Three things we’ve learnt from Malaysia’s spectrum reallocation: Page 3 of 3

3) The crunch is more real

Three things we’ve learnt from Malaysia’s spectrum reallocation: Page 3 of 3

Putting the customer first nicely dovetails into my last point.
It can be argued that competition in Malaysia’s wireless industry is one of the healthiest. It’s certainly much more intense today than in the past – something I would also argue is good for us consumers.
For years, the industry witnessed the competition as largely a two-horse race between Maxis and Celcom Axiata. Today, this is no longer true.
Digi, traditionally playing the third wheel, is the leader in terms of total subscribers, going by company data revealed recently. Celcom Axiata, traditionally a giant in its profit earnings, found itself performing poorly recently.
Maxis, for so long the leader in terms of subscriber base, has had its fair share of its missteps recently. It got caught up in a social media firestorm when people felt it had reacted badly to a customer complaint about its packages, and acknowledged its customer care unit had behaved wrongly in its bid to keep loyal customers within its fold.
Nothing is set in stone anymore as the ‘Big Three’ incumbents are beginning to see their market share, subscriber base, as well as revenue and profits, fluctuate.
In my OpEd on April 1 2015, the day Albern Murty took on the chief executive officer (CEO) role at Digi, I noted how he planned to challenge the status quo since his company was no longer content to sit back and let its two main rivals roll past it.
Digi may be the new No 1 in terms of subscriber base for now, but as it aspires to top-dog status, it will be hounded by its competitors, something that it has recently experienced from price wars with players such as U Mobile.
For its part, U Mobile has had its fair share of its problem too. In 2009, its main investors KT Freetel and NTT DoCoMo pulled out their investments, signalling a loss of confidence in the operator. In 2010 it received a much needed lifeline from Singapore Technologies Telemedia.
In 2012, its then CEO Kaizad Heerjee, appointed in 2010, abruptly resigned without clear indications as to why. His replacement, high-flying executive Jaffa Sany Ariffin, was then summarily dismissed.
The company seems to have somewhat stabilised under the helm of Wong Heang Tuck, who has been CEO since 2014.
In the early days, the Big Three incumbents certainly didn’t think much of U Mobile as a competitor. In 2012, U Mobile even secured a deal to share parts of Maxis’ Radio Access Network (RAN), reportedly for a period of 10 years.
Described as a first-of-its-kind arrangement in South-East Asia, the deal also included a domestic roaming deal that allowed U Mobile, which doesn’t have a 2G network, to roam on the Maxis network when U Mobile doesn’t have any 3G access.
While Maxis was able to cut deals like this back then, it isn’t able to do so today. It may even regret having done so for such a long period of time because U Mobile isn’t seen as a small fourth player any longer, but actually one that is eating into the Big Three’s lunch.
This would be a defining time for Digi and Celcom. The same with Maxis, which may still hold a slight edge for now in terms of profitability, but who knows what else will happen in the coming months and years?
Final words
Three things we’ve learnt from Malaysia’s spectrum reallocation: Page 3 of 3In my opinion, the spectrum delineation exercise is a good thing. Often, when companies get too comfortable with the status quo, they don’t feel the need to be as innovative as they can be.
Twenty years after spectrum was first leased out, I find that it’s timely that all operators are forced to relook at how they will use this limited resource for the future.
The main headline of the Deep Dive supplement (pic) in The Edge was Sleepless over Spectrum. As these issues keep telco CEOs awake at night, it is my hope that they would take note of the volatility in the market today and not rest on their laurels.
Competition is a good thing and it serves to keep all these operators honest. Hopefully, they will be able to give us paying customers much better services.
Related Stories:
Celcom revenue plunges … and 4 more things you should know
6 key takeaways from Digi’s Q1 results you may have missed
5 interesting facts from Maxis’ Q1 2016 results
U Mobile plans 4G-heavy US$1bil capex over next 5yrs
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