Summary Bullets:
• 5G is finally available in Malaysia but there is still a lack of innovations with the service providers.
• 5G monetization may not be critical, but telcos need to expand their initiatives with partners to explore new applications.
5G is Finally Available in Malaysia
Malaysia started its 5G journey as early as 2019, but the service was only widely available in the country in November 2022, after all major telcos except Maxis signed the Access Agreement (AA) with the sole wholesale provider Digital Nasional Berhad (DNB). For more, please see Malaysia 5G Through SPV: One Step Forward and Two Steps Back, March 8, 2021 and 5G War Begins Again in Malaysia as Launch Nears, September 24, 2021. Those service launches were rather late compared to neighboring countries such as Singapore, Thailand, Indonesia, and the Philippines. Currently, Malaysian telcos are focused largely on offering 5G as part of their mobile plans for the mass market. There are limited initiatives with enterprises to leverage the technology to co-develop new solutions. However, with a fast-expanding population coverage from 33.2% in September 2022 to (planned) 80% by 2024, combined with a strong push by the government through various industry initiatives, enterprise 5G development in the country is expected to accelerate within the next two years.
Future Outlook
5G will be a telcos’ key business driver in both the enterprise and mass market segments. GlobalData Malaysia Mobile Broadband Forecast, November 22, 2022, estimated that 5G subscription in the country will reach 388,000 by the end of the year and continue to grow at a compound annual growth rate (CAGR) of 130% to 24.8 million or 47% of total mobile subscriptions in 2027. As widely discussed in the industry, 5G is not just about providing higher bandwidth to users. The technology will also enable new applications for enterprises. Other 5G features such as lower latency, multi-access edge computing and network slicing will drive innovations for telcos to co-develop new use cases with their technology partners, developers and customers. For example, edge computing and low latency offered by 5G can enable applications like autonomous vehicles, mixed reality (AR/VR), and robotics. These applications will be a crucial part of digital transformation for major industries in the country such as manufacturing, energy and construction. These industries are also leading the 5G development driven by various collaboration and co-development initiatives across the world, such as Vodafone (UK) and Ford; AIS (Thailand) and Mitsubishi; China Unicom, Huawei and Midea; and M2M Connectivity and Blair Fox (Australia). GlobalData 5G & Private Network Deployments Tracker, (viewed in December 2022) shows that 31% and 13% of 368 global deployments are in manufacturing and mining & energy industries respectively. Besides, Malaysian enterprises also have a decent awareness of 5G. GlobalData 2021 ASEAN ICT Study with 34 local decision makers shows that around half of them plan to deploy enterprise 5G applications in their organizations by 2024.
What’s Next for Telcos?
5G monetization may not be a pressing issue for Malaysian telcos as the technology is acquired from DNB’s single wholesale network on a usage-based basis. There is also no competitive or regulatory pressure to expand the coverage. Nevertheless, telcos should leverage the technology to differentiate against competitors and explore new revenue streams, in order to stay relevant in the saturated telecom market. Malaysian telcos had various enterprise 5G initiatives in 2019 (for more, please see The 5G Race Is Heating Up in Malaysia, but Commercial Availability Remains Unclear, December 20, 2019). However, despite the uncertain commercial unavailability of the technology from 2020 to mid-2022, only Maxis continued its initiatives including the partnership with HPE on MEC and the launch of its 5G Alliance while others were rather quiet. Collaborations with other partners could be challenging with a shared 5G network, but telcos should restart their enterprise 5G initiatives again to gain an early advantage. Based on the development in other relevant markets, there are several areas Malaysian telcos should consider:
- Expand partner ecosystem with players across the technology stacks to develop end-to-end solutions.
- Drive co-creation initiatives to understand customers’ challenges and provide solutions tailored for their needs.
- Focus resources and capabilities on high-growth use cases such as autonomous industrial vehicles, robotics, and smart cities.
- Integrate 5G with existing enterprise ICT solutions. For example, positioning 5G as additional underlay connectivity for IoT and SD-WAN, multi-access edge computing, private cellular network.
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