Economic Performance Of The Industry

© Malaysian Communications and Multimedia Commission 2007

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Malaysian Communications and Multimedia Commission

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Contents

Message from the Chairman

Executive Summary

Economic Performance Of The Industry

Malaysian GDP At 5.8% in 2006; 6% 2007 7

Contribution of C&M Companies to Bursa Malaysia 9

C&M Industry Revenue Overview 11

Telecommunications Sector 12

Broadcasting Sector 16

Postal Services Sector 18

Digital Signature Usage 19

MESDAQ - MCMC Licensees 21

Malaysian Adex 2006 22

Adex Comparisons: General Observations 22

FTA TV and Radio Advertising Revenue 23

Adex by Sectors 26

Advertisement by MCMC Licensees 27

C&M Industry Overview

Communications & Multimedia Industry 28

C&M Revenue by Services Market Segment 29

Fixed Line & Cellular Mobile Phone Services 30

Broadcasting-Subscription TV 32

Postal Services 33

Communications & Multimedia Services Connections 33

Fixed Line Services 33

Cellular Mobile Phone Services 34

Internet Connections; Broadband; and 3G 35

Direct-To-Home (DTH) Satellite Pay-TV 38

Postal Services 39

Philately 41

Direct Mail 41

Proposed Postal Services Bill 43

Courier Services 43

The MSC Malaysia 44

Regulating Effectively

Licencing in 2006 46

Variations and Transfer Of Licences 47

Response to Market and New Developments 47

Suspension of Licence 48

Licensing Developments and Issues 48

Rebates on Applicable Annual Licence Fees 48

Implementation of Rebates Framework 49

Niche Guidelines 49

Consumer Protection 50

Consumer Satisfaction Survey (CSS) 50

Mandatory Standards for Quality of Service (MS QoS) 51

Audit and Certification Exercise 52

Trend Analysis for MS QoS 56

Rates Regulation 66

Rate Monitoring as at June 2006 67

Chapter

3

4

Message from the Chairman

Consumer Complaints Received by MCMC 68

Required Application Services (RAS) 69

Competition and Access to Services 70

Access Regime 70

Competition Regulation 72

Challenges in Regulating Content 76

Industry Overview 76

Compliance with Content Requirements 77

Resource Management 79

Spectrum Management 79

Number Management 90

Enforcement 92

Investigations & Action Taken On Cases Investigated 93

Initiating Transformations For Future Generations

Introduction 94

MyICMS 886 94

MyICMS 886 Directorate 96

MyICMS 886 Implementation Committee 96

Going Forward in 2007 99

Mobile Number Portability (MNP) 100

Numbering Regulation 100

Developments on Content 100

Role of MCMC in Networked Content Development 101

Network Security 102

Digital Signature 102

Prepaid Registration Exercise in Malaysia 104

Cybercities 106

The Role of MCMC in Cybercities 107

Specific States with Proposed Cybercities 107

Enhancing Partnerships

Forums under the CMA 110

Communications and Multimedia Consumer Forum of Malaysia 110 Communications and Multimedia Content Forum of Malaysia 112 Malaysian Technical Standards Forum Berhad 112

Malaysian Access Forum Berhad 113

Courier Industry Forum 113

Universal Service Provision (USP) 114

Overview of USP Programme 114

USP Rollout Group and Status 117

Looking Ahead 120

USP Fund 124

Progress of Time 1 and Time 2 Implementation 126

Industry Impact 129

Awareness Campaigns 131

Standards 133

Certifying Agency 133

Spectrum Research Collaboration 135

Steps Into The Future – An Outlook

Chapter

5

6

7

Appendices

List Of Figures

Contact Us & Secretariat Information

For the last five years, the MCMC has been publishing the Industry Performance Report as stipulated under Chapter 15, Part V of the Communications and Multimedia Act, 1998 (CMA);

reporting the industry and regulatory developments, including highlights of the changes in the industry since the migration of licensees in 1999/2000 to the current licence structure under CMA. The report also includes developments under the Postal Services Act, 1991 and the Digital Signature Act, 1997 of which MCMC plays the role of regulator as well.

The Commission is indeed pleased to present our sixth Industry Performance Report for 2006.

The report, with the theme of “Regulating Effectively For Successful Transformations” notes changes effected to accelerate success of the communications and multimedia (C&M) industry in Malaysia. The C&M industry in our case includes the telecommunications, broadcasting as well as postal services. Developments include the launch of the MyIX or Malaysian Internet Exchange; the registration of prepaid users; the progress of Time 1 and Time 2 implementation for nationwide cellular coverage on integrated efforts basis with industry and state governments;

the 2.3 GHz spectrum, with expectation of its award in 2007; and groundwork underway for implementation of mobile number portability in the country.

Regulatory monitoring continues on the implementation of 3G and for the new spectrum assignments of 3G awarded in 2006. Competition and access issues are recurring phenomena in the changing industry environment, and require detailed assessment and deliberation in its facilitation to ensure a level playing field.

Meanwhile, as the domestic operators are successfully reaping from overseas operations acquired over the last few years, the domestic mobile market still has wide potential in a market maturing towards an increased avenue for differentiation of services, cash-in on customer loyalty in ways to reduce churn, and strife for higher quality of service in existing and new emerging services such as mobile TV, Internet Protocol TV (IPTV) and interactivity in broadcast. The postal service is seeking new revenue streams towards rejuvenation and sustained earnings.

Amidst all this, the digital divide remains a prime feature to ensure the availability of services to all users irrespective of location. Furthermore, the movement to broadband for the nation is ongoing with aims to include mitigating “broadband divide” more so in the highly populated and developed Klang Valley area.

Strategically, the MyICMS 886, which is a blueprint for the industry’s development in the period 2006 to 2010 and officiated by the Minister in December 2005, has had in 2006, the MCMC and all parties concerned creating awareness of the need for alignment in its implementation across the industry and related sectors.

So far, the industry’s development has involved concerted efforts of all parties concerned - industry players, government and its agencies; also the vendors, manufacturers, and even users as stakeholders. There is vigilance for changes to come, instituting changes for better and more robust business models in the communications services arena. These in turn affect “workstyles”

and lifestyles with engaging or captivating new and emerging communications devices and platforms, which are able to catalyse new businesses and accelerate or rejuvenate the old;

shape public sector improvements and growth as well as sharpen national competitiveness and sustain economic growth.

The MCMC welcomes any comments, enquiries, suggestions and feedback on the information presented in the Industry Performance Report. MCMC’s contact information is available on the last page of this report.

Datuk Dr. Halim Shafie

Message From The Chairman

Executive Summary

Chapter 1

The still resilient Malaysian economy, in the face of reiterative concerns of fuel hikes, inflationary pressures and an overall slowing global economy, has managed to lend steady support to the growth of the communications and multimedia (C&M) industry over the years. The C&M industry comprises the telecommunications, broadcasting as well as postal services. The Malaysian economic growth is expected at 6% in 2007 (2006: 5.8%) – a pace in line with the growth rate desired in the Ninth Malaysia Plan (9MP) for propelling national development activities and implementation of its far reaching initiatives.

By way of contribution to the market capitalisation of the country, the public-listed C&M companies comprising the integrated telecommunications service providers, the broadcast service providers of Free-To-Air television (FTA TV) and pay-TV, and the postal services capture altogether a market capitalisation of RM87.3 billion, up 18.5% from RM73.7 billion in 2005. The public-listed C&M companies constitute 10.3% of the Bursa Malaysia market capitalisation (2005: 10.6%).

In terms of revenue, the C&M companies garnered RM31.7 billion in 2006 (2005: RM26.8 billion).

Overall growth is supported by revenue from overseas operations (16% contribution in 2006).

For the bigger players, Telekom Malaysia Berhad (TM) and Maxis Communications Berhad (Maxis), the strategic move to provide their core services in faster growing regional markets over the past two to three years have borne fruit significantly in 2006, especially in the midst of a maturing mobile market in Malaysia. Overall, the C&M industry contributes 9.6% to the country’s GDP.

Adex for the country appears relatively stable, with industry experts forecasting adex of RM4.8 billion in 2007 (2006: RM4.7 billion). Aggregate revenue posted by the CMA licensees listed on MESDAQ market of the local stock exchange is more than RM561 million (2005: RM300 million). Postal services garnered revenue of RM822 million in 2006, while courier services posted RM1.1 billion.

Cellular mobile penetration in the country was 72.3% in 2006 (2005: 74.1%). Prepaid growth has moderated to a negative growth of 3% in 2006 (2005: 39.5%) whilst post-paid growth has increased 17.2% in 2006 (2005: 11.5%). This is due to prepaid registration exercise in 2006 and perhaps better package for post-paid services in contrast.

Fixed line substitution by mobile cellular phone continues. Connections by DEL shows penetration rate of 16.1% in 2006 (2005: 16.6%). Broadband connections amounted to 879,200 subscribers or 3.3% penetration rate in 2006 (2005: 1.9%), and this is about 11% by household penetration. 3G subscribers totalled 406,717 or 1.53% penetration at end 2006. Internet dial- up service, however, is slow on take-up with estimates at 3.8 million subscribers or 14% based on penetration rate (2005: 3.7 million subscribers; 13.9% penetration rate). IPTV and mobile TV are still emergent services in the Malaysian scene.

Executive Summary

The Multimedia Super Corridor, aptly renamed MSC Malaysia in April 2006, continues with its Phase 2 (2004-2010) development that includes expansion of the MSC-status web to similar development corridors across the country. In line with this, the various economic development corridors in the Northern, Eastern and Southern regions of Peninsular Malaysia have already been specified as such in the Budget 2006/2007. Digital certificates issued under the purview of the Digital Signature Act, grew 147.6% in 2006 to 415,641 (2005: up 46.1% to 167,847 certificates) due mainly to security requirement from e-Filing exercise for tax returns introduced by the Inland Revenue Board.

The communications and multimedia industry in Malaysia has moved forward, with the first convergence law of its kind since eight years ago. Today, the licensing regime under the CMA continues to be tested for robustness. While this is but the order of the day for MCMC, the service providers have yet to take full advantage of the monetary savings available in the CMA environment such as licence fee rebates provision through the implementation of specified development expenditures.

The year 2006, at least from the regulatory perspective, was a year of regulating effectively for successful transformations into the future. This is exemplified by the initiatives such as further progress of Time 1 and Time 2 implementation for nationwide cellular coverage; spectrum research collaboration; network security initiatives of prepaid registration requirement; MyICMS 886 initiatives; continued vigilance on quality of service, enforcement activities, and of course, the initiatives under the Universal Service Provision (USP) for lessening the digital divide in the country. These developments ultimately pave the way for new or alternative ways of doing business in the converging environment of the communications and multimedia industry as well as to expand the communications services as “a basic dependable, reliable and needless to say, available utility”.

With Time 1 completed, Time 2 was 79% completed in 2006. While delays in various quarters still exist, these are being mitigated through various means such as licensing, state government co-operation, infrastructure sharing and the use of government land as an alternative to “difficult”

private land acquisition for tower sites.

Monitoring and enforcement activities of the MCMC continue with offenders charged in court or facing compound. In 2006, the prepaid registration exercise completed in December would facilitate MCMC enforcement activities as well as law enforcement and national security activities by police and other enforcement authorities nationwide.

The mandatory standard on QoS is in its third year of implementation in 2006. Results show that while compliance efforts have overall been stepped up by licensees, there is still much room for improvement in certain areas, which need additional attention by service providers.

Generally, while the QoS standards are mandatory, the service providers should fare better if they strive to exceed the stipulated benchmark rather than, perhaps work to “just meeting” the standards set. After all, excellent quality of service benefits their services reputation directly.

Resource management in the areas of spectrum and numbering remains crucial as efficient usage supports national development to ensure long term economic resilience and future competitiveness. In 2006, spectrum research and collaboration activities have been given emphasis amidst the on-going activities of spectrum monitoring, international coordination and the various assignments associated with spectrum usage. Also, a new Spectrum Plan was published in November 2006.

Executive Summary

In 2006, the remaining two 3G spectrum blocks were assigned to TT dotCom Berhad and MiTV Corporation Sdn Bhd (MiTV) on top of those for TM and Maxis effective in 2003. In respect of numbering resource, the MCMC published the National Electronic and Addressing Plan (NEAP) in January 2007. This together with the Numbering Regulations, which is in the final stages of development, will arm the MCMC, the industry and other stakeholders, with a clear basis of numbering environment for deriving their business models. Mobile number portability is in the offing in the coming year in line with the Minister’s call to accelerate this matter in the interest of competitive forces and spurring the market forward.

As new services emerge and old delivery platforms upgrade to avail higher speeds or bandwidth and a greater variety of offerings and channels, the aspect of content development, including local content, needs to be highlighted. For MCMC, content monitoring and regulation is an ongoing task, while content development is a role for initiation as highlighted in 2006. The Content Forum had in 2006 received its fair share of complaints for resolution. From the complaints perspective, the avenue for recourse is clear – first complain to respective service providers; then to the Content Forum and also MCMC if matters remain outstanding. Broadcasting services in 2006 saw the introduction of a new TV station reminiscently called TV9 and a new radio station, Hot FM, both from the Media Prima group.

Access to services under the access regime of the CMA is a dynamic area of monitoring and vigilance for the MCMC. With the expansion of the access list effective in 2005, monitoring its developments and obtaining feedback on their status and success of implementation are MCMC’s tasks for attention. Overall, the access regime serves to provide greater transparency in the provision of access to key services thereby facilitating a fair and equitable environment and choice of services to end-users.

As is for 2005, the requirement for more partnerships and collaborations in many areas remains ever more crucial in 2006 and beyond, especially so as convergence takes further root. This is particularly so in the area of standards and standards development; trade negotiations of free trade agreements and from a more micro perspective, the domestic and international events of the MCMC, be it for creating awareness, fulfilling national requirements such as prepaid registration and international activities such as International Telecommunications Union (ITU) recommendations or discussions in Asia Pacific Telecommunity (APT) meetings.

The government’s recognition for an accelerated and coordinated plan for getting connected today is exemplified in the MyICMS 886, which is one of the government’s strategies to propel information and communications technology (ICT) in the country. The goals and targets as specified in the MyICMS 886 are set together by the government as well as the industry. Goal alignment in planning and carried through in execution and implementation stages is key to achieving overwhelming success at journey’s end.

Indicators 2005

(%) 2006 ^(e)

(%) 2007 ^(f) (%) Real GDP (annual change)

Sectors - Agriculture, livestock, forestry, fishing - Mining & quarrying

- Manufacturing - Construction - Services Consumer Price Index (CPI) Producer Price Index (PPI) Unemployment Rate Budget Deficit as % of GDP Corporate Tax Rate (%)

Per Capita Income (current prices) (RM) Per Capita Income (current prices) (USD)

Per Capita Income by Purchasing Power Parity (USD)

5.2 2.5 0.8 5.1 -1.6 6.5 3.0 6.8 3.5 3.8 28 18,039

4,763 10,614

5.8 5.3 2.4 7.3 0.7 5.7 3.5-4.0 6.8 3.5 3.5 27 19,739

5,353 11,871

6.0 4.7 4.5 6.8 3.7 6.0

< 3.0 - 3.5 3.4 26 21,168

5,740 12,666

Ministry of Finance (MoF) Bank Negara Malaysia (BNM)

Malaysian Institute of Economic Research (MIER) Asian Development Bank (ADB)

World Bank

5.8 5.8 5.9 5.8 5.5

6.0 - 5.2 5.3 5.5

- - 5.5 - 5.5-6

GDP Growth Forecasts 2006 ^(e)

(%) 2007 ^(f)

(%) 2008 ^(f) (%)

(e) - estimate ^(f) - forecast

Source: Bank Negara Malaysia, Economic Report

Fig. 2.1 Selected Economic Indicators

(e) - estimate ^(f) - forecast

Source: MoF, BNM, MIER, ADB, World Bank

Fig. 2.2 GDP Growth Forecasts

Economic Performance of the

Industry Chapter 2

MALAYSIAN GDP AT 5.8% IN 2006; 6% 2007

In 2006, economic expansion strengthened on the back of a stronger currency notwithstanding higher inflation and utilities tariff hikes. The economy expanded at a steady momentum registering real Gross Domestic Product (GDP) growth of 5.8% in the third quarter, and 6.2%

(revised) in the second quarter of 2006. Growth was underpinned by strong expansion in the services and agriculture sectors at 6.5% and 6.2% respectively. The manufacturing sector contributed a more moderate pace of 7.1% compared to the previous quarter (2Q-06: 8.4%).

Given the resilient domestic demand and projected disbursements under Budget 2006/2007, the outlook for the economy in the fourth quarter remains positive. Bank Negara Malaysia (BNM) is confident of the economy achieving the forecasted GDP growth of 5.8% in 2006.

Selected Economic Indicators

Economic Performance of the Industry

As part of the government’s efforts to cut its subsidy bill, retail gasoline and diesel prices increased by as much as 23% in February 2006, being the fifth rise since May 2004. In June 2006, electricity tariffs rose for the first time in nine years. Subsequently, in November, water rates also rose by as much as 18% in Kuala Lumpur, Selangor and Putrajaya.

Headline inflation, as measured by the Consumer Price Index (CPI), hit a seven-year high in March at 4.8% before easing to a 16-month low of 3% in November. Bank Negara Malaysia (BNM) raised its Overnight Policy Rate (OPR) twice during the year 2006 in February and April but as inflation eased, BNM maintained an accommodative stance to support business and expansion, keeping borrowing cost steady at 3.5%.

In 2006, the performance of the ringgit has been mixed against major currencies. In the period from end September 2006 to 9 January 2007, the ringgit strengthened against the US dollar hitting a high of 3.5065 on 9 January 2007.

Stocks on Bursa Malaysia rallied strongly in the later half of 2006; the Kuala Lumpur Composite Index (KLCI) hit a high for the year at 1,101.70 points on 11 December 2006. Investor sentiments improved on the back of encouraging developments such as better-than-expected second quarter GDP growth, Budget 2006/2007 goodies such as corporate tax cuts, amidst easing inflationary pressures.

MIER’s Business Conditions Index (BCI) and Consumer Sentiments Index (CSI) for the third quarter of 2006 are both trending upwards. The trend indicates that optimism is improving in the manufacturing sector despite the uncertainties in the external environment, albeit with expectations of impending moderation in production, local and export orders later in the year 2006. Consumer sentiments also remained upbeat as income and employment conditions get a boost from provisions in Budget 2006/2007. However, rising cost of living and festivities in the fourth quarter of 2006 has had consumers tightening purse strings especially where big ticket items are concerned.

6 5 4 3 2 1 0

Percentage

Consumer Price Index & Overnight Policy Rate

Consumer Price Index Overnight Policy Rate

Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06

Source: BNM

Fig. 2.3 Consumer Price Index & Overnight Policy Rate 3.4 3.5

3.2 3.2

4.8 4.6

3.9 3.9 4.1

3.3 3.3 3.1 3.0

3.4 3.0 3.0 3.5 3.5 3.25 3.5

3.5 3.5 3.5 3.5

3.25 3.25

Economic Performance of the Industry

On the inflation front, there is expected further rise in toll rates in 2007 as per the concession agreements with toll operators. Nevertheless, BNM expects inflation to fall below 3% in 2007.

Public expenditure, as provisioned under the Ninth Malaysia Plan (2006-2010), and its effects are expected to be felt in 2007 though contingent on timely and effective implementation.

Hence, in terms of growth, the government envisages steady expansion of 6% in 2007. This is in line with the targeted GDP growth under the Ninth Malaysia Plan.

CONTRIBUTION OF C&M COMPANIES TO BURSA MALAYSIA

The overall market capitalisation of the domestic stock market increased 22% to a total of RM848.7 billion in 2006. In contrast, the public listed C&M companies comprising the integrated telecommunications service providers, the broadcast service providers of FTA TV and pay-TV, and the postal services of Pos Malaysia Services and Holdings Bhd (PosM) captured altogether a market capitalisation of RM87.3 billion. This is 18.5% higher than the market capitalisation of RM73.7 billion recorded at end 2005. The public listed C&M companies constitute 10.3% of Bursa Malaysia’s market capitalisation (2005: 10.6%).

MIER Consumer Sentiments & Business Conditions Indices versus GDP Growth

140 120 100 80 60 40 20 0

Index Points

CSI BCI GDP Growth

1Q-04 7.9%

2Q-04 3Q-04 4Q-04 1Q-05 2Q-05 3Q-05 4Q-05 1Q-06 2Q-06 3Q-06 8.5%

6.8%

5.9% 6.1%

4.1%

5.3% 5.2% 5.9% 6.2% 5.8%

9 8 7 6 5 4 3 2 1 0

Source: MIER, MCMC

Fig. 2.4 MIER Consumer Sentiment & Business Conditions Indices versus GDP Growth

World US Japan Eurozone Asia China

World Trade Volume

3.0 1.9 -0.3 0.9 6.6 9.1 3.3

3.9 2.7 1.8 0.8 6.7 10.0 5.4

5.3 3.9 2.3 2.1 7.8 10.1 10.6

4.9 3.2 2.6 1.3 7.4 10.2

7.4

5.1 3.4 3.2 2.4 7.2 10.0

8.9

4.9 2.4 2.3 1.8 7.0 9.0 7.6

% change 2002 2003 2004 2005 2006^e 2007^f

GDP Growth Forecasts of Major Economies

(e) - estimate ^(f) - forecast Source: MIER

Fig. 2.5 GDP Growth Forecasts of Major Economies

Growth (%)

Economic Performance of the Industry

10

Communications and Multimedia Market Capitalisation 2006

Bursa Malaysia Market Capitalisation (RM848.7 billion)

Others 89.7%

C&M Sector (RM87.3 billion)

10.3%

Maxis 3.0%

DiGi

1.4% Time

0.2%

PosM 0.3%

Media Prima 0.2%

ASTRO 1.3%

TM 3.9%

Source: MCMC, Bloomberg

Fig. 2.6 C&M Companies Market Capitalisation 2006

Market Capitalisation - Communications

& Multimedia versus Bursa Malaysia

RM (billion)

2003 640 900

800 700 600 500 400 300 200 100 0

579.1

722 695

849

640.8 621.6

761.4

60.9 81.2 73.7 87.3

2004 2005 2006

C&M Others on Bursa Malaysia

Source: MCMC, Bloomberg

Fig. 2.7 Market Capitalisation - C&M Sector versus Bursa Malaysia

The main telecommunications operators contributed 8.5% to Bursa Malaysia’s capitalisation.

PosM contributed 0.3% which is the same as that for 2005. All Asia Networks plc (ASTRO) (satellite pay-TV operator) and Media Prima Berhad (Media Prima) (FTA TV operator) contributed 1.3% and 0.2% respectively.

Economic Performance of the Industry

11 C&M INDUSTRY REVENUE OVERVIEW

The C&M industry comprising the major sectors of telecommunications, broadcasting, and postal services together posted combined revenue of RM31.7 billion for the year ending 31 December 2006. This exceeds the RM26.8 billion recorded in 2005 by 18.3%.

The telecommunications companies commanded the lion’s share of the overall C&M revenue at 88% market share or RM28.1 billion, followed by broadcasting and postal services at 9%

(RM2.7 billion), and 3% (RM0.8 billion) respectively.

Telecommunications service providers are represented by main telecommunications players Telekom Malaysia Berhad (TM), Maxis Communications Berhad (Maxis), DiGi.Com Berhad (DiGi) and Time dotCom Berhad (Time).

TM Maxis DiGi Time ASTRO Media Prima PosM

0 10 20 30 40

RM (billion) C&M Companies

Market Capitalisation in Ringgit

TM Maxis DiGi ASTRO PosM Time

Media Prima Total

C&M Companies Market Capitalisation RM (billion)

32.4 21.0 5.9 10.1 2.1 1.2 1.0 73.7

33.1 25.7 11.4 10.7 2.6 1.9 1.9 87.3

2.2 22.4 93.2 5.9 23.8 58.3 90.0 18.5 2005 2006

Change% 2006

2005

Source: MCMC, Bursa Malaysia

Fig. 2.8 C&M Companies Market Capitalisation

C&M Revenue Market Share 2006

TM 52%

Media Prima 1.5%

ASTRO*

7%

Time 1%

DiGi

12% Maxis

24%

PosM 2.5%

C&M Industry Revenue Breakdown by Sectors 2006

Major Telcos RM28.09 billion

88%

Post RM0.82 billion

3%

Broadcasting*

RM2.74 billion 9%

* Adjusted and annualised based on third quarter results Source: MCMC, Industry

Fig. 2.9 C&M Industry Revenue Market Share 2006

* Adjusted and annualised based on ASTRO third quarter results Source: MCMC, Industry

Fig. 2.10 C&M Industry Revenue Breakdown by Sectors 2006

Economic Performance of the Industry

12

Telecommunications Sector

The telecommunications sector recorded revenue growth of 18.8% for the year ending December 2006.

Revenue market share leader TM maintained its pole position with RM16.4 billion or 59% of total market share of RM28.1 billion, followed by Maxis and DiGi at 27% and 13% respectively.

Telecommunications Companies Revenue

TM group revenue stood at RM16.4 billion for 2006 (2005: RM14 billion) posting a year-on-year revenue growth of 18%. The growth was driven mostly by overseas operations and from its domestic Internet and multimedia segment.

Domestic mobile cellular arm, Celcom (Malaysia) Berhad (Celcom), posted revenue of RM4.4 billion as at end of 2006 compared to RM4.3 billion for 2005. Mobile revenue from foreign operations contributed 13% or RM1.8 billion of total group revenue for 2005. In contrast, contribution from the same segment increased to 25% or RM4.1 billion for 2006. The Group’s revenue from its mobile segments constituted 52% surpassing its traditional fixed line revenue of 46%. Overall, group operating profit margin in 2006 was 21.3%.

Telecommunications Sector

Revenue 2005 Telecommunications Sector

Revenue 2006

TM 62%

Time 2%

DiGi 11%

Maxis 25%

TM 59%

Time 1%

DiGi 13%

Maxis 27%

Source: MCMC, Industry

Fig. 2.11 Telecommunications Sector Revenue 2005

Source: MCMC, Industry

Fig. 2.12 Telecommunications Sector Revenue 2006

Economic Performance of the Industry

1

TM

RM (million)

16,500 11,500 6,500 1,500 -3500

35 30 25 20 15 10 5 0

Operating Profit Margin (%)

Revenue Operating Profit Margin

2002 2003 2004 2005 2006

9,834 11,796 13,251 13,942

16,399

18.2 15.8 14.2 13.1

21.3

Source: MCMC, Industry

Fig. 2.13 TM Revenue versus Operating Profit Margin 2006

Source: MCMC, Industry

Fig. 2.15 TM Revenue by Segment

TM Revenue by Segment 2006: RM16.399 billion

Fixed Line & Data 41%

Internet & Multimedia

5% Others

2%

Mobile Domestic 27%

Mobile Foreign 25%

Celcom

RM (million)

3,500 3,000 2,500 2,000 1,500 1,000 500 0

20 15 10 5 0 -5 -10 -15

Operating Profit Margin (%)

Revenue Operating Profit Margin

2002 2003 2004 2005

2,400 2,590

3,179 3,016

1.9

16.7

-12.3

15.8

Source: MCMC, Industry

Fig. 2.14 Celcom Revenue versus Operating Profit Margin 2005

Economic Performance of the Industry

1

Maxis Revenue by Segment 2006: RM7.707 billion

Source: MCMC, Industry

Fig. 2.17 Maxis Revenue by Segment Mobile Foreign

10%

Fixed Services 2%

Mobile Domestic 84.9%

International Gateway Services

3% Others

0.1%

Maxis revenue grew 21% from RM6.371 billion in 2005 to RM7.707 billion at end of 2006.

Malaysian and Indian operations show encouraging growth by way of revenue and number of subscribers. Indonesian subsidiary, PT Natrindo Telepon Seluler, is on track for commercial rollout but in the meantime, has incurred start-up losses. Domestic SMS volume grew by 103%

while mobile data revenue generated growth of 29% or RM1.344 billion (2005: RM1.044 billion).

Nevertheless, operating profit margin for year 2006 moderated to 36.8% from 38.5% in 2005.

Source: MCMC, Industry

Fig. 2.16 Maxis Revenue by Operating Profit Margin Maxis

RM (million)

10,000 8,000 6,000 4,000 2,000

0 Operating Profit Margin (%)

100 80 60 40 20 0

Revenue Operating Profit Margin

2002 2003 2004 2005 2006

3,769 35.4

4,680 5,689 6,371

7,707

29.7 40.7 38.5 36.8

Economic Performance of the Industry

1

DiGi continued its strong revenue growth trend, rising 26.7% to RM3.653 billion at end 2006 from RM2.884 billion garnered for 2005. Data revenue for 2006 amounted to RM650 million, a growth of 41% from RM460 million in 2005. Operating profit margin stood at 29.2%.

Time revenue edged lower for the year 2006 due to lower wholesale voice revenue and lagging payphone revenue. The company posted revenue of RM335 million, a drop of RM125 million from RM460 million in 2005. Currently developing new growth areas for its business, Time is reported also undertaking voluntary separation scheme as part of its restructuring plan and workforce optimization initiatives.

In 2006, its wholly-owned subsidiary, TT dotCom Sdn Bhd, was awarded the Third Generation (3G) spectrum assignment and has plans for a commercial launch in the second quarter of 2007 using High Speed Downlink Packet Access (HSDPA) networks which enable higher data transfer speed for 3G mobile services.

Revenue Operating Profit Margin DiGi

RM (million)

4,000 3,000 2,000 1,000

0 Operating Profit Margin (%)

100 80 60 40 20

2002 2003 2004 2005 2006 0

1,290 1,714 2,234

2,884

3,653

15.9 15.6 22.8 23.4 29.2

Source: MCMC, Industry

Fig. 2.18 DiGi Revenue by Operating Profit Margin

DiGi Revenue by Segment 2006: RM3.653 billion

Source: MCMC, Industry

Fig. 2.19 DiGi Revenue by Segment Others

4%

Cellular Mobile 96%

Economic Performance of the Industry

1

Broadcasting Sector

The broadcasting sector is represented by listed entities FTA TV operator Media Prima and ASTRO, a subscription-based multi-channel satellite TV service provider. The combined revenue of the companies amounted to RM2.7 billion.

Broadcasting Companies Revenue

Media Prima, an integrated media investment group, has four of the country’s FTA TV stations in its stable, namely 8TV, TV3, NTV7 and TV9. Media Prima also owns local radio stations Fly.

fm and Hot FM as well as FTA TV network, TV3 in Ghana.

Media Prima posted revenue of RM533 million for the period under review, an increase of 33%

from RM400 million in 2005. Operating margin for the company stood at a steady 22% for the period and compares favourably to 19% operating profit margin in 2005.

RM (million)

600

100

-400

-900 2002 2003 2004 2005 2006

916 799

578 460

335

-290

-44

-848

-203 -177

Time Revenue and Operating Profit/Loss 2002 - 2006

Revenue Operating Profit/Loss

Source: MCMC, Industry

Fig. 2.20 Time Revenue and Operating Profit/Loss

300

0

-300

RM (million)

Q1 Q2 Q3

119

-42

122

-40

120

-42

Time Revenue and Operating Loss 1Q-4Q 2006

Revenue Operating Loss

Source: MCMC, Industry

Fig. 2.21 Time Revenue and Operating Loss 1Q-4Q 2006

-52 76

Q4

Economic Performance of the Industry

1

* Annualised

Source: MCMC, Industry

Fig. 2.23 ASTRO Revenue and Operating Margin

ASTRO forged ahead, posting RM1.65 billion revenue for the nine months period ending October 2006 (based on financial year ending 31 January 2007) - growing its revenue by 11.2% from the same period in 2005. Operating profit margin is encouraging at 21.5%.

The company’s pay-TV service start-up in Indonesia, PT Direct Vision, is currently awaiting formal authorisation to use MEASAT for its DTH services. At home, ASTRO further reinforced its leadership position with the launch of additional channels and more are being planned given the recent launch of the Measat 3 satellite.

^ 16 months ending 31 Dec Source: MCMC, Industry

Fig. 2.22 Media Prima Revenue and Operating Margin

RM (million)

550 500 450 400 350 300 250 200 150 100 50 0

100 80 60 40 20 0

Operating Profit Margin (%)

2003^ 2004 2005 2006

Media Prima

371 328

400

533

62

19 19 22

Revenue Operating Profit Margin

ASTRO

RM (million)

2,200 1,700 1,200 700 200 -300

1,143

1,419

1,716

2,013 2,195

-159

149 299 274 473

FYE Jan-03 FYE Jan-04 FYE Jan-05 FYE Jan-06 FYE Jan-07*

Revenue Operating Profit/Loss Operating Profit Margin -13.9

10.5

17.4 13.6

21.5

40.0 30.0 20.0 10.0 0 -10.0 -20.0 Operating Profit Margin (%)

Economic Performance of the Industry

1

PosM

RM (million)

900 800 700 600 500 400 300 200 100 0

50 45 40 35 30 25 20 15 10 5

0 Oprerating Profit Margin (%)

645 648 694

787 822

2002 2003 2004 2005 2006

11.8

4.3

8.5

13.1 12.0

Revenue Operating Margin

Source: MCMC, Industry

Fig. 2.25 PosM Revenue and Operating Margin

Postal Services Sector

The postal services sector comprises the postal services of PosM and the courier segment, which is constituted by 113 licensed courier companies (as at 15 November 2006).

Postal Revenue

PosM recorded total revenue of RM822 million for the year ending 31 December 2006. This is a growth of 4.4% from RM787 million recorded in 2005. The company’s operating profit margin dropped slightly to 12% in the period concerned compared to 13.1% for 2005.

ASTRO Revenue* by Segment FY Ended 31 January 2007

Satellite TV 89%

Others Radio 2%

7%

Library licensing &

distribution 2%

* Annualised

Source: MCMC, Industry

Fig. 2.24 ASTRO Revenue by Segment

Economic Performance of the Industry

1

Courier Services Revenue

The courier companies in Malaysia are a mix of homegrown companies as well as overseas linked companies. The major overseas linked companies are DHL, Federal Express (FedEx), United Parcel Services (UPS) and TNT Express (TNT) while some of the major home grown companies are City Link Express (City Link), Nationwide Express (Nationwide), GD Express (GDEX) and ABX Express (ABX).

In terms of revenue, the top ten courier companies recorded RM1.1 billion, a 7.6% increase compared to 2004. The significant revenue contributors are DHL (32%), FedEx (26%), UPS (16%), City Link (7%) and Nationwide (6%).

Noticeably, DHL overtook FedEx in terms of the top ten position, having increased market share by RM0.3 billion to 32% in 2005 from 29.6% in 2004. FedEx is in second position.

Top 10 Courier Services Companies 2005 (Capturing RM1.1 billion Revenue)

GDEX 4%

TNT 4%

Nationwide 6%

City Link 7%

UPS 16%

FedEx 26%

DHL 32%

KTM Distribution 1%

Udara Express 2%

ABX 2%

Source: MCMC, Industry

Fig. 2.26 Top 10 Courier Services Companies 2005

Top 10 Courier Services Companies by Revenue

RM (‘000)

350,000 300,000 250,000 150,000 100,000 50,000 0

2004 2005

Source: MCMC, Industry

Fig. 2.27 Top 10 Courier Services Companies by Revenue

KTM Distribution Udara

Expr ABX ess TNT GDEX

Nationwide City

Link DHL FedEx UPS

Digital Signature Usage

The total number of digital signature certificates issued as at 2006 is 0.4 million. This is a 148% jump from 2005 to 2006, adding 0.2 million in terms of issuance of digital certificates.

Such increase was mainly due to the e-Filing exercise introduced by Inland Revenue Board (IRB) in collaboration with one of the licensed Certification Authorities (CA), DigiCert. Online submission of tax forms to the IRB over the Internet requires legal binding digital signature for security precautions and other administrative reasons.

Economic Performance of the Industry

20

Certification Authorities – Revenue

Source: MCMC, Industry

Fig. 2.30 Digital Certificate Revenue

RM (million)

10 8 6 4 2 0

Digital Certificate Revenue

6.7

7.8 7.9

4.1 5.1 4.8

2.6 2.7 3.1

2003 2004 2005

MSC Trustgate DigiCert Digital Signature Growth

160 140 120 100 80 60 40 20 0

Percentage (%)

2003 2004 2005 2006

57.1

72.1

46.1

147.6

Source: MCMC, Industry

Fig. 2.29 Digital Signature Growth

8,893 77,145 329,603 415,641 7,584

36,971 22,209 66,764

7,903 55,620 51,388 114,911

8,194 63,222 96,431 167,847

2003 2004 2005 2006

Type Individual Corporate Government Total

Source: MCMC, Industry

Fig. 2.28 Digital Signature Usage

In the initial years, digital signatures was widely used in G2B (government to business) and B2B (business to business). The individual usage of digital signatures is still low compared to G2B and B2B. It is believed that for the forthcoming years, the figures will increase tremendously with more G2C (government to citizen) applications such as e-Passport.

In terms of revenue posted by the CA, MSC Trustgate posted a steady growth while DigiCert showed a decline when compared to 2004. However, both companies posted combined revenue of RM7.9 million compared to RM7.8 million in 2004.

Economic Performance of the Industry

21 MESDAQ - MCMC LICENSEES

The total number of MESDAQ (Malaysian Exchange of Securities Dealing and Automated Quotation) listing is 128 companies as at end December 2006. Out of this, 14 companies are MCMC licensees (11%).

Most of these licensees are in the licence category of Applications Service Providers (Class) or ASP(C). ASP(C) licensees are those that provide services such as discounted voice services, data services, content based services, electronic commerce and others. Most of these application services providers are in businesses that services end users directly.

The new MCMC licensed company listed on MESDAQ as at 27 April 2006 is Airocom Technology Bhd. Their core business is the provision of wireless communications solutions and services in the field of messaging technology. Overall, the holding company of these licensees posted revenue totalling RM582.1 million, with total paid-up capital amounting to RM252.7 million.

S/B - Sdn Bhd Bhd – Berhad Source: Bloomberg

Fig. 2.31 MCMC Licensees Listed on MESDAQ 2006 eB Capital Bhd

Airocom Technology Bhd

AKN Messaging Technologies Bhd asiaEP Bhd

DVM Technology Bhd

Intelligent Edge Technologies Bhd MNC Wireless Bhd

Mobif Bhd N2N Connect Bhd NasionCom Holdings Bhd Nextnation Communication Bhd REDtone International Bhd REDtone International Bhd REDtone International Bhd

eB Technologies (M) S/B Airocom Technology Bhd

AKN Messaging Technologies Bhd asiaEP Bhd

DVM Intellisource S/B Intelligent Edge Solutions S/B MNC Wireless Berhad Mobif Global S/B N2N Connect Bhd NasionCom S/B

Nextnation Network S/B

REDtone Telecommunications S/B REDtone Marketing S/B

REDtone Mytel S/B

NFP(I) Last Mile, NSP(I) & ASP(C ) ASP(C)

ASP(C) ASP(C) ASP(C)

NFP(I) Last Mile and NSP(I) ASP(C)

ASP(C) ASP(C)

NSP(I) and NFP(I) Last Mile ASP(C)

ASP(C) NSP(I) ASP(C)

Holding Company MCMC Licensees Types of Licenses

* For 15 months ending 31 May 06; change of financial year end from 28 Feb to 31 May Source: Bloomberg

Fig. 2.32 MCMC Licensees Listed on MESDAQ - Revenue eB Capital Bhd

Airocom Technology Bhd

AKN Messaging Technologies Bhd asiaEP Bhd

DVM Technology Bhd

Intelligent Edge Technologies Bhd MNC Wireless Bhd

Mobif Bhd N2N Connect Bhd

NasionCom Holdings Bhd Nextnation Communication Bhd REDtone International Bhd Total

Holding Company Revenue RM (million)

1.6 21.1 30.7 10.7 11.1 1.5 16.6 36.3 7.7 195.0 67.4 182.4*

582.1

2.5 15.2 16.4 20.0 16.3 9.1 9.4 19.9 13.5 80.0 25.2 25.2 252.7

31/12/2005 31/12/2005 30/06/2006 28/02/2006 30/09/2005 31/12/2005 31/12/2005 31/12/2005 31/12/2005 31/12/2005 30/4/2006 31/05/2006

2/08/2005 27/04/2006 27/01/2003 16/01/2004 2/01/2004 18/03/2002 25/10/2005 19/05/2004 28/11/2005 25/02/2005 26/08/2005 09/01/2004 Paid-Up Capital

RM (million) FY Ending Date Listed on MESDAQ

Economic Performance of the Industry

22

2004 311.1 298.5 354.8 339.1 360.2 379.1 358.7 396.5 370.7 404.0 372.4 402.8 2005 357.6 299.7 400.4 378.6 379.2 368.0 382.4 389.8 387.5 402.5 360.5 433.7 2006 355.4 281.8 381.9 348.8 386.0 435.7 405.3 425.1 420.2 406.3 418.1 449.6

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2005

2004 2006

Adex Month-to-Month 2004-2006 Comparison

RM (million)

500 400 300 200 100 0

Source: Nielsen Media Research Service

Fig. 2.34 Adex Month-To-Month 2004-2006 Comparison

MALAYSIAN ADEX 2006

Adex Comparison: General Observations

Source: Nielsen Media Research Service, MCMC Note: 2006 GDP (% Growth) is an estimate

Fig. 2.33 Adex and GDP Growth Comparison

Adex and GDP Growth Comparison

RM (billion)

6

4

2

0

Growth (%)

20 15 10 5

0

Adex (RM billion) GDP (% Growth) Adex (% Growth)

2001 2002 2003 2004 2005 2006

3.2 3.5 3.7

18.9

4.6 4.7

4.4

3.2 0.3

9.4

4.1 5.7 7.1

5.2 4.5

5.8 2.2

In line with the respectable growth of the economy, adex in Malaysia showed positive growth throughout the period from 2001 until 2006, reaching a compound annual growth rate (CAGR¹) of 8%. Adex in 2006 is currently at RM4.737 billion and industry experts are forecasting a 2%

growth in 2007. Festivities such as the Visit Malaysia Year 2007 promotions could kick-up adex and achieve the forecasted growth.

The adex growth in 2006 includes events such as the FIFA World Cup 2006 and the launch of TV9 under the Media Prima Group.

Adex Month-To-Month Comparison 2004-2006

1 CAGR – Compound Annual Growth Rate. This is a formula to measure the annual growth rate over a period of several years.

5.3

Economic Performance of the Industry

2

The month of December in 2006 showed the highest adex achieved compared to other years, registering RM449.6 million. Notably, the contribution was mainly from the end of year sale events and various national celebrations. It is observed that the monthly trend has the months of October and December collecting highest adex of more than RM400 million, likely due to the festive seasons during these periods.

The print medium lost 3% of its market share to 61% in year 2006, paving the way for TV medium arriving at 31%, a 2% notch higher from that of 2005. Radio remains status quo while the “other medium” category was one percentage higher.

FTA Television and Radio Advertising Revenue

Adex Market Share 2005 Adex Market Share 2006

Print 64%

Radio 4%

Others 3%

Television 29%

Television 31%

Others 4%

Radio 4%

Print 61%

Source: Nielsen Media Research Service

Fig. 2.35 Adex Market Share 2005 and 2006

Source: Nielsen Media Research Service

Fig. 2.36 Advertising Revenue of FTA TV and Radio Comparison

Advertising Revenue for FTA TV & Radio Comparison

RM (million)

1,600 1,400 1,200 1,000 800 600 400

119.7

2001

144.1 152.5

168.8 178.2

878.1

193.3

921.9 993.8

1,300.7 1,309.9 1,477.7

2002 2003 2004 2005 2006

Television Radio

Both FTA TV and radio showed accelerating growth during 2001 until 2006, registering an all- time high adex of RM1.478 billion and RM193.3 million respectively in 2006, reaching a CAGR of 11% and 10.1% respectively for the 2001-2006 period. The FTA TV advertisement revenue was made possible with the launch of TV9 plus the remarkable success of TV3 and three-year old 8TV.

Economic Performance of the Industry

2

Currently rated as the number one FTA TV channel in Malaysia, TV3 collected the highest advertisement revenue of RM672 million in 2006, a growth of 18.9% from 2005. Despite the decline in growth of 15.5% from 2005, NTV7 remains the second favourite advertising TV station after TV3. Sister channels 8TV and TV9 registered RM225.7 million and RM70.5 million respectively as at end 2006. Government-owned channels raked in a total of RM229.1 million worth of adex in 2006, of which TV2 contributed three quarters of this revenue.

* TV9 started operations April 2006 Source: Nielsen Media Research Service

Fig. 2.38 FTA TV Advertising Revenue 2004–2006

RM (million)

800

600

400

200

0

FTA TV Advertising Revenue 2004-2006

26.6 40.954.4

141.1 154.1174.7

565.1 565.3 672.0

385.7 331.9

280.4

*70.5 136.2

215.9 225.7

TV1 TV2 TV3 NTV7 TV9 8TV

2004 2005 2006

FTA TV Advertising Revenue

Source: Nielsen Media Research Service

Fig. 2.37 FTA TV Advertising Revenue versus Growth

FTA TV Advertising Revenue versus Growth

1,600 1,400 1,200 1,000 800 600 400 200 0

35 30 25 20 15 10 5 0

% Growth

RM (million) ^{921.9 993.8}

1,300.7 1,309.9

1,477.7

2002 2003 2004 2005 2006

5.0

7.8

30.9

0.7

12.8

Economic Performance of the Industry

2

Radio Advertising Revenue

Radio advertising revenue witnessed a double-digit growth from 2001 until 2002 and in 2004 followed by decelerated growth in 2005. Radio adex chalked up RM193.3 million in 2006 representing a growth of 8.5% from the same period in year 2005.

Radio Advertising Revenue Market Share

* Channel 9 ceased operations on February 2005 ** TV9 (under Media Prima) started broadcast on 22 April 2006 n.a. - not applicable

Source: Nielsen Media Research Service

Fig. 2.39 FTA TV Stations Revenue Growth TV1

TV2 TV3 NTV7 Channel 9 TV9 8TV

FTA TV Stations

26.6 141.1 565.1 385.7

*46.0 n.a.

136.2

-18.2 -9.1 7.8 36.8 n.a.

n.a.

n.a.

40.9 154.1 565.3 331.9

*1.8 n.a.

215.9

53.8 9.2 0.0 -13.9 n.a.

n.a.

58.5

54.4 174.7 672.0 280.4 n.a.

**70.5 225.7

33.0 13.4 18.9 -15.5 n.a.

n.a.

4.5 RM

(million) RM

(million) RM

(million) Growth

% Growth

% Growth

%

2004 2005 2006

Source: Nielsen Media Research Service

Fig. 2.40 Radio Adex 2001-2006

Radio Adex 2001-2006

RM (million)

250 200 150 100 50 0

30

15

0

Growth (%)

RM (million) % Growth

2001 2002 2003 2004 2005 2006

119.718.0 144.120.4 152.5 168.8 178.2 193.3

5.8

10.7

5.6

8.5

Radio Stations Advertising Revenue

Market Share 2005 Radio Stations Advertising Revenue Market Share 2006

Star RFM 14%

RTM 7%

AMP 79%

AMP 78%

RTM Star RFM 10%

12%

Source: Nielsen Media Research Service

Fig. 2.41 Radio Stations Advertising Revenue Market Share 2005 and 2006

Economic Performance of the Industry

2

Adex by Sector

** Percentage share across all sectors Source: Nielsen Media Research Service

Fig. 2.43 Top Ten Advertising Sectors Comparison

Communications Miscellaneous Toiletries Retail Automotive Finance

Beverage (Non- Alcoholic) Foodstuff Service Government, Social & Political Organisation Entertainment Sector

1,257.7 1,238.3 854.7 844.5 514.0 485.4 445.4 432.3 366.4 364.6 350.3

14 13 9 9 6 5 5 5 4 4 4 Miscellaneous

Communications Toiletries

Retail Automotive Finance Foodstuff Beverage (Non- Alcoholic) Service Entertainment Government, Social & Political Organisation

622.9 639.1 420.2 408.6 243.7 229.1 198.3 196.2 194.2 176.6 158.0

14 14 9 9 5 5 4 4 4 4 3 RM

(million) RM

(million) (%)

Share** (%)

Share**

Sector

2005 2006

Top Ten Advertising Sectors Comparison

Radio Advertising Revenue By Stations

Era FM continued to be the favourite radio station among advertisers in 2006, raking in RM46.4 million worth of advertising revenue - a growth of 11.3% from the same period last year. Era FM leads two other radio stations in the AMP family, namely, My FM at RM31.4 million (8.6%

growth) and Mix FM at RM25 million (negative growth of 2.3%) as at 2006.

Radio Advertisng Revenue by Stations 2006

RM (million)

50 40 30 20 10 0

46.4

19.5 11.3

25.0 31.4

22.0

1.6 1.0 1.5 0.8 6.1 3.2 1.2 0.5

7.0 7.2

1.8 5.8

Era FM hitz.fm Light & Easy Mix FM My FM redi 988 red 104.9 KL FM (RMSKL) Nasional FM (RMS 4) Traxx FM (RMS 4) Ai FM (RMS 5) Minnal (RMS 6) Muzik FM (RMS Muzik) Selangor FM (RMS S’gor) Sinar FM THR Xfresh FM Other Regional (RTM)

Source: Nielsen Media Research Service

Fig. 2.42 Radio Advertising Revenue by Stations 2006

Economic Performance of the Industry

2

Advertisements By MCMC Licensees 2006

Maxis tops as MCMC licensee having the highest advertising expenditure totalling RM151.8 million, with highest advertisement spent on their mobile lines services at RM130 million.

On Internet Services Providers (ISP) services, TM, through their subsidiary TM Net Sdn Bhd (TM Net), spent RM20.5 million on advertisements followed by Jaring and Time at RM0.5 million and RM0.2 million respectively. The majority of the licensees and non-licensees spend advertisement on their mobile interactive services, totalling RM113.2 million, the highest when compared to other major licensees.

Communications