are having an impact on the postal
supply chain, sometimes slowing down delivery.

Specifically, the UPU is looking into standardisation of information delivery for cross border customs
clearance. In order to shorten processing time, UPU partners are working with Customs to align such
that timely information on the items delivered are available for requisite clearance on cross border
deliveries. Postal services are working with Customs to do their job as quickly as possible so that
postal customers can receive their mail as soon as possible.

The communication of information accompanying delivery for cross border process is envisaged to be
a standard message that could be used for this purpose on a universal basis. This is expected as an
electronic message, which eventually is mandatory for all 192 UPU member countries. UPU is also
focusing on a project to improve the express mail services through development of an interoperable IT

21
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

PostMe.com.my is open 24 hours every day. The online shopping service offers a variety of products
that range from apparels, cosmetics, toys to appliances. Payment can be made through credit cards
from local and international banks. The eDeduction payment service from savings accounts is also
available and of course, physical payment through post office branches. Delivery of items purchased is
within five to seven working days.

Five Year Strategic Plan

Source: Pos Malaysia Annual Report
Fig. 5.9 Five Year Strategic Plan
Towards building a sustainable Pos Malaysia, the group is
committed to invest in resources and people for transformation.
Such planned transformation is effected through a five-year
Strategic Plan 2013 2017 that is projected to yield double digit
growth revenue each year and significantly improve profitability
by 2017.

The Strategic Plan involves fundamentally redefining core
businesses from the product centric focus that previously
encompass mail, courier and retail businesses to four new
solutions driven approach in the following business clusters:

1. Communications and Distribution Solutions
2. One-Stop Solutions
3. Supply Chain Solutions
4. Digital Solutions

Framework of Postal Services Act 2012
(commencement on 1 April 2013 to replace Postal Services Act 1991)

Source: MCMC
Fig. 5.10 Framework of Postal Service Act 2012



130

Rural Postal Development Programme in Malaysia

Source: MCMC
Fig. 5.11 Launching of Postal Transformation Programme for Sabah and
Sarawak
Development Policy

The Minister of Information, Communications and
Culture launched the Postal Transformation
Programme for Sabah and Sarawak (PTPSS) in Miri,
Sarawak in May 2010. The PTPSS (2010 2012) is a
two year public-private initiative through MCMCs
funding of RM10 million.

Notably the objectives are to improve the postal
service in rural areas of Sabah dan Sarawak.

The National Postal Strategy (2010 2014) sets two key universal service performance indicators
to be achieved by end 2014. These indicators are as follows:

(i) Mail delivery service to the home (95% of the total addresses); and
(ii) Postal outlet per population ratio (15,000 people per postal outlet).

The Outcomes

By end of 2012, Pos Malaysia has created more than 450 new rural
postal routes in Sabah and Sarawak through the appointment of 450
Posmen Komuniti and 600 Wakil Pos Komuniti. The initiative benefits
more than a million people and has generated additional income to
more than 1,000 rural folks.

Pos Malaysia has deployed 10 units of Pos-On-Wheels (POW)
equipped with a modern communication technology such as VSAT to
serve the rural communities in 70 villages in Sabah and Sarawak.
Rural communities who normally have to travel more than 10 km to a
nearby post office to pay bills, conduct ASN/ASB
23
transactions or
posting a mail or a parcel have greatly benefitted from the
convenience provided by the POW.

Source: MCMC
Fig. 5.12 Posmen Komuniti Delivering Mail

23
An investment fund in Malaysia aimed to generate reasonable level of income distribution and capital appreciation to the unit holders through a
diversified portfolio of investments.
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

system or Customs Declaration System that allows information sharing between both Posts and
Customs. The first version is said to be ready for roll out in 2013.

Furthermore, the standard message can be used for a multiplicity or purpose. However, the key is in
the customer as clearly the information needs to be accurate and correctly entered at the point of
origin. In addition, there is the customer endorsement for post to share information to other parties in
the supply chain.

Domain Name .post

Notably .post was launched on 10 October 2012 during the Doha Congress. MCMC believes that .post
will contribute to the nation in the long run with the development of postal synergy in physical,
electronic and financial dimensions in Malaysia. This is a secure global electronic postal platform which
was approved by ICANN in 2009.

Standards in Postal Services

Pos Malaysia continues to strengthen its international network by focusing on quality of service and
operational efficiencies. A highlight of this stance is Pos Malaysia integration of S42
22
standards into
the domestic mail sorting system which enables faster processing of international mail. This improves
the quality of mail across the globe.

Towards this end, Pos Malaysia has been awarded a Certificate of Recognition for successfully
participating in the regional addressing project conducted by UPU. With this award, Malaysia joined 17
other countries in the world in using worldwide S42 address formatting standards.

Pos Malaysia Expedited Mail Service (EMS) was also awarded Gold level certification for their EMS
quality of service. This is also an international accreditation wherein the service performance of
international inbound EMS items across the country was monitored and measured by UPU and audited
by an international audit body. The EMS Gold certification is indicated as a testament to the strength
and efficiency of Malaysia PosLaju domestic network in supporting international courier service.

22
1
2
3
4
inARPU
5
6
7
network
8
. Also known as
9
.Yota
10
.Bhd
11
12
13
14
15

16
17
. starting 2010
18
19
20
21
22
standards conduct
ASN/ASB
23
transactions

1

2

3

4

5
monthly figure.
6

7

8
9

10

11

12

13

14

15
definition.

16
population.

17

18

19
20

21
22

23

Philately

The issuance of stamps is regulated and controlled by the MCMC. The issuance of stamps in any year
averaged about 16 new issues a year. In 2012, there were 17 stamp issued. Figures 5.11 and 5.12
show the stamp issuance and themes in 2012 respectively.

Fig. 5.13 Stamp Issuance 2006 2012

17 17
16
17
16
14
17
0
5
10
15
20
2006 2007 2008 2009 2010 2011 2012
N
o
.

o
f

S
t
a
m
p

I
s
s
u
a
n
c
e

Stamp Issuance 2006 2012
Malaysian Stamp Themes 2012 Date of Issue
Legacy of the Loom 12 January
Yes To Life, No To Drugs 27 February
Malaysian Antarctic Research Programme 8 March
Underwater Life 21 March
Installation of 14th DYMM SPBYDP Agong 11 April
Aromatic Plants 24 May
World Gas Conference 2012 4 June
Traditional Livelihood 21 June
Second Series of Malaysian Currency 16 July
Unity Series II (Malaysia Day) 30 August
Diamond Jubilee of Queen Elizabeth II 13 September
Malaysian Festivals Series 2 27 September
750 Years Melaka 7 October
Postman's Uniform 22 October
SetemKu 5 November
Children's Hobbies (BoBoi Boy) 19 November
Postal History of Kedah 20 December
Fig. 5.14 Malaysian Stamp Themes 2012


132
Courier Services

Strategic Goals

In 2012, foreign equity ownership of courier services companies have been liberalised to 100%
beginning 1 January 2012. This is to attract new players and investment in the country.
Furthermore, there was the implementation of Courier Industry Development Plan 2012 2014
to increase level of service in the industry. Ultimately, this is to make Malaysia a courier hub for
the region.

Strategic Goals
Strategic Role To create modern courier service industry that facilitates the countrys ability to compete in the global market.
Economic Goal Courier industry to grow 2% faster than the national GDP (3 years average).
Courier volume handling of more than 200 million items by end of 2014.
New job increase by 3,000 by end of 2014.
Quality Goal MCMC courier challenge of more than 80% by end of 2014 (current level: 69%).
Actual performance D+1 is more than 90% (self measured via track and trace system).
Access Goal Footprint of more than 93% of populated areas by end of 2014 (current level: 91%).
Number of new outlets to increase by 100 by end of 2014.
Technology Goal All licenced courier service providers (class A and B) provide track and trace features by end 2014.
At least 8 automated courier hubs by end of 2014.
Source: MCMC
Fig. 5.15 Strategic Goals

Industry Licensing and Revenue Performance

The courier service industry generated revenue of an estimated RM2.03 billion for the year 2011.
This is the first time that the courier industry surpassed the RM2 billion mark in revenue.

As at end of 2012, there were 105 licensees compared with 108 in 2011.

Source: MCMC
Fig. 5.16 No. of Courier Licences Issued
115
117
110
114
112
114
109
113
105
112
108
105
1.7
-6
3.6
-1.8
1.8
-4.4
3.7
-7.1
6.7
-3.6
-2.8
-8
-6
-4
-2
0
2
4
6
8
0
20
40
60
80
100
120
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
G
r
o
w
t
h

(
%
)

N
o
.

o
f

C
o
u
r
i
e
r

L
i
c
e
n
c
e
s

No. of Courier Licences Issued
No. of Courier Licences Growth
135

Over the last 10 years, revenue from the courier business has almost consistently been on the
uptrend. Figure 5.19 shows this consistent trend with the exception of 2008 2009 when Malaysian
economy posted negative growth due to impact from the global financial crisis in 2008 2009. The
courier market recovery thereafter was considered remarkable in line with Malaysian economy rebound
in 2010 and sustained growth into the next year.

Fig. 5.19 Total Revenue Top 10 Courier Providers 2001 2011
954
1,049
1,079
1,099
1,297
1,550
1,625
1,511 1,491
1,737
2,030
10.0
2.8
1.8
18.0
19.5
4.9
-7.0
-1.3
16.5 16.8
-10
-5
0
5
10
15
20
25
0
500
1,000
1,500
2,000
2,500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
G
r
o
w
t
h

(
%
)

R
M

(
m
i
l
l
i
o
n
)

Total Revenue Top 10 Courier Providers
20012011
Total Revenue Growth

Licenced courier service companies in Malaysia include both local and multinational foreign companies.
The major companies for 2011 in Malaysia are shown in Figure 5.17. Noteworthy is that the top 15
companies generate nearly 99% of the courier service industry revenue.

Major Licenced Courier Companies in Malaysia
Foreign Companies Local Companies

Federal Express Services (M) Sdn Bhd (FedEx)
DHL Express (Malaysia) Sdn Bhd (DHL)
United Parcel Service (M) Sdn Bhd (UPS)
TNT Express Worldwide (M) Sdn Bhd (TNT)
Yamato Transport (M) Sdn Bhd (Yamato)
Aramex (M) Sdn Bhd (Aramax)
Overseas Courier Service (M) Sdn Bhd

PosLaju (Pos Malaysia Bhd)
City Link Express (M) Sdn Bhd (City Link)
GD Express Sdn Bhd (GD Express)
Nationwide Express Courier Services Bhd (Nationwide)
Skynet Express (M) Sdn Bhd (Skynet)
ABX Express (M) Sdn Bhd (ABX Express)
Secure Express Services Sdn Bhd (Secure Express)
Airpak Express (M) Sdn Bhd (Airpak Express)
Source: MCMC
Fig. 5.17 Licenced Courier Companies in Malaysia

Source: Companies Annual Report
Fig. 5.18 Top 10 Courier Providers Revenue Market Share 2011

The courier market is considered a mature market in Malaysia where there is intense competition in
the provision of services. The growing Malaysian markets in all aspects of the economy over the last
decade, which has translated into relatively steady GDP growth rates, have consistently buoyed the
courier business as well.

Moreover, advancing technology in logistics management and various related developments such as
introduction of rugged handheld devices for use in this service has generated cost savings and
operational efficiencies. Such developments also augur well for increasing demand from this sector for
more networked services, especially wireless connections and devices.

DHL
23%
FedEx
24%
UPS
15%
PosLaju
12%
TNT
7%
City Link
6% GD
Express
5%
Nahonwide
4%
Skynet
2%
ABX
2%
Top 10 Courier Providers Revenue Market Share 2011
134

MODULE 6: STRATEGIC TRADE ACT



137

Module Content

MODULE 6: STRATEGIC TRADE ACT 137
Strategic Trade Act 2010 139
MCMC Licensing under Strategic Trade Act 2010 139
Malaysia and the Strategic Trade Act 139
Implementation and Enforcement 140
STA Framework 141
Strategic Items 142
Online Applications 142
Permits and STA Applications in 2012 142
Categories of Permits 143


STA Framework

As a comprehensive legislation on export controls, the provisions of the STA 2010 have important
implications for regional and global export controls and compliance. The creation of a licensing
framework that regulates the export and transit of strategic items is representative of the
Governments efforts to prevent Malaysian exporters from being used as a channel for supplying illegal
strategic items and curb the proliferation of WMD.

For this reason, STA 2010 applies to any person who is engaged in the activities of export,
transhipment, bringing into transit or brokering of strategic items such as exporters, traders,
manufacturers, brokers and others who have ownership of the strategic items when exported. This
includes activities of a person who either on his own behalf or acting as an agent on behalf of another
person is directly involved in the negotiation, purchase, financing, conveying, selling and supply of
such items.

A Strategic Trade Controller has been appointed by the Minister in charge of International Trade and
Industry (MITI) to oversee and act as the focal point for the administration of the STA 2010. To assist
the Strategic Trade Controller in the performance of his duties, the MCMC together with the relevant
agencies are designated as the licensing and enforcement authorities under STA 2010.

Effectively, MCMC has dual function under the STA, which is licensing or permit issue in reference to
export, transit and transhipment for dual use items and the function of enforcement. The MCMC
functions including outreach sessions are carried out in collaboration with the Strategic Trade Act
Secretariat (STS) under MITI and other designated agencies. MCMC is also a member of the Strategic
Trade Coordinating Committee (STAC) chaired by the Strategic Trade Controller. Two MCMC officers
were placed at STS to receive training on the STA work scope, implementation tasks and permit
processing until November 2011.

Partner Agencies

Source: STA 2010, Various Agencies
Fig. 6.4 Partner Agencies

Licensing Ministry/Agencies
Strategic Trade Secretariat,
MITI
Malaysian Communications and
Atomic Energy Licensing Board
(AELB)
Pharmaceutical Services Division,
Ministry of Health
Royal Malaysian
Customs
Royal Malaysian
Police
Malaysian Maritime
Enforcement Agency
Other officers
specified by the
Controller
Enforcement Agencies
Malaysian Communications and

Implementation and Enforcement

To enforce and implement the STA 2010, the following subsidiary legislations were enacted:

The Strategic Trade Regulations 2010;
The Strategic Trade (United Nations Security Council Resolutions) Regulations 2010;
The Strategic Trade (Restricted End users and Prohibited End users) Order 2010; and
The Strategic Trade (Strategic Items) Order 2010.

Strategic Trade Act 2010

Source: STA 2010
Fig. 6.2 Strategic Trade Act 2010

Regulation and Orders

Source: STA 2010
Fig. 6.3 Regulations and Orders

STA 2010
Strategic Trade Regulations
2010
Strategic Trade (Strategic Items)
Order 2010
Prescribes:
Procedures
Payable fees
Any matter,
including
enforcement
Strategic Trade
(Restricted End Users and Prohibited
End Users) Order 2010
Forms
Consist of Six Parts:
Part I Preliminary
Part II Appointment and powers of Strategic Trade Controller
Part III Control of strategic items, unlisted items and restricted activities
Part IV Permit and registration
Part V Enforcement
Part VI General

Strategic Items

With effect from 16 February 2012, MCMC commenced the full operations of implementing the STA
and began processing applications for permits for strategic items specifically under MCMC purview
which was previously performed by the Strategic Controllers office.

The categories of strategic items that are within the ambit of MCMC licensing powers as specified by
STA 2010 are:

i. Category 4 Computers;
ii. Category 5 Telecommunications and information security; and
iii. Non-tangible items including technology transfer.

STA 2010: Strategic Items

Source: STA 2010
Fig. 6.5 STA 2010: Strategic Items

Online Applications
Effective 1 July 2011, online permits applications were available along with compulsory self declaration
for strategic items or non-strategic items concerned. As a licensing agency, the MCMC has to approve
applications for permit within five working days upon complete documentation submission from the
exporters.
Permits and STA Applications in 2012
Since the MCMC took over responsibility of permit issuance from the Strategic Trade Secretariat (STS)
at MITI in February 2012, a total of 704 permit applications at end December 2012 were received. Out
of this, 600 applications were approved. In terms of STA applications, as of 31 December 2012, a total
of 630 applications were approved.

142

Process Flows on Licensing

Permit Registration Process Flow

Permit Application

Source: MITI
Fig. 6.6 Permit Registration Process Flow
Source: MCMC
Fig 6.7 Permit Application

Categories of Permits

The activities of export, transhipment, transit and brokering of strategic items would require
permit/broker certificate under the STA 2010.

Categories of Permits

Source: STA 2010
Fig. 6.8 Categories of Permits

DNT Registration for User ID and Password
www.dagangnet.com
Get User ID and Password

STA Registration
http://www.mytradelink.gov.my
Approved by MITI
Key-in information
Submit Application
Get Digital Signature Token from DNT
Permit Application
Activation of Digital Signature
Customs
One Single System
Pre-registration
Permit Application
Applicant
Single/ Multiple-use/
Bulk/ Special Permit
Approved
Rejected

MODULE 7: GOING FURTHER IN
CONNECTIONS AN OUTLOOK
145

Malaysian Economy Supporting Investments

While international economy proves to be cautiously optimistic, the Malaysia economy remains
relatively positive for investments and growth. The Malaysia economy is expected to expand between
5% 6% in 2013. Along with this, the C&M industry is expected to continue its investment plans, for
example, for HSBB infrastructure both wired and wireless access and accordingly nurturing necessary
capability in services, content and applications development.
For such success, we need to have network connectivity that is available, accessible and reliable. Thus,
there is a need for building proper foundation when expanding the communications infrastructure
including related information technology systems and software solutions. Of utmost importance is to
build a foundation for a connected future and shaping it in a way that it facilitates sustained growth
into the future. This is especially critical for the C&M industry as communications services is a
pervasive enabler to the growth of other economic sectors. Connected services support delivered over
an optimum operating network can pave the nation onwards to better opportunities for reaping
financial as well as quality lifestyle benefits.

C&M Industry Infrastructure and Access

Improving Infrastructure Reach

As indicated in the Tenth Malaysia Plan (2011 2015), a pervasive broadband network and usage can
extend business boundaries from local to international markets. Network advancements should indeed
be delivering communications services increasingly in real time, which allows for new opportunities in
various types of services provision. Hence, supply of next generation infrastructure should be timely to
meet the demand for higher bandwidth over the coming years.
The C&M industry in boldly carrying across
the enabling factor of high speed broadband
connection for all is in step with national
growth aspirations. Such timeliness opens up
opportunities for all corporate or individual
users as well as industry stakeholders.
To ensure supply readiness, in 2012, the
MCMC has allocated spectrum 4G-LTE high
speed wireless broadband in the 2.6GHz
spectrum band. Caveats to this are
infrastructure sharing which is a must
among the service providers, along with
necessary cost based pricing. The minimum
population coverage expected from service
providers is 10% by 2013, with increments
of 10% each year to reach 50% by 2017.
Capacity and Demand From Next Generation Infrastructure

Source: NKEA CCI
Fig. 7.1 Trends in C&M Industry Malaysia


145

Module Content

MODULE 7: GOING FURTHER IN CONNECTIONS AN OUTLOOK 145
Malaysian Economy Supporting Investments 147
C&M Industry Infrastructure and Access 147
Improving Infrastructure Reach 147
Cross Channel in Accelerating Networked Services and Content 148
Reaping Opportunities by Working Together 148
Regulatory Development 148
Market Development 149
Reinforcing Efforts in Communications Services Provision 149


Peak data rates would range from 86 73Mbps depending on spectrum bandwidth. Specifically,
average data rate based on 10MHz bandwidth is 16.7Mbps while on the 20MHz bandwidth, the
average data rate is 33.4Mbps
With this extent of speed in mobile data delivery, users in Malaysia can expect many new services
including high definition video streaming along with real time applications using their mobile and
consumer electronic devices. Businesses will benefit from the higher capacity to deliver desired content
and applications service, improve operational management and many other beneficial functions for
industry growth.
With high speed fixed and mobile broadband capacities accelerated as such, the Malaysian networked
services scene can be further transformed to include new content and application services making use
of true mobility advantages such as connected car and telematics platforms; connected healthcare
such as remote patient monitoring and community eHealthcare; connected homes; businesses making
full use of sensor networks and many more.
With broadband penetration rate achieved through both wired and wireless services connections, the
nation is also working onwards nevertheless to expand coverage in rural areas as well and further
improvement of service quality nationwide. Again the approach is that in areas where fixed
infrastructure is lacking, wireless broadband 4G-LTE network can also provide necessary high capacity
coverage.
In Malaysia, the approach is that both supply and demand issues are being addressed in
communications service and also providing the critical supporting enabler to propel economic growth.
The implementation of Digital Lifestyle Malaysia in selected focus areas is expected to be initiated in
2013 to take advantage of these new services complemented by high capacity wireless broadband
access. The implementation is expected to create information sharing, collaboration, interoperability
and seamless experience for all anywhere in the city or defined geographic area or unit and later to all
parts of the country.

Cross Channel in Accelerating Networked Services and Content

Reaping Opportunities by Working Together

Regulatory Development

With the newest spectrum allocation to start off implementation of high capacity wireless broadband
network to complement the fixed broadband infrastructure, the regulatory housekeeping also needs to
be enhanced in areas of access, transparency and governance. Industry capacity building in services
provision in 2013 also encompasses the implementation of accounting separation to enable licensee
operational transparency.
In 2012, the MCMC has completed a cost study and has revised access price caps in the Mandatory
Standards on Access Pricing to be effective from 2013 till 2015 to reflect the changing industry trend in
costs in regulated services provision. In 2013, there are expected preparations to review facilities and
services which may be included in the Access List. The MCMC will continue to work closely with the
industry to ensure smooth execution of the Accounting Separation Guidelines over 2013 and into 2014.


148
Market Development
With revenue generating capabilities built over the years, the latest technologies and services
introduced in developed countries were able to be brought early to Malaysia shores. Prices
continue to remain competitive. This ensures more digital lifestyle gadgets and devices featuring
Internet connectivity including TV and games console. 2013 is expected to see more such
offerings and sophistication in the devices and services.
With platform readiness and availability, the C&M industry is ready to have intra industry
collaboration and as needs be inter industries mode to perfect a networked service. Examples
are many as in content delivery, video conferencing and telepresence, eCounter, ePayment,
support in healthcare, retail and other connected services.
Over the last two years, content producers or broadcasters have created various types of content
for multiplatform delivery, that is, over online and mobile networks as well. There is emergence
of content delivery networks for various purposes as the service providers and content producers
collaborate in their efforts to leverage on next generation infrastructure and services.
The year 2012 saw implementations of such strategy by major broadcasters based on
agreements signed with other service providers wired and wireless. The year 2013 is expected
to see further such collaboration and integration in services provision.

Reinforcing Efforts in Communications Services Provision

The synergy is tremendous in leveraging digital content production and delivery in its myriad
forms. This is not only in entertainment, but also in supporting content and applications delivery
for education, corporate training, industrial design, supply chain management purposes just to
name a few. The value add in digital content allows for customisation of content to suit various
preferences of end users.
There is also more advanced high definition (HD) and three dimension (3D) formats. In 2012,
there were ultra HD offerings, and multiservice set top boxes offering more channels for
subscribers. In 2013, we can expect more combinations of TV while multitasking on the
smartphone, or checking related content on our tablets while watching television, and many
more. The options are ever increasing over time, which means more choices and options to suit
user requirements to turn the wheels of economic well being for all.
These avenues for creating and introducing new networked products and services are
opportunities not to be missed by any industry player, especially as broadband usage becomes
more pervasive in the country. Indeed, opportunities for creating better and new content in such
delivery modes is open to more players in other industries as well.
In 2011, wireless broadband speeds were 6 8Mbps overseas and about one to 2Mbps
domestically. Meanwhile, fixed broadband speed offerings have gone from 10Mbps to as high as
30Mbps for small and medium enterprise connections in 2012. In 2013, the scenario promises to
be more exciting as wired and wireless broadband continue to compete with offerings of
packages based on quality and speed.
Quick Reference on Terms

AGs Attorney Generals Chamber
Chamber
ccTLD Country Code Top Level Domain
CE Consumer Electronics
CSR Corporate Social Responsibility
DEL Direct Exchange Line
DL Downlink
DNO Donor Network Operator
DNS Domain Name System
DNSSEC DNS Security Extensions
DRX Discontinuous Reception
E-UTRA Evolved Universal Terrestrial Radio Access
E-UTRAN Evolved Universal Terrestrial Radio Access Network
Fkm Fibre Kilometer
GB Gigabyte
GSM Global System for Mobile Communications
HUIS Household User of the Internet Survey
IANA Internet Assigned Numbers Authority
ICANN Internet Corporation for Assigned Names and Numbers
ID Identity
IP Internet Protocol
IPO Initial Public Offering, offer of shares to the public in a
stock exchange
IPO A document on detailed company information during
Prospectus an IPO
IPTV Internet Protocol Television, refers to content delivery
over online platforms
ISPs Internet Service Providers
LED Light Emission Diode
MAMPU Malaysian Administrative Modernisation and
Management Planning Unit
MB Megabyte
MdeC Multimedia Development Corporation
MIPCOM Refers to March international des Contenus
Audiovisuels, The International Audiovisual Content
Market Exhibition
MIPTV Refers to March International des Programmes de
Tlvision, The International Market and Creative Forum
MMS Multimedia Messaging Service
MOSTI Ministry of Science, Technology and Innovation
MTFSB Malaysian Technical Standard Forum Bhd
MVNO Mobile Virtual Network Operator
NBI National Broadband Initiative
NEAP Numbering and Electronic Addressing Plan
NFDM National Film Development Malaysia
NGO Non Governmental Organisation
NRD National Registration Department
OTT Over the Top means broadband delivery of video
and audio through a managed IPTV network
P1 Packet One Networks (Malaysia) Sdn Bhd
PC Personal Computer
Proforma Refers to a set of financial statements which is
based on projections
QoQ Quarter on Quarter or Quarter over Quarter
RONR Return of Net Revenue
RTM Radio Televisyen Malaysia
Share Split A division of shares to reduce the value of each
shares, and issues more shares in the same
proportion
SIM Subscriber Identification Module
SNDRP Sensitive Names Dispute Resolution Policy
The Ministry Refers to Ministry of Information,
Communications and Culture
TIFFCOM Tokyo International Film Festival for Content
Market
Top 10
Market
Capitalisation
The top 10 list of the publicly traded companies
having the greatest market capitalisation
TVRO Television Received Only or Parabolic Dish
UL Uplink
UGC User-Generated Content
VoD Video on Demand
VSAT Very Small Aperture Terminal
YoY Year on Year or Year over Year
YTL YTL Communications Bhd
ZTE ZTE Corporation

Another catch is that overall price of connection and cost of connected devices including mobile are
coming down. This means more demand for available access to networked enablers such as, mobile
applications to facilitate work and play, and the like.
As the saying goes the devil is in the details. This spells the next 10 years of work and working pace
in the C&M industry. Today, the Government and industry stakeholders are reviewing and reinforcing
the foundations of the industry built over the last ten years. This is in preparing readiness for the next
level of growth optimising the use of next generation networks, providing next generation service
offerings such as content and applications over multiple platforms for connected homes, connected
machines, connected transport, connected healthcare and many more.
Competitive forces, be it domestic or international, is demanding enhanced efficiency and effectiveness
in a globalising products and services environment that requires the best of performance in quality of
service and quality of experience. The next phase of C&M growth in Malaysia is already exciting as we
progress into 2013, spurring more to come as we progress towards 2020 and beyond.


Fig. 3.15 Trend in Number of IDN by the Language Characters 2011 Fig. 5.1 Modernisation of Postal Services Over the Years
and 2012 Fig. 5.2 Performance Standards for Domestic Letter Service
Fig. 3.16 Number of Domain Names 2008 2012 Fig. 5.3 Delivery Standards for Domestic Letter
Fig. 3.17 Share of Domain Names by Categories 2012 Fig. 5.4 Performance Standards for Domestic Parcel Service
Fig. 3.18 Share of Domain Names by Categories 2011 Fig. 5.5 Delivery Standards for Domestic Parcel
Fig. 3.19 Comparison of Domain Name Registration by Categories Fig. 5.6 Domestic Mail Performance 2011
Fig. 3.20 Domain Names with IPv6 DNS 2009 2012 Fig. 5.7 Domestic Parcel Performance 2011
Fig. 3.21 Number of Domain Names with DNSSEC Fig. 5.8 Business Units Services Description
Fig. 3.22 IP Address Protocols Fig. 5.9 Five Year Strategic Plan
Fig. 3.23 IPv6 Leading Agencies and Working Group Fig. 5.10 Framework of Postal Service Act 2012
Fig. 3.24 MCMC initiatives to Drive IPv6 Adoption in 2012 Fig. 5.11 Launching of Postal Transformation Programme for Sabah
Fig. 4.1 Malaysian Scenario Today and Precursors to Future and Sarawak
Fig. 4.2 Broadcasters Companies in Malaysia Development
to 2012
Fig. 4.3 Media Prima TV Stations
Fig. 4.4 Media Prima TV Networks Net Advertising Revenue 2011
and 2012
Fig. 4.5 IPTV Services in Malaysia
Fig. 4.6 Commercial Radio Stations in Malaysia
Fig. 4.7 Total Listenership (000) 2011 2012
Fig. 4.8 Radio Surveys Highlights 2010 2012
Fig. 4.9 Global Advertising Expenditure by Region USD (billion)
Fig. 4.10 Global Adex by Medium
Fig. 4.11 Adex in Malaysia
Fig. 4.12 Adex by Medium
Fig. 4.14 Top 10 Malaysia Advertising Spend by Categories
RM (million)
Fig. 4.15 Top 10 Malaysia Advertising Spend by Advertisers
RM (million)
Fig. 5.12
Fig. 5.13
Fig. 5.14
Posmen Komuniti Dekivering Mail
Stamp Issuance 2006 2012
Malaysian Stamp Theme 2012
Fig. 5.15 Strategic Goals
Fig. 5.16 No. of Courier Licences Issued
Fig. 5.17 Licenced Courier Companies in Malaysia
Fig. 5.18 Top 10 Courier Providers Revenue Market Share 2011
Fig. 5.19 Total Revenue Top 10 Courier Providers 2001 2011
Fig. 6.1 Strategic Trade Act 2010 (STA 2010)
Fig. 6.2 Strategic Trade Act 2010
Fig. 6.3 Regulations and Orders
Fig. 6.4 Partner Agencies
Fig. 6.5 STA 2010: Strategic Items
Fig. 6.6 Permit Registration Process Flow
Fig. 6.7 Permit Application
Fig. 6.8 Categories of Permits
Fig. 7.1 Trends in C&M Industry Malaysia

List of Figures

Fig. 1.1 Global World Economic Outlook Fig. 2.17 MCMC on Consumer Protection Regulatory Approaches and
Fig. 1.2 Selected Economic Indicators Beyond
Fig. 1.3 Malaysia GDP Growth Fig. 2.18 Trend of Consumer Complaints 2002 2012
Fig. 1.4 Private Investments and Consumption Supported Quality Fig. 2.19 Complaints against Service Providers
GDP Growth Fig. 2.20 Category of Complaints 2010 2012
Fig. 1.5 Communications Services Sector Contribution to GDP Fig. 2.21 Category of Complaints 2012
Growth Fig. 2.22 Complaints Handling Process
Fig. 1.6 Communications Services Performance vis--vis Overall Fig. 2.23 C&M Industry Forums
Services Fig. 2.24 Industry Forums in Self Regulation
Fig. 1.7 Market Capitalisation C&M Industry in Bursa Malaysia Fig. 2.25 Communications and Multimedia Consumer Forum of Malaysia
Fig. 1.8 Individual C&M Companies Contribution to Bursa Malaysia (CFM)
2012 Fig. 2.26 Among CMCF Activities
Fig. 1.9 C&M Companies Market Capitalisation RM (billion) Fig. 2.27 Launching of KDB Programme
Fig. 1.10 C&M Market Capitalisation 2010 2012 Fig. 2.28 Activities during KDB Programme
Fig. 1.11 Top 10 Market Capitalisation 2011 and 2012 Fig. 2.29 Print Advertisements on Klik Dengan Bijak
Fig. 1.12 Licensees on ACE Market 2012 Fig. 2.30 KDB Publications
Fig. 1.13 Holding Companies of Licensees Market Listing and Fig. 2.31 Complaints Received According to Offences 2010 2012
Financials Fig. 2.32 Cases Investigated 2010 2012
Fig. 1.14 Licensees Listed on ACE Market 2012 Fig. 2.33 Non Compliance Cases Investigated in 2012
Fig. 1.15 C&M Industry Revenue Growth: Domestic compared to Fig. 2.34 National Transformation Programme
Foreign Fig. 2.35 NKEAs in National Transformation Programme
Fig. 1.16 C&M Industry Revenue compared to GDP Fig. 2.36 NKEA CCI Approach
Fig. 1.17 C&M Industry Revenue 2010 2012 Fig. 2.37 NKEA CCI Highlights 2012
Fig. 1.18 Telecommunications Companies Revenue 2010 2012 Fig. 2.38 C&M Industry Development
Fig. 1.19 Broadcast Revenue 2010 2012 Fig. 2.39 Number of Broadband Subscriptions 2012
Fig. 1.20 C&M Companies Financial Performance 2008 2012 Fig. 2.40 Broadband: Subscribers and Household Penetration 2007 2012
Fig. 1.21 C&M Companies EBITDA 2008 2012 Fig. 2.41 Malaysia Broadband Milestones
Fig. 1.22 Telecommunications Companies Operating Profit Margin Fig. 2.42 Launch of Get Malaysian Business Online (GMBO)
compared to EBITDA Margin 2008 2012 Fig. 2.43 Broadband Penetration Rate per 100 Households by State 2012
Fig. 1.23 Digital Signature Act 1997 and the Role of MCMC Fig. 2.44 Broadband Penetration Rate per 100 Households by State
Fig. 1.24 Digital Certificate Revenue Fig. 2.45 HSBB Subscriptions
Fig. 1.25 Development of Public Key Infrastructure in Malaysia Fig. 2.46 Fixed Broadband Services 2010 2012
Fig. 1.26 Services Market Segment excluding Foreign Revenue Fig. 2.47 TM HSBB Packages
2008 2012 Fig. 2.48 TM Business Packages
Fig. 1.27 C&M Services Market Share 2008 2012 (%) Fig. 2.49 End To End High Speed Broadband Network
Fig. 1.28 C&M Services Market Revenue and Trend Profile 2008 Fig. 2.50 3G Subscriptions 2006 2012
2012 Fig. 2.51 Prepaid and Postpaid 3G Subscriptions 2006 2012
Fig. 1.29 Blended ARPU (RM) 2004, 2008 and 2012 Fig. 2.52 Mobile Speeds
Fig. 1.30 Postpaid and Prepaid ARPU (RM) 2010 2012 Fig. 2.53 Mobile Communications Standards Adoption
Fig. 1.31 Blended ARPU (RM) 2010 2012 Fig. 2.54 Small Cells in the Home or SME or Community
Fig. 1.32 TM Fixed Line and Broadband ARPU 2010 2012 Fig. 2.55 USP Essentials
Fig. 1.33 TM UniFi Blended ARPU 2011 2012 Fig. 2.56 Kampung Tanpa Wayar
Fig. 1.34 ASTRO Pay TV Residential ARPU (RM) Fig. 2.57 Global ICT Development 2001 2012
Fig. 2.1 C&M Industry Capex Fig. 2.58 Akamai Study of the Internet 3
rd
Quarter 2012
Fig. 2.2 The Laws Regulatory Role Fig. 2.59 Home ICT Access 2011
Fig. 2.3 CMA One of the Cyber Laws in Malaysia Fig. 3.1 DEL Connections per 100 Inhabitants 2002 2012
Fig. 2.4 The 10 National Policy Objectives for C&M Industry in Fig. 3.2 DEL Connections: Subscriptions and Penetration Rate
Malaysia 2008 2012
Fig. 2.5 The MCMC Vision Fig. 3.3 DEL Connections: Household and Non Household Subscriptions
Fig. 2.6 Functions and Working Procedure and Growth Rate 2008 2012
Fig. 2.7 Sectors under MCMC Jurisdiction Fig. 3.4 DEL Market Share by Service Providers 2012
Fig. 2.8 C&M Licensees (Individual) 2003 2012 Fig. 3.5 Hotspot: Locations and Growth 2007 2012
Fig. 2.9 C&M Licensees (Class) 2003 2012 Fig. 3.6 Hotspot Locations by State
Fig. 2.10 Equity Stake (%) in Major Public Listed C&M Companies Fig. 3.7 Penetration Rate and Mobile Subscribers 2001 2012
2012 Fig. 3.8 3G Subscriptions 2006 2012
Fig. 2.11 Profile of Shareholder: C&M Licensees (Individual & Class) Fig. 3.9 Mobile Number Portability 2009 2012
2012 Fig. 3.10 Prepaid and Postpaid Subscribers of Mobile Services
Fig. 2.12 Spectrum Monitoring is One of the Feedback Process 2000 2012
Fig. 2.13 Evolution of Digital Cellular Standards Fig. 3.11 Mobile Phone Subscriptions by Service Provider 2003 2012
Fig. 2.14 MCMC Final View From Public Inquiry Fig. 3.12 Mobile Phone Service by Service Providers 2003 2012
Fig. 2.15 Services Identified for Accounting Separation Fig. 3.13 MVNO in Malaysia 2010 2012
Fig. 2.16 Consumer Protection in Action Roles and Approaches Fig. 3.14 Background of IDN in Malaysia
HEAD OFFICE

MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION
Off Persiaran Multimedia
63000 Cyberjaya, Selangor
Telephone: +60 3 86 88 80 00
Facsimile: +60 3 86 88 10 00
E-mail: ccd@cmc.gov.my
Website: www.mcmc.gov.my
Aduan MCMC: 1-800-888-030
Aduan MCMC SMS: 15888
Aduan SKMM Fax: +60 3 86 88 18 80

SATELLITE OFFICES

PRIMA1 OFFICE
Malaysian C&M Commission
Prima Avenue One
Block 3507, Jalan Teknokrat 5
63000 Cyberjaya
Selangor Darul Ehsan
Malaysia
Tel: +60 3 8688 8488
Fax: +60 3 8688 1051

MCMC KL OFFICE
Enforcement & Investigation Department
Malaysian C&M Commission
1st & 2nd Floor, Block C
Bangunan Sultan Abdul Samad (BSAS)
Jalan Raja, 50610 Kuala Lumpur
Malaysia
Tel: +60 3 2630 5555
Fax: +60 3 2697 8128

REGIONAL OFFICES

NORTHERN REGIONAL OFFICE
Level 1, Bangunan Tabung Haji
Jalan Bagan Luar
12000 Butterworth
Pulau Pinang
Tel: +60 4 323 8228
Faks: +60 4 323 9448

PERAK BRANCH OF THE
NORTHERN REGIONAL OFFICE
Level 12, Perak Techno-Trade Centre (PTTC)
Bandar Meru Raya
Jalan Jelapang
30020 Ipoh
Perak
Tel: +60 3 527 2913
Faks: +60 3 527 2943

EASTERN REGIONAL OFFICE
B8004 Level 1
Sri Kuantan Square
Jalan Telok Sisek
25200 Kuantan
Pahang
Tel: +60 9 512 1100
Faks: +60 9 515 7566

KELANTAN BRANCH OF THE
EASTERN REGIONAL OFFICE
Pejabat Cawangan Kelantan
PT400, Bandar Baru Tunjong
Jalan Kuala Krai
15100 Kota Bharu
Kelantan
Tel: +60 9 741 1900/ 1901
Faks: +60 9 741 1905
SOUTHERN REGIONAL OFFICE
Suite 7A, Level 7
Menara Ansar
Jalan Trus
80000 Johor Bahru
Johor
Tel: +60 7 226 6700
Faks: +60 7 227 8700

MELAKA BRANCH OF THE
SOUTHERN REGIONAL OFFICE
Level 11 (Ruang Pejabat 2)
Bangunan Yayasan Melaka
Jalan MITC, Hang Tuah Jaya
75450 Ayer Keroh
Melaka
Tel: +60 6 233 1659/ 1646
Faks: +60 6 233 1615
SABAH REGIONAL OFFICE
6-10-10, 10 Floor
No. 6 Menara MAA
Lorong Api-Api 1, Api Api Centre
88000 Kota Kinabalu
Sabah
Tel: +60 88 270 550
Faks: +60 88 253 205

SANDAKAN BRANCH OF THE
Level 3, Menara Rickoh
Indah Commercial Complex
Bandar Indah, Batu 4, Jalan Utara
90000 Sandakan
Sabah
Tel: +60 89 227 350
Faks: +60 89 227 352

BEAUFORT BRANCH OF THE
Lot 4, Tingkat Bawah & 1
Cerah Commercial Center
89808 Beaufort
Sabah
Tel: +60 87 212 171
Faks: +60 87 212 176

SARAWAK REGIONAL OFFICE
Level 5 (North), Wisma STA
26, Jalan Datuk Abang Abdul Rahim
93450 Kuching
Sarawak
Tel: +60 82 331 900
Faks: +60 82 331 901

SIBU BRANCH OF THE
GF 1st & 2nd Floor
No. 2 Lorong Kwong Ann 8
Brooke Drive
96000 Sibu
Sarawak
Tel: +60 84 327 300
Faks: +60 84 326 500

MIRI BRANCH OF THE
Lot 1385 (1 Floor), Block 10
Centre Point Commercial Centre
Phase II
98000 Miri
Sarawak
Tel: +60 85 417 900/600
Faks: +60 85 417 400
CENTRAL REGIONAL OFFICE
Level 17, Wisma Sunway 1,
Jalan Tengku Ampuan Zabedah C9/C
Section 9
40100 Shah Alam
Selangor
Tel: +60 3 5518 7701
Faks: +60 3 5518 7710

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Industry Performance Report For 2012

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IPR 2012 Shaping a Connected Future

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