Pest: Mobile Phone and Malaysia Essay Example

the technology by Telecom Malaysia, the main telecommunication service provider, Celcom, Maxis and DiGi has created opportunity for local companies such as Sapura Telecommunication and Alif Telecommunication. 2 The general scenarios of the three mobile telecommunication are as follows: Celcom Communications Celcom Malaysia) Berhad is the country’s most experienced and second largest mobile cellular telecommunication company with cover 4.

1 million customers. It currently operates the most comprehensive network coverage in the country, covering 95% of the populated areas. It recently merged its business with that of TM cellular and is on track to meeting its integration objectives of a unified, new Celcom by October n year 2003. When the cellular phone market was opened up in 1995, Celcom upgraded to the GSM900 service and quickly grew to become the largest mobile phone company in Malaysia until it was overtaken by Maxis.During the Asian financial crisis in 1997 , Celcom’ s owner, Tan Sri Tajudin Ramli suffered a debt crunch, and his shareholding in Celcom was seized by Danaharta, the national asset restructuring company.

Failure to resolve his debts resulted in the controlling stake in Celcom being sold to Telecom Malaysia, the government-owned incumbent fixed line operator in 2003. Telecom Malaysia proceeded to merge Celcom with its own mobile-operator subsidiary TM Touch through a reverse takeover of TM Touch.Celcom is currently doing nation wide promotion using power icons like including footballers Steven Gerrard, Michael Owen, Ryan Giggs and Robert Pires and Chinese entertainers JJ Lin and Wang Lee Hom. Recently just signed its first local power icon Maya Karin. Maxis Communications Maxis was founded in 1987 by Will Wright and “ idea guy ” Jeff Braun to

help publish SimCity on home computers. Before then, the game was only available on a limited basis on the Commodore 64 due to few publishers showing any interest in porting it.

The reason for this is because SimCity wasn ’ t a traditional game that had definite win and lose conditions. The title went on to become, statistically, one of the most popular and successful video games of all time. In 2002, Maxis purchased Timecel, a rival mobile service provider, from Time dotcom 3 Berhad. Prior to the purchase, Maxis offered phone numbers beginning with 012, and Time Cell 017. Now, subscribers can choose between the two. In 1999, Maxis introduced the popular pre- paid brand “Hotlink”, which currently has 6.

3 million customers.Maxis officially launched its 3G service on 1st July 2005 (the 3G data card service was soft-launched earlier in February 2005). The 3G service is available in selected regions of the country since nationwide coverage does not make economic sense. Maxis provide a variety of mobile communication products and services.

They offer prepaid call plans, monthly subscription plans, global roaming, MMS, WAP (over both GSM and GPRS), Residential Fixed Line services, Broadband Internet plans, and as of early 2005, 3G services to both pre-paid and subscription customers.For business customers, Maxis offer VSAT services (satellite based communications) and Blackberry based mobile services besides regular services. Maxis also provide an online Music store for its customers to download multimedia content. DiGi Communications In the Malaysian perspective DiGi is the leading mobile communication company providing a comprehensive range of affordable convenient and easy to use wireless service to simplify and enrich the lives of its customers.DiGi creates value

for its customer by selecting the most appropriate cutting edge technology so that they benefit from DiGi product and services. In year 1995, DiGi lunch and operate a fully digital cellular network in Malaysia.

In year 1996, DiGi is the first digital cellular network to be operational in Sabah and Sarawak. DiGi is Malaysia’s third largest telecommunication service provider which under its competitors like MAXIS and CELCOM. Same with other competitors.DiGi provides it telecommunication service product with prepaid and postpaid product to its customers. In 2005, DiGi held a bid on the 3G spectrum. In 2006, the MCMC (Malaysia Communications & Multimedia Commission) gave the license to other companies (Time Dotcom and MiTV), which were not mobile operators in Malaysia at time of bid.

At this point of time, Time Dotcom has not launched their 3G services. Because of DiGi not winning the 3G license, DiGi decided to bid on a WiMax license in July 2006, together with 13 other 4 providers.The bidding process was then cancelled by government due to certain requirements and specifications were not included by MCMC into the bid papers. DiGi has resubmitted the bid and are now awaiting the results from the government. PEST analysis of Telecommunication Industry in Malaysia: Political Factors The political development has been characterized by the relationship between the three main ethical groups.

There have been some problems between the groups but in the big picture, Malaysia has succeeded in avoiding bigger conflicts.Even though the freedom of speech and the political freedom have limitations, for which the government is criticized both internationally and domestically, the country is still one of the most open-minded in the region, both politically and

economically. Government-controlled incumbent fixed-line operator Telekom Malaysia continues to dominate the market, accounting for around 62% of total communications revenue, 86% of total fixed-line services revenues, and - via its Celcom subsidiary - 38% of total cellular telephony service revenues in 2003. In the cellular sector, it squares off against Maxis Mobile and DiGi.

om. Telekom Malaysia and Maxis each received third-generation (3G) universal mobile telecommunications service licenses in 2003, with Telekom Malaysia reportedly having begun offered limited services in early-2004 and Maxis launching a 3G data card offering at the very end of 2004. DiGi. com did not pursue a 3G license in 2002/03, but has only recently signaled its interest in entering the Malaysian 3G market. The Malaysian government has a very active privatization program.

Despite this, a number of major businesses are either government controlled or have government equity.Economical Factors: In the recent years Malaysia ’ s economy has been correlating to the world economy and to the Asian economy. When mentioning the world economy, it is, of course, the US economy that is the most importan t. In particular for Malaysia due to it’s exporting to the US.

Furthermore, I think that this is one of the most critical issues when determining whether we should enter the Malaysian market or not, because a growing economy encourages more investments, and more companies to enter the market. Therefore, the better economical conditions the more 5 ikely the need for third generation telecommunication infrastructures in the whole of Malaysia, and not just around Kuala Lumpur. In this few years, even the Malaysia economic was not so good and after a decade of high economic growth, the Asian

financial crisis in 1998 had plunged Malaysia into recession. However, during the discovery times, the major three telecommunication companies: DiGi, Maxis and Celcom increasingly become stronger and increased the sales, more and more customers in Malaysia buy their telecommunication product and service.This is an opportunity and change that help this three telecommunication companies to make, even the economic is not good, but using mobile phone become a trend.

Social Factors: Social factors can definitely affect the telecommunication industry. The basic values, perceptions, preference and behaviors always the main reason that can affect the telecommunication company product. Social factors are very important in Malaysian telecommunication industry because, nowadays, we can see, increasingly using the mobile phone became a society culture even become personal culture.Some years ago there are only business person would use the mobile phone, but today most of the people of Malaysia are using mobile phone. So, Mobile phone gradually becomes important tool in Malaysian society. In Malaysia people in same region will shape their basic beliefs and values, but is still have many people in same region have different preferences, perception and personal basic values.

It is difficult to understand one person preferences and perception, because sometimes the person preferences and behavior will change according to the social and cultural change.That is why Telecommunication companies in Malaysia like DiGi, Maxis and Celcom provides their different product packages. The potential customers of the three mobile phone operators are more or less multinational companies rather than end-user customers. Therefore, I think that the social factors are looking good for a possible entrance into the Malaysian market. Technological Factors: Malaysia is not a high-technological country, but the main

point is that it is striving to get there.

Communications and information technology infrastructure is a key element in Malaysia’s plans to achieve industrialized nation status by 2020 .This creates a huge demand 6 of information and communication technologies and it will make the Malaysian market and other South-east Asian markets even more attractive in the future. Every telecommunication company in Malaysia need and are necessary using to do their business transaction, because using advance technology can save the time and make more accuracy. In telecommunication Industry, technology can help the telecommunication companies in Malaysia to establish their own network supply station, to provide the available network to their customer so that customer can communication in that area which have network coverage.The company that succeeds to get the first infrastructure contract has a good opportunity to get more contracts later on when an expansion, or new technologies, will be needed. Therefore, I think that the technological factors are looking good for entering the Malaysian market.

Forecasting of the telecommunications Industry As with market trends in most economies, demand for telecommunications services in Malaysia is expected to continue to expand rapidly over the next five years. Malaysia has a well-developed telecom infrastructure. The number of mobile-phone subscribers overtook fixed-line subscribers in 2001.Despite slower growth in the mobile industry during the next five years, opportunities for development in the regions remain. Because of slow growth in the mobile segment, suppliers are likely to put their efforts into promoting new services, rather than attracting new subscribers.

The move to Internet-enabled video phones technology will be costly. In July 2003 the government announced that Telekom Malaysia, together with Maxis Communications, would spend

M$7. 5 billion (US$2. 2bn) over the next ten years on rolling out the 3G system.Maxis stated that it expects conventional short message service (SMS) operations to continue to provide the bulk of its revenue until 2006. Telekom Malaysia’s objective is to provide 3G coverage for 80 percent of the population by 2010.

For the short term, the results for mobile networks are likely to be bolstered by marketing or tie-ins with firms in other sectors, such as banks. Malaysia will remain a Global System for Mobile Communications (GSM) market. Telekom Malaysia will continue to use a code division multiple access (CDMA) network to reach some rural areas in Sabah and Sarawak. No mobile equipment manufacturer is likely to achieve a dominant position in the next few years. In the past, Telekom Malaysia has bought equipment from a range of suppliers, although its new mobile partner, Time favors Nokia.

Maxis have a long-standing relationship with Motorola, but its new partner, Celcom (now part of Telekom Malaysia) has a past history with Ericsson, a mobile systems supplier based in Sweden. The NTP (National Telecommunication Policy) will continue to emphasize efforts to upgrade rural telecommunications facilities.The main aim of the NTP with regard to the rural sector is to provide telecommunications facilities to every household by 2020. Besides the main provider, which now is required to supply telecommunications services to the rural areas, all telecommunication providers are expected to contribute towards this end.

Conclusion The telecom industry in Malaysia has always been one of contrasts and anomalies, and it continues in this vein. With the local mobile telecommunication are slowing down, operators have been pushed into looking for new growth

catalysts to boost their earnings.The telecommunications industry is, by far, one of the more dynamic ones where technological advancements sow the seeds for faster connectivity and greater efficiency within the system. Although the demand for telecommunication products will generally not wane over time, the fact remains that newer products will emerge in tandem with technological improvements, in response to current and future market considerations.

The challenges that an operator faces are connected to its ability and competency in adapting to and managing these inevitable changes and, subsequently, maintaining a competitive edge over its competitors.Nowadays, Telecommunication industry in Malaysia facing the fierce competition, three mobile operators provides (DiGi, Maxis and Celcom) are trying to gain their market share by using different kind of technology, marketing strategies to fight in Telecommunication industry market. Now technology rapidly changing. Everybody trying to give better service to their customer.

In any case, RAM has a stable outlook on the local telecommunications industry. The industry has been streamlined into a comfortable 3-player market, all of them financially strong enough to continue introducing attractively priced packages in order to 8 enerate further demand. Regulatory policies are also expected to continue supporting this growth momentum in view of the nation’s thrust towards the telecommunication economy.