Telco Deep Dive: No clear winner in Malaysia’s LTE race
On May 26, Digital News Asia (DNA) launched its first Deep Dive record, which looked at the telecommunications area in Malaysia. Over these next two weeks, we will be publishing the articles from the PDF record on our portal, plus other memories. To down load the Telco Deep Dive, click on here. In this newsletter, Analysys Mason’s Tom Mowat appears at how the LTE opposition is gambling out from the spectrum angle.
- MCMC allotted comparable quantity of spectrum to tier-1 and tier-2 operators
- MNOs decided to pool their spectrum and percentage community infrastructure
IN this newsletter, we examine the Long-Term Evolution (LTE) landscape and competitive dynamics in Malaysia from the point of view of spectrum venture, spectrum sharing, and recent acquisitions.
Spectrum pooling in Malaysia
In December 2012, the Malaysian Communications and Multimedia Commission (MCMC) auctioned the two,600MHz LTE spectrum and allotted it to eight operators.
Celcom Axiata, DiGi Telecommunications, Maxis, REDtone and U Mobile received 2x10MHz of frequency division LTE (FD-LTE) spectrum. Altel, a startup subsidiary of Puncak Semangat, a business enterprise connected to Malaysian mogul Syed Mokhtar Al-Bukhary, acquired 2x20MHz of FD-LTE spectrum.
Meanwhile, WiMax-primarily based operators Packet One Networks (P1) and YTL Communications (YTL Comms) had been each allocated 20MHz of time division LTE (TD-LTE) spectrum.
The licence auction was unique in the feel that MCMC allotted a similar quantity of spectrum to tier-1 operators (Maxis, Celcom DiGi) and tier-2 operators (U Mobile, REDtone) and new entrant (Altel).
In truth, Altel changed into allotted the most important block (2x20MHz) of FD-LTE spectrum. This led to a state of affairs where tier-1 operators needed for extra spectra in order that they might offer better high-quality services, specially in dense urban areas. Tier-2 operators and the brand new entrant had the spectrum however had confined or no present network infrastructure to set up offerings.
Such dynamics caused the eight cell network operators’ (MNOs) selection to work collectively, pool their spectrum and proportion network infrastructure among themselves.
Maxis has the edge
In October 2011, Maxis signed a wholesale 3G radio get admission to network (RAN) sharing agreement with U Mobile. The association turned into later prolonged to LTE. Maxis and REDtone agreed to pool their LTE spectrum and percentage community infrastructure for 10 years starting July 2012.
Meanwhile, Celcom and Altel announced their selection to pool their LTE spectrum bands and percentage RAN infrastructure thru a cell virtual community operator (MVNO) arrangement in July 2013.
As a end result of the spectrum sharing arrangements with REDtone and U Mobile, Maxis has won get right of entry to to a complete of 3x20MHz LTE spectrum. This implies that Maxis has the energy to offer the highest first-rate 4G LTE offerings inside the marketplace, though it is not clear the way it intends to make use of its spectrum from a generation perspective.
Maxis additionally claims to have the best LTE coverage inside the marketplace and became the primary operator to launch LTE in Malaysia, in January 2013.
Figures 1 and a pair of beneath illustrate how MNOs’ get right of entry to to LTE spectrum has modified earlier than and after spectrum pooling.
Without any spectrum sharing preparations, DiGi appears to lagging at the back of its competitors. It doesn’t currently provide LTE on 1,800MHz and has only 20MHz in 2,600MHz.
In phrases of LTE spectrum availability and differentiating LTE services based on great, DiGi might also lose out to its competition.
P1, TM might also pose a risk
In April 2014, TM become suggested to have offered fifty seven% of suffering WiMax participant P1. However, we don’t assume P1 to be absolutely incorporated into TM by this year, as it can be complicated and highly-priced at a time when TM is already present process predominant trade.
It is viable that P1 and TM will proportion a network rollout method, but commercially, it is more often than not probable they will continue to be separate for the instant future. P1 is reportedly planning its TD-LTE dongle release soon and is thinking of a handset release for later this yr.
However, device availability in 2.3GHz has now not reached a low enough price-factor to attain the marketplace P1 could currently address as it isn't presently called a handset provider in Malaysia, and could most probably are searching for to cope with low-fee customers.
YTL Comms has a smaller network in phrases of quantity of towers than P1, however a extra advanced structure. YTL Comms also has quite a sturdy brand, pretty plenty of spectrum (20MHz of two,600MHz + 30MHz of 2,300MHz), and a few high-profile deals.
For instance, it offers connectivity to faculties – in a challenge known as 1BestariNet – that positions it properly within the market. The major issues of the WiMax era, most significantly the shortage of handsets, will not repeat themselves in TD-LTE, and YTL Comms appears to have the least work to do so one can get a aggressive TD-LTE community to market in Malaysia.
But at the same time as YTL Comms might be a known logo for dongles, it has no name in Malaysia as a handset provider and could struggle to take marketplace percentage off the huge three – Maxis, Celcom and DiGi.
As a result of the acquisition of P1, TM now has 20MHz of 2,600MHz + 30MHz of two,300MHz in addition to its current 2x10MHz of 800MHz.
We need to assume TM to pop out with a completely sturdy LTE play, which it could correctly package deal with its domestic broadband and WiFi solutions to seize precious customers. We might also anticipate techniques like multi-tool bundles to be delivered.
The important troubles for TM are across the network itself. It does not have a longtime cell network in Malaysia and could need to invest extensively within the coming year.
Additionally, having the best 800MHz spectrum for LTE in the marketplace will give higher standard insurance and a sizeable benefit for in-building coverage.
Tom Mowat is important analyst and Asian programme head of Analysys Mason, a British-based telecom consultant and studies corporation.
Related Stories:
Telco Deep Dive: LTE’s elusive commercial enterprise model
Will TD-LTE make a distinction for YTL Comms?
DiGi to spend extra on capex in 2014
Maxis adopts hook strategy with LTE
Syed Mokhtar’s Altel takes measured technique to its release
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