Multiple LTE services rollout by telco players to take place in 2013

KUCHING: With the announcement by the Malaysian Communications and Multimedia Commission (MCMC) with regards to the award of the 2.6 gigahertz (GHz) spectrum, telco providers are expected to unveil their respective long term evolution (LTE) services next year.

“MCMC has finally announced the allocation of the much anticipated 2.6 GHz spectrum band to eight players. While the sequence of the spectrum bandwidth remains vague as this juncture, we expect the players to receive the award to further collaborate with their peers to further enhance efficiency,” said the research arm of Kenanga Investment Bank Bhd (Kenanga Research) in its recent update.

The research house noted that all the mobile operators had indicated earlier that their networks were ready to deploy LTE services of which, Celcom Axiata Bhd (Celcom) and Maxis Bhd (Maxis) had committed to rollout 4G services over the next three to six months in the Klang Valley, Penanga and Johor.

As such, the remaining players were expected to unveil their respective 4G services sooner rather than later.

Kenanga Research believed that online video service could be a key focus going forward, even as the local 4G ecosystem was not well-prepared yet.

“Data traffic is expected to rise tremendously when the 4G ecosystem is in place and this will ultimately benefit the network backhaul providers the likes of Telekom Malaysia Bhd (TM) and Time dotCom Bhd in the long run due to the higher data offloading demand,” the research house added.

In the third quarter of financial year 2012 (3QFY12), local telco players posted mixed results with Axiata Group being the only incumbent that recorded better than expected results due to higher turnover at its key operating companies and higher associates contribution.

Kenanga Research highlighted that DiGi.com Bhd and TM’s results were within expectations while Maxis continued to fail to deliver due to its sluggish revenue growth and earnings before interest, tax, depreciation and amortisation margin compression as a result of higher device sales.

On the issue of refarming 2G and 3G spectrums, the research expected it to happen later as the entire spectrum group had yet to expire.

“This means that, for example the 900 megahertz (MHz) spectrum refarming will only take place after January 2015 despite Maxis’ 900MHz expiring soon the end of 2012. The refarming exercise will only commence should all the subscribers under the particular spectrum migrated to other spectrums,” the research house explained.