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Thursday, March 17, 2005

Telco War Heats Up

I think it’s high time I put my 2 cents worth on the current telco war in Malaysia. If you have seen the ads on TV and newsprint lately, you can see the 3 players getting more and more desperate aggressive in their right to your money. At the moment, Celcom and Maxis are battling it out at the top, while DiGi is trailing a distant third. There is another service provider, the GLC-owned TMTouch, but it has since merged with Celcom.

This wasn’t the case when I started using mobile phones. Back then (in the dawn of time…) there more players, differentiated by their access numbers: Celcom (010 analogue, 019 digital), TM ATUR 450 (011), Maxis Mobile (012), Emartel (013), Mutiara Telecom (016), Adam (017) and Mobikom (018).

Since then, Emartel has now become TM Touch, Mobikom closed shop, Mutiara has become DiGi, Adam has been gobbled up by Maxis. As for ATUR, it has disappeared under the sea of technological change.

Just a short history lessons for all of you newbies.

Let’s now look last three standing: Celcom, Maxis and DiGi. I have used each of them over the years, so I will speak from my experiences only. Maxis and Celcom are fighting it out in both the pre- and post-paid fields. While Maxis is slightly ahead in terms of subscriber base, market capitalization and revenue, Celcom boasts of nationwide coverage. Personally, I find Celcom’s connection clearer and more dependable, Maxis’ tends to drop and get crossed. Furthermore, Celcom has now the backing of Telekom, while Maxis is bogged down by that questionable purchase of Indonesia’s PT Natrindo.

Of the three, DiGi stands to lose out the most. They are saddled with a few fundamental problems that will continue to hinder them in the future. Because of their GSM 1800 system, they will soon be running out of bandwidth. Furthermore, being a foreign owned company, they do not have certain benefits of their competitors. And being the backmarker, they are spending millions in aggressive marketing, and slashing their call and SMS rates. This is severely hurting their profits and cashflow, but this is something they have to do in this climate. But the question is just how long they can afford to keep this up.

This industry price war kind of reminds me of the petrol war in Malaysia some years back. But selling petrol is much simpler, there are only two parameters to control: price of petrol and freebies/prizes to be won.

In the telco case, there are too many things to fidget with: call rates, SMS rates, access fees, call rebates, availability of top-up cards, customer loyalty programs, etc. In the short term, I can see Celcom closing the gap and even overtaking Ananda’s Maxis, while DiGi have to swallow the bitter pill.

And when are the telcos going to offer me a free phone? Cheap-cheap one also can lah!

6 Comments:

  • If you read the S'pore papers (actually there's only ONE paper, but that's another story, haha), you will find the telcos there offering dirt cheap replacement phones for their customers. And they are all canggih phones some more, the idea being to entice you to use more MMS, GPRS, etc and boost their revenue.

    As a Celcom user, I have to say that they SUCK big time :) Sure, the line's clearer, but their customer service and charges are bad. I was trying to get GPRS for my phone, and was told that as a postpaid customer, I have to pay RM 10 fee every month, and that covers nothing, i.e. no free minutes, no free how many kb download. The only reason why I still use Celcom is because I had the number for 8 years already.

    Hopefully, the gomen will be able to push through the phone number portability later this year, which I believe will level the playing field for everyone. By then, you can still be having 013 number, but you are actually using Maxis line.

    Pat

    By Anonymous Anonymous, at 3/17/2005 10:59:00 am  

  • i'm stuck with maxis! :P well i wouldn't say it's the best telco but in terms of subscribers and status.. maxis still reigns.

    i'm a hotlink club member :P

    By Blogger MunKit, at 3/17/2005 11:01:00 am  

  • pat - i thot celcom and TMT still use different bandwidth & architecture? you're the only and still only 013 guy i know!

    munkit - ever been persuaded to switch, with all the promos?

    By Blogger Simon, at 3/17/2005 11:19:00 am  

  • From what I know, they have integrated everything after the merger (billing side still needs some work, though).

    Haha, I think everyone is hating me for not being on Maxis bcoz of the higher inter-operator charges :) But who knows, with the number portability...

    Pat

    By Anonymous Anonymous, at 3/17/2005 11:34:00 am  

  • Maxis user here but one annoying thing is the marketing sms they keep sending. Its like receiving spam on the handphone... "Sign up for Phua Chu Kang jokes today.... Sign up for football updates..." etc etc..(*grumble grumble*)

    By Blogger mumsgather, at 3/17/2005 12:30:00 pm  

  • I recently switched from Celcom to Digi. On the technical side, Digi seems to suffer slightly more network congestion then Celcom but my monthly phone bill has dropped by 25%.

    B

    By Anonymous Anonymous, at 3/17/2005 04:46:00 pm  

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