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Summary

A new disrupter has shown up in Malaysia's mobile telecoms scene – Webe. The mobile arm of Telekom Malaysia, Webe is counting on its aggressively priced postpaid plan with unlimited data, voice, and text to capture 4–5% market share in a couple of years in a market with four strong MNOs.

Webe's "unlimited everything" assault

A new disrupter has shown up in Malaysia's mobile telecoms scene – Webe.

Webe, the mobile arm of Telekom Malaysia, in September 2016 launched an LTE service in the capital, Kuala Lumpur, and other big cities. It has rolled out more than 1,000 base stations, provided by Huawei and ZTE. In areas where Webe's network doesn't cover, the MNO uses Celcom's 2G/3G network to provide the service.

Malaysia has four MNOs (Celcom, DiGi, Maxis, and U Mobile) that collectively dominate the mobile subscription market. There are also four WiMAX operators that are migrating to LTE networks, including Packet One Networks, which was acquired by Telekom Malaysia and became Webe.

How does Webe intend to disrupt this already competitive market of 32 million people? The answer is with a no-contract, postpaid plan offering (the firm will launch its prepaid tariff in 2017) unlimited data, voice, and text, aggressively priced at MYR79 ($18). The closest plan, offered by Yes, comes with 24GB of data and unlimited voice and text for MYR70.

Webe's disruption strategy mirrors what T Star in Taiwan has done – differentiate on price and through unlimited data. However, T Star itself hasn't been successful in capturing market share. The three strong incumbents in Taiwan and a new challenger launched promotional unlimited LTE data plans that took the wind out of T Star's strategy. In Malaysia, the incumbents' reactions to Webe's disruption have so far been moderate. If this continues, Webe could succeed in carving out market share. Webe has targeted 4–5% market share, though we think 2–3% is more realistic.

The bigger dilemma for Webe though is what's next after its "unlimited everything" assault? How should Webe bundle content with its plan, if at all, given offering zero-rated content as part of an unlimited data offer makes no sense? Though it is still early days, we'd watch for Webe to take its disruption to the next level by potentially offering a fixed-mobile integrated offer, leveraging Telekom Malaysia's strength in fixed services. Throughout Asia, some operators remain concerned about cannibalization if mobile is added to the existing bundle, particularly if a discount strategy applied. But we believe that operators like TM-Webe should cross-sell at every opportunity.

Appendix

Further reading

Disrupter Case Study: Taiwan's T Star, TE0009-001538 (August 2016)

Malaysia Update, December 2015, TE0016-000298 (January 2016)

Author

TZ Wong, Senior Analyst, Broadband and Multiplay

tz.wong@ovum.com

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