Low fixed broadband ARPU to persist

Telecommunication service providers are set for a prolonged headache over fixed broadband revenue to be generated from each of their subscribers.

They, however, can look forward to a steady and healthy revenue growth in the postpaid mobile segment.

Sweetening thing is the fact that the decline in prepaid revenue seemed to slow down, analysts said.

Analysts said the current low fixed broadband average revenue per user (ARPU) was likely to persist following price revisions this year.

This follows the implementation of the Mandatory Standards for Access Pricing (MSAP) by the government, leading to lower fixed broadband prices.

The Malaysian Communications and Multimedia Commission (MCMC) had expected the full implementation of the MSAP for fixed broadband services to reduce prices by at least 25 per cent by December 31 with higher Internet speed.

MCMC said the implementation had instead resulted in over 30 per cent reduction for entry-level package prices.

For example, in the case of Telekom Malaysia Bhd (TM), the 30 Mbps priced at RM139 a month was cheaper by 43 per cent at RM79, while Celcom’s 40 Mbps package dropped 56 per cent from RM180 to RM80 a month.

Maxis, which offers 30 Mbps from RM139, shaved off 36 per cent to RM89 per month, and TIME, which offers the fastest speed at 100 Mbps, reduced its monthly package price by 34 per cent, from RM149 to RM99.

“The revision would translate into lower revenue as lower price proposition translate into lower ARPU. It would encourage low usage broadband users to downgrade their packages. Moving forward, we expect the low fixed broadband ARPU to persist,” MIDF Research said.

“There has been pressure on pricing since the introduction of MSAP. This would made it difficult for the fixed broadband players to grow their ARPU, although some have introduced higher broadband packages,” said the firm in its 2019 Market Outlook Report published recently.


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