Colourful, exciting year for telcos

The year 2009 was indeed one of the most colourful and exciting year in recent times as far as the Malaysian telecommunications (telco) industry is concerned.
The year started with uncertainties. Mobile operators were worried that the global economic slowdown would hurt consumer spending, and eventually, their earnings.In the first half, most telcos' chief executive officers were reluctant to provide forecasts on concerns over the severity of the recession.IDC, an industry research company, said consumers did cut their spending on telecommunications somewhat. This translated into total industry revenue staying flat for the most part of 2009."IDC believes that the industry as a whole was successful in mitigating revenue declines by cautious capital expenditure and operating expenditures.

"In addition to this, mobile operators stayed away from price wars and remained focused on promoting mobile broadband offerings," said IDC telecommunications research associate analyst Chua Fong Yang.By the middle of 2009, it was evident that the slowdown did affect mobile operators' sales and earnings. For example, DiGi.Com Bhd recorded a quarter-on-quarter net profit and revenue decline for the quarter ended June 30 2009.But the industry kept on adding customers. The mobile penetration rate, which measures how much of the population uses handphones, hit 100 per cent.

Slowing growth used to be the worry for industry players but this did not appear to be the case as other smaller telcos entered the market.Known as mobile virtual network operators, XOX and Tune Talk launched their services by riding on networks of existing operators. Their strength was their niche areas. XOX, for instanc,e focused on Chinese subscribers.Last year was also the time TM International Bhd changed its name to Axiata Bhd to reflect a more dynamic image that fits its role as a regional telco.The unit of Khazanah Nasional Bhd operates in 10 countries around the world.

However, none of these news were as big as Maxis making its way back to the local stock market. On September 18, the country's dominant mobile operator Maxis announced its plan to list on Bursa Malaysia, ending several months of speculation on how the group would fund its Indian operations.The initial public offering, the biggest in Southeast Asia, had attracted key institutional investors, both locally and abroad.The year 2009 also ended with optimism in sight. With the country's economy expected to grow by 2 to 3 per cent in 2010, telcos think the worst is over."It was a year where we were tested on all fronts. A year that awakened the need for transformation in the way we managed our personal lives and businesses... Despite positive indicators in sight, I believe full recovery from the worst recessions we have had will take time and the economy will normalise eventually," said DiGi chief executive officer Johan Dennelind.

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