It’s a battlefield out there for telcos

sme entrepreneurship magazine
SME & Entrepreneurship Magazine
January 20, 2016
minister-of-housing-and-local-government
Minister of Housing and Local Government
February 21, 2016
It battlefield out there telcos

NONE of the three listed local telecommunications companies (telcos) will readily admit there’s a battle royale for market share. Some industry observers don’t think so too.

‘There is no battle. While there is some competition, I would say it is just a gentlemanly fight,’ says one.
Truth is, it is more than a friendly fight. On the contrary, competitive behaviour is reaching boiling point. Faced with intense pressure to keep up with or outdo the rivals, marketing activities among the telcos are reaching new levels of creativity.

The three major players, Telekom Malaysia Bhd, Maxis Communications Bhd and DiGi.com Bhd, have traditionally relied on straightforward fights to increase cellular subscriber base, stealing a few customers here and there through new prepaid and
postpaid packages. Now, they are slashing prices, providing flat rates for nation-wide calls and even cancelling access fees for postpaid subscribers.

In part, this is due to the fast-changing telco landscape, with newfangled technology and industry deregulation forcing telcos to change the rules of the game.

The telco war has been simmering for more than 12 months now. Battles are being fought on several fronts, from prepaid and postpaid to high-speed data services, customer services and network coverage. More recently, the war has spread beyond borders into Indonesia, Pakistan and India, among others.

Needless to say, all this has a direct impact on costs. Adding to the problem is the emergence of second-tier telco players who peddle various low-cost Voice-over-Internet-Protocol (VoIP)-based telephony services over broadband networks. This puts further
pressure on the profitability of fixed-line services.

With all this squeezing on various fronts, expenses are rising fast for the incumbent telcos.