Photo - Alfie Amir, Research Manager, Telecoms, IDC Malaysia
During 2015, Malaysian telecoms services providers will carry out major transformation plans in order to stay relevant to the market, according to analyst firm International Data Corporation (IDC)'s top 10 predictions for 2015.
"2015 will be a critical year for telecom service providers," said Alfie Amir, research manager, Telecoms, IDC Malaysia. "The telecom market is undergoing a major revolution driven by the changes of user requirements, revenue drivers and new technologies."
"Service providers with the right strategy will begin to see returns of their transformation investment while traditional providers will continue to struggle," said Amir, adding that Malaysian telecoms players will redefine their strategies, transform organisations, and launch new solutions and technologies.
He unveiled IDC's top 10 predictions as follows:
1. Total telecom spending will experience slower YoY growth from 5.5 percent To 2.8
The total spending on telecom services is expected to continue to grow but at slower rate, with only 2.8 percent YoY increase from RM34.3 [US$9.45] billion in 2014 to RM35.3 [US$9.73] billion in 2015. This is due to the slow growth in mobile services market, which accounts to 74 percent the total telecom revenue in 2014.
2. Business segment will continue to dominate Fixed Line market accounting to 59 percent of the total revenue
Business segment has been the key driver for fixed line services. Sixty (60) percent of the total fixed line revenue in 2015 is expected to be from this segment. The 3rd platform adoption will drive higher requirements from enterprise users to their telecom providers, and hence creating new opportunities for telecom providers to expand their services beyond connectivity.
3. Fixed Line service providers will expand their services To ICT solutions and triple the addressable market
Fixed line providers are expected to expand their existing services to ICT solutions, addressing the changes in market requirements. This will triple their total addressable enterprise market in 2015 to around RM16.4 [US$4.52] billion. The focus is expected to be on ICT solutions integrated with connectivity services, such as unified communications, cloud and network management services.
4. Fixed Line service providers will customize their ICT solutions focusing on high potential verticals
As fixed line providers are expanding their products and solutions to ICT, addressing the market requirements for different vertical industries become more challenging. In 2015, fixed line providers are expected to customize their solutions based on different vertical requirements, and focus on high potential verticals such as banking and government.
5. Managed Services trend will begin to rise in telecom market
Enterprises in Malaysia are beginning to look for more efficient delivery model for their ICT solutions, as part of their cost saving initiatives. Managed services market in Malaysia is expected to grow strongly by 9.3 percent to RM6.4 [US$1.76] billion in 2015. Telecom players are expected to explore this opportunity with their large connectivity customer base.
6. Mobile Voice revenue will start to decline for the first time ever
After a very slow growth of only 2 percent in 2014, mobile voice revenue is expected to finally decline for the first time ever in 2015.
This is driven by over-the-top players (OTTP) and LTE adoption, as LTE provides comparable VoIP experience compared to the traditional voice service.
7. Mobile Data experience will be enhanced With LTE-Advanced carrier aggregation
LTE adoption in Malaysia is expected to be doubled to 1.6 million users in 2015 while mobile data usage by LTE users is expected to be higher than 3G users. This will drive LTE data traffic in Malaysia. Mobile service providers are expected to implement LTE-Advance Carrier Aggregation in 2015 to enhance mobile data experience of their users.
8. Spectrum Strategy will be redefined to meet the exponential increase of mobile data demand
Mobile data user penetration is expected to increase to 67 percent of total mobile users in 2015. In order to cater for the exponential increase of data demand, mobile service providers are expected to redefine their spectrum strategy. This includes further refarming 2G spectrums for 3G or LTE technologies, spectrum leasing with other players, lobbying for new spectrums and small cell deployment.
9. Telecom providers will begin monetizing their data internally and externally
In 2015, mobile service providers are expected implement big data and monetize their internal data with simpler use cases such as to improve customer experience and reduce churn, before exploring more complicated use cases. Data monetization will be important for mobile service providers to show their retain subscribers and create new revenue streams in order to retain growth.
10. Telecom providers will expand ecosystem partners and drive the market as M2M evolves to IoT
Internet of Things (IoT) is expected to happen in Malaysia in 2015, starting with highest potential verticals. These initiatives are driven by the government and multi-national manufacturing companies based in Malaysia. It is important for telecom providers to start building their ecosystem partners and identify opportunities in different verticals, in order to capture their opportunities in IoT market.
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