Digital transformation is set to boom in Malaysia this year, but telcos have yet to feel the digital love.
IDC Malaysia recently unveiled its annual predictions for 2017 and beyond, highlighting the impact of emerging technologies such as digitization and market changes that will drive the future of the Malaysian ICT industry in the next one to three years.
The study predicts digital transformation to attain macroeconomic scale over the next three to five years. This is changing the way organizations operate, and is reshaping the Malaysian economy, leading to the dawn of what IDC calls the ’DX Economy’.
The predictions “explore the user trends and vendor strategies that will redefine the ICT market, redistribute market share in Malaysia, and help leaders capitalize on emerging market opportunities and plan for future growth,” says Pranabesh Nath, Research Director, IDC Malaysia.
IDC’s top strategic predictions expected to unfold in Malaysia in 2017 are:
Big data in the cloud: By 2018, new cloud pricing models will emerge for specific analytics workloads, where the growth for cloud analytics solutions will be three times more than on-premises analytics solutions.
Enterprise mobility and device deployment models: By 2019, 30% of unregulated enterprise organizations will offer a choose-your-own-device (CYOD) program for eligible employees as their default device policy.
Internet of Things: By 2018, connected vehicles, insurance telematics, personal wellness, and smart buildings will be four IoT use cases in the spotlight across Malaysia, accounting for $700 million in spending.
Cognitive cybersecurity: By 2018, 30% of cybersecurity environments will incorporate cognitive/AI technologies to assist humans in dealing with the increasing scale and complexity of cyberthreats.
Service provider strategy: By 2020, 60% enterprises will reconsider their current service providers, causing a shift in the systems integrator’s function from traditional to digital and the emergence of new services roles.
Where’s the love?
However, all the digital transformation love doesn’t seem to be translating into gains for the country’s telecom providers. While Celcom’s parent company, Axiata Group, ended the year with disappointing 4Q16 earnings, Affin Hwang Investment Bank (Affin Hwang Capital) highlighted that Maxis held up pretty well operationally amidst shrinking sector revenue.
According to Affin Hwang Capital, Maxis’ revenue market share – amongst the three cellcos – ended at 39% at the end 2016, the group’s second year of gain.
The growth in Maxis’ market share was, however, at the expense of Celcom and Digi’s shrinking revenue base.
Competition in the telco sector, particularly the mobile segment, was intense for a good part of 2016 but this eventually abated in the last two quarters.
AllianceDBS Research observed that the three mobile incumbents had not cut the pricing of their mobile plans since the research firm’s last review mid-December. It did not see any signs of them doing so in the near term.
Celcom did launch a new prepaid plan in the period, it said, but it was more of a tweak to the allocation of data quota in terms of more base quota than freebies.
“We echo the view of incumbents that price competition in 2016 had been value destructive for the industry, especially in terms of data monetization,” AllianceDBS said. “However, without a clear leader taking the first steps towards normalization — such as removing data freebies for example — we just do not see any uplift to ARPU when the current data quota given is way higher than the average data usage per subscriber.”
To maintain its competitiveness in the industry, Celcom’s chief executive officer Michael Kuehner told BizHive Weekly that Celcom has always delivered the most efficient and high quality services to its customers:
“Moving forward, advanced technologies such as cloud architecture, network function virtualization and software defined network among others, shall be key focus areas that will enable Celcom to remain ahead of the curve.
“The adoption of these technologies will help improve time to market, network resilience and the overall cost efficiency.
“Apart from investments in technology infrastructure, Celcom will stay focused on continuous innovation and improvement,” he said in an exclusive.
Kuehner added that it’s important to embrace digitization in all aspects, as consumers are at the heart of digital transformation.
“Celcom is advancing towards becoming a digital company through the digitization of its products and services, to meet the changing consumer behaviors and empower communities.
“Over the past year, we have consistently positioned our customers’ needs and their digital experiences as well the products and services which are in demand, as priority.”
Celcom has further provided its customers with the convenience and digitized customer service through its Blue Cube Online portal for the purchase of devices and content, as well as the recent digital self-service portal for device-related issues and management.
This article was originally published at PricingDataPlans