Room for voice messaging service to grow in Malaysia

BY B.K. Sidhu

THERE is still a lot of room to grow voice traffic, given that its usage is much lower than that in Singapore and even the US.  

Ericsson Malaysia country head Kristian Tear said Malaysia’s voice usage was no where compared with that of the US or even Singapore.  

On the average Malaysians only talk for 260 minutes in a month compared with Singaporeans' 550 and Americans' 1,000 minutes.  

Of course, the craze for SMS and its lower pricing has made it easier for people to just send messages, but a further reduction of call rates could spur higher voice traffic.  

“Voice is a great service that has yet to be fully exploited. For me it is much faster to talk than to write (a message).  

“If you leave a voice message instead of a text message, then the person has to retrieve the voice message and all this creates a lot more traffic for the operators,’’ Tear said.  

He is also president of Ericsson SEA.  

He also believes a broadcast of a voice message instead of a text message can generate lot more minutes than an SMS. In Malaysia, voice traffic accounts for about 70%-80% of average revenue per user (arpu). Industry arpus for pre-paid is in the range of RM55 to RM65 and RM136 to RM195 for post-paid.  

Although it is unclear how many subscribers the three celcos added in the last quarter due to the price war, some analysts believe it is anything from 600,000 to 1 million.  

Kristian Tear

As at end-September, Malaysia’s mobile subscriber base stood at 13.04 million.  

With 600,000 new additions, the cellular market would have grown by 23%, but with one million, the growth rate would be 26%.  

Avenue Securities Sdn Bhd senior analyst Jeffrey Tan believes the cellular growth this year would be in the mid teens.  

Another analyst in his report projected cellular subscriber growth rate to be 12% and 9% this and next year respectively.  

Talking about growth, there is a need to increase coverage as a lot of “growth opportunities are still present in outlying areas,’’ according to the findings of a survey by Malaysian Communications & Multimedia Commission (MCMC).  

The report said mobile penetration in FT Kuala Lumpur, Selangor, Penang, Johor and Melaka accounted for about 58% of total subscriber base of over 13 million.  

But states such as Sarawak, Sabah, Terengganu and Kelantan have very low penetration rates of only 30%. This goes to show there is a lot of room for growth in outlying areas where operators can count on voice traffic to grow with the basic facility being provided initially.  

One interesting point of the MCMC report was that the 15-19 age group made up the fastest-growing segment that accounted for about 12.3% of total subscriber base as at end-September.  

The 20-49 age group is the largest as its accounts for 78.7% of total subscribers and seniors (50 and above) represented the remaining 9%.  

The report also indicated that 41% of hand phones users’ bills did not exceed RM50 per month – 34% spent between RM50 and RM100; 11.4% spent between RM100 and RM150; 4.9% spent RM150 and RM200 while only 8.7% spent above RM200.  

The youth segment has been said to be where the growth really lies. Growing that market is critical for celcos, but knowing what that group wants can be equally challenging.  

“It would be nice to have a crystal ball in front of you, but learning from developed markets can be a valuable experience.  

“Given that the industry moves at such a rapid pace, it can be a costly experience if enough evaluation is not done before a product or service is launched to this group,’’ said an industry observer. 

Related Stories:More price slashing by celcos this year? 

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