From Oxford Business Group on 29 February 2016:
Competition heats up in Brunei Darussalam’s telecoms industry
Economic News Update
29 Feb 2016
Faced with an increasingly competitive marketplace, Brunei Darussalam’s telecoms operators are working to broaden their services as they look to attract new customers and gain market share.
The coming months are expected to bring significant developments across the Sultanate’s telecoms industry, in the form of infrastructure advances and a regulatory overhaul.
Expansion strategies, which include overseas link-ups and the rollout of competing 4G coverage, should improve service and speed, and generate cost benefits for mobile customers.
Although a relatively small market, Brunei Darussalam benefits from substantial telecoms penetration; the country reached 100% digitalisation of the phone network in 1995, while mobile penetration surpassed the 100% mark in 2008.
According to the latest data from the sector regulator, the Authority for Info-Communications Technology Industry (AITI), mobile penetration stood at around 110% at the end of 2014.
Telekom Brunei (TelBru), the incumbent operator, remains the Sultanate’s largest fixed line and internet broadband provider, while two other firms – Progresif Cellular and DST – vie for market share in the mobile segment.
After TelBru’s offshoot B-Mobile was acquired by Darussalam Assets, an investment holding company for government-linked entities, in mid-2014, the operator was relaunched under the Progresif Cellular brand.
DST remains the dominant mobile player, with around 78% market share, according to Sweden’s Ericsson, which partnered with DST to build the operator’s 4G network in 2013.
In recent months, industry players have taken strides to expand their services. In late 2015 TelBru announced it was setting up an IP point-of-presence in both Hong Kong and Singapore by joining the Equinix Internet Exchange.
The arrangement should support TelBru’s efforts to establish peering relationships with other telecos around the world, while also improving the quality of its local internet services.
In a separate development, Progresif Cellular announced plans in early February to launch 4G LTE services towards the middle of the year. The firm said it expected a positive outcome after lodging its 4G application with the AITI in late January.
According to Paul Hyde, CEO of Progresif Cellular, the company plans to pursue a low-cost alternative to traditional 4G rollouts. Hyde told media he expects minimal investment will be required, as the telco’s core systems and base stations are already 4G capable.
The company also aims to expand its mobile coverage around the Sultanate, with 82 new base stations planned. According to Hyde, this should increase overall coverage by 25% by the end of the year.
For its part, the AITI is undergoing a significant reorganisation, in a move aimed at boosting efficiency and streamlining the sector’s governing regulatory regimes.
Following in the steps of other regulators, such as Ofcom in the UK and the soon-to-be-launched Info-Communications Media Development Authority of Singapore, the AITI is looking to bring the regulatory frameworks for both broadcasting and telecommunications under a single umbrella.
New hard infrastructure and a converged regulatory regime should go some way towards supporting operators’ plans to improve services and speeds.
The rollout of 4G, in particular, is expected to level the playing field for Brunei Darussalam’s mobile operators, giving Progresif an opportunity to grow its market share. According to Hyde, the company is eyeing a 50% market share by 2017.
Consumers to benefit
The positive ripple effects of a more competitive mobile marketplace are likely to be welcomed by Bruneians, who are feeling the knock-on effect of falling oil and gas prices.
In March 2015, the AITI, which has the authority to intervene on matters relating to mobile tariffs, moved to eliminate incoming call charges and mobile termination fees.
The elimination of incoming call charges is also expected to limit the attractiveness of over-the-top services like WhatsApp or Skype, which have negatively impacted revenues for telecoms operators in many other markets.
In addition to levelling the mobile playing field, the move – along with an initiative in late 2014 to reduce roaming charges in nearby Singapore – is helping to rationalise costs for mobile customers.
According to the AITI, Bruneian telco customers are poised to be the ultimate beneficiaries of growing competition between Progresif and DST.
“We want them to compete and find the initiative to innovate other services, which ultimately benefits the consumers,” Melissa Tithymirda Nikman, manager for interconnection, tariffs and consumer complaints at the AITI, told local media in August.