Malaysia’s communications and multimedia market value remains sustainable during pandemic

by NURUL SUHAIDI / pic by BLOOMBERG

THE communications and multimedia (C&M) industry remains sustainable despite the challenges posed by the Covid-19 pandemic, as the rise in online transactions as well as online learning and work-from-home activities boosted demand for its services.

In its Industry Performance Report (IPR) 2020, the Malaysian Communications and Multimedia Commission (MCMC) said the C&M industry contributed 7.9% or RM142.96 billion to Bursa Malaysia’s total market capitalisation of RM1.81 trillion in 2020.

“Nevertheless, market capitalisation (cap) of the C&M industry declined by 0.7% in 2020 compared to 2019 due to the Covid-19 pandemic, which resulted in disruptions in demand as well as the emergence of several new trends,” MCMC noted in a statement yesterday.

This is following the increased demand for the services offered, which resulted in increased transactions and online purchases, entertainment, as well as study and work activities at home (WFH).

“High usage of Internet and technology among individuals and homes over the period of the Movement Control Order has led to good market sentiment for the communications sector,” it said.

The launch of the National Digital Network Plan in August 2020 to develop digital infrastructure and connectivity has helped mitigate the impact of the pandemic on this sector.

In 2020, capitalisation of the telecommunications sector market increased by 0.3% to RM134.42 billion.

Another sector that has seen a significant increase in the pandemic is the postal and courier services largely due to the increased amount of parcels delivered via e-commerce platforms.

Movement restrictions cause many consumers to turn to in-store purchases online for most items, including daily necessities.

“This favours the investor’s confidence in the sector, with an increased market capitalisation of 19.9% to RM3.25 billion during the year 2020.”

On the other hand, the broadcasting sector continues to face pressure in 2020 as a result of the more cautious attitude of advertisers over the period of the pandemic.

The cancellation of some high-profile sporting events also impacted the industry.

“Competition among over-the-top players also brings impact toward this sector. These factors contributed to a decline in market capitalisation of 27.4% to RM5.29 billion in 2020.”

Subscriptions to the pay TV segment increased by 3.1%, from 7.12 million subscriptions in 2019 to 7.34 million in 2020, as a result of increased subscriptions to Internet protocol television.