Malaysia Enterprise Telecom Update Q1 2022: Wider Industry Collaborations Despite Stagnant Growth in 2021

A. Amir

Summary Bullets:

  • Telcos continued their momentum in expanding their enterprise ICT capabilities through collaborations with government agencies, but there was limited involvement from technology and industry players.
  • The business was stagnant in 2021 due to the decline of legacy services. 2022 will be more challenging for telcos as businesses are returning to the physical workplace.

Malaysian telcos started their 2022 enterprise ICT initiatives with public-private collaborations.  TM partnered with Technology Park Malaysia (TPM) and Huawei to develop MRANTI, an e-service platform to drive technology commercialization, while Maxis announced its collaboration with MIMOS and Huawei to build a 5G and AI hub to co-develop new enterprise use cases.  This quarter also saw 2021 financial results reported by major enterprise ICT telecom providers such as TM and Maxis.  For updates on the previous quarters, please see Malaysia Enterprise Telecom Update Q4 2021 – Acquisition Season for Telcos (January 12, 2022).

1. TM’s Partnership with TPM and Huawei to Develop MRANTI: The MRANTI platform will be hosted in TM Cloud Alpha and focus on commercializing new technologies such as AI and software developments.  The initiative is also in line with the government’s plan to drive enterprise ICT adoption in the country.  It aims to attract application developers, enterprises, and other technology players to co-create new use cases leveraging the latest technologies such as AI, cloud, and analytics.  This can also address the slow technology adoption in the country despite various aggressive initiatives by service providers.  For TM, MRANTI will offer the provider a platform to drive its cloud business through wider collaborations with enterprises.  However, there was a lack of involvement from other leading technology players such as hyperscalers and cybersecurity vendors.

2. Maxis’ Collaboration with MIMOS and Huawei to Build a 5G and AI Hub: The hub will be located in MIMOS facilities with the aim to accelerate vertical use cases leveraging new technologies such as 5G, AI, IoT, and cloud.  Early use cases include smart manufacturing and data mining for customer service.  Similar to TM’s initiative above, the hub will drive collaborations with enterprises to co-develop new use cases.  The hub will provide Maxis access to wider enterprises and enable the provider to enhance its enterprise solutions and IoT capabilities.  Solution co-creation is a proven approach to driving the adoption of new technologies such as 5G and AI.  Nonetheless, there were also limited technology partners apart from Maxis, MIMOS, and Huawei.  Moreover, 5G is still uncertain in Malaysia and this could slow down innovations in 5G-enabled applications.

3. Stagnant Growth in 2021 – What Went Wrong? Maxis and TM also shared their 2021 financial results.  Despite various initiatives last year from new product launches to partnerships, acquisitions, and customer wins, their revenues from enterprise ICT business last year did not reflect their aggressive strategies.  Maxis recorded only a 0.4% YoY increase to RM 559 million (USD 132 million), while TM saw a 4.1% decline to RM 3.8 billion (USD 900 million) for the same period.  The growth in the newer solutions was also offset by the decline in legacy services such as leased lines, MPLS, and fixed voice.  This trend is also consistent with other markets where telcos such as PLDT, AIS, and Singtel saw the growth of their enterprise businesses slowed down by the traditional connectivity services.

The pandemic has accelerated some enterprises’ implementation of new ICT technologies, but there are still huge opportunities for telcos to drive further adoption in the market.  While the hybrid workplace will likely stay in most other markets, the return of businesses from hybrid to the physical workplace in Malaysia could slow down technology adoption again.  Nevertheless, telcos could use this opportunity to drive enterprises to transform their workplace to gain a competitive advantage.  Besides, having built wide capabilities in enterprise ICT in the last few years, local telcos should focus on expanding wider industry collaborations to work closer with enterprises in addressing their challenges.  This should not be limited to co-creating solutions in a lab but also trailing the solutions in a live environment.  Partnerships with leading technology players such as hyperscalers and system integrators can also enable local telcos to leverage their expertise and experience from other markets.  Telcos also need to further transform their business and pursue a more aggressive stance in developing new digital capabilities to meet enterprise demand.

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