Strategy Analytics: WiMAX Malaysia Launch Key Indicator for Emerging Markets

Motorola, Intel, Alcatel-Lucent, Sprint All Backing Contenders

The Strategy Analytics Multiplay Market Dynamics service report, “Malaysia Sees First Commercial WiMAX: Bellwether for Developing World?” looks at the role that this month’s launch of commercial WiMAX service may play in meeting Malaysia’s ambitious broadband penetration goal of 75% of households by 2010. If WiMAX succeeds in Malaysia, its prospects elsewhere in the developing world are brighter.

Broadband penetration in Malaysia has risen dramatically from a government-estimated 8% of households as recently as Q1 2006, but it still has a long way to go, especially outside the capital, Kuala Lumpur, and its immediate area. The government believes near-universal broadband connectivity is critical to achieving developed country status by 2020, and looks to WiMAX service, which was commercially launched in August 2008, to help reach this goal.

“There’s a real digital divide in Malaysia,” notes Tom Elliott, Vice President of Applied Analytics and author of the report. “Kuala Lumpur has a connectivity rate comparable to some OECD countries, but the outlying areas are a different story. If WiMAX succeeds in the smaller cities and in rural areas, it will help make the WiMAX case in emerging markets.”
Comparative Broadband Penetration, 2007

Broadband Subscriptions per
100 inhabitants
Hungary 13.6
Kuala Lumpur 11.8
Greece 9.1
East Malaysia 2.5
Ecuador 2.4
Sources: Strategy Analytics

There will be challenges for WiMAX in Malaysia, notes Ben Piper, director of the Multiplay Market Dynamics service. “Telekom Malaysia, the former PTT, has a near-monopoly in consumer wireline broadband, and has the financial resources to be a fierce competitor.”

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