addressing the critical issues for successful ...addressing the critical issues for successful...

Southern Cross UniversityePublications@SCU

Theses

2013

Addressing the critical issues for successfulinternational market penetration by Malaysiantelecommunications firmsAmita KrishnaSouthern Cross University

ePublications@SCU is an electronic repository administered by Southern Cross University Library. Its goal is to capture and preserve the intellectualoutput of Southern Cross University authors and researchers, and to increase visibility and impact through open access to researchers around theworld. For further information please contact [email protected].

Publication detailsKrishna, A 2013, 'Addressing the critical issues for successful international market penetration by Malaysian telecommunicationsfirms', DBA thesis, Southern Cross University, Lismore, NSW.Copyright A Krishna 2013

http://epubs.scu.edu.au

http://epubs.scu.edu.au/theses

mailto:[email protected]

Addressing the Critical Issues for

Successful International Market

Penetration by Malaysian

Telecommunications Firms

By

Amita Krishna

A Thesis submitted to the Southern Cross University, Australia, in partial fulfillment

of the requirements of the Degree of Doctor of Business Administration

September 2013

i

DECLARATION

I certify that the material contained within this Thesis has not been previously submitted,

in whole or part, for the award of an academic degree or diploma at this or any other

institute of Higher Education. To the best of my knowledge and belief the work

presented in this Thesis is original except where due reference and acknowledgement has

been made in the text.

Amita Krishna

24 September 2013

ii

ACKNOWLEDGEMENTS

This four year doctoral journey has been an arduous, however, invaluable one. There are

many who have travelled this long road with me and I would like to express my deepest

gratitude for their support and encouragement. Firstly, I am indebted to my Supervisor,

Prof. Selvanathan, who is undoubtedly the most inspiring man I have met in my life. My

MBA, nor this Doctorate would have been possible without him. His relentless support,

guidance and most of all patience is unsurpassed. Thank you so much Prof for believing

in me.

Secondly, to the staff of Unity and SCU for their assistance. A special mention to Dr

Ilham Sentosa, Cheryl Ng who helped with admin support and Dr. Michelle Wallace at

SCU who encouraged me to keep going. My special thanks to all the interview

participants, and survey respondents; particularly, Fraser Graham, Dato’ Khadar

Merican, Datuk Rebecca Sta Maria, Afzal Rahim, Vasu, Sam P, Gerald Miranda, Mike

C, Terry, Harold and Datuk Param, who assisted with contacts for interviews and

surveys. I am also most appreciative to Jasbir Chahl for always encouraging me to reach

greater heights.

Third, the numerous family members and friends who understood when I was ‘busy’. In

particular, to my family back home, Shivani, Jyoti and Kishore who were always there at

the end of the phone when I needed them. Their partners, Pradip, Shaffin and Sadhna and

the four amazing children; Shefali, Kushal, Sohini, and finally, Amar for their

unconditional love and laughter that was much needed when things were tough.

Most of all, my appreciation goes to the one person who lived this journey with me on a

daily and nightly basis, my soulmate, Thomas Cherian. Thank You.

Finally, my late parents, Ratilal and Prabhavati Chandarana who sacrificed so much to

give us a better life. Their determination, tenacity, resilience and unconditional love have

made me the person I am today. I so wish they were here as I dedicate this thesis to them.

iii

ABSTRACT

Malaysian telecommunications firms face challenges in a competitive maturing domestic

market and are compelled to seek opportunities abroad. Accordingly, this research was

aimed at “Addressing the critical issues that impact successful international market

penetration by Malaysian telecommunications firms”.

A review of the pertinent literature led to four research questions and four research

propositions for testing through a three-stage mixed methodology. The network model

was the identified preferred model for this research. Primary data from personal

interviews are used to refine the model. This model was also tested through a Web

Survey during the second and descriptive stage. The third and confirmatory stage

involving Confirmatory Factor Analysis and Structural Equation Modelling examined the

interrelationships between the key variables.

The research findings revealed that Malaysian telecommunications firms attach

importance to internationalisation for growth and corporate sustainability. The key

success factors are effective leadership, a strategic global outlook, adequate financial and

knowledge resources as well as participation in strong external business networks.

However, they face several challenges including the dynamic market landscape, new

technologies, regulatory requirements and changing consumer demands. These compel

them to review their business models for growth and differentiation strategies to compete

in the new economy.

In line with the research objectives, the findings extended the body of knowledge on the

research topic and offered recommendations for consideration by the public authorities

and the Malaysian telecommunications firms. The findings also contributed to new

theory development as reflected by a modified network model for internationalisation.

Finally, the research offered recommendations for follow up research.

Keywords: Malaysian telecommunications firms, critical issues, challenges,

internationalisation, mixed methodology, personal interviews, web survey, structural

equation modelling, recommendations, network theory, new theory development

iv

LIST OF ACRONYMS AND ABBREVIATIONS

10MP Tenth Malaysia Plan

1G First Generation wireless telephone technology

2G Second Generation wireless telephone technology

3G Third Generation mobile communications

4G Fourth Generation mobile communications

ADB Asian Development Bank

AFTA ASEAN Free Trade Area

APEC Asia Pacific Economic Corporation

ARPU Average Revenue Per User

ASEAN Association of South East Asian Nations

ASLI Asian Strategy & Leadership Institute

BMI Business Monitor International

BRIC (S) Brazil, Russia, India, China (South Africa)

CDMA Code-Division Multiple Access

CFA Confirmatory Factor Analysis

CMA Communications and Multimedia Act

DOS Department of Statistics

EPU Economic Planning Unit

ESCAP Economic and Social Commission for Asia and the Pacific

ETP Economic Transformation Plan

FDI Foreign Direct Investment

GATS General Agreement on Trade in Services

GATT General Agreement on Tariffs and Trade

GDP Gross Domestic Product

GFI Goodness of Fit Index

GNI Gross National Income

GOM Government of Malaysia

GSLI Global Services Location Index (AT Kearney)

GSM Global System for Mobile Communications

HSBB High Speed Broadband

HSDPA High Speed Download Packet Access

v

ICT Information and Communications Technology

IMF International Monetary Fund

IMP3 Third Industrial Master Plan

INV International New Ventures

ISDN Integrated Services Digital Network

ISP Internet Service Provider

IT Information Technology

ITU International Telecommunications Union

JV Joint Venture

KLCC Kuala Lumpur City Centre

KLIA Kuala Lumpur International Airport

KLSE Kuala Lumpur Stock Exchange

LLU Local Loop Unbundling

LTE Long Term Evolution

M & A’s Mergers and Acquisitions

MASSCORP Malaysia South South Corporation Berhad

MATRADE Malaysian External Development Corporation

MCMC Malaysian Communications and Multimedia Commission

MDeC MultiMedia Development Corporation

MIDA Malaysia Investment Development Authority

MIER Malaysian Institute of Economic Research

MITI Ministry of Trade and International Industry

MMS Multimedia Messaging Service

MNC Multinational Corporation

MNE Multinational Enterprise

MNO Mobile Network Operator

MSC Multi-Media Super Corridor

MVNE Mobile Virtual Network Enabler

MVNO Mobile Virtual Network Operator

NEP New Economic Policy – Malaysia

NITA National IT Agenda

NITC National IT Council – Malaysia

OECD Organisation for Economic Co-operation and Development

OPP Outline Perspective Plan

vi

PEMANDU The Performance Management and Delivery Unit

R&D Research & Development

RAM Ratings Agency Malaysia

RBV Resource Based View

RMSEA Root Mean Square Error of Approximation

SCA Sustainable Competitive Advantage

SEM Structural Equation Modelling

SME Small and Medium Enterprise

SMS Short Message Service

TMI Telekom Malaysia International

TMT Technology Media and Telecommunications

TRAI Telecom Regulatory Authority of India

TRCSL Telecommunications Regulatory Commission of Sri Lanka

UMTS Universal Mobile Telecommunications System

UN United Nations

UMNO United Malay National Organisation

VoIP Voice over Internet Protocol

WEF World Economic Forum

WIMAX Worldwide Interoperability for Microwave Access

WOS Wholly Owned Subsidiary

WTO World Trade Organisation

vii

TABLE OF CONTENTS

DECLARATION ................................................................................................. I

ACKNOWLEDGEMENTS ....................................................................................II

ABSTRACT .................................................................................................... III

ACROYNOMS AND ABBREVIATIONS ................................................................ IV

TABLE OF CONTENTS ................................................................................... VII

LIST OF TABLES ........................................................................................... XV

LIST OF FIGURES .......................................................................................... XX

CHAPTER 1 - INTRODUCTION .................................................................... 1

1.1 Introduction ............................................................................................. 1

1.2 Background to the Research ..................................................................... 2

1.3 The Research Problem .............................................................................. 4

1.3.1 The Research Questions ..................................................................... 5

1.3.2 The Research Objectives .................................................................... 6

1.3.3 The Research Propositions ................................................................. 6

1.3.4 The Research Hypotheses .................................................................. 7

1.3.5 Unit of Analysis ................................................................................ 7

1.4 Justification and Research Contributions .................................................. 8

1.5 Research Methodology ............................................................................. 9

1.5.1 The Research Design ......................................................................... 9

1.5.1.1 The Research Paradigm ............................................................................ 10

1.5.1.2 Dimensions of the Research ..................................................................... 10

1.5.1.3 Data Collection Instruments ..................................................................... 11

1.5.1.4 Data Analysis ............................................................................................ 12

1.5.2 Research Quality ............................................................................. 13

1.5.3 Ethical Issues .................................................................................. 13

1.6 Structure of the Thesis ........................................................................... 14

1.7 Definition of Key Terms ........................................................................ 17

1.8 Limitations and Delimitations ................................................................ 17

1.9 Chapter Summary................................................................................... 18

viii

CHAPTER 2 - THE THEORETICAL FRAMEWORK ................................. 19

2.1 Introduction ........................................................................................... 19

2.2 Globalisation and Internationalisation .................................................... 20

2.2.1 The Drivers for Internationalisation ................................................. 21

2.2.2 Internationalisation of the Telecommunications Sector .................... 24

2.2.3 Foreign Market Entry Mode ............................................................. 24

2.3 Selected Internationalisation Theories and Models .................................. 26

2.3.1 Economic Based Theories on Internationalisation ............................. 27

2.3.2 Process Based Theories on Internationalisation ................................ 29

2.3.3 The Stages and Innovation Related Models (I -Model) ..................... 33

2.3.4 Strategic Management Perspectives .................................................. 36

2.3.4.1 Resource Based View ............................................................................... 36

2.3.5 The Flagship Firm ........................................................................... 39

2.3.6 The Strategic States Model .............................................................. 40

2.3.7 The Network Model ......................................................................... 41

2.3.7.1 Justification for the Selection of the Network Model for this Research .. 45

2.4 Chapter Summary................................................................................... 46

CHAPTER 3 - THE GLOBAL TELECOMMUNICATIONS INDUSTRY .... 47

3.1 Introduction ........................................................................................... 47

3.2 Overview of the Global Telecommunications Industry ............................ 48

3.2.1 Market Structure .............................................................................. 48

3.2.1.1 Infrastructure and Equipment Suppliers ................................................... 50

3.2.1.2 Applications and Content ......................................................................... 51

3.2.1.3 Service Providers ...................................................................................... 52

3.2.2 Technological Advances .................................................................. 53

3.2.3 Regulatory Trends ........................................................................... 55

3.3 Market Changes and Industry Challenges ............................................... 58

3.3.1 Strategic Investments in a Competitive Landscape ........................... 59

3.3.2 Technology Developments ............................................................... 61

3.3.3 Changing Market Demands .............................................................. 62

3.3.4 Regulation ....................................................................................... 64

3.4 Chapter Summary................................................................................... 64

ix

CHAPTER 4 - THE MALAYSIAN TELECOMMUNICATIONS SECTOR . 65

4.1 Introduction ........................................................................................... 65

4.2 The Country Background ....................................................................... 66

4.2.1 The New Economic Policy ............................................................ 68

4.2.2 The Privatisation Policy ............................................................... 69

4.2.3 Malaysia – A Newly Emerging Economy ...................................... 70

4.3 The Evolution of the Malaysian Telecommunications Sector ................... 70

4.3.1 Liberalisation and Reforms: The Malaysian Telecommunications

Industry.................................................................................................... 72

4.3.1.1 Regulatory Reform ................................................................................... 75

4.4 The Malaysian Government’s Policies and Initiatives ............................. 77

4.4.1 The Current Economic and Telecommunications Landscape ............. 82

4.5 New Telecommunications Products and Services in the Malaysian

Telecommunications Industry ...................................................................... 84

4.6 The Major Malaysian Telecommunications Firms ................................... 89

4.6.1 Telekom Malaysia and TMI ............................................................. 89

4.6.2 Axiata and Celcom .......................................................................... 91

4.6.3 Time dotCom ................................................................................... 93

4.6.4 Maxis .............................................................................................. 94

4.6.5 DiGi ................................................................................................ 96

4.6.6 U mobile ......................................................................................... 96

4.7 The International Presence of Malaysian Telecommunications Firms ...... 97

4.7.1 Selected Target Regional Markets for Malaysian Telecommunications

firms ........................................................................................................ 99

4.7.1.1 India ........................................................................................................ 100

4.7.1.2 Indonesia ................................................................................................. 101

4.7.1.3 Sri Lanka ................................................................................................ 102

4.7.1.4 Singapore ................................................................................................ 103

4.8 The Malaysian Telecommunications Sector’s Competitive Strategies .... 104

4.9 Critical Factors Impacting Successful International Market Penetration 106

4.9.1 Leadership and a Global Mindset ................................................... 107

4.9.2 Global Competition and Network Externalities ............................... 109

4.9.3 Government’s Role ........................................................................ 110

4.9.4 Knowledge and Resources ............................................................. 111

x

4.9.5 Branding ........................................................................................ 113

4.9.6 Innovation and R&D ..................................................................... 114

4.9.7 The Financial Challenges ............................................................... 116

4.10 Chapter Summary ............................................................................... 117

CHAPTER 5 - RESEARCH ISSUES AND RESEARCH QUESTIONS

DEVELOPMENT ........................................................................................ 118

5.1 Introduction ......................................................................................... 118

5.2 Research Issues, Research Questions .................................................... 119

5.2.1. Key Determinants for the Internationalisation of Malaysian

Telecommunications Firms ..................................................................... 121

5.2.2 Corporate Strategies for Successful International Market Penetration

.............................................................................................................. 123

5.2.3 Challenges faced by Internationalising Malaysian Telecommunications

Firms ..................................................................................................... 124

5.2.4 Government Support for Internationalising Malaysian

Telecommunications Firms ..................................................................... 125

5.3 Summary ............................................................................................. 126

CHAPTER 6 - RESEARCH METHODOLOGY .......................................... 127

6.1 Introduction ......................................................................................... 127

6.2 Justification for the Selected Paradigm and Research Methodology ...... 129

6.2.1 Theoretical Paradigms ................................................................... 129

6.2.1.1 The Qualitative Paradigm ....................................................................... 131

6.2.1.2 The Quantitative Paradigm ..................................................................... 132

6.2.1.3 Discussion on the Theoretical Paradigms ............................................... 133

6.2.2 Justification for the Mixed Methodology ........................................ 134

6.2.2.1 The Preferred Type of Mixed Methodology .......................................... 135

6.3 Research Design .................................................................................. 137

6.3.1 Dimensions of Research ................................................................. 137

6.3.1.1 Exploratory Research ............................................................................. 138

6.3.1.2 Descriptive Research .............................................................................. 138

6.3.1.3 Explanatory or Causal Research ............................................................. 138

6.3.1.4 Combining Research Approaches .......................................................... 138

6.3.1.5 The Outline Research Plan ..................................................................... 140

xi

6.4 Methodology for Stage 1: Exploratory .................................................. 142

6.4.1 Qualitative Design and Data Collection methods ............................ 142

6.4.2 The Target Population: Composition and Selection of the Personal

Interviews .............................................................................................. 146

6.4.3 Conducting the Interviews ............................................................. 148

6.4.4 Interview Protocol and Questions ................................................... 149

6.5 Methodology for Stage 2: Descriptive .................................................. 151

6.5.1 Defining the Variables and Constructs ........................................... 151

6.5.2 The Web Survey ............................................................................ 153

6.5.2.1 Scripting Questions for the Web Survey ................................................ 154

6.5.2.2 Questionnaire Design ............................................................................. 156

6.5.2.3 The Delphi Technique ............................................................................ 159

6.5.2.4 Pilot testing the questionnaire ................................................................ 159

6.5.2.5 The Finalised Questionnaire ................................................................... 159

6.5.2.6 Sampling Design .................................................................................... 160

6.5.2.7 Sampling Methodology .......................................................................... 160

6.5.2.8 The Target Population and the Survey Sample ...................................... 162

6.5.2.9 Administration of the Web Survey ......................................................... 163

6.6 Methodology for Stage 3 : Confirmatory .............................................. 165

6.6.1 Development of the Hypotheses ..................................................... 165

6.6.2 Confirmatory Factor Analysis (CFA) ............................................. 167

6.6.3 Structural Equation Modelling (SEM) ............................................ 168

6.7 Research Quality .................................................................................. 168

6.7.1 Minimising Errors .......................................................................... 168

6.7.2 Reliability ..................................................................................... 169

6.7.3 Validity ......................................................................................... 169

6.7.4 Triangulation ................................................................................. 170

6.8 Data Analysis ....................................................................................... 170

6.8.1 Qualitative Data Analysis .............................................................. 170

6.8.2 Quantitative Data Analysis ............................................................ 171

6.9 Ethical Considerations ......................................................................... 172

6.10 Chapter Summary ............................................................................... 173

xii

CHAPTER 7 - QUALITATIVE DATA ANALYSIS .................................... 174

7.1 Introduction ......................................................................................... 174

7.1.1 Chapter Structure ........................................................................... 174

7.2 Analysis of the Primary Data: Personal Interviews................................ 175

7.2.1 Data Analysis for Research Question 1........................................... 178

7.2.1.1 Analysis of responses to IQ 1: ................................................................ 178



7.2.1.4 Summary of Findings on Research Question 1 ...................................... 184








7.2.2.7 Summary of Findings on Question 2 ...................................................... 191


7.2.3.1 Analysis of responses to IQ 10: .............................................................. 193






7.2.3.7 Findings on Research Question 3 ........................................................... 198


7.2.4.1 Analysis of responses to IQ16: ............................................................... 200



7.2.4.4 Findings on Research Question 4 ........................................................... 202

7.3. Coding for Content Analysis ............................................................... 203

7.4. Refining the Theoretical Model ........................................................... 205

7.5 Crafting The Propositions .................................................................... 207

7.6 Chapter Summary................................................................................. 207

xiii

CHAPTER 8 - DATA ANALYSIS QUANTITATIVE ................................. 208

8.1 Introduction ......................................................................................... 208

8.2 Descriptive Analysis of the Web Survey Responses .............................. 209

8.2.1 Profile and Composition of the Web Survey Respondents ............... 209

8.2.2 Statement 1: On “Positioning” ....................................................... 210

8.2.3 Statement 2: On “Capability” ......................................................... 213

8.2.4 Statement 3: On “Strategic Intent” ................................................. 217

8.2.5 Statement 4: On “Customer-Orientation” ....................................... 219

8.2.6 Analysis of the Combined Survey Responses for Proposition 1 ....... 222

8.2.7 Testing of Proposition 1 ................................................................. 224

8.2.8 Statement 5: On “Market Selection” ............................................... 225

8.2.9 Statement 6: On “Global Outlook” ................................................. 227

8.2.10 Statement 7: On “Risk” ................................................................ 230

8.2.11 Statement 8: On “Network Relationships” .................................... 234

8.2.12 Analysis of the Combined Survey Responses for Proposition 2 ..... 236

8.2.13 Testing of Proposition 2 ............................................................... 238

8.2.14 Statement 9: On “Leadership” ...................................................... 239

8.2.15 Statement 10: On “Insight” .......................................................... 241

8.2.16 Statement 11: On “Trust” ............................................................. 244

8.2.17 Statement 12: On “Knowledgeable Resources” ............................. 246



8.2.20 Statement 13: On “Government Policies” ..................................... 251

8.2.21 Statement 14: On “Government Incentives” .................................. 254

8.2.22 Statement 15: On “Government’s Role” ....................................... 257

8.2.23 Statement 16: On “Independent Regulation” ................................. 260



8.2.26 Summary of the Survey Responses ............................................... 267

8.3 Triangulation of the Findings ............................................................... 268

8.4 Reliability of the Sample Data and the Variables .................................. 271

8.4.1 Reliability of “Dynamic Market Landscape” .................................. 272

8.4.2 Reliability of “Strategy” ................................................................ 273

8.4.3 Reliability of “Challenges” ............................................................ 274

xiv

8.4.4 Reliability of “Government” .......................................................... 275

8.5 Confirmatory Factor Analysis of Propositions ...................................... 276

8.5.1 CFA on Proposition 1: “Dynamic Market Landscape” .................... 277

8.5.2 CFA on Proposition 2: “Strategy” .................................................. 278

8.5.3 CFA on Proposition 3: “Challenges” .............................................. 279

8.5.4 CFA on Proposition 4: “Government” ............................................ 280

8.6 Generated SEM Models ........................................................................ 281

8.6.1 Re-specified Model ........................................................................ 284

8.7 Chapter Summary and Conclusions ...................................................... 286

CHAPTER 9 - RESEARCH CONCLUSIONS AND IMPLICATIONS ....... 288

9.1 Introduction ......................................................................................... 288

9.2 Conclusions on the Research Propositions ....................................... 290

9.2.1 Conclusions on Research Proposition 1 ..................................... 290




9.2.5 Summary .................................................................................. 302

9.3 Conclusions About The Research Problem ....................................... 302

9.3.1 Summary .................................................................................. 307

9.4 Contribution and Theory Development............................................. 307

9.5 Implications for Policy and Practice ..................................................... 310

9.5.1 Implications for Policy .................................................................. 311

9.5.1.1 Recommended Policy Changes for the Successful Internationalisation of

Malaysian Telecommunications Firms ............................................................... 314

9.5.2 Implications for the Malaysian Telecommunications Firms ............. 314

9.6 Limitations .......................................................................................... 319

9.7 Implications for Further Research ........................................................ 319

9.8 Summary and Conclusions ................................................................... 320

xv

LIST OF TABLES

Chapter 2

Table 2.1: Psychic Dispersion Zones based on cultural affinity ........................ 25

Table 2.2: Economic Based Models - Internationalisation ................................ 28

Table 2.3: Summary of the Stage Models ......................................................... 34

Chapter 3

Table 3.1: Top 10 Global Telecommunications firms performance 2011 ........... 54

Chapter 4

Table 4.1: Overview of the MyICM886 Masterplan ......................................... 80

Table 4.2: TM International Ventures .............................................................. 90

Table 4.3: Axiata Group Subsidiaries and Associates ....................................... 92

Table 4.4: Maxis Entities ................................................................................. 95

Table 4.5 Malaysian Telecommunications Players venturing overseas .............. 99

Table 4.6: The Indian Telecommunications Market ........................................ 100

Table 4.7: The Indonesian Telecommunications Market ................................. 102

Table 4.8: The Sri Lanka Telecommunications Market ................................... 103

Table 4.9: The Singapore Telecommunications Market .................................. 104

Chapter 5

Table 5.1: Identification of Research Gaps .................................................... 120

Chapter 6

Table 6.1: Comparative Research Approaches ................................................ 131

Table 6.2: Mixed Method Design Types ......................................................... 136

Table 6.3: Creswell - Mixed Method Design Types ........................................ 136

Table 6.4: Dimensions of Research Design .................................................... 137

Table 6.5: The Outline Research Plan ............................................................ 141

xvi

Table 6.6: Stage 1: Steps in the qualitative research process .......................... 142

Table 6.7: Qualitative Data Collection Methods ............................................. 143

Table 6.8: Summary of Interview Types ....................................................... 145

Table 6.9: Interview Approaches Summary .................................................... 146

Table 6.10: Profile of Interview Participants .................................................. 147

Table 6.11: Interview Participants ................................................................. 148

Table 6.12: Key Discussion Points and Interview Questions .......................... 150

Table 6.13: Mapping Interview Questions to Research propositions ............... 151

Table 6.14: SEM Variables and Constructs ................................................... 152

Table 6.15: Scripting Questions for the Web Survey ...................................... 155

Table 6.16: Attitude Rating Scales ................................................................. 158

Table 6.17: Non-Probability Sampling ........................................................... 161

Table 6.18: Survey Sample Composition ....................................................... 163

Table 6.19: Survey Response Results ............................................................ 164

Table 6.20: References supporting Variables and Research Propositions ........ 166

Chapter 7

Table 7.1: Personal Interview Participants ..................................................... 176

Table 7.2: Research Questions and Related Interview Questions .................... 177

Table 7.3: Coding Process ............................................................................. 204

Chapter 8

Table 8.1: Profile of the Web Survey Respondents ......................................... 210

Table 8.2: Case Summary for Statement 1 on “Positioning” ........................... 211

Table 8.3: Cross Tabulation-Survey Responses to Statement 1: “Positioning” 212

Table 8.4: Weighted Average - Positioning .................................................... 213

Table 8.5: Case Summary for Statement 2 on “Capability” ............................. 214

Table 8.6: Cross Tabulation-Survey Responses to Statement 2: “Capability” .. 215

Table 8.7: Weighted Average – Capability ..................................................... 215

xvii

Table 8.8: Case Summary for Statement 3 on “Strategic Intent” ..................... 217

Table 8.9: Cross Tabulation-Survey Responses to Statement 3: “Strategic Intent”

..................................................................................................................... 218

Table 8.10: Weighted Average – Strategic Intent ........................................... 218

Table 8.11: Case Summary for Statement 4 on “Customer Orientation” .......... 220

Table 8.12: Cross Tabulation-Survey Responses to Statement 4: “Customer

Orientation” .................................................................................................. 221

Table 8.13: Weighted Average – Customer Orientation ................................. 222

Table 8.14: Combined Survey Responses to Proposition 1 ............................. 223

Table 8.15: Case Summary for Statement 5 on “Market Selection” ................. 225

Table 8.16: Cross Tabulation-Survey Responses to Statement 5: “Market

Selection” ..................................................................................................... 226

Table 8.17: Weighted Average – Market Selection ........................................ 227

Table 8.18: Case Summary for Statement 4 on “Global Outlook” ................... 228

Table 8.19: Cross Tabulation-Survey Responses to Statement 6: “Global

Outlook” ....................................................................................................... 229

Table 8.20: Weighted Average – Global Outlook .......................................... 229

Table 8.21: Case Summary for Statement 7 on “Risk” .................................... 231

Table 8.22: Cross Tabulation-Survey Responses to Statement 7: “Risk” ......... 232

Table 8.23: Weighted Average – Risk ........................................................... 233

Table 8.24: Case Summary for Statement 8 on “Network Relationships” ........ 234

Table 8.25: Cross Tabulation-Survey Responses to Statement 8: “Network

Relationships” ............................................................................................... 235

Table 8.26: Weighted Average – Network Relationships ................................ 235

Table 8.27: Combined Survey Responses to Proposition 2 by Group Type ..... 237

Table 8.28: Case Summary for Statement 9 on “Leadership” .......................... 239

Table 8.29: Cross Tabulation-Survey Responses to Statement 9: “Leadership”240

Table 8.30: Weighted Average – Leadership .................................................. 241

Table 8.31: Case Summary for Statement 10 on “Insight” .............................. 242

Table 8.32: Cross Tabulation-Survey Responses to Statement 10: “Insight” ... 243

Table 8.33: Weighted Average – Insight ........................................................ 243

Table 8.34: Case Summary for Statement 11 on “Trust” ................................. 244

Table 8.35: Cross Tabulation-Survey Responses to Statement 11: “Trust” ...... 245

Table 8.36: Weighted Average – Trust ........................................................... 246

xviii

Table 8.37: Case Summary for Statement 12 on “Knowledgeable Resources” . 247

Table 8.38: Cross Tabulation-Survey Responses to Statement 12:

“Knowledgeable Resources” .......................................................................... 248

Table 8.39: Weighted Average – Knowledgeable Resources .......................... 248


Table 8.41: Case Summary for Statement 13 on “Government Policies” ......... 252

Table 8.42: Cross Tabulation-Survey Responses to Statement 13: “Government

Policies” ....................................................................................................... 253

Table 8.43: Weighted Average – Government Policies ................................. 253

Table 8.44: Case Summary for Statement 14 on “Government Incentives” ..... 255

Table 8.45: Cross Tabulation-Survey Responses to Statement 14: “Government

Incentives” .................................................................................................... 256

Table 8.46: Weighted Average – Government Incentives .............................. 256

Table 8.47: Case Summary for Statement 15 on “Government’s Role” ........... 258

Table 8.48: Cross Tabulation-Survey Responses to Statement 15: “Governments Role”

......................................................................................................................... 259

Table 8.49: Weighted Average – Governments Role ..................................... 259

Table 8.50: Case Summary for Statement 16 on “Independent Regulation” .... 261

Table 8.51: Cross Tabulation-Survey Responses to Statement 16: “Independent

Regulation” ................................................................................................... 262

Table 8.52: Weighted Average – Independent Regulation ............................. 262


Table 8.54: Summary of Survey Responses .................................................... 267

Table 8.55: Triangulation of the Findings: ..................................................... 270

Table 8.56: Additional Comments provided by Web Survey Participants ........ 271

Table 8.57 Reliability Measure For “Dynamic Market Landscape” Variable ... 272

Table 8.58: Reliability Measure For “Strategy” Variable ................................ 273

Table 8.59: Reliability Measure For “Challenges” Variable ........................... 274

Table 8.60: Reliability Measure For “Government” Variable ......................... 275

Table 8.61: Goodness of Fit of Dynamic Market Landscape ........................... 277

Table 8.62: Goodness of Fit of Strategy ......................................................... 278

Table 8.63: Goodness of Fit of Challenges ..................................................... 279

Table 8.64: Goodness of Fit of Government ................................................... 280

Table 8.65: Summary of Goodness of Fit indices of Variables ........................ 281

xix

Table 8.66: Summary of Variables and Constructs ......................................... 282

Table 8.67: Goodness of Fit of Generated Model ........................................... 284

Table 8.68: Goodness of Fit of Re-specified Model ........................................ 285

Chapter 9

Table 9.1: Research Proposition 1 Response Pattern ...................................... 293




Table 9.5: Summary of Research Propositions Conclusions ............................ 304

Table 9.6: Findings on Research Gaps ........................................................... 306

xx

LIST OF FIGURES

Chapter 1

Figure 1.1: Structure of Chapter One ................................................................. 1

Figure 1.2: The Research Master Plan .............................................................. 11

Figure 1.3: Thesis Chapter Structure ................................................................ 16

Chapter 2

Figure 2.1: Structure of Chapter Two ............................................................... 19

Figure 2.2: Drivers for Internationalisation ...................................................... 22

Figure 2.3: The Uppsala Model of Internationalisation, 1977 ........................... 31

Figure 2.4: The Business Network Internationalisation Process Model, 2009 .... 32

Figure 2.5: Modes of Resource Adjustment ...................................................... 38

Figure 2.6: Crucial Competitive Edge within the Strategic States Model .......... 40

Figure 2.7: Preliminary Theoretical Model ...................................................... 43

Chapter 3

Figure 3.1: Structure of Chapter 3 ................................................................... 47

Figure 3.2: Telecommunications Market Sectors .............................................. 49

Figure 3.3: Telecommunications Regulatory Objectives ................................... 57

Figure 3.4: Changing Patterns and Attendant Challenges ................................. 58

Chapter 4

Figure 4.1: Structure of Chapter Four .............................................................. 66

Figure 4.2: National Development Policies ...................................................... 68

Figure 4.3: Consolidation of the Malaysian Market 1989 – 2003 onwards ........ 75

Figure 4.4: Malaysian Initiatives Timelines ..................................................... 82

Figure 4.5: Factors impacting the successful international market penetration of

Malaysian telecommunications firms ............................................................. 107

Figure 4.6: NIP Framework .......................................................................... 115

xxi

Chapter 5

Figure 5.1: Structure of Chapter Five ............................................................. 118

Chapter 6

Figure 6.1: Structure of Chapter 6 ................................................................. 128

Figure 6.2: Business Research Approach and Influencing Factors .................. 130

Figure 6.3: The Three Stage Research Approach ............................................ 139

Figure 6.4: The Web Survey Process ............................................................. 153

Figure 6.5: Likert Scale ................................................................................. 158

Chapter 7

Figure 7.1: Structure of Chapter Seven .......................................................... 175

Figure 7.2: Refined Theoretical Model .......................................................... 206

Chapter 8

Figure 8.1: Structure of Chapter Eight ........................................................... 208

Figure 8.2: Combined Responses to Statement 1 on “Positioning” .................. 213

Figure 8.3: Combined Responses to Statement 2 on “Capability” ................... 216

Figure 8.4: Combined Responses to Statement 3 on “Strategic Intent” ........... 219

Figure 8.5: Responses to Statement 4 on “Customer Orientation” ................... 222

Figure 8.6: Combined Responses to Proposition 1 .......................................... 223

Figure 8.7: Combined Responses to Proposition 1 – By Group Type .............. 224

Figure 8.8: Responses to Statement 5 on “Market Selection” ......................... 227

Figure 8.9: Responses to Statement 6 on “Global Outlook” ............................ 230

Figure 8.10: Responses to Statement 7 on “Risk” ........................................... 233

Figure 8.11: Responses to Statement 8 on “Network Relationships” ............... 236

Figure 8.12: Responses to Proposition 2 ........................................................ 237

Figure 8.13: Combined Responses to Proposition 2 – By Group Type ............ 238

Figure 8.14: Responses to Statement 9 on “Leadership” ................................. 241

Figure 8.15: Responses to Statement 10 on “Insight” ..................................... 244

Figure 8.16: Responses to Statement 11 on “Trust” ........................................ 246

xxii

Figure 8.17: Responses to Statement 12 on “Knowledgeable Resources” ........ 249

Figure 8.18: Combined Responses to Proposition 3 ........................................ 250


Figure 8.20: Responses to Statement 13 on “Government Policies” ................ 254

Figure 8.21: Responses to Statement 14 on “Government Incentives” ............ 257

Figure 8.22: Responses to Statement 15 on “Governments Role” ................... 260

Figure 8.23: Responses to Statement 16 on “Independent Regulation” ............ 263

Figure 8.24: Combined Responses to Proposition 4 ........................................ 264


Figure 8.26: CFA on Dynamic Market Landscape: Proposition 1 .................... 277

Figure 8.27: CFA on Strategy: Proposition 2 ................................................. 278

Figure 8.28: CFA on Challenges: Proposition 3 ............................................. 279

Figure 8.29: CFA on Government: Proposition 4 ........................................... 280

Figure 8.30: Generated SEM Model ............................................................... 283

Figure 8.31: Re-specified Model .................................................................... 285

Chapter 9

Figure 9.1: Structure of Chapter Nine ............................................................ 289

Figure 9.2: Relationship between the additional variables to the Network Model

generated by the SEM Model ......................................................................... 309

1

Chapter 1 - Introduction

1.1 Introduction

This Chapter lays the foundation for this research and provides an overview of the thesis

on “Addressing the critical issues for successful international market penetration by

Malaysian telecommunications firms”. It has nine (9) Sections as shown in Figure 1.1.

This Section provides an introduction and overview of the chapter.

Figure 1.1: Structure of Chapter One

Source: Developed for this Research

Section 1.2 presents the background to this research. It reflects the significant roles

played by Malaysian telecommunications firms in national economic development and

the emphasis accorded to venturing abroad for sustainable long term growth.

1.1: Introduction

1.2: Background to the Research

1.3: Research Problem

1.4: Justification & Contributions

1.5: Research Methodology

1.6: Structure of the Thesis

1.7: Definition of Key Terms

1.8: Limitations & Delimitations

1.9: Chapter Summary

2

Research starts with a problem which is a ‘specific restatement of a managerial problem

for the purpose of empirical investigation’ (Davis 2005, p. 48). Section 1.3 presents the

research problem, research questions, objectives, research propositions and the research

hypotheses.

Section 1.4 justifies the need for this research and outlines the contributions to

scholarship, policy and practice. Section 1.5 introduces the mixed methodology approach

that was adopted for this research. This Section also presents the research design, the

primary data collection tools, and the data analysis procedures.

Section 1.6 outlines the structure of the thesis which has nine chapters. Several key terms

are used in this research. The definitions and descriptions of the terms are outlined in

Section 1.7.

Section 1.8 addresses the limitations of this study on its scope due to time and resource

constraints and concludes with Section 1.9.

1.2 Background to the Research

The Malaysian Government recognises the strategic importance of the

telecommunications sector for the country’s social and economic development (Ure

2000). From being treated as a public good in its early stages of development, the

industry has witnessed rapid growth and transformed into an economic commodity. The

sector’s contribution to the GDP was 2.9% in 2009 and the target is to reach 10.2% by

2015 (GoM 2010). The market capitalisation of Malaysian telecommunications

companies listed on Kuala Lumpur Stock Exchange (KLSE) more than doubled from

RM48.5 billion in 2008 to an estimated RM115 billion in 2010 (bursamalaysia.com

2011; Economic Planning Unit (EPU) 2011).

The rapid growth of the industry is in line with the National Telecommunications Policy

(NTP 1994 - 2020) which is aimed at encouraging competition to enhance efficiency in

the regulated, open and competitive telecommunications market (Ure 2000; Lee 2002;

EPU 2010). This regulatory response has led to the Malaysian telecommunications

3

market becoming one of the most advanced in the developing world (budde.com 2011;

Business Monitor International (BMI) 2011).

The Malaysian market, dominated by mobile subscriptions, achieved a 137.7% mobile

penetration rate with over 39,826 million mobile subscribers as at September 2012 as

compared to a 98.9% penetration rate with 27.7 million subscribers in 2008 (Economic

Intelligence Unit (eiu.com) 2011; Pyramid Research 2011; BMI 2012; MCMC 2012).

Malaysia had the third highest mobile penetration rate in South East Asia, after

Singapore and Thailand in 2009 (MSC 2010). However, in alignment with global trends,

the domestic fixed line segment, dominated by Telekom Malaysia (TM), declined to

3,908 million fixed lines in Q2 2012, compared to 4.37 million in 2009 (MCMC 2012).

Internationalisation is an important factor for firms to grow economically and

technologically (Ahmad & Hashim 2007). Malaysian telecommunications firms are

embarking on internationalisation strategies to reap the benefits through acquisitions and

the purchase of equity (Ahmad & Hashim 2007; Ure 2009; Curwen & Whalley 2010).

The pull factors are market liberalisation, advances in technology, increased connectivity

and interdependence among world markets which provide opportunities for expansion

(Fletcher 2001; Friedman 2005; Salazar 2007; IMF 2008). Malaysia’s participation in the

WTO agreement, which included the telecommunications sector in 1997 as well as with

the regional and bilateral free trade agreements, accelerated the pace of market

liberalisation (Jussawalla 1999; Ure 2000; Zita 2005; Sivalingam 2007).

The push factor is the limited domestic market which is characterised by increased

competition. This requires Malaysian telecommunications firms to venture abroad for

growth and corporate sustainability. Two major Malaysian mobile telecommunications

firms, namely Axiata and Maxis, now have a presence in regional markets which include

India, Indonesia, Sri Lanka, Singapore and Bangladesh. Axiata has a presence in 10

Asian countries with an estimated 212 million subscribers (Axiata 2012). Maxis has a

presence in India, where it holds a 74% stake in Aircel which is ranked number five in

India and in Indonesia where it holds 44% of PT Natrindo Telepon Seluler (NTS),

rebranded as Axis (Oxford Business Group 2007; BMI 2011; Maxis 2012).

Significantly, the number of subscribers in their overseas market is double that of the

domestic market of Maxis. In the fixed line segment, Time dotCom completed its

4

acquisitions of three firms across South East Asia in the second quarter of 2012 and aims

to become a regional player by tapping into regional wholesale bandwidth and data

centre markets (The Business Times, 23 November, 2011; Time dotcom 2012).

However, Malaysian telecommunications firms that venture into foreign markets have to

address several attendant challenges. The strategic considerations of a firms

internationalisation process is influenced by both internal and external factors. The push

and pull factors were discussed in the earlier section. External factors include the impact

of globalisation, particularly in service industries (Oswal 2010; Wong 2012).

Furthermore, country factors, industry specific factors, target market potential and risk,

are usually beyond the control of the firms (Ekeledo & Sivakumar 2004; Laanti 2009).

Along with market selection, entry mode and timing, these include the need to have a

global strategic outlook and manage diverse cultural and competitive environments

(Ricks, Toyne & Martinez 1990; Bellin & Pham 2008); effective leadership (Curwen &

Whalley 2008; Carayol 2011); intellectual capital (Subramaniam & Youndt 2005);

keeping pace with technological advances (Krishna 2011; GoM 2012); developing

network relationships (Foster & Karin 2002; Li & Whalley 2002; Peppard & Rylander

2006; Kenny 2009; Laanti 2009); professional management structures and knowledge

(Tan 2008; Montolio & Trujillo 2012) and access to capital for branding and marketing

(MARC 2007). The situation requires Malaysian telecommunications firms to critically

review their strategies and business models for successful internationalisation and

minimise risks.

1.3 The Research Problem

‘The research process begins with problem discovery, and identifying the problem is the

first step towards its solution’ (Zikmund 2000, p. 56). The telecommunications industry

is characterised by traditional telecommunications players being challenged by

convergence and internet-focused players like Amazon, Facebook and Google (Mogg et

al. 2012). As telecommunications services become a commodity, firms face challenges

with strategic differentiation for competitive advantage (McKinsey 2012). As discussed

in Section 1.2, the resulting competitive landscape is compelling firms to seek

sustainable growth in international markets.

5

While there have been several studies on the internationalisation of telecommunications

firms (Stienstra et al. 2004; Curwen & Whalley, 2005; Gerpott & Jakopin 2007; Zita

2005; Curwen & Whalley, 2006, 2008, 2010; Salazar 2007; Kitchen & Ahmad 2008;

Jakopin 2008; Ure 2008, 2009; Chanmongkolpanich 2009; Laanti 2009; Laanti,

McDougall & Baume 2009; Kim et al. 2009; Clifton, Daniel & Comin 2011), much of

the scholarship is focused on the developed countries and the more developed emerging

markets.

The findings of a preliminary literature review revealed research gaps in the scholarship

on Malaysian telecommunications firms that are venturing abroad. Accordingly, the

research problem for this study can be stated as:

Addressing the critical issues for successful international market penetration by

Malaysian telecommunications firms.

1.3.1 The Research Questions

Since research can be complicated, good research questions enable a researcher to stay

on track (Punch 1998). The research questions, developed from the literature review and

stated in Section 5.2 are:

i. How are the dynamic changes in the global telecommunications industry

influencing the strategic choices of Malaysian telecommunication firms?

ii. What are the appropriate corporate strategies for successful international market

penetration by Malaysian telecommunications firms?

iii. What are the challenges that Malaysian telecommunications firms face in

international markets?

iv. How adequate are the Malaysian Government’s policies and initiatives for

supporting the internationalisation efforts of the Malaysian telecommunications

sector?

6

1.3.2 The Research Objectives

As reflected by the research questions, this research had the following six objectives.

i. To identify the dynamic changes in the global telecommunications industry that

influence the strategic choices of Malaysian telecommunications firms.

ii. To determine the appropriate corporate strategies that are necessary for successful

international market penetration by Malaysian telecommunications firms.

iii. To identify the challenges that Malaysian telecommunications firms face in

international markets.

iv. To examine the adequacy of the Government’s policies and initiatives for

supporting the internationalisation efforts of Malaysian telecommunications

firms.

v. To offer recommendations on policy and practice for addressing the critical

factors for successful international market penetration in the Malaysian context.

vi. To extend the scholarship and provide new insights into internationalisation

theory.

1.3.3 The Research Propositions

Research propositions are concerned with relationships between concepts (Maxfield &

Babbie 2001; Zikmund 2003). They are testable and are evaluated against empirical

evidence or data (Neuman 2006). As discussed in Section 6.5.2, a web survey was used

to test the theoretical model for this research. Four propositions, based on the research

questions that emerged from the literature review, were developed for this purpose and

these are listed below.

I. The dynamic changes in the global telecommunications industry have a strong

influence on the competitive strategies of Malaysian telecommunications firms.

7

II. Malaysian telecommunications firms have appropriate strategies for successfully

internationalising their operations.

III. Malaysian telecommunications firms that are internationalising their operations

face significant challenges.

IV. The Malaysian Government is fully supportive of the efforts of Malaysian

telecommunications firms that are internationalising their operations.

1.3.4 The Research Hypotheses

Four research hypotheses were crafted to confirm the validity of the tested theoretical

model through Structural Equation Modelling (SEM) and Confirmatory Factor Analysis

(CFA) as detailed in Section 6.6.1. These are:

H1: The “Dynamic Market Landscape” influences internationalisation strategy.

H2: “Internationalisation Strategy” is influenced by the dynamic market landscape

together with the ability to overcome challenges.

H3: “Challenges” impact the successful international market penetration of Malaysian

telecommunications firms.

H4: The “Government” plays a moderating role in the international market penetration of


1.3.5 Unit of Analysis

A unit of analysis can be defined as “the primary empirical object, individual, or group

under investigation” (Davis 2005, p.175). The Malaysian telecommunications sector has

four mobile players, 12 Mobile Virtual Network Operators (MVNO’s), seven Internet

Service Providers (ISP’s) and four Worldwide Interoperability for Microwave Access

(WiMAX) players with 8 players being awarded LTE licences in 2012 (MCMC 2012). In

view of cost and resource limitations, this research focuses on a single country, Malaysia.

The unit of analysis for this study comprises the major firms that had or currently have

8

overseas operations through outward internationalisation. They are namely i) Telekom

Malaysia; (ii) Axiata iii) Maxis; and iv) Time dotCom.

1.4 Justification and Research Contributions

Malaysian telecommunications firms have to internationalise their operations in order to

grow and develop into global players. As the domestic market becomes saturated and

highly competitive, Malaysian telecommunications firms are expanding their business

opportunities in neighbouring countries to seek new external revenue sources (Ahmad &

Hashim 2007).

The business performance of Malaysian telecommunications firms operating abroad have

been varied. Axiata was reported to have missed all its headline KPI’s for 2011 and

faces challenges in an increasingly complex marketplace (Axiata 2012; The Business

Times, Malaysia, 14 May 2012). This is reflected by the comments from Axiata’s CEO,

Jamaludin Ibrahim “2012 will be a game changing year for Axiata. To meet this demand

we have begun a comprehensive and holistic approach to data looking at it from revenue

opportunities, cost structure, customer experience, organisational reforms and new

business models. Moving forward we are confident of delivering profitable growth and

driving differentiation through innovative digital services and products. The results this

quarter are certainly a step in the right direction”.

Axiata had an estimated 200 million subscribers in its overseas markets and revenues

grew to RM4.55 billion, compared with RM4.19 billion in the previous corresponding

quarter. Cumulatively, for the nine-month period, the group's profit grew seven per cent

to RM2.2 billion with total group revenues of RM13.2 billion as at Q3 2012 (Axiata

2012; The Business Times, Malaysia, 30 November 2012).

TM, the predecessor incurred major losses in the early years when it ventured into Africa

(Kitchen & Ahmad 2008). Another key industry player, Maxis which has a presence in

Indonesia and India has also been plagued with challenges in its international ventures

(BMI 2012).

9

The study on the internationalisation processes of Malaysian telecommunications firms is

significant from a number of perspectives. First, is the limited scholarship on the

challenges that Malaysian telecommunications face when venturing abroad. Second, is a

need to assess the adequacy of the Malaysian Governments’ policies and measures to

support the internationalisation efforts of Malaysian telecommunications firms. Third, to

examine the strategies adopted by Malaysian telecommunications firms to maximise their

returns from their investments in foreign market operations. Based on these

considerations, this research can be justified on the grounds that the findings could:

i) extend the existing body of knowledge on the challenges that impact on Malaysian

telecommunications firms that are venturing abroad.

ii) lead to recommendations on appropriate corporate strategies for successful


iii) offer recommendations for improving the policies and programmes of the Malaysian

Government for supporting the internationalisation efforts of Malaysian


1.5 Research Methodology

Empirical research in social science proceeds in a variety of settings and contexts.

‘Within the constraints of time and other resources, there will usually be only one major

methodology which suits the research problem and associated research gaps’ (Perry

2001, p. 28). The methodology adopted for this research and its design is detailed in

Chapter 6 and outlined below.

1.5.1 The Research Design

The research design is the framework and structure for the collection and analysis of the

required data to address the research problem (Zikmund 2003; Bryman & Bell 2007). In

essence, it outlines the “plan on how the study will be conducted” (Berg, 2004, p.31).

The research was guided by a masterplan setting out the selected paradigm, the

10

dimensions of the research, the data collection instruments, the analysis procedures and

the targeted outputs. This is detailed in Section 6.3 and is outlined below.

1.5.1.1 The Research Paradigm

While there are a number of paradigms to guide research (Guba & Lincoln 1994), they

are generally grouped into two methodological approaches; inductive and deductive

(Patton 1990; Easterby-Smith, Thorpe & Lowe 1991; Parkhe 1993; McMurray 2009).

Guided by the objectives of this research, the inductive and deductive approaches were

used in a complementary manner at different phases of the research as discussed in

Section 6.2.2.1.

1.5.1.2 Dimensions of the Research

Research can be categorised into three main dimensions, namely, exploratory,

descriptive, and explanatory or causal (Neuman 2006). As detailed in Section 6.3.1, a

three-stage approach, utilising all the three types of research, was used for this study. As

shown in Figure 1.2, the first stage, exploratory and qualitative was also aimed at

identifying an appropriate theoretical model for this study (Sekaran & Bougie 2010). The

second stage and descriptive permitted the testing the identified theoretical model. The

final stage, quantitative and confirmatory in nature involved the validation of the tested

model using Confirmatory Factor Analysis (CFA) and Structural Equation Modelling

(Tabachnick & Fidell 2007; Hair et al. 2010).

11

Figure 1.2: The Research Master Plan

Research Paradigm

Research Dimension

Data Collection

Instruments

Data Analysis

Quality

Assessment

Research Outputs


1.5.1.3 Data Collection Instruments

As detailed in Sections 6.4.1 and 6.5, three data collection instruments were used. These

were (i) the literature review for the collection of secondary data (ii) personal interviews

for the collection of primary, qualitative data and (iii) a web survey for the collection of

quantitative data for the descriptive and confirmatory stages of this research.

i) The Literature Review

Secondary data was collected through a detailed review of the existing scholarship on the

background and focus theories (Philips & Pugh 1987) of this study. The former related to

international market penetration models and theories, the global telecommunications

industry and the emerging trends. The focus theories were the Malaysian

Stage 2 Stage 1 Stage 3

Exploratory Descriptive Confirmatory

Secondary Data

Primary Data

Primary Data

Literature Review

Interviews

Content Analysis

Theoretical Model

Content Analysis

Refined Model

E-Survey

SPSS

Delphi Pilot

Refined Model

CFA SEM

Triangulation

Qualitative Quantitative

Final Verified Model

12

telecommunications sector, the pertinent Malaysian regulatory policies, the Malaysian

telecommunications sectors’ strategies and the factors which impact the successful

international market penetration of the sector.

The review identified the key research issues and an appropriate theoretical model for the

study. It also developed the research questions which served as the basis for the crafting

of research propositions. These were used to test the identified theoretical model during

the second and descriptive stage of this research.

ii) Personal Interviews

Primary data were collected through face-to-face interviews with 20 participants from

the regulatory bodies, academia, Government agencies and the telecommunications

firms. The researcher adopted a semi-structured approach to ensure a free flow of

information through dialogue (Yin 1994; Mason 2002). The analysed data from the

personal interviews permitted the refinement of the theoretical model.

iii)The Web Survey

The quantitative data for the descriptive and confirmatory stages of the research were

collected through a web survey with 205 participants as detailed in Section 6.4 A

structured questionnaire was used for ‘comparability of the data, increased speed,

accuracy of recording, and to facilitate data processing’ (Malhotra 2010, p. 335). The

Delphi technique was used to provide feedback on the draft questionnaire from eight

knowledgeable individuals who were familiar with the research issues. It was based on a

five-point Likert attitude rating scale. The questionnaire was then pilot tested by a sample

of 20 participants before it was released to the target population.

1.5.1.4 Data Analysis

Qualitative and quantitative data were collected for this mixed methodology research.

The qualitative data emerged from the literature review and the personal interviews. The

web survey generated the required quantitative data for the descriptive and confirmatory

stage of this research.

13

As detailed in Section 6.8.1, the qualitative data analysis process involved data reduction,

coding, content analysis and data display. The display enabled the researcher to draw

justifiable conclusions (Miles & Huberman 1994).

The quantitative data analysis procedures, detailed in Section 6.8.2, included checking,

editing, coding, categorising, transcribing and data cleaning. The data was keyed into

SPSS version 17.0. Descriptive statistical analysis techniques were used to calculate the

mean, standard deviations and cross tabulation of the results.

The SPSS data were subjected to Confirmatory Factor Analysis (CFA) using AMOS 20.0

SEM software.

1.5.2 Research Quality

An important element of any research is to ensure its quality, credibility and

trustworthiness (Bryman & Bell 2007). The researcher took measures to ensure the

quality of research (Flick, Kardorff & Steinke 2004) and these are detailed in Section 6.7.

1.5.3 Ethical Issues

Social and business research raises concerns about moral and ethical issues (Hussey &

Hussey 1997). Research ethics ensure that research activities do not cause harm to

participants or have any adverse consequences (Ticehurst & Veal 2000; Cooper &

Schindler 2006). As detailed in Section 6.9, the researcher took several measures to

ensure that no harm was caused to the University and the several parties involved in the

research.

This research was conducted in compliance with the National Statement on Ethical

Conduct in Human Research (2007) and was approved by the Human Research Ethics

Committee of Southern Cross University (Approval Number ECN-10-122).

14

1.6 Structure of the Thesis

The thesis adopted a unified structure with nine chapters, as shown in Figure 1.3 in line

with Easterby-Smith, Thorpe & Lowe (2002).

Chapter One introduces the research topic and lays the foundation for this research. It

presents the background to this research, the research problem, the research questions,

the research objectives, the research propositions and the research hypotheses. It then

justifies the need for the research and its contributions for scholarship, policy and

practice. It then outlines the research methodology including the data collection

instruments and the data analysis procedures. The limitations of the research are

discussed and the key terms are defined. The Chapter concludes with a presentation on

the structure of the thesis.

Chapter Two presents the background theories on international market penetration that

are pertinent to the telecommunications sector. These include the economic and process

theories; the U models of 1977 and 2009; the flagship model; the strategic states model

and the strategic management based theories.

Chapter Three examines the literature on the global telecommunications industry in

terms of market characteristics. It then discusses changing patterns and challenges

emerging from the liberalisation of the telecommunications sector.

Chapter Four commences with an overview of the Malaysian economy, the national

developmental goals and the evolution of the Malaysian telecommunications sector. It

moves on to examine the literature on the country’s telecommunications policies and the

strategies adopted by the industry players to address the challenges emerging from the

forces of globalisation. It also identifies the factors which impact the successful

international market penetration of the sector.

Chapter Five analyses the data that emerged from the literature review and identifies a

preliminary theoretical model for this research. The analysis revealed several gaps in the

existing body of knowledge and these permitted the basis for the development of four

research questions.

15

Chapter Six presents the methodology for this study which is a mixed methodology

using qualitative and quantitative approaches. It also justifies the need for a three-stage

study which amalgamates an exploratory stage, a descriptive stage and a confirmatory

stage. The data collection instruments are discussed and the data analysis procedures are

presented. The discussion concludes with the measures being taken to enhance the

quality of the research and to address ethical issues.

Chapter Seven analyses the qualitative data that emerged from the personal interviews.

The findings were then compared with the analyses of the secondary data in respect of

each of the four research questions for the purpose of refining the preliminary theoretical

model. The Chapter concludes with the crafting of the research propositions for the

testing of the refined theoretical model during the descriptive stage of the research.

Chapter Eight analyses the quantitative data generated from the web survey for the

descriptive and confirmatory stages of the research. On the basis of the findings of the

descriptive stage, the refined model is tested. The Chapter then develops the hypotheses

for the validation and confirmation of the model during the third and confirmatory stage

of the research.

Chapter Nine presents the conclusions in respect of each research proposition by linking

the data from the qualitative and quantitative stages. It then discusses the relevance of the

research problem and the implications for theory development, policy and practice.

Finally the Chapter offers suggestions for future research.

16

Figure 1.3: Thesis Chapter Structure


Chapter 9: Conclusions and Implications

Chapter 8: Quantitative Analysis

Chapter 7: Qualitative Analaysis

Chapter 6: Research Methodology

Chapter 5: Research Issues and Research Questions Development

Chapter 4: Literature Review: Malaysian Telecommunications Sector

Chapter 3: Literature Review: The Global Telecommunications Industry

Chapter 2: Literature Review: The Theoretical Framework - Internationationalisation

Chapter 1: Introduction

17

1.7 Definition of Key Terms

This Section provides the definitions of some of the key terms used in this research.

Detailed descriptions of other important terms appear in various Chapters of the thesis.

Internationalisation is ‘the process by which firms increase their awareness of the

direct and indirect influence of international transactions on their future and

establish and conduct transactions with other countries’ (Beamish 1990, p. 77)

Globalisation Globalisation can be defined as ‘the flow of technology, economy,

knowledge, people, values and ideas across borders’ (Fok 2007, p.185)

Core Competence refers to “a competitively important activity that a company

performs better than other internal activities” (Thompson, Strickland & Gamble,

2005, p.101).

Generation Y refers to those people who were born in the internet era and who were

born in the period from the early 1980s to the early 2000’s (Noble, Haytko &

Phillips 2009).

Sustainable Competitive Advantage refers to situation when “a company achieves

sustainable competitive advantage when an attractive number of buyers prefer its

products or services over the offerings of competitors and when the basis for this

preference is durable.” (Thompson, Strickland & Gamble, 2005, p.7).

1.8 Limitations and Delimitations

The scope of this research had to be limited due to time and resource constraints.

Accordingly, the research focused on the four mobile players in the Malaysian

telecommunications sector. It did not emphasise on the internet service providers, the

WiMAX players and the Mobile Virtual Network Operators. The findings may not

therefore be reflective of the entire Malaysian telecommunications sector. Additionally,

the literature review was reviewed and finalised in March 2012 and updated in November

2012. Due to the dynamic nature of the sector, where possible pertinent details were

added to the review.

http://en.wikipedia.org/wiki/1980s

http://en.wikipedia.org/wiki/2000s

18

Furthermore, the researcher relied on judgemental and quota sampling for the selection of

the participants in the personal interviews and the web survey. This was necessary given

the relatively small size of the target population. Notwithstanding, the researcher

acknowledges that the recruitment process could have created an element of research

bias.

1.9 Chapter Summary

This Chapter introduced the research topic and laid the foundation for this research. It

presented the background to this research, the research problem, the research questions,

the research objectives, the research propositions and the research hypotheses. It then

justified the need for the research and its contributions for scholarship, policy and

practice. The research methodology including the data collection instruments and the

data analysis procedures were then outlined followed by a presentation on the structure

of the thesis. The key terms were defined and the Chapter concludes with a discussion on

the limitations and delimitations of the research.

The next Chapter commences the literature review with a discussion on the theoretical

framework for this research.

19

Chapter 2 - The Theoretical Framework

2.1 Introduction

The earlier Chapter introduced this research on Addressing the critical issues for

successful international market penetration by Malaysian telecommunications firms.

This Chapter reviews the pertinent literature on the research topic.

The literature review is an essential first step for driving the research (Berg 2004;

Neuman 2006). Accordingly, four chapters are devoted to the review based on the

background and the focus theories (Phillips & Pugh 1987). Chapters 2 and 3 discuss the

background theories, namely the theoretical framework and the global

telecommunications industry. Chapter 4 examines the focus theories; namely the

Malaysian telecommunications sector and the principal industry players. Chapter 5

analyses the secondary data that emerged from the literature review.

This Chapter, which sets the theoretical framework for this research has four Sections as

shown in Figure 2.1.

Figure 2.1: Structure of Chapter Two


Section 2.1 introduces this Chapter. Section 2.2 examines the literature on globalisation

and internationalisation. Section 2.3 reviews the pertinent internationalisation theories

2.1: Introduction

2.2: Globalisation & Internationalisation

2.3: Internationalisation Theories & Models


20

and models categorised as the economic and process based theories. The final Section 2.4

provides a summary of the Chapter.

2.2 Globalisation and Internationalisation

This Section begins with a discussion on international market penetration, globalisation

and internationalisation. Successful international market penetration can be considered as

being synonymous with the term “internationalisation”.

There are several definitions of internationalisation many with emphasis on the term

international operations (Beamish 1990; Johanson & Vahlne 1990; Andersen 1997;

Welsch & Luostarinen 1998; Gabrielsson & Gabrielsson 2004; Ruzzier, Hisrich &

Antoncic 2006; Hollensen 2007). However, a single definition of the term

‘internationalisation’ has yet to be agreed upon. After considering all the definitions and

taking into account the objectives of this study, the researcher adopted the description

provided by Beamish (1990, p.77) who defines Internationalisation as ‘the process by

which firms increase their awareness of the direct and indirect influence of international

transactions on their future and establish and conduct transactions with other countries’

(Beamish 1990, p. 77). This definition considers behaviourial elements of

internationalisation including learning and awareness implying relationships in

international transactions may influence a firms plans to venture into overseas markets.

This adequately reflects the scenario in the Malaysian telecommunications industry

where emphasis is placed on relationships in conducting business.

There is much new research on internationalisation. The findings suggest that an

international presence with its benefits is required for growth and sustainability (Fletcher

2001; Dunning & Lundan 2008; Booz & Company 2012). The benefits include reduced

transaction costs, economies of scale, increased revenue from foreign markets,

technological advances and the lowering or removal of the barriers of entry. The

adoption of internationalisation is most likely to be motivated by two factors; proactive

firms that internationalise because they want to and reactive firms that internationalise

because they have to as a result of market saturation, excess capacity and overproduction

(Knight & Cavusgil 2004; Filipescu 2007; Czinkota & Ronkainen 2007; Johansson,

Schorling & Strandberg 2008).

21

The terms globalisation and internationalisation are often interchangeably used.

However, authorities maintain that there are noteworthy differences between the two

concepts (Daly 1999). Walker and Fox (1996) view globalisation as different things in

different contexts. With increasing interdependence of national institutions and national

economies, economic theorists suggest that globalisation frees up capital flows (Floyd

2001). The gradual lifting of trade barriers through GATT and WTO has enabled global

geographical reach for firms. Similarly, globalisation theory is the growing

interdependence of national economics – involving consumers, producers, suppliers and

governments in different countries (Dunning 1997; Alam et al. 2010).

The globalisation phenomenon became prevalent in the 1970’s (Gjellerup 2000) and was

commonly used in the 1980’s as efficient trade and financial flows were enabled by

advances in technology (IMF 2008). As boundaries opened up, companies had to build

partnerships and relationships to compete effectively (Kanter 1995). Steger (2009)

describes globalisation as the buzzword of the ‘roaring nineties’ as interest in

globalisation intensified with many divergent views (Aharoni & Nachomi 2000; Clark &

Knowles 2003).

The role of the state and the importance of nations are significant for the

internationalisation process. The former aims to fulfill the national interest and the latter

conducts economic activities that extend beyond national boundaries. However, whilst

globalisation in its complete form eliminates the nation state, denationalisation and

economic activity are functionally integrated (Walker & Fox 1996). The impact is

discussed further in the next Section.

2.2.1 The Drivers for Internationalisat ion

The rapid convergence of the world’s economies and movement of capital flows has

resulted in the blurring of industry boundaries and an increasingly complex landscape

(Ernst & Young 2010; The World Bank 2011). These trends, which also present

opportunities, require the industry and Governments to rethink and reshape their

strategies to remain competitive in domestic and cross-border activities (Ali 2000; Asian

Productivity Organisation 2010; McKinsey 2012; PWC 2012).

39

22

Internationalisation involves firms expanding their operations into foreign markets

(Filipescu 2011). A firm’s internal capabilities, both nationally and internationally, guide

the internationalisation strategy along with the external environment (Johansson,

Schorling & Strandberg 2008). The influence and motivation for Malaysian companies

to invest abroad varies (Tham 2006; Zain & Ng 2006). According to Ragayah, (1999),

the key motivation was to expand and to find new markets for growth. There are several

factors impacting the push and pull factors including market-seeking, asset-seeking,

resource-seeking motives (Nachum & Zaheer 2005). Other market forces, include

competition, network externalities, Governments role and policies, and financial costs as

shown in Figure 2.2.

Figure 2.2: Drivers for Internationalisation

Source: Adapted from Yip 2003

As a consequence of globalisation and internationalisation there has been rapid growth in

global foreign direct investment (FDI) inflows has risen from US$700 billion in 2002 to

an estimated US$1.6 trillion in 2012 with forecasts of 1.8 trillion and 1.9 trillion in 2013

and 2014. However, the uncertainty in economic recovery and slowing global demand is

impacting the investment of transnational companies in overseas markets.

Internationalisation

Strategy

Markets

Customer demand

Transferable

Marketing

Global Customers

Cost

Economies of Scales

Country Specific

Difference

Government

Trade Policies

Technical

Standards

Host

Government

Policies

Competition

Competitors

global strategies

Interdependence

between

competitors

23

FDI in-flows in the services sector which includes telecommunications amounted to

US$668 million in the first half of 2012, a decline of 8% in the same period in 2011, as

compared to US$ 1.1 trillion in 2009 (UNCTAD 2012).

While FDI from developed countries rose by 25% in 2011 to reach 1.24 trillion, outward

FDI from developing countries declined by 4% to US4384 billion in 2011. The rapid

growth is also reflective of the policies of several countries, particularly in the

developing world to liberalise their economies and promote foreign investment in various

industries. However, the first half of 2012 witnessed an 11% decline in FDI inflows in

developing Asia reflected by weak external demand and uncertainty about high-growth

emerging markets.

ASEAN countries witnessed a sharp rise in FDI inflows from an estimated US$3 billion

in the latter part of the 1980’s to US$30b in 1996 by which time Malaysia accounted for

25% of inflows into ASEAN. Since independence, FDI has been fundamental to

Malaysia’s structural transformation. However, the Asian Financial Crisis of 1997-98,

resulted in Malaysia’s inflows contracting from US$7.2b in 1996 to US$2.7b in 1997.

The ASEAN regions decline in FDI flows was reflected by the overall global trend.

However, the pattern of FDI for Malaysia diverged from its ASEAN counterparts in 2002

and in 2007 Malaysia’s FDI outflows doubled that of its inflow. Furthermore,

Indonesia’s FDI flows and Vietnams FDI flows surpassed Malaysia in 2008 (Athukorala

& Wagle 2011; The World Bank 2011).

In 2011, Malaysia’s outflow FDI increased to US$1.5t as compared to by 13.1% to

US$1.32t in 2010 and US1.17t in 2009 (MITI 2011; UNCTAD 2012). Malaysian firms

are seeking growth in regional markets and FDI outflows are expected to increase with

US$8bn reported as at the end of the first quarter in 2012. However, it is viewed that

Malaysia is losing its competitiveness with rising costs and is caught in a middle income

trap as a result of limited innovation, capability and skills (World Bank 2011; UNCTAD

2012).

24

2.2.2 Internationalisation of the Telecommunications Sector

The significant developments in the service sector were triggered by GATS in 1992

(Javalgi et al, 2003; Laanti 2009; Wong 2012) Following the liberalisation of trade and

the increasing role of services, the service sector had to contend with global competition

(Wong 2012). This competition extended to network industries, including the

telecommunications sector. The telecommunications industry is a unique industry as it

has a ubiquitous influence on individual lifestyles and second, the sector has had to

contend with rapid transformation underpinned by technological developments,

liberalisation, intense competition and consumer behaviour (Lee, Ure & Lee 2009).

While the sector plays a significant role in the global economy, there is limited research

on the internationalisation of services and network industries like telecommunications,

particularly from the emerging economies. “Many of the theories and models developed

on internationalisation are based on empirical data on manufacturing companies” (Laanti,

McDougall & Baume 2009; Asgari, Ahmad & Gurrib 2010).

2.2.3 Foreign Market Entry Mode

Internationalisation choices involve strategic decisions including, foreign market

selection, the choice of the entry mode and the pace of internationalisation (Jones &

Coviello 2005). Additionally, internationalisation strategies involve product, operations,

market and organisation structural choices and decisions. The three key dimensions,

discussed below, are significant for the internationalisation of the firm.

41

Foreign market selection is determined by various factors including the size of the

market the industry, the home country and the affluence of the target market (Dow 2000;

Clark & Pugh 2001; Sakarya, Eckman & Hyllegard 2006). Firms initially select markets

which are “psychically close” in nature (Johanson & Vahlne 1977). Known as the

concept of psychic distance, it explains variations in firms international performance

(Evans & Mavondo 2002). The concept of psychic distance, coined by Beckerman

(1952) suggests that uncertainty is created as a result of the perceived differences

between a firms’ domestic markets and foreign markets (Childs, Rodrigues & Frynas,

2009). It describes the notion of the movement of a firm entering countries that are

25

physically close based on culture, economics, political inclinations and geographic

closeness and progressively expands into foreign markets with a greater distance

(O’Grady & Lane 1996; Lee 1998).

Psychic distance can be calculated through a psychic dispersion index based on the four

dimensions of (i) number of countries, (ii) psychic dispersion (iii) the number of

proportionate subscribers and (iv) their distribution by region. A composite index can

be drawn up by bringing together these four dimensions. The concept of “psychic

dispersion groups countries into Zones based on their cultural affinity” (Curwen &

Whalley 2008). On this basis, Ronen and Shenkar (1985) identified nine zones as shown

in Table 2.1.

Table 2.1: Psychic Dispersion Zones based on cultural affinity

Zone Countries

Anglo Australia, Canada, Ireland, New Zealand, South Africa, United

States and United Kingdom

Arab Abu-Dhabi, Bahrain, Kuwait, Oman, Saudi Arabia and United

Arab Emirates

Far Eastern Hong Kong, Indonesia, Malaysia, Philippines, Singapore, South

Vietnam, Taiwan and Thailand

Germanic Austria, Germany and Switzerland

Independent Brazil, Japan, India and Israel

Latin European France, Belgium, Italy, Portugal and Spain

Latin American Argentina, Chile, Colombia, Mexico, Peru and Venezuela

Near Eastern Greece, Iran and Turkey

Nordic Denmark, Finland, Norway and Sweden

Source: Ronen & Shenkar 1985

The number of Zones in which telecommunications firms have a presence in any point in

time is an indicator of the degree of internationalisation that they have achieved which is

based on the four dimensions of (i) number of countries, (ii) psychic dispersion (iii) the

number of proportionate subscribers and (iv) their distribution by region.

26

While the psychic dispersion index can be used to determine which operator is the most

internationalised, the findings of a study by Curwen and Whalley (2007) which covered

30 leading global mobile operators showed that the size of the telecommunications firm

and their global presence is poorly correlated. This is borne out by Deutsche Telekom

which is heavily dependent on its home market with no investments beyond its

neighbouring countries.

The choice of entry mode is an important decision that a firm has to make as part of its

internationalisation process. It requires the commitment of resources for market

expansion and impacts performance in international markets (Root 1994; Johansson,

Schorling & Strandberg 2008; Filipescu 2011). Entry mode choices are divided into two

categories: equity and non-equity. Equity entry modes which require a higher level of

control and direct investment include joint venture (JV), wholly owned subsidiary

(WOS) or sole ownership including greenfield, brownfield sites or acquisitions (Wild et

al. 2008). Non-equity entry modes include licensing, research and development (R&D)

contracts and strategic alliances (Andersen & Gatignon 1986).

The entry mode strategy attaches importance to the timing of entering a market as it

impacts the resources that a firm requires for internationalisation. If the firm has the

required knowledge and resources, and network externalities exist, it has the potential to

leverage from a first-mover advantage whilst minimising risks (Griffin & Pustay 2007;

Asgari, Ahmad & Gurrib 2010).

2.3 Selected Internationalisation Theories and Models

An important objective of the literature review, was to identify an appropriate theoretical

framework for this research. The internationalisation process is a complex phenomena

(Wong 2012), and the reviewed literature revealed several international frameworks and

theories that relate to this research. The pertinent theories are analysed and their

limitations are discussed in this Section with the aim of identifying the appropriate

theoretical framework for this research.

Internationalisation choices are connected to the growth strategy of a firm and the

technology it develops (Filipescu 2007). This Section explores three main

27

complementary categories of internationalisation. Benito and Welsch (1994) describe

these as economic based theories and process theories while Fletcher (2001)

differentiates them into factors causing internationalisation, which include

management/organisation characteristics or external impediments of incentives, and the

process of firms’ internationalisation. Laanti (2009) stresses the importance of the link

between strategic management perspectives and internationalisation. The discussion

begins with a review of economic based theories on internationalisation.

2.3.1 Economic Based Theories on International isation

Early research on internationalisation began with international trade theories and

economics (Bhowmick 2004). Often referred to as FDI theories, economics-based

theories of internationalisation, as shown in Table 2.2, include the works of: Vernon

(1966) product life cycle theory; Hymer (1976); Buckley and Casson, inspired by Coase,

(1976) internalisation theory; Williamson’s (1973;1974) transaction-cost theory and

Dunning’s (1985) eclectic paradigm. Each of these are described below.

Building on Ricardo’s (1817) framework of comparative advantage, Vernon’s Product

Life Cycle theory accentuates, that in its early stages, product innovation initially takes

place in developed western nations due to increased consumer’s spendable income.

Production starts locally and as growth occurs and products mature, production is

relocated to low cost developing countries, resulting in the innovating country becoming

the net importer. Vernon’s theory focuses purely on US-based MNE internationalisation

and assumes that factors of production are immobile across countries and as such has

received criticism (Morgan & Katsikeas 1997; Oswal 2010).

Evolving from international trade theories, Stephen Hymer’s (1976), market imperfection

theory postulates that firms internationalise to leverage on advantages specific to their

ownership that are not shared by competitors. These advantages include economies of

scale, access to raw materials, factors of production, market imperfections and access to

capital. Although Hymer’s work was seminal in explaining foreign direct investment, it

received much criticism as it failed to distinguish between structural and transaction costs

that market imperfections made and focused on industrial organisations. It also did not

take into account the geographical and spatial dimensions of the MNE and the impact of

28

political or social issues. Kindleberger (1969) built on Hymers work and added superior

access could be a source of advantage; Caves (1971) suggested that brand is another

source of monopolistic advantage.

Buckley (1988) and Buckley and Casson (1976, 1985) explored the concept of

internalisation where firms replace the market and use internal capabilities to exploit a

firm-specific advantages (FSA’s) for forward integration, backward integration or for

knowledge. The theory acknowledges imperfections in the market preventing efficient

operation of the international market investment flows (Kalfadellis & Gray 2002).

Market imperfections include external market factors, government induced regulations or

the lack of knowledge. The superior ability of a firm to innovate and overcome market

imperfections by creating its own market and developing and exploiting firm-specific

advantages (FSA’s) can lead to enhanced performance (Nelson & Winter 1982).

The Transaction cost theory (Williamson 1973;1974) analyses the comparative costs of

planning, adapting and monitoring task completion under alternative governance

structures. Williamson (1981) argues that market relationships are more opportunistic

than hierarchical relationships within the organisation and firms tend to grow via mergers

and acquisitions. Asset specificity, uncertainty and frequency affect the type of

governance structure selected for the transaction. The risk of bounded rationality and

opportunism increases as asset-specificity and uncertainty increases (Aubert & Weber

2001).

Table 2.2: Economic Based Models - Internationalisation

Author Year Theory/Model Main Features Vernon 1966 Product Life Cycle

Theory

Comparative advantage of advanced

countries to developed countries.

Innovation as a key driver.

Hymer 1960, Published

in 1976

Market Imperfection

Theory

Advantages specific to ownership

Buckley

Buckley and Casson

1982, 1988

1976, 1985

Internalisation

Theory

Common ownership and control of

activities - Firms FSA’S

Williamson 1973; 1974;

1985;1991;1996

Transaction Cost

Theory

Asset specificity, uncertainty and

frequency affect governance structure

Dunning 1985; 1988 Eclectic Paradigm;

OLI model

Owner, Location and Internalisation

advantages

Kindleberger

Caves

1969

1971

Builds on Hymers

Theory

Superior access to capital

Brand as an advantage

Source: Williamson 1973;1974;1985;1991;1996; Buckley & Casson 1985; Dunning

1988; Roolaht 2002; Bhowmick 2004

29

Of these, Dunning's (1988) eclectic paradigm, represented in his OLI Model, highlights

that the internationalisation of a firm includes both internal and external environment

variables and three specific advantages (Bell & Young 1995; Pauwels, Lommelen &

Matthyssens 2004; Oswal 2010). Firstly, Owner specific advantages, including

knowledge capital and patents which can be transferred to other countries at a lower cost.

Secondly, Location specific advantages (host country factors, profitability of utilising

assets abroad in comparison to home country), which in certain target markets can attract

FDI and thirdly, Internalisation advantages (relational factors, utilisation of specific

assets internally). The model suggests that where location advantages favour the home

market, then exporting is the preferred entry mode, (Roolaht 2002; Asgari, Ahmad &

Gurrib 2010). Furthermore, as a result of the developments of globalisation, the model

was extended to include networks (Dunning & Lundan 2008).

These theories attempt to explain the motivations and reasons for the existence of

MNE’s. They do not take full account of the dynamic process of internationalisation, the

risk factors and the behaviour of managers (Benito & Welsch 1994). Furthermore, they

partially explain the behaviour of individual business units. They also focused on cost

measures and FDI and do not consider other operation modes (Dunning 2000 cited in

Laanti 2009). Another limitation is the exclusion of the choice of entry mode which is

critical to the internationalisation process (Kenny 2009). Due to these limitations, the

economic theories were not considered appropriate for this research.

2.3.2 Process Based Theories on International isation

Process based theories are generally based on a broad range of business perspectives and

widespread empirical research (Kenny 2009; Matthews 2010; Oswal 2010). In the last

three decades, two streams of research have emerged; European based models, mainly

from the Nordic region and US based models (Osarenkhoe 2008). The European models

include the Uppsala model (Johanson & Wiedershiem-Paul 1975; Johanson & Vahlne,

1977, 1990; Luostarinen, 1979, 1994) and the US based models are innovation-related

(Czinkota, 1982; Reid 1983; Cavusgil 1984; Bilkey & Tesar 1997). These conceptual

models describe the internationalisation process as a gradual and incremental sequential

process of a firm towards international development and foreign involvement of the

company (Bell & Young 1998). The process models postulate that firms increase their

30

international commitment incrementally as they increase their knowledge and experience

to increase ownership advantages. They have their backgrounds in Penrose’s (1959)

theory of the firm and behavioural theory. Of significance to this research are the

Uppsala Model, the Innovation Related models, the Resource Based View (RBV), and

the Network Model and these are discussed next.

Uppsala Internationalisation Model (U-Model), 1977

Much research has been undertaken on internationalisation in the Nordic countries and

these are collectively referred to as the Uppsala School. The School advocates two

primary models namely the Uppsala Internationalisation Model (U-Model) and the

Innovation Related Models (I-Model).

The Uppsala Model has been one of the most seminal models in internationalisation

business research and influential on the internationalisation of the firm (Bell & Young,

1998). Initiated by Johanson and Wiedersheim-Paul (1975) and further expanded and

refined by Johanson and Vahlne (1977, 1990), emphasised on market commitment and

market knowledge acquisition (Bell & Young 1998). It focused on how organisations

learn and how the learning experience impacts subsequent behaviour (Forsgren 2002).

The model implied that a firm’s penetration of individual foreign markets takes place in

stages. Each stage represents a higher level of international involvement. The first or start

up stage relates to a firm with an interest in a new foreign market. In the second or

growth stage, the firm starts exporting through agents. Based on the knowledge gained, it

then expands and establishes a foreign sales subsidiary. In the final or mature stage, it

builds a production facility (Johanson & Wiedersheim-Paul 1975).

In this model, internationalisation is an incremental and gradual process (Welsch &

Luostarinen 1988b). It reduces risk by entering neighbouring countries located at a

shorter psychic distance, and as market and experiential knowledge is acquired, it makes

a commitment to gradually expand into new foreign markets as discussed in Section

2.2.3 (Andersson 1993; Calof & Beamish 1995; Forsgren & Haagstrom 2007).

Johanson and Vahlne (1977) amended the model to emphasise that the outcome of one

cycle of events constitutes input into the next. As shown in Figure 2.3, the model

31

differentiates between the “state” and “change” aspects of the internationalisation

variables (Gabrielsson 2004). The “state” aspects consist of market commitment which

includes the resources committed to the market as well as the degree of commitment and

the ease of transferability of resources from one market to another (Eriksson et al. 1997).

According to Oviatt and McDougall (2005), it also includes knowledge about foreign

markets which is at the core of the traditional internationalisation process, the “change”

aspects relate to (i). Changes stemming from firms learning from the experiences gained

from their operations in foreign markets, and (ii). The commitment decisions that they

make to strengthen their position in the foreign market.

Figure 2.3: The Uppsala Model of Internationalisation, 1977

State Change

Market knowledge Commitment decisions

Market commitment Current activities

Source: Johanson & Vahlne (1977)

The Modified U-Model , 2009

The Uppsala Internationalisation Model offered by Johanson and Valhne (1977) had

several weaknesses and in their subsequent authoritative work, Johanson and Vahlne

(2009, p.1) acknowledged that “much has changed since our model of the

“internationalisation process” of the firm. They highlighted that the economic and

regulatory environment have changed company behaviour. Accordingly, they agreed that

networks were important for successful internationalisation in line with Coviello and

Munro, (1997). They also agreed that relationship trust, commitment and new knowledge

created through exchanges in a firm’s network of interconnected relationships are also

important variables for successful internationalisation.

Johanson and Valhne accordingly amended the model in 2008, published in 2009, as

shown in Figure 2.4. The modified version differentiates between ‘state’ and ‘change’

aspects of the internationalisation variables. The ‘state’ aspects consist of market

32

commitment which includes the resources committed to the market as well as the degree

of commitment referring to the ease of transferability of resources from one market to

another. The ‘change’ aspects relate to i). Changes stemming from firms learning from

the experiences gained from their operations in foreign markets, and ii). The commitment

decisions that they make to strengthen their position in the foreign market.

Figure 2.4: The Business Network Internationalisation Process Model, 2009

State Change

Knowledge Relationship

Opportunities Commitment

Decisions

Learning

Network Position Creating

Trust-building

Source: Johanson & Valhne 2009

The four principal amendments to the original model are:

1. Adding recognition of “opportunities” to the original “knowledge concept”.

2. Changing the term “market commitment” to “network position” on the grounds that

the internationalisation process is pursued within a network.

3. Changing the original change label “current activities” to “learning, creating and

trust building in order to make the outcome more explicit.

4. “Relationship commitment decisions” to reinforce that the “commitment‟ relates

to a relationship and a firm may decide to increase or decrease its level of

commitment to one or more relationships in its network.

The models offered by Johanson and Valhne in 1977 and modified in 2009, were

considered as a good starting point for explaining the internationalisation processes of

Malaysian telecommunications firms; in particular the importance of business networks

for successful internationalisation in line with Coviello and Munro (1997). The modified

33

model 2009, has its strengths since it emphasises the key variables of relationship, trust,

commitment and the new knowledge that is created through exchanges in a firm’s

network of interconnected relationships. In view of these strengths, the researcher gave

serious consideration, to selecting the U model, (2009), as the appropriate theoretical

framework for this research.

However, the researcher also had to take into account, one important factor, i.e. that the

internationalisation paths of two leading Malaysian telecommunications firms, namely,

Axiata and TM, as discussed in Section 4.6.1 were the outcome of Government to

Government (G2G) relationships. It is therefore likely that the issues of trust, knowledge

and commitment to business partners, while important, were not given as much

emphasis. Based on these considerations, the U models were not considered appropriate

for the research.

2.3.3 The Stages and Innovation Related Models (I -Model)

Originating from the work of Rogers (1962), (cited in Gankema, Snuif & Zwart 2000),

the diffusion of innovation theory (Ruzzier, Hisrich & Antoncic 2006), authorities have

subsequently offered variations of the I-Model. These models, focusing on the export

development process, view each stage of internationalisation as an innovation for the

firm. (Tan 2008). These stages are the outcomes of managers’ perceptions and beliefs

which influence foreign market involvement (Coviello & McAuley 1999).

The number of stages, as shown in Table 2.3, varies amongst the models, from three to

six (Johanson & Wiedersheim-Paul 1975; Bilkey & Tesar 1977; Wortzel & Wortzel

1981; Cavusgil 1982; Czinkota 1982; Moon & Lee, 1991; Rao & Naidu 1992; Crick

1995). Crick, (1995), suggests three generic stages: the “pre-export stage”; the “initial

export stage” and the “advanced stage”. These could also be classified as the “low stage”,

“middle stage” and the “higher stage” of export behaviour.

Johanson and Weidersheim-Paul, (1975) highlight that there are four stages for firms

entering international markets. The first stage focuses on the domestic market, followed

by direct exports through agents. Based on the progress achieved, firms establish an

overseas sales subsidiary and finally establish an overseas production centre.

34

Bilkey and Tesar (1977) viewed the evolution of firms’ internationalisation process as a

series of successive learning stages, increasing international experience of managers and

subsequent internationalisation. Wortzel and Wortzel (1981) examined

internationalisation in emerging economies linking technological capabilities with

marketing strategies. They identified five (5) stages of export development, distinguished

by the internalisation of various functions previously conducted by the firm’s foreign

customers (Roolaht 2002; Humphrey 2004; Kenny 2010).

Rao and Naidu (1992) organised firms into four distinct stages based on their level of

involvement in export activities. This includes non-exporters, firms who intend to export,

sporadic exporters and regular exporters. Czinkota’s (1982) model involves six stages

characterised by the interest in exporting to learning to the scale aspect of foreign sales.

Whilst Crick (1995) draws upon Czinkota’s (1982) model, he does not define specific

stages and emphasises on the difference in the stages from non-exporters, passive

exporters to active exporters.

Lim et al (1991) extended the works of Rogers (1962) and Reid’s (1981) work. Their

model takes into account the decision makers view on exporting in the stages of

awareness, interest, intention/trial, motivation and adoption.

Table 2.3: Summary of the Stage Models

Author Year Number

of Stages

Main Features

Johanson &

Wiedersheim-

Paul

1975 Four Commitment to overseas markets increases with each stage.

Bilkey and Tesar 1977 Six Evolution through the stages is dependent learning and

attitudes of management.

Wortzel and

Wortzel

1981 Five Based on emerging economies, stages distinguished by the

internalisation of various functions previously conducted by the

firm’s foreign customers.

Cavusgil 1982 Five Establishment of relationships is core to internationalisation

where commitment and experience increases.

Czinkota 1982 Six Stages characterised by the interest in exporting based on

experience and learning.

Moon and Lee 1991 Three Export behaviour involvement; low, middle, high.

Rao and Naidu 1992 Four Stages range from no interest to regular involvement.

Crick 1995 Six Differentiates between non exporters, passive exporters and

active exporters; draws on Czinkota, 1982.

Source: Johanson & Wiedersheim-Paul 1975; Bilkey & Tesar 1977; Wortzel & Wortzel

1981; Cavusgil 1982; Czinkota 1982; Moon & Lee 1991; Rao & Naidu 1992; Crick 1995

35

While the stages models have received much support in that mutual commitment and

experiential knowledge supports the incremental approach (Chetty 1999; Peng 2001)

they have been challenged and criticised (Reid 1983; Bell 1995; Turnbull 1987;

McDougall & Oviatt 2000b). The main contention is that a linear and orderly move into

international markets may not always occur due to differences in market opportunities,

managerial capabilities and resource abilities. Furthermore, Clarke et al (1997) argues

that stages models, focus on the accumulation of market specific knowledge and not

general knowledge. Turnbull (1987) argues that a firms internationalisation is influenced

by its operating environment, industry specific characteristics, and its marketing strategy.

Government support also impacts the internationalisation process (Sullivan &

Bauerschmidt 1990). Some authorities contend that there is inadequate research to

support the notion that firms increase their commitment to markets through a sequence of

incremental steps as advocated by the stages theories (Buckley et al. 1970; Reid 1983;

Turnbull & Valla 1986; Bell 1995).

McDougall, Shane & Oviatt (1994) place emphasis on the growth of International New

Ventures (INVs) or ‘Born Globals’ (Oviatt & McDougall 1994) which may enter foreign

markets at inception and as such omit stages of the internationalisation process. Rennie

argues that “it is possible to succeed in world markets without an established domestic

base” (Knight & Cavusgil 2009). The variations include the timespan between the

foundation and internationalisation, the contribution of international activities to the

overall revenue, and the respective locations of international operations (Dib, Rocha &

Da Silva 2010). Globalisation, characteristics of the home and external markets, the

interdependence of national economies, technological advancements, network links,

entrepreneurial mindsets and consumer demand provide opportunities for born globals

(Baronchelli & Casia 2010).

Andersen (1993) points out that the stages models fail to delineate the movement

between the stages adequately and internationalisation patterns and approaches are not

universal (Buckley, Newbould & Thurwell 1979). This is supported by Welsch and

Luostarinen (1988, 1990) as they found that firms jumped stages and the process of

internationalisation had accelerated over time. The models fail to address the reversal of

the process where firms may reduce their commitment to a market and withdraw, the

process known as de-internationalisation. Some authorities are of the view that the

36

explanatory power of the stage models are more appropriate and applicable to the

manufacturing industry rather than the service industry which includes

telecommunications (Buckley, Pass & Prescott 1992; Chadee & Mattsson 1998).

The literature suggests (Ahmad & Hashim 2007; Asgari, Ahmad & Gurrib 2010) that the

internationalisation efforts of Malaysian telecommunications firms did not occur in

gradual and incremental stages. These firms established a presence in foreign markets, in

several cases, by taking up majority equity stakes in local telecommunications firms in

respective international markets as a result of Government relationships. Furthermore,

the technical capabilities of Malaysian telecommunications firms were in the domestic

market and their knowledge and experience in international markets was limited.

Accordingly, the stages and innovation-related models, despite their merits, were not

considered appropriate for this research. In summary, many of the earlier

internationalisation theories are context specific and fail to take into account the

significant changes in the global and technological advances in today’s environment.

However, many of the theories remain relevant for an understanding of the

internationalisation process.

2.3.4 Strategic Management Perspectives

Viewed in the context of globalisation, internationalisation strategies are influenced by

the growth strategies of a firm. A competitive strategy is based on strategic management

principles and its sustainability is dependent on both industry and firm specific factors

(Chew 2007). The understanding of the internationalisation process can benefit from

integrating strategic management and international business theories (Laanti 2009) and

the pertinent ones are discussed next.

2.3.4.1 Resource Based View

Regulatory reforms and globalisation present a competitive landscape whereby it is

imperative for industry players to be agile and adapt to create value for sustainable

competitive advantage. The ability to optimise resources and capabilities are integral to

the formation of a value-creating strategy (Hamel & Prahalad 1994; Jamison 1998;

Zimmerman, Zimmerman & Lange 2008). Pioneered by Wernerfelt (1984) and evolved

37

further by the works of Teece (1982), Barney, (1996, 1991), Prahalad and Hamel (1990),

Rumelt (1991), and Peteraf (1993), the RBV of a firm has its origins in Penrose’s (1959)

seminal work on the growth of the firm.

The resource-based view (RBV) focuses on a firms internal environment and contends

that competitive advantage originates at the firm level rather than at the industry in which

the firms operate (Conner & Prahalad 1996). This concept views the firm as a collection

of inimitable resources and capabilities. Resources include physical resources, human

capital, organisational capital, financial resources and technological capabilities (Hofer &

Schendel 1978; Barney 1991, 1995). Capabilities are invisible knowledge based

phenomena and include skills, invisible assets and intermediate goods (Amit &

Schoemaker 1993). The ability to optimise resources and capabilities are integral to the

formation of a value-creating strategy (Hamel & Prahalad 1994; Jamison 1998; Fahy &

Smithee 1999; Zimmerman 2008).

However, Fiol (2001) argues that a firms SCA based on a single inimitable core

competency is debatable due to the dynamic business environment. Barney’s (1991)

response lies in the firm’s ability to be adaptive to the changing business environment in

itself could be a form of competitive advantage. According to Fahy (2002) resources

have a broad distinction between assets and capabilities. Assets can be tangible

(Wernerfelt 1989) or intangible (Hall 1992); capabilities can be skills, invisible assets

and intermediate goods (Amit & Schoemaker 1993).

Grant (1991) on the other hand, argues that while resources are the source of a firm’s

capabilities, capabilities are the main source of its competitive advantage. This implies

that the RBV of a firm takes into total consideration all the resources and capabilities of

the firm (Grant 1991). These resources should capture durability, transparency,

transferability and replicability and the capabilities of its management to formulate and

implement value enhancing strategies.

Intangible resources and internal innovation are key for business success (Itami 1987).

Firms are likely to use a combination of resources and capabilities in the pursuit of

sustainable competitive advantage. The RBV was extended to the Dynamic Capabilities

perspective (Teece, Pisano & Shuen 1997; Eisenhardt & Martin 2000) which are the

38

drivers behind managers’ abilities to recombine resources into new sources of

competitive advantage, particularly in situations of rapid and unpredictable change

(Henderson & Cockburn 1994; Teece et al, 1997).

Accordingly, the RBV places emphasis on the importance of the integration or

individuals’ specialised knowledge to build competencies to achieve SCA (Nelson &

Winter 1982; Tan 2008). Resources can also be externally leveraged through network

relationships as shown in Figure 2.5. Resource adjustments over time provide for

flexibility to determine the course of the firms “internationalisation” (Ahokangas 1998).

Figure 2.5: Modes of Resource Adjustment

Source: Ahokangas 1998

The model of resource adjustment has practical applications. It provides firms with the

flexibility to adopt different internationalisation strategies with different activities. These

could be firm or network orientated resource development strategies or alternatively, a

combination of internal and external resources. In this regard, the RBV is similar to the

network theory, which is discussed in Section 2.3.7, as both the available internal and

external resources as the total resources of the firm. External resources could be obtained

through network relationships (Tan 2008).

While the RBV theory has strengths, it has also received much criticism (Porter 1990,

1996; Preim & Butler 2001a, 2001b; Bromiley 2005; Kraijenbrink, Spender & Groen

2010). These authorities argue that (i) it excludes several factors that are important for

39

the successful entry of firms into new markets. These include relationships (Vahlne &

Johanson 2002), business networks (Johanson & Mattsson 1988), developing

commitments, market specific knowledge (Luo & Peng 1999) and trust (Morgan & Hunt

1994).

While extant RBV research has identified the linkage between resources and outcomes,

questions relating to how resources are used, developed and implemented within

managerial processes have yet to be answered (Barney et al 2001).

(ii) Porter (1991) has criticised the RBV for its negligence of the environment.

(ii) While the RBV postulates that firms are successful because they have unique

resources, it remains unclear on how firms can acquire and nurture the required resources

to remain successful (Truijens 2003).

Significantly, Malaysian telecommunications firms, as discussed in Section 4.6, invested

heavily in overseas markets and as such their internationalisation efforts were not driven

by the need to secure additional resources (Ahmad & Hashim 2008). Taking these

factors into account, the RBV was also not considered appropriate for this research.

2.3.5 The Flagship Firm

Emerging from the authoritative work of Rugman and D’Cruz, (2000), this refers to an

MNE that coordinates the investment and operational activity within its business network

(Curwen & Whalley 2010, p.36). It comprises suppliers, customers, non-business

infrastructure and selected customers. The suppliers provide the business network with

resources, and the customers are the intermediaries between the flagship firm and the end

user, a customer. However, from the perspective of the flagship firm, its customers are

the intermediaries.

The principal activity of the flagship firm in the business network centres on

coordination. Its ability to do so stems from its asymmetric relationships with other parts

of the business network. Such strategic asymmetry makes it possible for the flagship firm

to control the capital expenditure programme of its partners as well as to determine the

markets in which they can operate. Other forms of co-ordination relate to common

40

branding, pricing strategies, strategic investments, and targeting the same set of end

customers (Curwen & Whalley 2004).

This theory is well suited for understanding the operations, performance and strategies of

the leading global players in the telecommunications sector like Vodafone and Telenor as

it applies to MNEs. The unit of analysis for this research relates to Malaysian

telecommunications firms which are relatively small and do not have the necessary

strategic asymmetry to effectively exercise control and coordinate the activities of its

business partners. Therefore, this theory was not considered to be appropriate for this

research.

2.3.6 The Strategic States Model

Advocated by Pehrsson (2001), this model is centered on an understanding of the nature

of the firm and the factors that characterise the environment in which the firm functions.

The model has two dimensions namely market penetration and segment adaptation. The

former relates to the number of markets in which the firm has a presence. The latter is the

extent to which the firm’s products meet the specific needs of the market. According to

Pehrsson, cited in Curwen and Whalley, (2004) there are four optimum strategies that the

firm may follow. These, as shown in Figure 2.6, relate to price, distribution, relations and

responsiveness and each could be a source of the firm’s competitive advantage.

Figure 2.6: Crucial Competitive Edge within the Strategic States Model

Source: Pehrsson (2001) cited in Curwen & Whalley 2004

Segmentation

Penetration

Price/Distribution Responsiveness/

Distribution

Price/Relations Responsiveness/

Relations

B

A D

C

Many Segments

Few Segments

Less More

Segment

Adaptation

41

This model is useful for firms that are endeavoring to identify their optimum strategies

for competing in the market. As also pointed out by Curwen and Whalley (2004, p. 42) it

is well suited for determining the strategies of companies over time by “undertaking the

analysis for a company at two points in time”.

However, Malaysian telecommunications firms are relatively small in size and only a

small number of them have ventured abroad. Furthermore, they have done so only over

the past few years and their presence is confined to very few countries. For these reasons,

this model, despite its merits, was considered to be less appropriate for this study.

2.3.7 The Network Model

The network approach proposes a more recent behaviourial approach to the

internationalisation of a firm (Blomqvist et al 2008). Extended from the Uppsala Model

by Johanson and Vahlne (1990), the network approach incorporates investments (Tan

2008). It offers a complimentary view to FDI and other theories, Granovetter, (1985)

cited in Kenny (2009) which are decreasing in prominence as a result of the changing

global business environment. Much of the research on network theory is developed from

industrial networks.

It postulates that firms are engaged in a complex web of interdependent relationships.

Network structure is determined by interrelated and interdependent actors, activities and

resources (Hakansson 1987). Actors are bound through various resources and activity

links and are in control of resources, perform activities, develop relationships through

exchange process and aim to increase their control over the network (Hakansson &

Johanson 1992). The focus of the network model is that an individual firm is dependent

on skills and resources from another firm, and firms are motivated to engage and

establish partners in their networks to gain access to required resources through exchange

relationships. Resources could be technical, financial and distributional and have to be

invested as an incentive for companies to enter into exchange relationships (Whalley

2001, p. 9). Coordination is essential because of various dependency relationships

between the activities (Hakansson & Johanson 1992).

42

The success of a firm in entering new markets is dependent on its position in the network

as it characterises its relationships with other firms (Laine & Kock 2000; Smith-Doerr &

Powell 2003). It stresses that the internationalisation process is not based on the focal

firm alone, it relies on the external environment and networks and relationships which

evolve over time to build trust resulting in market opportunities to internationalise

(Turnbull & Valla 1986; Johanson & Mattsson 1988; Johanson & Vahlne 1990; Bell &

Young 1998). The appropriateness of this model for this research is discussed further in

Section 2.3.7.1.

It has two main dimensions, first, the degree of internationalisation of the firm and

second, the degree of internationalisation of the market. There are four different types of

firms within these dimensions; the “early starter”, the “lone international”, the “late

starter” and the “international among others”. The first two types of firms follow the

traditional internationalisation model. The other two relate to firms who are already

doing business in the international environment and are therefore able to internationalise

more rapidly by being able to utilise international networks (Johnson & Mattson 1988).

However, Asgari, Ahmad and Gurrib (2010), postulate that firms are also influenced by

varying operational environmental settings and do not have a fixed pattern of

internationalisation. These factors include both internal and external factors (Choo &

Mazzarol 2001; Ekeledo & Sivakumar 1998, 2004; Koch 2001a; Quer, Claver & Andreu

2007); Internal factors include firm specific resources, strategic considerations,

ownership advantage factors, foreign business experience and networking capability

(Ahmad & Kitchen 2008; Ekeledo & Sivakumar 1998, 2004; Koch 2001a). External

factors, such as country factors, industry factors, target market potential and risk, are

usually beyond the control of the firms (Ekeledo & Sivakumar 1998, 2004; Koch 2001a).

Accordingly, as shown in Figure 2.7, establishment in a foreign market, considers several

environmental factors as outlined by Asgari, Ahmad and Gurrib (2010). Furthermore,

involving a new network to the firm, could entail international extension which involves

establishments of positions in relation to counterparts new to the firm, penetration by

leveraging on current positions and increasing resources, or international integration,

coordination of networks (Johanson & Mattsson 1988).

43

Figure 2.7: Preliminary Theoretical Model

Source: Adapted from Johanson & Mattsson 1988; Ahmad, Asgari, Ahmad and Gurrib

(2010)

Whalley, (2001), viewed integration as the most useful of the three methods, on the

grounds that it was a more “appropriate descriptor of collaborative behaviour’ (Whalley

2001, p.18). Furthermore, the likely outcomes emerging from network integration are

consolidation involving small highly internationalised players. Firms could also use the

financial strengths, to integrate their existing positions in different networks, as

manifested by Telenor, increasing its shares in its Malaysian operations.

There are various factors which influence network selection as part of the

internationalisation process. These include a firm’s market entry mode as well as the

choice of foreign markets including customers. In addition to this, network members

influence decisions and activities in the network approach (Coviello & Munro 1997;

Coviello & McAuley 1999; Andersen & Buvik 2002).

Social interaction and personal contacts can play an important role in establishing

networks in international markets and firms enter into strategic alliances or joint

ventures in situations where there is an initial lack of knowledge and where

complementary skills are sought (Johanson & Mattsson 1988; Welsch & Luostarinen

Domestic

Operators

Strategic

Considerations

Industry

Characteristics

Host/Home Country

International

Operators

INTERNATIONAL

EXTENSION

Extension of exchange

relationships to include

foreign markets

INTERNATIONAL

PENETRATION

Developing positions and increasing resource

commitments to existing

networks for market penetration

INTERNATIONAL

INTEGRATION

Integration of networks that the company is a member of

in different locations

Internal Factors

44

1988b). There are several factors which are critical to ensure the effective use of the

network model and these are:

First, liberalisation and regulatory reforms in the sector, accelerated by the WTO

Telecommunications Agreement, have spurred internationalisation. The regulatory

framework presents an increasingly competitive landscape in which foreign market entry

is reliant on access to networks and subsequent approval by Governments. The

internationalisation process must take into consideration Government relationships and

trade agreements (Zita 2005; Salazar 2007; Alam et al. 2010).

Second, motivated by growth and economic gains, foreign market selection is critical for

successful internationalisation. In addition to market knowledge and familiarity,

marketing strategies need to take onto account a firm’s specific advantages in the choice

of entry mode (Driscoll 1995). In the case of telecommunications firms, market entry and

successful penetration is dependent on the selected network partner.

Third, telecommunications firms require significant investments in physical

infrastructure which are challenging to transfer, and often controlled by the host

country. This results in them entering new markets through equity and non-equity modes

with network partners. Network participation involves interconnection and

interoperability. Although utilising networks, decreases some of the risks involved when

entering new markets, telecommunications firms still require adequate financial

resources to invest in R&D, resources and marketing to innovate and internationalise

(Bain & Company 2010; Deloitte 2010).

Fourth, services which appeal to global customers provide opportunities for

telecommunications firms to internationalise more rapidly. Consequently, network

externalities can be leveraged through an expanded customer base built through effective

and trusting network relationships.

The fifth relates to rapid technological advances and developments including

convergence challenges and new product developments. Access to markets as well as

products can be optimised through networks (Ahokangas 1998; Andersson & Wictor

2003).

45

Finally as discussed earlier, leadership and entrepreneurial mindsets are critical for

internationalisation through networks which are dependent on relationships and trust.

Networks also provide opportunities for learning and access to local resources (Nummela

et al. 2004).

2.3.7.1 Justification for the Selection of the Network Model for this

Research

The discussion in earlier sections set out the strengths and weaknesses of the reviewed

theories and models that attempt to explain the dynamic processes of internationalisation,

Guided by the objectives of this research, the network model was considered to be

appropriate for this study for the following reasons.

First, networks are an important factor for internationalising telecommunications firms as

foreign market penetration requires regulatory compliance. This involves obtaining

licences, spectrum or buying bandwidth from network operators in the location country.

Access to financial, technical, knowledge and cultural local support can be exploited

through networks to accelerate foreign market entry and minimise risk (Freeman &

McVea 2001).

Second, Asian businesses emphasise on inter-relationships and cooperative business

networks for their expansion processes to Asian and African countries (Ahmad &

Hashim 2008). Viewed from this perspective, the network theory has relevance for the

internationalisation of Malaysian telecommunications firms.

Third, the internationalisation expansion of Malaysian telecommunications firms which

commenced with TM, a Malaysian Government linked company, in the mid 1990’s was

into countries in which Malaysia had strong bi-lateral ties through South-South economic

links (Ahmad & Hashim 2007). Through the use of business networks,

telecommunications firms entered into joint ventures with host Governments and local

partners in the host country. As discussed in Section 4.6.1, TM’s international expansion

was facilitated by its business networks with foreign partners. The firms

internationalisation process could not be considered to have been incremental in process

and stages.

46

Taking these factors into account, the network theory was considered to be appropriate

for this study. Furthermore, the above critique of theories thus justifies the selection of

network theory as a 'best fit' model for analysis in this case.

2.4 Chapter Summary

The discussion in this Chapter was aimed at setting the theoretical foundation for this

research. It reviewed the drivers for internationalisation; examined the

internationalisation indicators and outlined pertinent theories and models. These were the

economic based theories, the process based theories, the resource based view, the

flagship firm, strategic states model and the network model. The review of the pertinent

theories revealed that Internationalisation is a complex process and that no universal

theory explains the process. Based on key considerations, the preferred theoretical

framework for this study was based on the network model. The next Chapter examines

the global trends in telecommunications.

47

Chapter 3 - The Global Telecommunications

Industry

3.1 Introduction

The earlier Chapter discussed the theoretical framework for this research. This Chapter

reviews the pertinent literature on the background theory relating to the global

telecommunications industry. It has five sections.

Section 3.1 introduces the Chapter and is followed by Section 3.2 which provides an

overview of the global telecommunications industry. Section 3.3 discusses the changing

patterns and the challenges emerging from the increasingly competitive environment

generated by the forces of globalisation. Section 3.4 examines regulatory trends in the

global telecommunications industry with the final Section 3.5 presenting the summary of

the Chapter.

Figure 3.1: Structure of Chapter 3


3.1: Introduction

3.2: The Global Telecommunications Industry

3.3: Market Changes and Industry Challenges

3.4: Regulatory Trends


48

3.2 Overview of the Global Telecommunications Industry

The global telecommunications industry was once country-centred, regulated and

monopolised by Governments, the industry has witnessed dramatic changes due to rapid

revenue growth, changes in market structure, technological advances and regulatory

practices (Curwen & Whalley 2008; IBM 2010; Kagan 2010; Ernst & Young 2012;

McKinsey 2012) and these are discussed next.

3.2.1 Market Structure

During its early stages of development, most countries treated the telecommunications

industry as a public good (Leff 1984; Pennings, Vankranenburg & Hagedoorn 2005). The

situation has since changed; triggered by the forces of globalisation, regulatory

developments, technology advancements and consumer demand. Consequently, the

industry is now characterised by intense competition and industry players are reviewing

their positions and participation in the value network (Bain & Company 2010; ITU 2011;

McKinsey 2012).

Another factor is market liberalisation; fuelled by the WTO. The consequential easing of

the barriers of entry (Porter 1995) led to telecommunications firms in developed

countries penetrating international markets. This has changed the telecommunications

landscape (Contractor & Lorange 2002; Accenture 2010; Deloitte; 2012; McKinsey

2012).

The transition of analogue to digital technologies, along with convergence and

integration of information and media, including the internet, broadband, mobile and

wireless communications, have challenged the traditional telecommunications business

model. The shift from traditional services to next generation networks, wireless, Voice

over Internet Protocol (VOIP), media and social networking has led to the rapid adoption

of mobile communications in developing countries. This medium is creating new

business imperatives for telecommunications providers (Jamison 2001; Bain & Company

2010; BMI 2012).

49

The acceleration of digitisation is an economic driver for growth and is leading to

commoditisation of telecommunications services. Firms face challenges with operational

efficiency and achieving sustainable growth (Booz 2012). With ongoing economic

market uncertainty, firms are shifting from integrated to open business models to

leverage on opportunities in the marketplace and digitisation can play an important role

in assisting policymakers to spur economic growth and employment. The trends and

forces are blurring the ecosystem and industry players are reviewing their positions and

participation in the value network ((IBM 2011). This challenge implies that

telecommunications firms have to shift their focus from technology to the customers

(Roland Berger, 2012, p.14). They have to give more emphasis to the usage and the users

of new technologies - segmented by education, income, age and gender – that now

emphasise the shift from voice to data traffic.

Currently there is an array of sectors and players in the telecommunications industry as

shown in Figure 3.2 and the pertinent ones are described below.

Figure 3.2: Telecommunications Market Sectors

Source: Developed for this Research Wireline

Wireless

Infrastructure

Equipment

Suppliers

Tele-

communications Business and

Consumers

Service

Providers:

Voice and

Data

Applications

& Content

50

The ITU (2012) reports that the mobile sector is leading the way with an estimated 6

billion subscriptions worldwide. Consumer demand for data has spurred 3G growth

which reached an estimated 1.5 million subscribers in 2012 (mobithinking.com 2012).

Much of this demand is from Asia which accounts for over 50% of global mobile

subscriptions with China and India accounting for majority of growth.

Customer needs and expectations for data services is driving technology developments.

The growth of mobile devices and connectivity has fuelled the evolution of the wireless

sector which is predicted to be the fastest growth sector expected to reach $796.2 billion

by 2013 (Kagan 2011). However, the fixed, wireline segment on a downward trend,

declined from 1.27 billion at the end of 2008 to below 1.2 billion in 2010 (Datamonitor

2010; ITU 2010; Plunkett Research 2010). Access to these services is underpinned by the

infrastructure which is discussed next.

3.2.1.1 Infrastructure and Equipment Suppliers

Network infrastructure provides the backbone, transmission capacity and supports

network services and access for operators. Traditionally viewed as core to the telco

industry, the dynamic market landscape and driving forces are transforming the sector as

operators review their business models and positions in the broader networked economy.

While the transition to next generation networks, including, IP, web-based infrastructure

and fibre to the home to meet communication needs across multiple channels presents

opportunities, operators remain vulnerable to sustain competitive advantage in the

dynamic landscape. These challenges are forcing operators to review how they can

combine their strategic assets and customer relationships and leverage their positions in

the network value chain (Accenture 2010; IBM 2011; Deloitte 2012).

To enhance competitive advantage, several models are emerging in the new economy.

These include firms outsourcing their network assets and operations to free cashflow.

Additionally many are entering into network sharing arrangements to reduce cost and

manage capacity as well as forming partnerships with leading media and internet firms.

Operators are also splitting their wholesale and retail businesses (Alcatel-Lucent 2012;

Roland Berger 2012). The major challenge remains achieving growth to meet consumer

51

demand as convergence increases, whilst maintaining low cost structures (CIMI 2011;

Alcatel-Lucent 2012).

Equipment suppliers meet telecommunications infrastructure needs as well as devices

(Arthur D. Little 2011). The devices sector is experiencing steady growth. There are

three times as many phones in the world today as there are personal computers (CCS

Insight 2010). Growth is fuelled by smartphones which witnessed an increase of 63.1%

increase in sales from 304 million in 2010 to 491 million in 2011 and reached over a

billion as at Q3 2012 (IDC 2011; mobithinking.com 2012). Deloitte (2011), estimate that

the $100 smartphone reached its first half billion in 2011. As consumers engage in a

mobile lifestyle, the sector has also witnessed an increase in tablet computers which grew

from 10 million sales in 2010 to an estimated 50 million in 2011 (Ortega 2011).

Due to competitive pressures and changing regulatory requirements suppliers are

increasingly adopting innovative business models to achieve network efficiencies and

fixed line infrastructure remains challenged by regulatory policy (Arthur D. Little 2011).

Due to recessionary conditions in 2003 the market valuations of leading industry players

plunged as borne out by Ericsson from US$115 billion to US$11 billion and Nortel from

US$136 billion to US$8 billion in March 2003 (Curwen & Whalley 2010). This led to

restructuring and consolidation through mergers and acquisitions.

Currently, Vodafone is a global market leader in respect of mobile networks. In respect

of GSM the leaders are Ericsson and NSN. As regards to CDMA Motorola, Nortel and

Chinese vendors Huawei and ZTE are the market leaders (Curwen & Whalley 2010).

3.2.1.2 Applications and Content

The web has presented opportunities for both the business and personal market segments.

This has made possible the usage of applications which capture valuable customer

information, enabling firms to gain insights to create customer advocacy. These services

include banking and microfinance firms like m-pesa in Africa reaching the unbanked in

rural communities. This is reflected by over 364 million low income people using mobile

financial services in 2012 (ITU 2012). There were an estimated one million applications

available in the market as at December 2011 compared to over 300,000 in December

52

2010 (IDC 2011; Deloitte 2010). IDC (2011) forecasts an estimated 77 million

downloads in 2014 worth US$35 billion However, only 20% are downloaded and often

abandoned after being used a few times. It is anticipated that the prices of mobile

applications are likely to fall as mobile devices are enhanced with preloaded applications

(The Distimo report (2011) cited in mobithinking 2011). With content initially being

offered free, content players struggle to monetise content and manage piracy issues.

While social networks continue to attract consumers, they struggle to deliver revenues as

reflected by the Facebook IPO and its subsequent share price plunging to half its original

levels in 2012 (Bloomberg 2012). Both Facebook and Twitter are considering charging

users for specific services.

However, mobile applications services are being extended to several industry sectors

including agriculture, health, and Government. To deliver customer value, industry

players need to innovate and review business models to go beyond digitising content and

leverage on media platforms available as they face pressures to deliver high speed

connectivity (ITU 2011; Capgemini 2011).

3.2.1.3 Service Providers

Telecommunications services include both voice and data over mobile and fixed lines.

While the internet remains a major force in today’s business and social environment, it is

the mobile and wireless sector which is leading the way. Worldwide mobile subscriptions

reached an estimated 6 billion in 2012, equivalent to nearly 85% of the world’s

population, compared to 1.41 billion in 2003. China and India alone accounted for 30%

of subscriptions in 2011 (ITU 2012). The forecast is for 7.3 billion mobile connections

by 2015 Revenue from mobile data contributed as much as 25% to overall global mobile

revenue in 2010 (Ovum 2010; ITU 2011).

With mobile broadband demand increasing, there were an estimated 1.2 billion active

mobile broadband subscribers in 2011 compared to an estimated 870 million in 2010

(ITU 2011, 2012). Cloud computing continues to grow and services will be promoted

through network appliances (CIMI Corp 2012). The ITU (2010-2011) Trends in

Telecommunications, contends that “Broadband is no longer a luxury, it is a necessity

53

that will be crucial to every country’s economic, political and social growth”. Rise in

smart devices is also set to spur mobile broadband growth.

Initially used for social purposes, the landscape for social media is evolving as more

businesses are embracing these channels to reach out to consumers (Ventana Research,

2010). With the shift in social communication patterns, social networking sites like

Facebook are estimated to have a billion subscribers as at the end of 2012

(socialmediatoday.com 2012). Twitter, with an estimated 250 million active users has

900 million registered profiles. Additionally, advertising, mobile payments and e-

Government services are on the increase (Deloitte 2012).

3.2.2 Technological Advances

Ure, (2009, p.6) contextualised five technological trends that are milestones in the

telecommunications sector.

From analogue to digital

From telecom protocol (standard and proprietary) to internet protocol (IP)

From Narrowband to Broadband

From wireline to wireless (including cellular, mobile, microwave including

WiMAX).

From Broadband (BIT Rates from domestic users 144kbs upwards) to high speed

Broadband (bit rates for domestic users up to 100mbs and 1GBs) for wired

networks and 3G for wireless networks

Due to the convergence of telecommunications and media, the telecommunications

industry is often classified as part of the information, communications and technology

(ICT) or technology, media and telecommunications sectors (TMT), (AT Kearney 2010;

Deloitte 2010). The evolution of technology including the transition of analogue to

digital technologies, and consumer behaviour has led to the innovation of new mobile

services. Technological advances have resulted in demand for narrowband to broadband

and a surge in the use of IP (ITU 2011).

54

The worldwide telecommunications industry accounted for and estimated 3% of global

GDP, with revenues of $2.1 trillion in 2012 (Ovum 2012) as compared to $3.10 in 2010

(TIA 2010). Worldwide telecommunications revenues are predicted to grow to over $5.1

trillion in 2016 of which carrier revenue alone is predicted to grow from $1.9 trillion in

2010 to nearly $5 trillion in 2015. Much of this growth is fuelled by the emerging

markets, particularly mobile, of Asia Pacific, Middle East, Africa and the BRIC

economies (Budde.com 2010; Insight Research 2011).

However, fixed telephony has been on the decline since 2005 due to the rapid growth of

mobile telephony which has reached saturation levels and recorded penetration rates of

over 100% in the developed countries. In the developing countries, mobile subscriptions

are growing at 20% annually with no signs of a slowdown (ITU 2011). Technology

advances are spurring Broadband and wireless growth. The top ten global

telecommunications firms in 2011 are shown in Table 3.1

Table 3.1: Top 10 Global Telecommunications firms performance 2011

Rank Company

by

Subscribers

No of

Subscribers

2011

Millions

Company

by

Revenue –

October

2011

Total

Revenues

in Euros

(m)

Company

by Brand

Value

1 China Mobile 649,568

December

AT & T 92,733 China Mobile

2 SingTel 433,569

December

NTT Do Co

Mo

87,719 Vodafone

3 Vodafone

Group

381.72

December

Verizon 79,515 Telefonica

4 America

Movil

236

December

Deutsche

Telekom

62,421 ufone

5 Telefonica 231

September

Telefonica 60,737 AT &T

6 Bharti Airtel 227.04

September

China

Mobile

54,928 Telenor

7 Orange

France

217.3

June

Vodafone 51,926 TeliaSonera

8 Telenor 203

September

France

Telecom

45,503 Deutsche

Telekom

9 Vimpelcom 193

June

America

Movil

36,746 China

Unicom

10 China

Unicom

192.38

October

KDDI 29,236 France

Telecom

Source: risedream.com 2011; Totaltelecom 2011; reuters.com 2011

55

With increased global connectivity, the industry is increasingly been viewed as a critical

factor for socio-economic advancement (Markova 2008; World Economic Forum 2009).

The top ten operators generated a net income of Euro 77 billion in 2011. However,

telecommunications operators now face the challenges of growth, convergence, business

transformation, change in communication patterns, along with technology and regulatory

modifications (Ernst & Young 2010).

3.2.3 Regulatory Trends

The principles of privatisation, competition and liberalisation have characterised the ICT

sector over the past two decades. There has been a shift away from the public funding

ICT infrastructure towards private sector funding and participation through Public-

Private Partnerships (PPP).

Triggered by the Uruguay Round (1986-94), commitments were made in value-added

services. Deregulation, triggered by the WTO, a key actor for the telecommunications

industry, commenced in the USA with the Telecommunications Act of 1996. The Basic

Telecommunications Agreement was negotiated by WTO members in 1997. The

agreements promotes liberalisation, market access, competition and price reductions for

consumers. Deregulation was followed by reforms in Western Europe in 1998, and by

Japan, Australia, New Zealand, (Li & Whalley 2002; Sanchez & Hwa 2003; Laanti 2009;

Alam et. Al. 2010; McKinsey 2010). Ownership has now shifted from the public to the

private sector and over the period 1984 and 1996, privatised assets rose to an estimated

$160 billion largely in Asia Pacific region and Western Europe (Economides 1999).

Market-based approaches characterised by intense competition as emerging new entrants

has resulted in decreasing prices for customers and lower revenues for

telecommunications firms. In parallel, the successful transformation of monopolistic

markets into competitive ones required the need for increased regulation and industry

oversight. As such, the number of ICT regulatory agencies worldwide has increased from

14 regulatory agencies in 1990 to 153 in 2009 (ITU 2010).

The regulatory framework at the global level is the International Telecommunications

Union (ITU) which develops policy guidelines, best practices and globally agreed

56

technical standards to support Governments and the industry. Committed to bridging the

digital divide via ICT development, it has developed a Universal framework for global

communications. The ITU also supports the industry through reports on industry trends,

events, conferences and publications (ITU 2010).

Regulatory reforms have created a dynamic landscape which presents both opportunities

and challenges for consumers, industry players and Governments. Several

telecommunications operators now have opportunities to venture into foreign markets.

The increased competition has led to consumers benefitting from competitive pricing,

innovative solutions and enhanced quality of service (Markova 2008; Ernst & Young

2010; MCMC 2010; McKinsey 2010).

These trends are generating a new set of issues. Intense competition compels industry

players to unbundle the local loop (LLU) as well as constrain and confine roaming prices

to the regulatory limits. Additionally, Governments, by way of flexible and transparent

regulations have to administer bottlenecks, oversee access and international gateways

(ITU 2011).

Regulatory objectives and their impact differs across countries. However, the overall

generally acknowledged objectives of telecommunications regulation are comparable. As

outlined in Figure 3.3. these fall into four main categories, namely, economic, technical,

social and political regulation and are discussed next.

Economic Regulation is based on the premise of supporting a growing economy through

a competitive landscape. In the telecommunications industry where the nature of the

industry may create natural monopolies, independent economic regulation is required to

protect consumers and promote the provision of quality and reliable services through

effective regulatory policies including licensing, pricing and interconnect agreements.

Competitive practices deliver these services to consumers and provide incentives to

invest and improve efficiency and service quality. Additionally, universal access and

universal service provision assist in achieving social empowerment by encouraging

operators to provide affordable telecom services to communities and households. In

Singapore, from the beginning of 2007, Singaporeans enjoyed free wireless connectivity

57

at up to 512 kbps speeds almost everywhere for at least two years under the regulator’s

‘Wireless@SG’ programme (ITU 2012).

Technical Regulation involves the regulator ensuring access to services. Operators are

encouraged to invest in cost efficient information infrastructure and technologies.

Spectrum is a finite resource and technical regulation is required to ensure effective and

efficient allocation and utilisation of such scare resources. This is extended to numbering.

Regulators are also responsible for standardisation within ITU guidelines, convergence

VoIP and monitoring NGN (ITU 2010; MCMC 2011).

Social Regulation is based on the principle that operators make available the right

infrastructure to satisfy customer needs resulting in delivering quality of service cost-

effectively. In Malaysia, social regulation which is aimed at ensuring that applications

and services promote Malaysian culture, identity and values. Regulators are obliged to

protect consumer rights through price regulation, privacy, managing dispute resolution

and appeals. Social regulation also aims to encourage operators to provide suitable and

affordable telecom services to rural, non-profitable communities (Universal

Services/Universal Access) (ITU 2011).

Political Regulation, based on the premise of transparency, aims to increase

competitiveness through using ICT and promotion of mechanisms to facilitate market

entry. It aims to support the provision of telecommunications to improve quality of life.

Figure 3.3: Telecommunications Regulatory Objectives

Source: ITU 2010; MCMC 2010

Economic Regulation

Universal access provision

Licensing

Interconnect

Access to services

Competition practices

Infrastructure sharing

Technological Regulation

Technical standards

Spectrum management & assignment

Numbering

Universal access to broadband

VoIP Regulation

Social and Consumer Regulation

Quality of Service

Pricing regulation

Protect Consumer rights, Privacy

Dispute resolution and appeals

Universal service provision

Application & content requirements

Political

Transparency

Industry structure - Foster competition

Social welfare maximisation

Promotion of Investment

Ownership & Performance Levels

58

The rapidly evolving market, technology advances in mobility, NGN, and the

convergence of IP telephony, VoIP, data, and video warrant corresponding changes in

the regulatory framework. This is necessary as several policies in relation to the use of

internet protocol and convergence are now obsolete and serve as restrictions and barriers

for the changing market environment (Melody, Sutherland & Tadayoni 2005; ITU 2010).

3.3 Market Changes and Industry Challenges

The earlier sub-section, 3.2, discussed the significant developments in the

telecommunications market structure and its rapid growth in terms of revenues,

investments, technological advances and regulatory trends. While the prospects for the

industry remain bright, the increasingly competitive environment also has attendant

challenges.

Ure and Lovelock, (2009, p.3)

“believe that many telecoms companies are confronting the dual challenges of a maturing

industry and an increasingly ‘tech savvy’ consumer base. The challenge that now

confronts telecoms companies is to find a new role and formulate a new set of objectives

to cope with these demands”

Figure 3.4 shows some of these challenges emerging from the literature (Markova 2008;

Bain & Company 2010; EY 2010; IBM 2010; ITU 2010) and these are discussed below.

Figure 3.4: Changing Patterns and Attendant Challenges

Source: Markova 2008; Ure & Lovelock 2009; Bain & Company 2010; Deloitte 2010;

IBM 2010; ITU 2010; MCMC 2010

Strategic

Investments

Changing

Market Demands

Technology

Developments

Regulatory

Developments

Changing

Patterns

59

3.3.1 Strategic Investments in a Competitive Landscape

The global telecommunications industry witnessed dramatic structural adjustments as a

consequence of economic globalisation and liberalisation which led to regulatory

reforms. The outcome was a change in the nature and pattern of strategic investments

which was also driven by push and pull factors. An important push factor, for European

operators, was the increased competition in domestic markets which required them to

move into foreign markets for growth and revenue gains. In the United States, firms

embarked on overseas ventures to overcome the domestic regulatory challenges that they

had to contend with.

There were two significant pull factors. The first was the privatisation of the

telecommunications sector in several developing countries, including Malaysia, India,

Indonesia, Sri Lanka and Thailand. In these countries, the issuance of licences, initially

to local operators was characterised by them focusing on home markets. As the markets

became more liberalised, local operators entered into partnerships with major global

players largely from Europe and the United States to benefit from technical expertise and

to secure the capital required for infrastructure development in a capital-intensive

industry (Curwen & Whalley 2008).

The second pull factor was the advances in technology as reflected by the entry of mobile

communications in the early 1980’s. This major development, which commenced with

the First generation spectrum (1G) and subsequently 3G and broadband created new and

lucrative investment opportunities. The global investment flows gained momentum with

WTO’s BTA agreement in 1997. Accordingly, several European operators were

motivated to expand into regional and global markets to capitalise on the growth

opportunities presented by the upcoming mobile segment. This was reflected by T-

Mobile’s investment in Poland and Vodafone, currently the worlds’ most international

operator which commenced its internationalisation in the early 1990’s and now has a

presence in more than 20 countries with more than 80% of its revenues generated from

foreign markets (Kim et al 2009; Curwen & Whalley 2010).

A pertinent regional example was SingTel which ventured into international markets due

to its limited market size. It had a presence in 20 countries with 468 million mobile

60

customers globally as at September 2012, including Australia where it acquired a

majority stake in Optus (SingTel 2012). However, it’s strategy for international

expansion was halted by the coup in Thailand in 2006. The firm subsequently entered the

Thai market and has since raised its stake in its Thai venture to 23.2% to maximise its

value from its existing operations. AIS was listed on the Thai stock exchange in 2011

(cellular news 2011).

In the case of Japan, NTT’s internationalisation efforts were motivated by its desire to

leverage on its dominant position in the domestic market. It sought to implement its, i-

mode as a post 2G standard to the global market. However, its technology-led strategy

was not viable as it lost $9b, and commenced retracting from international markets in the

US and Europe in 2004 and 2005 respectively. However, it commenced its

internationalisation efforts again in 2005 with the purchase of equity stakes in South

Korea, and Philippines via DoCoMo. The firm had also invested in U mobile, however,

subsequently withdrew in 2009 (U Mobile 2009).

Malaysia was more focused on global opportunities with TM venturing into African

markets in the mid 1990’s. By 2006 it had a presence in 9 countries.

The Industry’s oligopolistic nature along with network characteristics, suggests that the

telecommunications industry is a capital intensive industry requiring capital investment

in physical infrastructure. While motivations for venturing overseas vary for MNO’s, and

technological advances, along with market liberalisation present operators and industry

players alike with challenges as they share two common concerns. First, the changing

nature of consumer demand. This requires telecommunications operators to invest in

solutions that provide mobility and ubiquitous access with an emphasis on speed,

bandwidth, convergence and quality of service. Second, increasing competition and

pressures on operating margins, with declining market shares. This requires them to seek

revenues for sustainable growth, differentiation to create advocacy while managing

commitment and risks.

With limited opportunities in foreign markets, spending trends are shifting towards

mobile devices and mobile applications (Gartner 2010). Although, the nature of

investments has changed, the sector is predicted to grow rapidly in emerging markets

61

(Dunning & Lundan 2008). While both create opportunities for growth, they have to be

matched by long term growth and innovation strategies that meet investors’ expectations

(Perlmutter & Heenan 1994; OECD 2007; Markova 2008; PWC 2012).

While declining ARPU’s were a push factor for early internationalisation, as discussed in

this section, the situation has now changed. Technology advances, market reforms and

consumer demand resulting in a competitive landscape present opportunities as well as

challenges for today’s operators. The current driver for these companies is towards

sustainable technology and Long Term Evolution (LTE) technology to meet consumer

demand for data.

3.3.2 Technology Developments

The internet, now a major competitive force is altering the telecommunications landscape

and is a catalyst for the technological developments required to meet consumer demands

The convergence of technology, media, and telecommunications (TMT) combined with

open IP networks, has led to an erosion of the barriers to entry (Deloitte 2010; Mathews

2010).

Consequently, the rise in smartphones and network appliances presents further

opportunities for players to form alliances and bundle solutions with complementors to

increase revenue and market share in adjacent and related industries (Funk 2009; Deloitte

2012). Technological advances, however, require increased investments in R&D to bring

new innovative products and services to the market. Related challenges are the reducing

project life cycle times, positioning in the value network and the need for product

differentiation to reap its attendant benefits in a highly competitive market (Laanti 2009;

Ernst & Young 2010; IBM 2012). Technology advances also present opportunities for

market entry as well as increased capacity thereby increasing competition. This in turn

impacts pricing, often resulting in price reductions (Roland Berger 2012).

62

3.3.3 Changing Market Demands

The earlier sub-section, 3.3.2, discussed technology developments, in particular, the

internet and the convergence of technology, media and telecommunications (TMT).

Consequently, telecommunications firms have to address the challenges relating to

customer expectations of convergence, multi-media rich services and new product

offerings to unlock consumer value and maintain customer loyalty (Sandeberg 2008;

Bain & Company 2010; EY 2010; MCMC 2010; O2 2010; Qtel 2012).

This challenge implies that telecommunications firms have to shift their focus from

technology to the customers (Roland Berger, 2012, p.14). They have to give more

emphasis to the usage and the users of new technologies - segmented by education,

income, age and gender – that now emphasise on the move from voice to data traffic.

Firms are striving to leverage on customer experience as a differentiator to disrupt the

market and achieve advocacy (Indosat 2012; McKinsey 2012; XL 2012).

Voice revenues worldwide are generally on a decline due to increases in internet usage

through both mobile and fixed communications, the rise of social media, availability of

mobile applications and content. In high income countries, computer and internet user

penetration rates are broadly similar. However, in lower income countries, the

discrepancy between computer and internet user penetration is larger and this may be due

to the lack of fixed internet infrastructure, resulting in higher prices for internet access

and relevant content. While the demand for data services remains a major challenge in

developing countries, it also presents itself as an opportunity for increased revenue

earnings for telecommunications services, particularly in the mobile sector.

Available data on internet use show that people with higher education levels use the

internet more than those with a lower level of education. Furthermore, differences in

internet usage rates between consumers with different education levels are more

pronounced in countries where incomes are equally less distributed. In Africa, one of the

key determinants of internet access is income with those, the higher income brackets

having greater access to the internet. Data from developed countries also suggests that

affordability also plays a key role in internet use (ITU 2011).

63

However, three key trends in the internet market in developing countries point to

narrowing of the internet user divide in the short and medium terms. First, is a rapid

spread of mobile internet access which include mobile broadband access as these can

overcome infrastructure barriers as well as to allow consumers to access the internet via

the mobile devices. Second, the growing interest in providing pre-paid mobile broadband

internet services which can lower the income barriers and permit lower income

customers to purchase affordable, time or data volumes to access the internet. Third, the

increasing number of students at schools and universities who use the internet for their

study material. This implies that those currently enrolled in schools and universities that

provide internet access are likely to contribute to rapidly increasing internet penetration

rates.

A higher percentage of men than women use the internet in both developing and

developed countries. The gap is wider in developing countries and gender related

differences could be due to lower education and income levels. There are also significant

differences in internet use between urban and rural areas. People in the latter have less

access to the internet due to infrastructure and service limitations. This is also due to

differences in education and income (ITU 2011).

Another important trend that is impacting on consumer demand is the growth of social

media and networking sites which allow users to expand social and business contacts as

well as to communicate and share contact including photos, media and music. Social

networking sites have become a key driver of internet use, particularly by young people.

The findings of a survey conducted by Livingstone et al, (2011) of 25,000 young internet

users between the ages of 9 and 16 and their parents in 25 European countries found that

38% of children between 9 and 12 years old, have a social network profile and 77% of

children between 13 and 16 years old.

The trends discussed above are reflective of the significant changes that characterise the

telecommunications consumer market. They are also indicative of the new challenges

that telecommunications firm must address through revised business models that focus

on the consumer in order to meet consumer expectations and retain customer loyalty for

sustainable growth.

64

The growing demand for convergence and consumer demands for more choices of

products and services have triggered unprecedented rises in social media channels, smart

phones, SMS and Multimedia Messaging Service (MMS). This requires actions by

telecommunications operators and related industry players to maintain customer loyalty.

They also have to unlock customer value through the delivery of innovative, multi-media

rich services (Sandeberg 2008; Bain & Company 2010; EY 2010; MCMC 2010; Roland

Berger 2012).

3.3.4 Regulation

Regulatory Trends were discussed in 3.2.1.3. Regulatory reforms are targeted at

encouraging competitive markets to support growth and quality of service. The

increasing competitive landscape has resulted in growing complexity in the regulatory

environment. Convergence requires regulatory bodies to adopt a flexible and innovative

approach to meet consumers, industry players and home Government needs. The global

telecommunications’ market had 158 regulators as at the beginning of 2011. Privatisation

and ongoing reforms will require regulatory bodies to be agile and recruit knowledgeable

resources to “adapt to the needs of their mandates” (ITU 2011).

3.4 Chapter Summary

This Chapter discussed the global emerging trends in the telecommunications industry. It

outlined the market structure and size, and reviewed the regulatory framework. It then

examined the driving forces and resultant challenges emerging from the changing

patterns and trends in the industry. The next Chapter examines the Malaysian

telecommunications sector and industry.

65

Chapter 4 - The Malaysian

Telecommunications Sector

4.1 Introduction

The earlier Chapter introduced and discussed the global telecommunications sector. This

Chapter discusses the background theory of the Malaysian telecommunications sector

that relate to this research. It has ten Sections as shown in Figure 4.1.

Section 4.2 presents the country background with an overview of the key demographic

and economic indicators. Section 4.3 discusses the evolution of the Malaysian

telecommunications sector and the current situation. Section 4.4 examines the new

telecommunications products and services that are transforming the Malaysian

telecommunications market. Section 4.5 outlines the Malaysian Government’s policies

and institutional framework. Section 4.6 examines the major players in the Malaysian

telecommunications industry. Section 4.7 reviews the international presence of

Malaysian telecommunications firms and outlines selected target regional markets.

Section 4.8 assesses the Malaysian telecommunications sector competitive strategies.

Section 4.9 identifies and discusses the critical factors that impact on successful

international market penetration by Malaysian telecommunications firms. The final

section 4.10 presents the chapter summary.

66

Figure 4.1: Structure of Chapter Four


4.2 The Country Background

This Section introduces Malaysia to provide the country context in line with Perry

(2002). This is considered important as the ethnic composition and the development

strategies adopted by the country provide the contextual setting for the research.

Malaya gained independence in 1957 and in 1963 became Malaysia when it merged with

Singapore and the eastern states of Sabah and Sarawak. Political and social unrest led to

Singapore exiting the Federation in 1965 (Andaya & Andaya 1982; Jessy 1985).

4.1: Introduction

4.2: Country Background

4.3: The Evolution of the Malaysian Telecommunications Sector

4.4: New Products & Services

4.5: Malaysian Government’s Policies & Institutional Framework

4.6: Major players in the Malaysian telecommunications industry

4.7: International presence: Malaysian telecommunications firms

4.8: Malaysian telecommunications sector competitive strategies

4.9: Critical Factors Impacting Successful International

Market Penetration


67

Covering an area of about 330,252 square kilometers and the country consists of

Peninsular Malaysia (Perlis, Kedah, Pulau Pinang, Perak, Selangor, Negeri Sembilan,

Melaka, Johor, Pahang, Terengganu, Kelantan); Sabah and Sarawak in Borneo Malaysia

is a multi-ethnic country with a population of 28.92 million as at September 2012 (GoM,

201; MCMC 2012). The principal ethnic groups are the Malays, followed by the Chinese

and Indians. Other significant groups are the indigenous people of Sarawak and Sabah,

including the Dayaks, Kadazans, Bajaus, Melanaus and Muruts (GoM 2011).

At the time of independence Malaysia was, an agricultural based economy with rubber

exports accounting for 70% of export earnings with an equivalent contribution to GDP. It

was also a plural society divided by race, income and occupational classifications (Goh

2009). Almost two thirds of the population of 7.2 million people lived below the poverty

line in 1957 and the majority of them were the Malays or Bumiputeras. Committed to

poverty alleviation, Government policies were directed at rural development and the

Government plays a role of initiator, facilitator and the implementer of developmental

projects. Public policies are also aimed at providing a stable and conclusive

macroeconomic environment to support private sector involvement in the economy

(Yogeswaran 2004).

The country’s developmental goals are, namely, national unity, social equity and

improving the quality of life. As articulated in Vision 2020, these are directed at

restructuring the economy and the societal setting through four national policy

frameworks as shown in Figure 4.2. These are: the New Economic Policy (NEP), 1971-

1990, the National Development Policy (NDP), 1991-2000, the National Vision Policy

(NVP), 2001-2010, and the National Mission, 2006-2020 (EPU 2009).

68

Figure 4.2: National Development Policies

Source: Adapted from EPU 2009

4.2.1 The New Economic Policy

The New Economic Policy (NEP), an affirmative policy based on the principle of

distributive justice. The Bumiputeras were targeted as the main beneficiaries in order to

achieve the nations overriding goal of peace and harmony (OPP1 1970-1990) of the

policies two thrusts. The first was to eradicate poverty, and the second, to increase

Bumiputera ownership of economic assets from 2.4 percent in 1970 to 30 per cent by

1990 (Dixon 1991; Jomo 2004). It was the outcome of the racial riots in 1969 that was

triggered by the wide gaps in terms of income, employment and wealth between the

economically disadvantaged Bumiputeras and the other ethnic groups (Salleh &

Meyanathan 1993). Several programmes were introduced to accelerate Bumiputera

participation in the economy and these included preferential share allocations in all

companies listed in the stock exchange; price preferences for Bumiputeras tendering for

The National Mission

2006 - 2020

National Vision Policy(NVP)

National Development

Policy(NDP)

New Economic Policy(NEP)

Total DevelopmentVision 2020

National Vision Policy(NVP)

National Development

Policy(NDP)

New Economic Policy(NEP)

Enhancing Nation’s Capability: To achieve competitiveness, unity

and quality of life.

Building a Resilient & Competitive Nation:

To raise the quality of lifeand generate high sustainable growth

Balanced Development: To establish a more united

and just society

Growth with Equity: To eradicate poverty and

restructure society

Po

licie

s O

bje

ctiv

es

OPP1 (1971 – 1990)

OPP2 (1991 -2000)

OPP3(2001 -2010)

Na

tio

na

l D

ev

elo

pm

en

t P

oli

cie

s

Post Independence1957 - 1970

• Laissez-faire / Export-Oriented• Economic and Rural Development

69

Government projects and preferential treatment in the issue of new licences or permits

including transport and communications (East Analytical Unit 1995).

The NEP was generally resisted by the Malaysian non- Bumiputera community. Critics

argued that it had to be abolished for the country to stay competitive in a competitive

world. Furthermore, it led to high costs through the use of Bumiputera firms with

licences being “rented” out to Non-Bumiputeras (East Asia Analytical Unit 1995; Jomo

2004). The NEP received much criticism for creating a ‘subsidy mentality’ which

hindered competition and growth in the new world economy (Jomo 2004; Musa 2007).

Although the NEP was subsequently replaced by the New Development Policy, the

Bumiputeras continued to receive preferential treatment in all aspects of business and

industry (Perkins 2004). As part of the NEP, the telecommunications, fixed and mobile

services were monopolised by the Government (Faaland 1971; Jomo 2004).

4.2.2 The Privatisation Policy

A review of the progress made under the NEP revealed that the Bumiputeras accounted

for less than 15% of the Nation’s economic assets in 1981 (4MP 1981). To address the

imbalance, the Government introduced the Privatisation Policy in 1983 (Milne 1986) and

in support of this policy issued a Privatisation Master Plan which resulted in 230

Government enterprises, largely in the key sectors of utilities, power, transportation, and

telecommunications (Bruton, Fried & Hisrich 1997). Of these, less only 14% of the

equity ownership of the privatised entities were owned by Malaysian non-Bumiputeras in

December 2000 (GoM 2000 – 8MP).

Critics of the Privatisation Policy contended that it suited the needs of a vital few to the

detriment of the wider public. (The Star, 30 July, 2009). The absence of competitive

bidding with privatisation contracts being only awarded to those with political patronage

gave rise to problems of transparency, accountability and disclosure (Kirkpatrick 1993).

70

4.2.3 Malaysia – A Newly Emerging Economy

Classified by the Asian Development Bank (ADB) as a “newly emerging economy”, it

had a per capita income of RM30,326 (USD10,108) as at July 2012 (MIDA 2012).

Malaysia’s GDP growth rates averaged 5.8% over the period 2007-2009 (ADB 2010,

2011). Although the country reported an impressive growth rate of 5.1% in 2011 and in

2012, this was significantly lower than the 7.1% reported in 2010. The economy is

expected to be resilient and the forecast for 2013 between 4.5-5.5% on the basis that

world trade and growth improve (IMF 2011, 2012; ADB2012; MIER 2012).

The country has consistently registered a positive merchandise trade balance. However, it

remains a net importer of services and a key developmental objective is to increase its

share in world export services (ESCAP 2011). Under the Tenth (10th

) Malaysia Plan,

2011-2015, the services sector aims to attract RM44.6 billion in investments generated

by trade liberalisation as reflected by the ASEAN Framework Agreement on Services

(AFAS), the World Trade Organisation (WTO) and the bi-lateral Free Trade Agreements

(EPU 2010).

The Government remains central to economic and social development by playing the role

of the catalyst and facilitator for the private sector. It is responsible for institutional and

infrastructure development including telecommunications (Yogesvaran 2004).

4.3 The Evolution of the Malaysian Telecommunications

Sector

When Malaysia gained independence, it inherited an efficient communications

infrastructure (Naidu & Lee 1997) with “one of the highest teledensities in South East

Asia” (Salazar 2007, p.10). In line with global trends, national political forces influenced

the evolution of the Malaysian telecommunications sector (Mesher & Zajac 1997).

The country’s telecommunications services were initially provided by the Post and

Telegraphic Services Department. A separate Telecommunications Department was

formed in Peninsular Malaysia in 1946 and in 1968, this Department merged with the

Telecommunications Department in Sabah and Sarawak to form the Department of

71

Telecommunications Malaysia (Jabatan Telekomunikasi Malaysia “JTM”). The JTM,

became the regulator and the sole provider of telecommunications services in Malaysia

as provided by the Telecommunications Act of 1950 (Ure 2000; Venugopal 2003; Zita

2005; Sivalingam 2007).

As part of the NEP, the telecommunications, fixed and mobile services were

monopolised by the Government (Faaland 1971; Jomo 2004; Salazar 2007) and

Government policies were directed at ensuring that the Malay community dominated the

telecommunications sector (Kitchen & Ahmad 2008). The NEP led to several specific

policies for Bumiputera business development which had an impact on the

telecommunications sector. These included:

(i). A Federal Procurement Policy which required at least 20% local content with

preferential treatment being given to Bumiputera companies. This policy led to

politically connected Bumiputeras securing contracts to manufacture telecommunications

equipment including mainframes in partnership with leading international

telecommunications firms (Salazar 2007).

(ii). Government Linked Agencies like Pernas and the Armed forces fund board (LTAT)

taking advantage of the NEP and securing controlling equity interests in multinational

telecommunications firms like Ericsson and NEC which supplied the JTM with

electronics and cable equipment (Salazar 2007).

(iii). A schedule of standards and rates or Jadual Kerja Harga (JKH) which set out the

rates for all public works projects including the operations of JTM, however, all

contractors had to be registered with the Malaysian Treasury and preference was given

to Bumiputera companies for the sub-contracting of all of JTM’s operations (Salazar

2007).

The NEP also focused on creating employment for Malays within the public sector and

the Government-linked organisations. This resulted in the JTM tripling its staff strength

from 7,000 to 21,000 by the end of the 1970’s (Kennedy, 1995 cited in Mesher & Zajac

1997).

72

The inefficiencies in the JTM led to calls for privatisation through the issuance of

licences or contracts and the first private telecommunications company, Sapura Holdings

was set up in 1975. The privatisation process gained momentum with the Malaysian

Privatisation Policy, 1983 (Mesher & Zajac 1997; Salazar 2007; Sivalingam 2007).

However, there was no clear liberalisation policy with corresponding regulatory rule in

place and the Government’s majority ownership of STMB led to much contradiction for

regulation and policy planning.

4.3.1 Liberalisation and Reforms: The Malaysian Telecommunications

Industry

In the mid 80’s, the Malaysian Government recognised the strategic importance of the

telecommunications sector for Malaysia’s social and economic development. This period

also signalled the start of telecommunication’s liberalisation and reform (Ure 2000).

However, some authorities (Kennedy 1995; Jomo & Gomez 1999) suggested political

patronage was a driver for the liberalisation of the industry.

Another contributory factor was JTM’s incapacity to meet increasing demand and

improve its services resulted in the JTM being corporatised in 1987 (Zita 2005;

Sivalingam 2007). It was renamed Syarikat Telekom Malaysia Berhad (STMB); now

known as Telekom Malaysia Berhad (TMB). The JTM’s assets were transferred to the

STMB, and the new legal entity, with majority ownership by the Ministry of Finance

(MoF) was empowered to run fixed and mobile telecommunications operations.

However, the JTM remained a Government-owned body with regulatory functions (Lee

2001; Salazar 2007; Sivalingam 2007; Telekom Malaysia 2010).

Being a state owned enterprise, the STMB had to overcome the challenge of being a

commercially orientated enterprise rather than to limit itself to producing public goods to

satisfy societal needs. However, its bureaucratic culture, conflicting objectives and

leadership lacking business acumen tended to result in politically, rather than

commercially motivated decisions (Abang 2009).

Liberalisation was largely in the form of issuance of licences for entry the two major

markets, fixed line and mobile service. Although five additional licences were issued for

73

the fixed line market, TMB’s share remained at a high 96.7% due to the high investment

costs that would have to be incurred by new entrants for building a fixed line network.

Several telecommunications licences were issued in the mid-80’s. However, the licences

were given to companies owned by businessmen linked to the leaders of the political

party that was in power (Zita 2005). Furthermore, licences were awarded in a non-

transparent manner and largely to individuals who were “rent seekers” with no

background in the telecommunications sector (Salazar 2007). The low start-up costs for

mobile services made it more attractive for new entrants. Five licences were issued for

mobile services between 1985-1993 and this resulted in a decline in TMB’s market share

(Lee 2001).

As pointed out by Ure (2000) there were no clear policies on the issuance of licences.

There was also a blurring of the lines of authority and a lack of transparency. Licences

for cellular mobile, paging and satellite communications were issued by the Prime

Minister’s department rather than the JTM which was only informed of licensing

decisions after they had been taken (Zita 2005). Consequently, far too many licences

were issued for a relatively small population then of about 20 million.

In the mid 90’s, the telecommunications sector underwent neo-liberal reforms and

embraced advances in technology (Ure 2000; Zita 2005). This was reflected by the

issuance of a broad framework for the industry in the form of the National

Telecommunications Policy (NTP) in 1994 (Salazar 2007). Drafted by the JTM, the NTP

recognised the central role of competition policy. However, as pointed out by Lee (2001,

p.9) “the Government did not subscribe to a totally laissez-faire approach as with the

NTP (p.10) states that”:

“Even though competition is encouraged, the Government is empowered to determine the

number of competitors that are economically viable for certain telecommunications

systems/services…”

The NTP also proposed a revision of the sector’s structure into network infrastructure

and IT Super Highway Network Infrastructure. There was also a dramatic rationalisation

of the sector. The outcome, as shown in Figure 4.3, was a reduction in the number of

74

players from nine main players to three mobile and two fixed line providers. Although

JTM was not involved in the liberalisation of the telecommunications sector, it had to

regulate the industry which was dominated by players that benefitted from political

patronage (Salazar 2007; Zita 2005).

The telecommunications sector underwent further reform in 1996 as reflected by the

announcement of the General Framework for Interconnection and Access (GFIA) in

1996 (Ure 2000). The framework established the policy objectives and regulatory

principles for the interconnection of licenced telecommunications operators on the basis

of fair, equitable and non-discriminatory principles (GFIA 1996; Ure 2000). The long

term objective of the GFIA was to arrive at an excess charge and in the event of network

operators not agreeing to a method of calculation for the excess charges, this would be

determined by the JTM. However, JTM had difficulties in discharging its regulatory role

as the major players in the industry had strong political connections (Ure 2000).

The country was hard hit by the Asian Financial Crisis that impacted the region in

1997/98. It revealed that the conventional model of the Government’s major involvement

in industry and the management of public sector enterprises had effectively collapsed

(Ching, Jomo & Fay 2005). It also led to a withdrawal of foreign telecom investments

from the region. Malaysia’s mobile industry was not spared as evidenced by sharply

increased bad debts. Consequently, about $65 million of the Employees Pension Fund

was used to buy the shares of Time dotcom. Celcom defaulted on its Eurobond debt. The

Government used another pension fund to redeem the Eurobond for $494 million (Zita

2005). Due to these financial difficulties, the industry underwent consolidation with a

reduction in the number of players from nine to five as shown in Figure 4.3.

These difficulties and the reduced average revenues per user (ARPU) necessitated a

suspension in network improvements and rollout (Ure 2000). The Government

temporarily relaxed foreign ownership limits in April 1998 to allow for up to 61%

ownership, with a proviso that the funds had to come from abroad (Sivalingam 2007) and

Telenor increased its minority position in Digi to effective control (Zita 2005).

75

Figure 4.3: Consolidation of the Malaysian Market 1989 – 2003 onwards

1989 – 1996 1996 - 2002 2003

Telekom Malaysia Telekom

Malaysia

Telekom

Malaysia

Telekom

Malaysia

MRCB

Telecommunications

Celcom TM Celcom TM Celcom TMI Axiata Celcom

Mobikom

Maxis Maxis Maxis Maxis

Time Telecom:

Timecel,

TimedotCom

Timecel

Time

Telecom

TimedotCom

Time dotCom

Sapura Digital

Digi.Com

Digi.com

DiGi.com

DiGi.com

Syarikat Telefon

Wireless

Prismanet

(receivership)

Source: Zita 2005; Salazar 2007; Spire 2010

A notable policy initiative was the “Equal Access” policy. Introduced in 1999, the aims

were to improve the quality of telecommunications services and encourage price

reductions. Consumers benefited from the option of selecting their long distance and

international carriers and the interconnectivity between operators. Although there were

nearly four million subscribers in 1999, the industry was saddled by several issues

including the unbundling of the local loop and interconnectivity (Ure 2000; Highbeam,

2006; Totel 2010).

4.3.1.1 Regulatory Reform

As discussed in Section 4.3.1, there have been significant Malaysian regulatory reforms

since 1987. These, together with emerging technologies and rapid increases in consumer

demands have resulted in a major transformation of the sector (Lee 2001). In 1998 the

Ministry of Telecommunications Energy and Post (MEPT) was restructured into the

Ministry of Energy Communications and MultiMedia (MIECM) in order to take account

of technological developments and for the regulatory structure to address convergence in

communications and multimedia industries.

76

The National Telecommunications Policy (NTP, 1994-2020), was crafted by the JTM

and provided a broad framework to support growth in line with Malaysia’s vision to

achieve developed nation status by 2020. It was also tasked with supporting the emerging

competitive landscape. A notable objective for the NTP was to encourage active

participation of Bumiputera entrepreneurship across the development of

telecommunications and support services. Furthermore, JTM was not involved in the

liberalisation of the telecommunications sector, it had to regulate the industry which was

dominated by players that benefitted from political patronage (Zita 2005; Salazar 2007).

The NTP advocated the need for more comprehensive and effective regulatory measures

and this led to the enactment of the Communication and Multimedia Act (CMA) 1998

and the Malaysian Communications and Multimedia and Commission Act 1998. This

overhauled the licensing regime (Ure 2000) and provided for the establishment of the

Malaysian Communications and Multimedia Commission (CMC) in 1999 with the

mandate of regulating the telecommunications sector (Lee 2001; Salazar 2007; EPU

2010). This significant development indicated that the Government was moving on to a

new path to create a well regulated open and competitive telecommunication market (Ure

2000).

Regulatory activities under the CMA fall into four main areas and these are:

(i) economic regulation to enhance the efficiency of the telecommunications industry

through licensing, competition policy and service access

(ii) consumer protection which includes the main issues of service quality, required

applications services consumer disputes and affordable services

(iii) technical regulation for efficient allocation of resources security and integrity

(iv) social regulation which is aimed at ensuring that applications and services promote

Malaysian culture, identity and values.

The literature suggests that despite the reforms, several policy issues remain unsolved.

To enhance competition and increase access, transparency issues also have to be

addressed in respect of the decisions made by the Minister of Culture and Information.

77

Although the NTP was aimed at promoting competition, “competition policy and laws

are virtually non-existent in Malaysia” (Lee 2001). These issues require addressal to

maximise the benefits of the reforms which were underpinned by the objectives of

efficiency and equity.

4.4 The Malaysian Government’s Policies and Initiatives

During the late 1990’s, public policies were directed at developing an information

society which can be defined as “the creation, distribution, and manipulation of

information as the most significant economic and cultural activity” (IT Standards &

Organisation 2012). Liberalisation opened up the market and supported the provision of

telephony services. Further regulatory reform was required to improve the infrastructure

and support socio-economic growth while attracting FDI to enhance Malaysia’s global

competitive positioning (Salazar 2007).

Pivotal to this, was the creation of a world-class infrastructure for promoting innovation

and bridging the digital divide. Curwen and Whalley (2010) argue that several authorities

put forward differing factors relating to the term resulting in varying definitions for the

“digital divide”. Neuman and Robinson (2001) refer to access and use; Fink and Kenny

(2003) refer to access to ICT and ability and impact of ICT use; where are the OECD

(2009) and ITU (2009) focus on its dependence on geographical location. However, for

the purpose of this study the researcher adopted the OECD definition outlined below:

‘the gap between individuals, households, businesses and geographic areas at different

socio-economic levels with regard to their opportunities to access information and

communication technologies and to their use of the internet for a variety of activities

(OECD 2001, P.5)’.

This is an important national developmental objective in view of the wide differentials in

incomes, IT literacy and internet penetration between the rural and urban areas of the

country (EPU 2009)

In line with the National objective of creating a knowledge-based information society,

the Government launched five significant initiatives as outlined below:

78

i) The National IT Agenda (NITA)

ii) The Multimedia Super Corridor

iii) MyICM886 and Communications Content and Infrastructure

iv) The Economic Transformation Plan

v) The Digital Malaysia Masterplan.

i). The National IT Agenda (NITA)

The NITA was launched in 1996 as the foundation for utilising ICT in supporting the

country’s transition to a value based knowledge society by the year 2020. The strategic

framework encompasses three key elements comprising people, infostructure and

applications., People, the first component is central to the framework. Transformation

involves managing change and the development of skills and capabilities of individuals

resulting in value creation and participation in a civil society. The second focuses on

impartial access to information through infostructure including development of secure

networks, related devices and appropriate regulation to improve the quality of life. The

third element is content and the development of pertinent applications for progression to

a knowledge based society. The policies underpinning these core elements support the

nation-building efforts towards vision 2020 (Chew 2007; Alsagoff & Hamzah 2008;

NITC 2010). While NITA continues to provide the foundation and framework for the

utilisation of information and communication technology (ICT), the nation continues to

face challenges with knowledgeable resources, inclusiveness and brain drain (Abang

2009). Furthermore, regulation is perceived to suffer interference from Government (Zita

2005).

ii). The Multimedia Super Corridor (MSC)

The MSC Malaysia, referred to as the Silicon Valley of Malaysia, was established in

1999. A Government supported initiative; its key objective was to attract world-class

technology firms alongside developing the local ICT industry. It covers an area of 750

square kilometres and covers three key landmarks, namely, KLCC, Putrajaya and KLIA.

Central to Malaysia’s strategic development (Ure 2000) it is positioned as a global hi-

tech ICT hub, with the goal of attracting Multinational companies while driving the

nation towards a knowledge based economy (Zita 2005; Chew 2007; MDeC 2007). The

MSC Malaysia has over 20 cybercentres and has attracted over 2,000 companies,

79

including multinationals which enjoy a range of business privileges including favourable

taxation, superior infrastructure and expedited foreign employment passes. It is managed

by the Multimedia Development Corporation (MDC), rebranded as MDeC in 2006,

which has the primary role of advising the Government on legislative and policy matters

for multimedia operations (MDeC 2011; MSC 2011). While the MSC has been a driving

force in the industry and has succeeded in attracting foreign and domestic investments, it

faces challenges in delivering its Bill of Guarantees. Its bureaucratic culture and lack of

customer focus has resulted in firms questioning their value (Krishna 2010; GoM 2011).

However, it continues to expand its cybercentres and is playing a key role in the Digital

Malaysia Masterplan.

iii). Malaysian Information, Communications and Multimedia Services

886 (MyICMS886)

The regulatory framework introduced under the Communications and Multimedia Act

1988 led to significant growth in the industry with ICT revenues increasing from RM12

billion in 1999 to RM24 billion in 2004.

Accordingly, leveraging on existing investments to support the delivery of advanced

information communications and multimedia services to improve the quality of life of

Malaysians and enhancing Malaysia’s competitiveness (NITC 2010; MCMC 2010).

MyICMS, "The Malaysian Information, Communications and Multimedia Services” (My

ICMS), a five year blueprint, for the period 2006-2010, was primarily a private sector

initiative supported by the Government. It was aimed at leveraging on existing

investments to support the delivery of advanced information communications and

multimedia services to improve the quality of life of Malaysians and enhancing

Malaysia’s competitiveness (NITC 2010; MCMC 2010).With eight services, as shown

in Figure 4.3, and the development of eight essential infrastructures in six identified

growth areas, and succeeded in supporting the development of the industry.

80

Table 4.1: Overview of the MyICM886 Masterplan

Services Infrastructure Growth HSBB Hard Content Development

3G & Beyond Multiservice Convergence

Networks

ICT Education Hub

Mobile TV 3G Cellular Networks Digital Multimedia Receivers

Digital Multimedia

Broadcasting

Satellite Networks Communications Devices

Digital Home Soft Embedded Components,

Devices

Short Range Communications Next Generation Internet

Protocol

Foreign Ventures

Internet Telephony/VoIP Home Internet Adoption

Universal Service Provision -

USP

Information and Network

Security

Competence Development

Product Design,

Manufacturing

Source: MyICMS Master Plan, Ministry of Water, Energy and Communications 2006

iv). The Economic Transformation Plan

The 10th Malaysia Plan (2011-2015) also places emphasis on expanding the export of

services in line with the Economic Transformation Plan (ETP). While international trade

is a major contributor to Malaysia’s impressive growth, the country faces major

challenges in an increasingly competitive global market. Mindful of this and the

importance of achieving inclusive and sustainable development, the Government

introduced the Economic Transformation Plan (ETP) which incorporates fundamental

strategic and economic reform initiatives in 2010 (EPU 2010; MIER 2010; Pemandu

2010; Ratings Agency Malaysia (RAM) 2010). The ETP, requires investments of RM1.3

trillion largely from the private sector for 12 National Key Economic Areas (NKEA’s).

These have 131 entry point projects and 60 business opportunities. The NKEA projects

are expected to create 3.3 million jobs and contribute 73% of Gross National Income

(GNI) by 2020 (The Business Times, 22 Sept. 2010; ECM Libra 2010; The Star, 22 Sept.,

2010).

Towards this end, the Government is promoting the wider use of Information and

Communications Technology (ICT), communication networks and High Speed

Broadband (HSBB). These are fundamental for innovation and the achievement of the

81

national development agenda (The Star, 25 March 2010; Zita 2005). As at 13 September

2012, the ETP reported investments of MYR5.607b. However, while the ETP has been it

has also received criticism (GoM 2012).

Equally significant is the regional ASEAN ICT roadmap and strategic plan. It was

launched in January 2011 to provide better integration amongst the telecommunications

players across the ASEAN economies. It is also targeting lower roaming charges across

the region, particularly between Singapore and Malaysia (ASEANSEC 2011; MCMC

2011; The Star, 30 April 2011).

v). The Digital Malaysia Masterplan – Digital Economy

Digital transformation, underpinned by the internet, provides several opportunities for

socio-economic growth and development (BCG 2009). Acknowledging the importance

of the digital age, the Malaysian Government mandated the MDeC to develop the

innovation digital economy framework (IDE) in July, 2011. The outcome was a Digital

Masterplan with the objective of leveraging on opportunities for innovation and

collaboration between the public and private sector. A key aim is to enhance the

customer experience by improving service delivery across channels (GoM Malaysia

2011; MDeC 2011).

(vi). Summary timeline of The Malaysian Government’s Policies and

Initiatives

A timeline of the initiatives discussed in this Section is shown in Figure 4.5.

82

Figure 4.4: Malaysian Initiatives Timelines


4.4.1 The Current Economic and Telecommunications Landscape

Public Policies are aimed at the country remaining competitive in the globalising world.

The emphasis therefore is on development of human capital, technology and knowledge

to achieve the long term goal of becoming a developed economy.

As discussed earlier, Malaysia is classified by the Asian Development Bank (ADB) as a

“newly emerging economy”, it had a per capita income of RM30,326 (USD10,108) as at

July 2012 (MIDA 2012). Malaysia’s GDP growth rates averaged 5.8% over the period

2007-2009 (ADB 2010, 2011). Although the country reported an impressive growth rate

of 5.1% in 2011 and in 2012, this was significantly lower than the 7.1% reported in 2010.

The economy is expected to be resilient and the forecast for 2013 between 4.5-5.5% on

the basis that world trade and growth improve (IMF 2011, 2012; ADB, 2012; MIER

2012).

83

There have been significant Malaysian regulatory reforms since 1987. These, together

with emerging technologies and rapid increases in consumer demands have resulted in a

major transformation of the sector (Lee 2001). Currently, the Malaysian

telecommunications market is one of the most advanced in the developing world (IDC

2009; elioe.com 2010; budde.com 2011; Fiercetelecom 2011; TNS 2011). Malaysia is

ranked fifth in the BMI business environment rankings, up from seventh in the previous

quarter (BMI 2011).

The mobile market grew at a rapid rate as compared to fixed wireline telephony. There

were 4.5 million direct exchange lines in Malaysia in early 2000 with a penetration rate

of 22% as compared to 2.5 million mobile telephone subscribers with a penetration rate

of 10.2%. However, between 1996 – 1999, mobile subscriptions grew at a faster rate of

63% per year as compared to a compound growth rate of 14.8% for fixed wireline

telephony between 1990-1998. The Malaysian telecommunications landscape comprises

both data and voice players. They are competing to meet consumer demand with

prevalent modern technologies to profitably deliver speed and quality service. Malaysia

is one of the most avid users of telecommunications services across the Asia Pacific

region. The rapid growth in the industry has resulted in the sector impacting the economy

from both a demand and supply perspective (Deloitte 2010; Oxford Business Group

2010). The sector contributed to 3.4% of the GDP in 2009, with a target of achieving

10.2% by 2015 (DOS 2010) and employs over 40,000 people. The market capitalisation

of Malaysian telecommunications companies listed Kuala Lumpur Stock Exchange

(KLSE) more than doubled from RM48.5 billion in 2008 to an estimated RM115 billion

in 2010 (EPU 2010; bursamalaysia.com 2011).

Dominated by mobile subscriptions achieved a 137.7% mobile penetration rate with over

39,826 million mobile subscribers as at September 2012 (Economic Intelligence Unit

(eiu.com) 2011; Pyramid Research 2011; BMI 2012; MCMC 2012). The comparable

statistics were a 110.1% penetration rate with 31 million mobile subscribers in 2010, a

106.1% penetration rate with 30.38 million subscribers in 2009, and a 98.9% penetration

rate with 27.7 million subscribers in 2008 (BMI 2011; Pyramid 2011; Viewswire 2011;

MCMC 2012). Malaysia had the second highest mobile penetration rate in South East

Asia, after Singapore in 2009 (Bernama 2010; MCMC 2010). However, the market

average ARPU of RM47.3 in 2011 compared to RM50.3 in 2010, is likely to decline due

84

to intense competition and an increase in pre-paid, low net worth subscribers (BMI

2011). The sector currently employs over forty thousand people and the market reaching

saturation presents further challenges for operators.

The Household Broadband penetration reached an estimated 63.8% in 2012 compared to

approximately 22% in 2008 (Kugan 2010; Bernama 2011;NITC 2011; MCMC 2012).

However, in alignment with global trends, the domestic fixed line segment, dominated by

Telekom Malaysia (TM), declined to 3,908 million fixed lines in Q2 2012, compared to

4.37 million in 2009 (MCMC 2012).

4.5 New Telecommunications Products and Services in the

Malaysian Telecommunications Industry

The telecommunications industry is characterised by technological advances which in

line with changing consumer demand is driving new and innovative products and

services. This Section begins with an overview of early technologies. This is followed by

a discussion on the significant new products and services which are impacting on the

Malaysian telecommunications industry. These are listed below.

A. First and Second Generation (1G and 2G) Spectrum

B. Third Generation (3G) Spectrum

C. Broadband

D. Worldwide Interoperability for Microwave Access (WiMAX)

E. Mobile Virtual Network Operators (MVNO’s)

F. Subsea Communications Cables

G. Long Term Evolution (LTE) and 4G

A. First and Second (1G and 2G) Spectrum

Mobile communications have been commercially available since 1946, although mobile

networks commenced with the adoption of a cellular structure in 1983. This first

generation (1G) system was with an analogue system with FDMA (Frequency Division

Multiple Access) technology for modulation. Each user had exclusive use of a specific

frequency, narrowband, and services were provided with circuit switching. The

85

Malaysian telecommunications sector, primarily JTM, a public monopoly, was viewed as

failing to respond to the demands of industry as Malaysia only offered fixed line

analogue services until 1984. In 1984, JTM introduced the first mobile phone, the

ATUR and its monopoly was extended to mobile telephony (Sivalingam 2007).

This has largely been replaced by 2G digital networks using the 900MHz band, also

known as the global system for mobile (GSM), which makes more efficient use of the

spectrum providing improved sound quality in voice calls (Curwen 2002; Curwen &

Whalley 2010). However, 2G was not representative of a high speed data network. In

1988, STMB set up the first mobile phone company, STM Cellular Communications, to

provide GSM mobile services which was subsequently sold to a private corporation and

renamed Celcom in 1992. With only two mobile players in the market, competition

stifled innovation (Zita 2005).

With rent seekers and politically connected businessmen seeking market entry licences,

the mobile market was opened up in 1995 and Celcom, the largest mobile player

upgraded its services to GSM 900. Telekom Malaysia introduced CDMA based mobile

homeline services in 1997 (Zita 2005; Salazar 2007). However, the Asian financial crisis

and Malaysia’s commitment to the WTO led to consolidation in the market.

B. Third Generation (3G) Spectrum

The growing demands and the need for speed, compatibility and multi-media mobile

services led to the development and adaptation of 3G solutions (ITU 2003). The 3G

evolution offered audio, video and graphics applications through mobile telephones. 3G

is known as high speed IP data networks and offers mobile broadband. In Malaysia, The

MCMC awarded two 3G licences to UMTS, a Maxis subsidiary, and TM in 2002 via a

beauty contest. In 2003, Celcom, part of TM, became the first provider to introduce video

call base on 3G WCDMA technology and both firms launched their services in 2005.

Two further licences were awarded to MiTV (U Mobile) and Time dotCom in 2006

which subsequently sold its licence to DiGi (MCMC 2006).

Motivated by consumer demand for data services, including social media and content, all

the four Malaysian mobile operators currently utilise the 3G network to provide services

86

to subscribers. The number of 3G subscribers increased from 9.2m at the end of Q4 2010

to an estimated 13,637 million as at Q2, 2012 (Business Monitor International (BMI)

2012; MCMC 2012). With pressures on margins and increased competition, several

operators have entered into infrastructure sharing deals. This is reflected by the Maxis

and U mobile RAN sharing deal as well as DiGi and Time dotCom (BMI 2012). Several

operators are planning to migrate to LTE.

C. Broadband

Policy makers and investors worldwide are directing attention at Broadband which has

the ability to transfer information at greater speeds than previous technologies (ITU

2011). Broadband can be fixed or mobile. Its benefits include the ability to transfer

information at greater speeds than previous technologies. The technology benefits

include convergence and the ability to transfer voice and data through one channel.

In view of the importance of broadband, the Malaysian Government announced the

National Broadband initiative, HSBB in 2007. The target was of achieving a 50%

household broadband penetration by 2010, was surpassed with the achievement of a

55.6% penetration rate as at January 2011 and the MCMC reported a 63.8% penetration

rate with 6, 726m households as at Q3 2012 (EPU 2010; The Edge 2010; MCMC 2012).

Fixed broadband is predominantly led by the HSBB, UniFi, initiative with 1.3 million

subscribers. (MCMC 2012; Telegeography 2012).

Wireless Broadband access is growing rapidly and internet users are shifting from fixed

to wireless connections and devices. This is due to users upgrading to smartphones, and

the increased demands for data services (Adham, Said, Ramlee & Hainninen 2009;

MCMC 2010; Oxford Business Group 2010; BMI 2011; Frost & Sullivan 2011; Pyramid

Research 2011). There were an estimated 7.556 million broadband subscribers in 2011 as

compared to 4.722 million at the end of 2010. This is forecasted to increase to 15.718

million by 2015 (BMI 2011).

Mobile broadband, under the HSPDA is anticipated to lead market growth with users

upgrading to smartphones, and the increased demands for data services (Adham, Said,

87

Ramlee & Hainninen 2009; MCMC 2010; Oxford Business Group 2010; BMI 2011;

Frost and Sullivan 2011; Pyramid Research 2011).

While there has been much progress in the spread and uptake of Broadband technologies

and services (ITU2011) fixed broadband services are limited in urban areas, furthermore

internet access remains expensive in developing countries. This is aptly summed up by

(BMI, (Q4 2011 p.9) that “broadband tariffs remain high as to wholesale broadband

costs which have been passed onto the consumers”.

D. Worldwide Interoperability for Microwave Access (WiMAX)

Malaysia’s commitment to ICT is also borne out by the creation of new market segments

to support and encourage broadband penetration. The MCMC awarded WiMAX, 2.3GHz

licences to four companies in Malaysia in 2007, P1, AsiaSpace, YTL and RedTone.

WiMAX is positioned as a 4G technology with the capability of delivering triple play

across broadband (telecomasia.net 2007; MCMC 2010). In 2008, Packet One Networks

Malaysia Sdn Bhd became the first provider to introduce Wireless WiMAX Service on

802.16e spectrum technology. While WiMAX has had a small impact on subscriber

numbers, the three mobile players continue to dominate the market.

E. Mobile Virtual Network Operators (MVNO’s)

MVNO’s ‘lease’ bandwidth from the Mobile Network Operators (MNO) that own the

respective networks. This enables, through cellular agreements, related and adjacent

sectors to enter the high growth sector through cellular players (MCMC 2010). MVNO’s

present opportunities for via existing operators with alternative sources of revenue. The

Malaysia landscape had 12 MVNO players as at the end of 2011 and more are

anticipated to launch services in 2012 (MCMC 2012). The most prominent MVNO’s in

Malaysia are TuneTalk; Merchant Trade; RedTone and Happy. Celcom holds at least

50% share of total MVNO’s locally and is targeting to capture at least 2% of the total

mobile market by 2015.

88

F. Subsea Communications Cables

Subsea communications cables play an integral role in extending telecommunications

reach across nations. Currently, the majority of transoceanic internet traffic is transmitted

via subsea cables and their increasingly important strategic value is acknowledged by

Governments and corporates alike (ITU 2011). Malaysia’s ongoing commitment to

enhance communications is reflected by the recent announcement by Telekom Malaysia

to build a 400km submarine cable linking Malaysia to Indonesia. The arrangement is

between TM and its Indonesian partners PT XL Axiata and PT Mora Telematika

(MCMC 2011). Additionally, Time dotCom has been invited to participate in the Unity

Cable System, a 9,620km cable connecting Asia to the US. Other partners include,

Google, Bharti Airtel, SingTel, Pacnet and KDDI (The Star, 20 November, 2010).

G. Long Term Evolution (LTE) and 4G

The Third Generation Partnership Project (3GPP) Long Term Evolution for UMTS sets

the standards for improving UMTS based on GSM. Often referred to as Long Term

Evolution (LTE), which replaced Worldwide Interoperability for Microwave Access

(WiMAX) it provides high data speeds across mobile networks and handheld devices

(pcmag.com 2011). LTE sometimes referred to as a 3.9G standard (mobile88.com 12

January 2010) offers integration with other open standards increases spectrum efficiency.

LTE Advanced, approved in May 2011, along with WiMAX 2.0 and LTE, is now

accepted as a 4G technology (ltewold.org 2011; pcmag.com 2011).

The IT working definition for 4G, cited in Curwen and Whalley, (2008, p.46; 2010,

p.13), is “A downlink speed of at least 100mbs when fully mobile or (according to ITU

which is operating via working part 8F) 1GBS with limited or local mobility, although it

remains unclear for now exactly how this is to be measured”. 4G technology is designed

to deliver fast wireless broadband services to mobile devices using an encoding method

OFDM (Orthogonal Frequency Division Multiplexing).

Nine Malaysian companies were allocated blocks of the 2.6MHz LTE spectrum in

December 2011. These were the four cellular players namely, Celcom Axiata Berhad;

DiGi Berhad; Maxis Berhad; U mobile Berhad, all of which already have 3G networks

89

and the three WiMAX operators in the market, Packet One Networks Sdn. Bhd.;

REDtone International Berhad and YTL communications Sdn Bhd.

While this situation implies that consumers are set to benefit as price wars are likely to

ensue the award of spectrum did however raise questions about the transparency of the

process. This stemmed from Puncak Semangat Sdn. Bhd., a newcomer to the scene being

awarded the biggest bite of 30MHz as compared to the 20MHz block allocated to the

seven named firms. Equally surprising was the selection of AsiaSpace Sdn. Bhd. as the

firm had stopped offering WiMAX services for almost a year (The Star, December 6,

2011). This also raises the question as to whether doing business in Malaysia requires

dealing with the politically well-connected (BMI 2011). In line with global trends,

Malaysian operators are embarking on network sharing deals to roll out LTE. In

December 2012, the MCMC announced confirmation that eight of the abovenamed firms

were awarded the LTE spectrum. AsiaSpace was not successful. It is anticipated that

many of the firms will enter infrastructure sharing deals and LTE will assist in reducing

network congestion and latency (MCMC 2012).

4.6 The Major Malaysian Telecommunications Firms

Currently, the Malaysian telecommunications market is one of the most advanced in the

developing world (IDC 2009; elioe.com 2010; budde.com 2011; Fiercetelecom 2011;

TNS 2011; BMI 2012). In terms of mobile penetration, it ranked third in comparison to

its regional counterparts. In 2012, the Malaysian telecommunications sector had four

mobile players, 12 Mobile Virtual Network Operators (MVNO’s), seven Internet Service

Providers (ISP’s) and four WiMaX players. This section presents the salient features of

the pertinent key players: namely i) Telekom Malaysia; ii) Time dotCom; iii) Maxis; iv)

DiGi; v) Axiata and Celcom vi) U mobile. Of these players, Axiata is the most

internationally active.

4.6.1 Telekom Malaysia and TMI

Malaysia’s fixed line market is dominated by Telekom Malaysia, the previous Telekom

Malaysia (TM) which is listed on the KLSE. TM commenced its international ventures in

90

1994 when it entered the Sri Lankan market. It continued its international expansion as

shown in Table 4.1 below.

Table 4.2: TM International Ventures

Company Country Year Type of

Investment

Type of Partnership

Societe Des

Telecommunications

De Guinee

Republic of

Guinea

1995 Joint Venture

(with local

Government)

Strategic partnership:

40% - Government of Guinea to form

Sotelgui s.a (national

telecommunication

operator);

60% - TM

Ghana

Telecommunications

Company Limited

(Ghana Telekom)

Ghana Feb 1997 Shareholder

(local

Government

& partners)

Purchase of equity:

70% - Government of

Ghana 30% - TM

Telkom SA Limited

(TSA)

South

Africa

May 1997 Joint Venture

(with foreign

partners and

Government

of S. Africa)

Joint with US-based

South Western Bell Corp

(9%) via Thintana

Communications LLC to

acquired TSA (total 15%); 6% - TM

Dialog Telekom

Limited (formerly

known as MTN

Networks (Private)

Limited (MTN)

Sri Lanka

February

1994

Shareholder TM majority shareholder

in MTN Networks

(Private) Ltd (100%)

TM International

(Bangladesh)

Limited (TMIB)

Bangladesh

October

1995

Joint Venture 30% - AK Khan & Co. Ltd

(a leading Bangladesh

business group) 70% - TM

Samart Corporation

Public Company

Limited (SAMART

Thailand

June 1997 Joint Venture Stake (19.22% of TM) in

Samart Corporation

Public Company Ltd

Cambodia Samart

Communications

Co. Ltd.

(CASACOM)

Cambodia

May 1998 Shareholder Partnership with Samart

Corp. Public Co. Ltd from

Thailand (100% - TM)

Telekom Networks

Malawi Limited

(TNM)

Malawi

January

1995

Joint Venture 40% - Malawi

Telecommunications Ltd

60% - TM

PT Excelcomindo

Pratama

(Excelcomindo)

Indonesia

January

2005

Shareholder 59.7% - TM, 16.8% - Khazanah, 7.4%

(AIF Indonesia Ltd), 16.0%

(PT Telekomindo Primabhakti), 0.1%

(Employees & Public)

MobileOne Limited Singapore

August

2005

Joint Venture 29.79% - SunShare. Investments Ltd –

consortium,TMI holds 80%;Khazanah

20%

Mobile

Telecommunications

Company of

Esfahan (MTCE)

Iran

December

2005

Joint Venture Agreement between TMI and

Technology Resources Industries – to

transfer MTCE equity from TRI to

TMI

Multinet Pakistan

(Pvt) Limited

(Multinet)

Pakistan February

2005

Joint Venture 78% - TMI, 22% - local

investors

Spice

Communications

India March

2006

Joint Venture 49% - TMI; 51% - Mcorp

Source: TM International 2006; Ahmad & Hashim 2007

91

After venturing overseas, forming strategic partnerships and acquiring equity stakes in

several regional entities, the TM Group underwent a demerger exercise in 2007. This

resulted in the formation of Telekom Malaysia (TM) and Telekom Malaysia International

(TMI), with TM focusing on the fixed market. TMI, concentrated on the mobile business

across regional markets, and was listed as a separate entity on the KLSE in 2008. It was

subsequently rebranded as Axiata in March 2009 (Axiata 2011; MCMC 2011; TM

2011).

In July 2011, Telekom Malaysia sold its remaining 92.4 million shares in Axiata to focus

on its rapidly expanding broadband network, UniFi (BMI 2011; TM 2011). The UniFi

project is targeted to boost GDP by 0.6% and create 100,000 jobs by 2017. The company

reported revenues of MYR7.2bn year to date as at September 2012, representing a 7.2%

year on year increase (TM 2012).

4.6.2 Axiata and Celcom

Celcom, formerly part of TM is now part of the Axiata Group. With 12.4 million

subscribers as at Q3 2012 and a 34.2% market share, it is the market leader for

Broadband (Kettha.gov.my 2005; BMI 2011; Axiata 2012). Additionally, in line with its

customer segmentation strategy, Celcoms services are extended through its eight MVNO

partnerships. These include Tunetalk and MerchantTrade which have succeeded in

attracting over 2 million subscribers in the last 2 years (Celcom 2011).

Axiata, with its roots in Government, has a presence in 10 countries, as shown in Table

4.2 (The Edge, 30 August, 2010; Axiata 2012). It had an estimated 212.6 million

subscribers as at Q3 2012 compared to 120 million subscribers in 2009. The company

has experienced year to date increase its revenue by 8.6% with revenues of RM 16,448

million as at Q3 2012. Axiata is the market leader in Sri Lanka through its partnership

with Dialog and among the top three players in Indonesia, India, Bangladesh, Cambodia

and Singapore (Axiata, 2012; BMI 2012).

Axiata now faces challenges in its international ventures. It accrued losses in the highly

competitive Indian marketplace through its venture with poorly performing Idea Cellular

Ltd. The impairment losses of Idea cost Axiata US$1.08b. It has also divested its non-

92

core assets, withdrawing from its investments in Africa and recently announced the sale

of its stake in Iran (The Star, 13 December, 2011). Furthermore, Etisalat sold its equity

stake in XL, Axiata’s partner in Indonesia.

Table 4.3: Axiata Group Subsidiaries and Associates

Company Country Equity

Stake

No of

subscribers

(Millions) 2012

Revenue Sept

2012

Market

Position

Celcom Malaysia 100% 12.400 RM5,726 mn # 2

XL Indonesia 66.7% 42.3 RM5,268 mn # 3

Dialog Sri Lanka 85% 7.6 RM1,106 mn # 1

Idea India 19.1% 115.5 INR54,035 # 5

M1 Singapore 29.6% 2.1 S$577.4 million # 3

Robi Bangladesh 70% 30.4 RM1,084 mn # 3

Hello Cambodia 100% 2.3 RM96 mn # 3

MTCE Iran 49.0%

SamartiMobile Thailand 24.41%

Multinet

Pakistan

Pakistan 89%

Source: Axiata 2012; Idea 2012; M1 2012

While witnessing strong growth in data revenues, intense competition impacted the

earnings margin of Axiata as reflected by its first quarter results for the period January –

March 2011. Earnings dropped by 40.4% year – on – year as pointed out by the

Chairman in his annual report,

‘the challenges that will continue to plague the company include stiff competition, rising

inflation and ringgit appreciation, since more than half of its revenue for the first quarter

was from overseas operations.’ (The Star, 2 June 2011).

Notwithstanding these challenges, Khazanah, which owns a 41% equity stake in Axiata

recently announced that it targets Axiata to be a regional champion by 2015 (The New

Straits Times, 21 May 2011). Benefitting from Government associated financial support,

Axiata is also modernising its network and has earmarked US$550 million for its

Indonesian operation. In line with its strategy of focusing on regional growth, Axiata

93

through its subsidiary, Dialog Broadband Networks obtained a share of the Sri Lankan

corporate telecommunications market through its US$34 million acquisition of Suntel

Limited on December 15, 2011. This firm provides voice solutions, data solutions and

manages services for corporate clients. It also holds 20% of the country’s fixed-line

market (Telegeography 2011).

Axiata’s foreign exchange translation losses and higher operating costs in some of its

ventures have resulted in reduced profits. It has been affected by the Indian

Government’s decision to revoke 122 2G licences including the nine circles which were

held by Idea. Axiata profits from its India operation account for 5% of its total profits.

While this may be relatively small, it is significant that the company views India as one

of its fastest growing segment markets. As reflected by the statement from Axiata that it

had “A long term view on India which represented an important and strategic stake for

Axiata” The Indian Government has announced that it will hold an Auction for the

affected licences, and Axiata has stated that it will make a bid if invited to do so (The

Edge, financial Daily, 01 December, 2011; The Star, 4 February, 2012; The Star, 8

February, 2012).

4.6.3 Time dotCom

Time Telecommunications incorporated in 1996 was renamed as Time dotCom in 2000

and listed on the KLSE in 2001. Part of Khazanah’s media and communications

portfolio, It was awarded a 3G licence in 2006 (Malaysiawireless, 13 July, 2007). This

was later ‘sold’ to DiGi in a 27.5 million new share swap deal. This was also as a result

of Telenor’s requirement to reduce its stake to 49% to meet foreign ownership regulation

(Telegeography 2007). Although it had only an estimated 5% of the fixed line market in

2010. Time dotcom is the second largest fibre network with approximately 90% of its

revenues generated from wholesale, corporate and Government sales. Its revenues have

grown rapidly from RM286.8 million in 2009 to RM297.3million revenue as at Q3 2012

(NewSabahtimes, 15 March, 2010; MCMC 2010; time.com.my 2012).

The majority of the revenue came from the wholesale segment with 75% emerging from

the data services. Since the demand for voice services in the saturated domestic market is

declining, Time dotCom entered regional markets through acquisitions. These include,

94

AIMS, Malaysia’s leading data centre player; Global Transit Communications, a Global

IP network and Global Transit Limited which provides a Trans Pacific Cable System

(Time dotCom 2011; MCMC 2011; telecomasia.net 2011). In November, 2010, the

company announced further plans to restructure as a regional telecommunications player

(Time.com.my 2010). In April, 2011, Time dotCom launched additional High Definition

TV channels as part of a collaboration agreement with ASTRO, Malaysia’s market leader

for pay TV services The package, bundled with Broadband, is anticipated to protect

Astro’s market share as TM’s IPTV service expands (The Star, 21 April, Malaysia 2011).

4.6.4 Maxis

Maxis, formed in 1993, launched its operations in 1995 and was listed on the KLSE in

2002. (BMI 2011; Maxis 2011). With a market share of 44% and 14.2 million

subscribers, as shown in Table 4.3, it is the leading Malaysian cellular

telecommunications player. It was the first in the world to upgrade its 3G network to

HSDPA offering wireless broadband, and the first to launch the Blackberry and the

Apple iPhone in Malaysia (BMI 2010; MCMC 2010; Maxis 2012).

In the past, Maxis was overshadowed by TM. The situation has now changed and Maxis

is one of the three Malaysian telecommunications firms that have penetrated international

markets. The firm currently has a presence in India, where it holds a 74% stake of Aircel

which was acquired in 2005. As shown in Table 4.4, Aircel which is ranked number five

in India currently has 68 million subscribers (Oxford Business Group 2007; Aircel 2012).

It entered Indonesia via a 51% owned Joint Venture with the Lippo Group for NTS. It

bought a 25% NTT stake in Mobitel in May 2007, but the Government suspended the

transaction (Curwen & Whalley 2008). Significantly, the number of subscribers in their

overseas market is double that of the domestic market of Maxis.

However, India’s Central Bureau of Investigation (CBI) registered a corruption case in

2011 against the major shareholders of Maxis, the owners of the Indian partners, Sun TV

and the former Telecommunications Minister of India on the grounds that there were

elements of coercion and corruption surrounding the Aircel purchase (Indiapost, 6 Dec,

2011). Although the former Indian Telecommunications Minister is already in Jail on

corruption charges, Maxis has denied any wrong doing (The Business Times, 26 Dec

95

2011; The Star, 26 May, 2011). Binariang GSM which holds the 74% stake in Aircel

through Maxis communications, announced the decoupling of Aircel due its weak

financial performance (The Star, 28 December, 2011).

The situation has been compounded by the Indian Government’s decision to revoke 122

2G licences following the Supreme Court’s judgement delivered on 2 February, 2012

(The Malay Mail, 3 February, 2012). This development is bound to impact on the

medium and longer term growth strategies and the future of Aircel (telecompaper, 2

November, 2012).

In the domestic market, Maxis entered into a 10 year collaboration network sharing deal

with U mobile in 2011. This benefits both firms as it reduces cost and provides

opportunities for growth (The Business Times, 22 October 2011; Telegeography 2011;

the edgemalaysia.com, October, 2011; Maxis 2011; U Mobile 2011). Maxis is one of the

recipients of the LTE/4G spectrum and is preparing to upgrade its network and services

to meet consumer demand, especially for data (The Star, 28 January, 2011). Maxis

continued to strengthen its broadband services and announced its entry into the IPTV

market in October 2011 (The Star, 6 October, 2011). It also partnered with Western

Union to launch its mobile money transfer service in 2010 and is generating revenues

from advertising and broadband services (Maxis 2012).

Table 4.4: Maxis Entities

Company Country Equity

Stake

No of subscribers

(Millions) Q3

2012

Revenue Q3

2012

Market

Position

Maxis Malaysia 100% 13,930 RM661 mn # 1

Aircel India 74% 68 USD 1.159 bn # 6; 22

circles

in India

PT Axis

Telekom

Indonesia

(Formerly NTS,

formerly Lippo)

Indonesia 14.9% 17+ IDR 1.3

trillion

US$150.14

million

# 5

Source: Aircel 2011; Axis 201; Maxis 2011, 2012

96

4.6.5 DiGi

DiGi, is part of the Telenor group which owns 49% of its shares. The Employees

Provident Fund (EPF) owns 15.57% with the remainder listed on the KLSE. It is the

market leader in prepaid services, with 10.3 million subscribers as at Q3 2012 of which

8.64 million were prepaid. A noteworthy recent development was the network sharing

deal between DiGi and Celcom which would enable both firms to collectively save

RM2.2 billion over the next 10 years (The Business Times, 4 April, 2011; Celcom 2011;

MCMC 2011; DiGi 2012).

Telenor which used to own 61% of DiGi had to sell 10.2 % stake to Time dotCom in

2007, to comply with the foreign shareholdings rule and acquired the 3G licence from

Time dotCom. Recent reports indicate that Telenor is now in talks with the Malaysian

Government to raise its stakes in DiGi.com. It is considering quitting the Indian market

after being affected by the Indian Governments announcement of revoking the licences.

Telenor had a joint venture with Unitech and delivered mobile services through its JV

firm, Uninor (The Star, 4 February, 2012).

4.6.6 U mobile

U Mobile is Malaysia’s fourth mobile player. It was assigned a 3G Spectrum in March

2007. From an early stage in its existence, the company formed several strategic

partnerships. On the domestic front, these included a domestic roaming agreement with

Celcom which enabled U Mobile to offer nationwide coverage to its customers.

Internationally, the firm attracted overseas investors, namely, KT Freetel and NTT Do

Co Mo who acquired a 16.5% equity stake each in the company in December 2007.

However, both firms subsequently sold their shares back to its parent and majority

shareholder, U Television, in 2009 citing lowered market expectations for U mobile in

Malaysia (Global Telecom Buisness 2009; Reuters 2009)

The firm continued to pursue growth through partnerships and in March 2010, ST

Telemedia acquired a 33% equity stake in the company, enabling U Mobile to leverage

on ST Telemedia’s expertise to capitalise on 3G opportunities in Malaysia. Furthermore,

in August 2010 it renewed its domestic roaming agreement with Celcom for three years,

97

extending nationwide access to it’s customer base. The company launched mobile

broadband in October 2010 and entered a 3G Radio Access Network (RAN) sharing deal

with Maxis in October 2011. The company registered two million subscribers as at May

2012 (U Mobile 2012).

4.7 The International Presence of Malaysian


Malaysian telecommunications firms and players in adjacent industry sectors have

ventured into international markets. A push factor for reverse investments is the intense

competition in the Malaysian telecommunications domestic market. The process

commenced in 1994 with TMI moving into regional markets in line with the concept of

psychic distance. These countries were Sri Lanka (1994), Bangladesh (1995). Thailand

(1997) and Cambodia (1998) as these were psychically close. The entry mode was

largely through Joint Ventures and through purchase of shareholdings, reducing business

risks and provide for successful financing, marketing and networking (Ahmad & Hashim

2008; Asgari, Ahmad & Gurrib 2010).

Taking advantage of market access resulting from Government to Government

arrangements in the spirit of South-South corporation they expanded further afield into

several countries in Africa, namely the Republic of Guinea (1995), Ghana (February

1997) and South Africa (May 1997), (Ahmad & Hashim 2007). The entry mode strategy

was to have majority ownership with management control which did not quite fit the

Stages theory (Uppsala Model of Internationalisation 1977). The literature indicates that

the timing of entry was an important factor for determining TMI’s international ventures.

In addition to taking advantage of Government to Government business connections,

they also invested in countries like Malawi where penetration rates were low in order to

secure a first mover advantage.

The literature points to both successes and failures. The latter relates largely to the

overseas ventures by the then TM which had invested US$890 million in its international

ventures by September 2000. In late 2002, TM withdrew its investments in Ghana, where

it had had acquired a 30% equity in Ghana Telecom. The decision to withdraw was

triggered by the Government of Ghana terminating the contract of the Managing Director

98

appointed by TM. It also withdrew its investments in South Africa in 2004 on the

grounds that it was moving away from reaching a market saturation point. The exit was

also reflective of TM’s move to consolidate its strategic investment overseas and focus

on markets closer to Malaysia (Ahmad & Hashim 2007). The implementation of GATS

and the establishment of the ASEAN free trade area which was implemented in 2003 led

to another wave of overseas ventures by Malaysian firms. These included, Indonesia

(January 2005), Pakistan (2005), Singapore (August 2005) and Iran (December 2005).

They then expanded further afield, particularly into less developing countries like India

which had strong market potential and limited resources to make the necessary

investments in physical infrastructure

The literature suggests (Ahmad & Hashim 2007; Kitchen & Ahmad 2008) while

knowledge and experience of internationalisation is a prominent factor for successful

internationalisation (Johanson & Vahlne 1997; Reid 1983), TM’s knowledge and

experience of internationalisation was then limited. The pool of expert staff with

internationalisation knowledge was insufficient (Ahmad & Hashim 2007; Kitchen &

Ahmad 2008). Due to these shortcomings, TM’s experienced difficulties in securing

reliable local partners.

Another possible contributory factor for TM’s poor performance in its earlier African

ventures was its bureaucratic culture. This arose from the Government being the major

shareholder with the board of directors comprising retired senior civil servants and

politicians. Their lack of business acumen tended to result in politically, rather than

commercially motivated decisions (Abang 2009).

The increasing demand for mobile services was another contributory factor as Malaysian

telecommunications firms faced challenges in maintaining domestic growth. The limited

domestic market size, structural, cyclical and institutional factors have led players to

venture into foreign markets in pursuit of growth (Ariff & Lopez 2007; Shankar et al.

2010). Notwithstanding, only two major telecommunications firms now have significant

contributions from their overseas operations. As shown in Table 4.4, the majority of the

revenues for these firms are generated by their overseas ventures.

99

Table 4.5: Malaysian Telecommunications Players venturing overseas

Company Description Countries Total

Foreign

subscribers

2012

Total

Malaysian

subscribers

2012

Total

Revenue

2012

Total

Revenue

Malaysia

2012

Axiata Formerly,

TMI, listed

on the

KLSE

10

countries

212.mn 13 mn MYR13,2

28 mn

MYR5,765

mn

Maxis Listed on

KLSE

2

countries

77 mn 14.2 mn N/A MYR6,651

mn

Source: Axiata 2012; Maxis 2012

Currently, other Malaysian players now have a presence in foreign markets. While they

include small players like Greenpacket, RedTone and AKN messaging, the larger ones

are Maxis and Axiata. Their strategies include leveraging on opportunities in fast

growing markets with low penetration rates. The total investments which amounted to an

estimated RM2.5 billion of GNI in 2011, are anticipated to generate additional GNI of

RM4.8 billion by 2020 (GoM 2011).

4.7.1 Selected Target Regional Markets for Malaysian

Telecommunications firms

The principal regional target markets for Malaysian telecommunications firms as

reflected by their degree of involvement are India, Indonesia, Sri Lanka and Singapore.

Different entry modes were used by the telecommunications firms to penetrate these

markets. They took account of national licensing and regulatory policies. In the BMI’s

(2011), risk/rewards rating, Malaysia is ranked fifth with the developed countries of

Japan, Singapore, Australia and South Korea in the lead. While emerging markets

present opportunities, they also present challenges and risks. The role of the Government,

both host and home, as seen in the case of the Indian telecommunications sector, is

becoming imperative in entering foreign markets (BMI 2011; The Star, 4 February,

2012). The pertinent regional markets are discussed next.

100

4.7.1.1 India

India’s population in 2012 was 1.22 billion of which an estimated 50% were under the

age of 25 (CIA 2012). One of the fastest growing telecommunications markets in the

world, India’s teledensity increased to an estimated 79.28% by May 2012 with 929 mn

mobile subscribers as at May 2012 compared to an estimated 4% in March 2000 with just

under 2 million subscribers. While the fixed market declined from 37.96 million in

March 2009 to 36.96 million in March 2010 and 31.53 million in May 2012, broadband

subscribers were on the rise (Telegeography 2011; India Telcom News 2011; TRAI

2012).

The liberalised policy environment and entrepreneurial abilities have enabled Indian

firms to innovate and move up the value chain (Oswal 2010). The country’s regulatory

policies allow international firms to enter the sector with restrictive equity, capping

foreign ownership at 74% (Telegeography 2012). The key Indian players are shown in

Table 4.6.

Table 4.6: The Indian Telecommunications Market

Company Equity Structure No. Of

subscribers

(Millions) 2012

Revenue

2012

(Millions)

Market

Position

Bharti Airtel Sony Ericson, Nokia

and SingTel

252 mn $14,937mn

# 1

Reliance

Communications

Reliance Group 13.41 mn INR

203,803mn

# 2 in India

# 4 globally

Vodafone India Vodafone UK 70%

Primal Healthcare 5%

Indian Business

partners 25%

153.73 (Q2 2012) GBP4 bn # 3

BSNL Indian Government 119 mn (Q2

2012)

INR32,045

Crore

# 4

Idea Cellular and

Spice

Indian 11.8%

Promoters 46% (Aditya

Birla 25.3%)

Foreign Holding 42.2%

(Axiata 19.1%)

117.2 mn INR363.6 bn

# 5

Source: Bharti Airtel 2012; Reliance communications 2012; Trai 2012

101

The demand for services is anticipated to remain high as opportunities exist across all

segments and the nature of increased competition has improved quality of service to

customers. India also has a large rural population with nearly half of its GDP coming

from rural areas (Budde.com 2010; BMI 2010; Trai 2012). 3G, number portability and

value added services across broadband with low penetration present opportunities for

growth.

Regulatory reforms as well as the availability of liquidity have enabled Indian firms to

capitalise on ownership and location advantages to leverage on opportunities in

international markets (Oswal 2010). Airtel has successfully penetrated 19 countries and

is the fifth largest mobile player in the world with an estimated 252 million subscribers

(Airtel 2012). Notwithstanding an increasing degree of rivalry, firms with access to

capital and innovative valued added services have an opportunity to leverage on the size

of the market.

However, the Indian Government’s decision in February 2012 to revoke 122 2G licences

issued in 2008, affected nine India mobile operators. Two of them, namely, IDEA and

Aircel have Axiata and Maxis, as their shareholders respectively. The court’s decision

has had a negative impact on foreign investors as reflected by the comment by Telenor’s

CEO, John Frederick Baksaas, “Telenor would from now on carefully consider every

option prior to making further investment” (cited in The Star, 14 February, 2012 p.2)

4.7.1.2 Indonesia

Indonesia’s population was estimated at 248 million in 2012 and the majority were

between the age of 15-64 years (CIA 2012). Recent major regulatory and structural

reforms altered the Indonesian telecommunications landscape and the country is now the

third largest wireless market in Asia after China and India with an estimated 265 million

subscribers in 2012. Although it achieved an estimated 110% mobile penetration rate in

2012 compared to 44.2% at the end of 2007, ARPU was one of the lowest in the region

at USD2.50. Internet penetration was also only 12% (Frost & Sullivan 2011; The

Jakarta Post, 16 May, 2011). The landscape constitutes twelve mobile players of which

the top five are shown in Table 4.7 below.

102

Table 4.7: The Indonesian Telecommunications Market

Company Equity Structure No. of

subscribers

(Millions)

2012

Revenue

2012 – Q3

Market

Position

Telkomsel Government of Indonesia –

52.85%

Local – 7.20%

Foreign – 39.5% (SingTel 25%)

121 IDR39.8 tn # 1

Indosat Qtel – 65%

Government of Indonesia –

14.29%

Skagen AS Entities – 5.57%

Public – 15.15%

55 IDR16.5 tn # 2

Axiata XL Axiata - 66.7%

Etisalat 13.3%

Public – 20%

50 IDR18,921 Bn # 3

PT

Hutchinson

CP (3)

Hutchinson - 60% N/A N/A # 4

Axis Maxis - 14.9%

STC – 80%

17+ IDR 1.3 trillion

US$150.14

million

# 5

Source: Axiata 2012; Axis 2012; Indosat 2012; Telkomsel 2012

Malaysian firms have penetrated the Indonesian market to leverage on the low

penetration and high growth opportunities. These include Axiata which owns 66.7% of

PT XL Axiata TBK and Maxis which now owns 14.9% of Axis Telekom, formerly, PT

Natrindro Telepon Selular (NTS). The Indonesian telecommunications sector continues

to present opportunities for firms with access to capital, willing to innovate and deliver

value added services, to leverage on growth opportunities in the mobile and data sector

(Oxford Business Group 2011).

4.7.1.3 Sri Lanka

The Sri Lankan market is on a path of recovery after the end of the civil Tamil Tiger war

in 2009. With a population of approximately 21.4 million as at 2012, mobile penetration

rates reached 90% in mid 2012 or an estimated 19 million compared to 70% in 2010

(TRCSL 2012) Internet penetration grew to 27% in 2011 with 5 million subscribers

compared to 1.7 million subscribers in 2010 (ITU 2011), whereas fixed line penetration

reached 17.1% in 2011 compared to 6% in 2006. A fifth mobile operator Bharti Airtel,

103

launched its services in 2009 (Budde.com, 2010). Malaysia’s Axiata group owns 85% in

Dialog. Sri Lanka remains low on the BMI risk rewards, mainly due to its previous

unstable history, inflationary pressures and consumer demand (BMI 2011) The industry

players are shown in Table 4.8.

Table 4.8: The Sri Lanka Telecommunications Market

Company Equity Structure No. of

subscribers

(Millions) 2012

Revenue

2012 – Q3

Market

Position

Dialog Axiata 85% Axiata

15% Public Listed

7.568 SLR41,5bn # 1

Mobitel Sri Lanka Sri Lanka

Telecom

4.8 estimated SL18.2bn # 2

Etisalat Sri Lanka

(Previously Tigo)

Etisalat 4.0 N/A # 3

Airtel Lanka Bharti Airtel 1.8 SLT 5.96 bn # 4

Source: Axiata 2012; TRCSL 2012

4.7.1.4 Singapore

Singapore with a population of 5.353 million as at July 2012 is the most globalised

nation in the world (Statistics Singapore 2012) It also has the most advanced and

developed telecommunications infrastructure in South East Asia (WEF 2011). Singapore

achieved a 148.5% penetration rate and 7.38 million subscriptions as at June 2011 of

which over 50% were 3G subscribers (IDA 2011). The main telecommunications players

are shown in Table 4.9.

As of December 2012, SingTel had 468 million subscribers in 26 countries, of which

only an estimated 1.6% were domestic. Due to its small population and saturated

domestic market, SingTel had to internationalise and move into Asia Pacific countries

(Curwen & Whalley 2008). Its brand is recognised across the region and it is the largest

telecommunications firm across Asia (Pyramid 2011; SingTel 2012).

104

Table 4.9: The Singapore Telecommunications Market

Company Equity

Structure

No. of subscribers

(Millions) Q3 2012

Revenue

2012 – Q3

Market

Position

SingTel Mobile

- Singapore

Temesek –

54.4%

SingTel

3.7 S$18,625 mn # 1

Starhub Mobile Starhub 2.18 S$ 2.18 mn # 2

M1 Axiata

29.6%

2.059 S$2.059 mn # 3

QMax

Communications

Qtel N/A N/A # 4

Source: IDA 2012; M1 2021; Starhub 2012; SingTel 2012

4.8 The Malaysian Telecommunications Sector’s Competitive

Strategies

As discussed in Section 2.2, Globalisation and the gradual lifting of trade barriers

through GATT and the WTO has enabled geographical reach for firms (Alam et al 2010)

since WTO membership requires countries to relax their trade and non-trade barriers to

permit the freer flow of global trade (WTO 2011; MITI 2011). An increasing number of

countries are also participating in Free Trade Agreements (FTA’s) at the global, regional

and the bi-lateral levels. These developments together with technology advances have

created a dynamic market landscape characterised by intense competition which compel

Malaysian Telecommunications firms to internationalise their operations for continuing

growth and development (Ahmad & Hashim 2008).

Trade liberalisation is making the global market place a much larger base for goods and

services. However, firms have to contend with a greater number of competitors (Kotler

2006). Consequently and in order to withstand the challenges emerging from

globalisation, organisations must be able to survive high intensity domestic competition

which is also critical for international success (Porter 1995). Success is also dependent on

a competitive strategy which is about addressing the question ‘How can we perform this

function better than our rivals?’ (Rumelt 1991).

105

The purpose of a competitive strategy is to provide the organisation with a sustainable

competitive advantage for survival in the long term. An organisation that has created for

itself a “unique and sustainable competitive advantage is more likely to succeed than one

that simply trails behind somebody else’s practices” (Majaro 1995).

However, a more liberalised trading environment with new players and rivals could lead

to hyper competition which can be defined as:

‘an environment characterised by intense and rapid competitive moves, in that

competitors must move quickly to erode the advantage of their rivals. This speeds up the

dynamic strategic interactions among competitors’ (Grant 1998, p. 72)

It follows therefore that competitive advantage is transitory. Enterprises should

continuously generate new competitive advantage in order to neutralise their rivals’

competitive advantage. It is only by continually creating and renewing competitive

advantage, that firms can sustain market dominance and superior performance in both the

international export and domestic markets.

For the firm to compete globally it has to develop a global strategy which has three

essential elements (Yip 2003). These are:

Developing the core strategy – the basis of sustainable competitive advantage. It is

usually first developed in the home country.

Internationalising the core strategy through international expansion of activities and

through adaptation.

Globalising the international strategy by integrating its strategies across countries.

In pursuit of global competitiveness, the Malaysian Government has positioned its

strategies and policies to leverage on ICT for growth and development to compete in the

global arena in the late 1990’s (IMP3 2006; Chew 2007). In terms of its competiveness,

it has received differing rankings. The World Economic Forum (WEF) ranks Malaysia

25 out of 139 countries in its Globalisation Competitive index, a drop of in position from

106

24 in 2009-2010 (WEF 2012). Ernst and Young ranked Malaysia 28 out of 60 countries

in its, Globalisation Index in 2011. The country still maintains its position at number 3 in

AT Kearney’s Globalisation Services Location Index (GSLI), in 2010 (AT Kearney

2010; Ernst & Young 2011). The challenge for telecommunications firms is “whether

their distinctive capabilities in their existing markets provides them with an advantage

over incumbents and new market entrants” (IBM 2011). Therefore, achieving

competitive advantage is dependent on the ability to align distinctive capabilities

including strategic assets and customer relationships to deliver differentiated and

innovative customer experiences (ibid).

4.9 Critical Factors Impacting Successful International

Market Penetration

The growing interdependence of national economies resulting from globalisation

provides opportunities for integration to increase connectivity (Floyd 2001). The gradual

lifting of trade barriers through GATT and WTO have extended the geographical reach

of firms as capital flows are freed up (Dunning 1993; Wolf 2004).

However, globalisation and liberalisation, stimulated by the rise of the emerging

economies and the BRICS nations, have led to competitive pressures which create

challenges for firms and nations alike. Malaysian firms have to respond to these

challenges by securing competitive advantage, in order to compete in today’s

increasingly complex global arena (Abang 2009; Goh & Wong 2010). This is a

motivation for Malaysian telecommunications firms to venture into foreign markets for

growth. The drivers include the globalisation of industry and commerce, reducing trade

barriers, increasing competitive pressures, regulation asymmetry, new telecom

technologies and political needs (Ahmad & Hashim 2007).

Venturing into foreign markets for competitive advantage requires Malaysian

telecommunications firms to address the strategic issues and attendant challenges. The

situation requires them to formulate effective network level strategies and in parallel,

maintain domestic market share (The Edge, 7 June, 2010). Equally important is the need

to satisfy the rapidly changing customer preferences and to invest in the new emerging

technologies to take advantage of the data boom. There are seven key factors which

107

impact the successful international market penetration of Malaysian telecommunications

firms as shown in Figure 4.5 and discussed next

Figure 4.5: Factors impacting the successful international market penetration of

Malaysian telecommunications firms


4.9.1 Leadership and a Global Mindset

Curwen and Whalley (2004), highlighted effective leadership as being important for

shaping and executing company strategy and offered five different approaches to

strategic management; strategy, human assets, expertise, control and change. These

different aspects of strategic leadership are also important for the telecommunications

sector. Success in the new economy therefore requires Malaysian leaders who are agile

Government’s

Role

Factors

Impacting

Successful

International

Market

Penetration

Leadership

and a Global

Mindset

Innovation

and R&D

Financial and

Performance

Management

Network

Externalities

Knowledge

and

Resources

Branding and

Marketing

108

and able to adapt to the changing environment (Carayol & Firth 2001; Bhagat et al.

2009).

Consequently, it is necessary for Malaysian telecommunications firms leaders to be

confident, trustworthy, enthusiastic, assertive, emotionally intellectual, customer-focused

and tolerant (Dubrin 2004). The ability to identify opportunities, manage risk,

communicate effectively, building a customer orientated culture and delivering the brand

promise are also crucial for success (Stoian & Rialp-Craido 2010; McKinsey 2012).

A global leader inspires and motivates the workforce, irrespective of location, by clearly

communicating the direction, vision and expected outcomes. Global leaders also have

strategic capabilities to enhance reputational advantage and create sustainable

competitive advantage of firms (Scherer et al. 1999).

A company’s performance is also affected by organisational culture and the national

culture (Shenkar & Lup, 2004 – cited in Hexter, Stoain, Phillips 2010). Malaysia’s

culture is steeped in the New Economic Policy (NEP) that favours Bumiputeras and this

has resulted in an economic and business environment which is characterised by quota

systems and a lack of meritocracy. Leadership positions, especially in the Government

and its associated sectors, are reserved for Bumiputeras. The somewhat closed

environment impacts innovation and potentially impedes competitiveness (Salazar 2007;

The World Bank 2010).

Oviatt and McDougall, 1995, p.35 state that “To be global, one must think global”. A

global mindset integrates diversity across cultures and markets (Gupta & Govindarajan,

2002) and evaluates organisational and environmental factors to exploit capabilities and

strategies to achieve international superior performance (Fletcher 2001; Bellin and Pham

2008). Jeannet, (2000, p. 43), describes the global mindset as “a state of mind able to

understand a business, an industry, a sector, or a particular market on a global basis”.

The characteristics of a global mindset include (i) a positive attitude to the world and the

concept of the global village. (ii) a positive attitude to global business and openness to

local and international developments. (iii) a positive attitude to organisational standards

and processes, and (iv) a positive attitude to people and their respective cultures.

109

Viewed in this context, it is necessary for the senior management of Malaysian

telecommunications firms to embrace a global perspective with a global strategic outlook

(Nesadurai 2011). In order to have a successful international presence, they should also

have an understanding of different value systems, legal structures, fiscal issues incurring

risks as well as cultural and language differences (Norton 2007). It is equally important

to master languages related to global business, in particular English (Fong 1999). This is

reflected by the “fast leapers who are the ones that speak more than two languages,

embrace a just-do-it approach and simply excel with greater streets-manship or be

streetwise” (Mok 2007, p. 53).

The global dimension of ‘think globally, act globally’ as defined by (Kefalas 1998)

requires the senior management of Malaysian telecommunications firms to have a full

understanding of the regulatory environment in the targeted new market as well as to

have a global orientation in order to successfully meet the regulatory requirements.

However, notwithstanding exposure to diversity, cultural integration and often

international education, there is a shortage of Malaysian leaders with global mindsets.

Due to this shortage, Malaysia has to import foreign talent with the necessary skillsets to

achieve global competitiveness (The World Bank 2011).

4.9.2 Global Competition and Network Externalities

Liberalisation and regulatory reform has resulted in hypercompetition (Grant 2005) and

Malaysian telecommunications firms are threatened by new entrants and rivals in both

the domestic and international markets. Porter (1985) argues that a firms performance is

underpinned by its ability to create competitive advantage through 1) marketing, 2)

research and development, 3) organisation advantages, 4) firm functional area advantages

and 5) network relationship advantages.

Competitive advantage in international markets can be derived from the firm’s products,

markets, technology orientation, and resources (Cavusgil & Nevin 1981). In the

telecommunications industry network externalities exist when the value of a product to

any user is greater, the larger the number of users. The value placed on subscribers is

dependent on the number of users with whom they can communicate. Network

110

externalities may result in aggressive internationalisation strategies as firms pursue

competitive advantage (Laanti 2009).

While network externalities present opportunities and can act as push factors for first

mover advantage, they also present risks (Fjeldstad et al. 2004). Government and

regulatory factors can create barriers to entry. These include, regulatory standards,

licensing and foreign ownership restrictions. Accordingly, Malaysian

telecommunications firms need to and use their knowledge base workforce to pursue

competitive advantage (David 2005; NEAC 2010).

4.9.3 Government’s Role

The role of the Government remains critical in network industries like

telecommunications. The arrival of new entrants and increased competition has resulted

in decreasing prices for customers and lower revenues for telecommunications firms.

However, the successful transformation of monopolistic markets into competitive ones

generated the parallel need for regulatory and industry oversight (ITU 2010). This

includes the allocation of strategic investments, a regulatory framework for the orderly

development of the industry and supporting socio-economic growth (Lee 2002; Zita

2005; Salazar 2007; Laanti 2009).

While the Government of Malaysia has launched initiatives to improve

telecommunications infrastructure, equal access and improve the quality of services,

foreign ownership restrictions, capped at 49% in the telecommunications sector create

barriers of entry and impede competition. There is also less transparency between

Governments and individual stakeholders in comparison to developed countries (Ure &

Vivorakij 1997; Ure 2000; Salazar 2007; Sivalingam 2007). However, TM remains a

monopoly in the fixed line sector and was awarded the HSBB project in 2008. It’s mobile

arm, TMI (currently Axiata) received support to enter into international markets from

1990’s until 2005. As a GLC, it continues to receive support from the Government. Time

dotcom is also a GLC and despite its losses over the last decade, the firm has received

much support from the Khazanah (The Star, 31 January, 2009). It is viewed that the

Government has a dominating role in the management of GLC’s ‘Ostensibly, the GLCs

111

have no political agenda, but in Malaysia, politics is never far away from any decision’

(Asiamoney, September, 2007 cited in Abang 2005).

4.9.4 Knowledge and Resources

Globalisation has transformed the new economy, sometimes referred to as the

“knowledge economy” and is impacting the way business is conducted (Kanapathi 2003).

Advances in communications and technology, including the internet, have enabled the

development of a global market in which sustainable competitive advantage is gleaned

from intellectual capital linked to the firms knowledge management processes (Drucker

1993; Nonaka & Takeuchi 1995; Marr & Schuima 2001). The increasing importance of

intangible assets and intellectual capital has led to knowledge impacting the value of a

firm. A firms knowledge resides in its human capital and is the driving force for

economic, business and corporate success (Nonaka & Teece, 2001; Stehr 2005, NEAC

2010).

Accordingly, Malaysian telecommunications firms require professional management

structures to support knowledge-based resources that are able to use the innate strengths

of the firm to compete effectively in the new economy (David 2005). With the evolution

of convergence and competition, these structures need to foster seamless horizontal

collaboration across functions, nurture innovation, manage the ecosystem and leverage

on global leadership teams with good governance practices (McKinsey 2012). Firms

need to be able to attract a high quality workforce that is competent with an

understanding of the competitive landscape, are able to identify pertinent opportunities

and adapt to the dynamic market landscape to enhance the intellectual capital of a firm

(Tan 2008; Abang 2009). Furthermore, in the telecommunications sector, resources need

to be able to meet the regulatory requirements of host countries in which they intend to

operate (Norton 2007).

However, a firms resources are only valuable when they exploit opportunities or

neutralise threats (Dowling, Festing & Engle 2008). Therefore, the capabilities of

managers and leaders to recombine resources that are knowledgeable, innovative and

productive, especially in uncertain times, are keys to success (Teece et al. 1997). This

also underlines the importance of developing managers who are capable of developing

112

and managing strategy of the division at the national and international level (Curwen &

Whalley 2004). Furthermore as competition intensifies and traditional business areas

face growth challenges, leaders with strategic capabilities are required to foster a culture

to support innovation and a customer-focused philosophy (McKinsey 2012).

As Consumer demand increases, ARPU’s are declining and Malaysian

telecommunications firms are further challenged to innovate and remain competitive. A

firm cannot innovate without knowledge, therefore it follows that knowledge is a source

of innovation to achieve competitive advantage (Ichijo 2002). Operators require

knowledge in balancing price vs. innovation and making services profitable for them

while making them affordable for customers. Operators strive to differentiate and meet

customer demands as they consider the adoption of new technologies which may be

costly and risky. Accordingly, industry players require knowledgeable resources to be

more innovative in their pricing strategies to increase their ARPU and review

opportunities with equipment suppliers for bundling smartphones for packages of voice,

text and mobile internet (Ovum 2012; ZDNet 2012).

Although switching costs in Malaysia remain low, a key differentiator impacting the

customer experience is the quality of service. Market based reforms and increased

competition have improved the quality of service to end users, however, firms are faced

with challenges of delivering service quality while managing operational issues. The

OECD and ITU undertake reporting of quality of service indicators in a limited capacity

and these include: Waiting times for new connections; Number and availability of

payphones; Faults incidence and repair times; Billing practices (OECD 2010) Successful

termination of outgoing international calls (answer/seizure ratios). Firms need clear

processes and metrics. Achieving quality of service involves firms to invest in resources

with technical and managerial competencies, including ITIL and eTOM. These resources

need to be able to multi-task, often across a multi-channel environment (PWC 2012).

These resources and knowledge can be acquired through network partners and a

collaborative business environment. Perlmutter & Heenan (1994) and Ohmae (1999)

stress the importance of cooperation in order to compete globally. Equally important are

human resources with personal attributes, multi-tasking skills, flexibility and

adaptability (Abang 2009). Specialised technical and professional knowledge along with

113

the ability to analyse and respond to market and customer needs are critical to compete in

the global arena (Homann, Koslowski & Luetge 2007). These have to be underpinned by

flexible, professional management structures, policies, procedures and processes that

enhance competitive positioning (Tan 2008; David 2005 cited in Abang 2009).

Malaysian telecommunications firms entering foreign markets must be knowledge based

(Kitchen & Ahmad 2008). This includes knowledge pertaining to cultural, economic,

political and social aspects. Shorter product life cycles and time to market require leaders

to have capabilities to identify market opportunities and leverage on the firms capabilities

to innovate. Firms need to manage their talent and cultural change. Capabilities can be

enhanced by upgrading skills education and training which are the most important

investments in human capital (Becker 1993).

However, Malaysia faces a shortage of knowledgeable and skilled resources, particularly

in the ICT sector. This is as a result of the mismatch between industry needs and

graduate outputs from educational establishments (Khoo 2010; Wahab 2011; NEAC

2010). Notwithstanding, the Government’s efforts to enhance human capital

development, inclusiveness and productivity, Malaysia is suffering from a brain drain

and there remains a shortage of knowledge workers (Mustapha & Abdullah 2005;

Schellekens 2011). This impacts Malaysian telecommunications firms as demand for

highly skilled and qualified knowledge workers are continuously seeking opportunities to

enhance their career prospects, in other professions or in foreign countries. The demand

exceeds the supply and the gap is widening (Chew 2007). Graduates who have studied

overseas are also reluctant to return home (PEMANDU 2010; World Bank 2011). The

success of telecommunications firms to achieve intellectual capital ultimately comes

down to management decisions about building professional management structures with

knowledgeable skills and resources and how they are nurtured.

4.9.5 Branding

An important element of any business strategy is to build and retain the customer base

since market share is an important indicator of the health of the company (Ure 2009).

More so in a highly competitive landscape where the customer experience has the

potential to be the real differentiator (MCE 2011; Ogilvy 2012). Brands are the sum of

114

the total expectations and perceptions and brand innovation goes merely beyond the

name (ASLI 2006). With the proliferation of services and new entrants in the

telecommunications arena, the need for brand differentiation will increase.

A firms’ brand can be a strategic asset to the business for customer loyalty (Interbrand

2008). ‘Telcos need to become the brand of choice rather than of necessity’ (Ovum

2007). Malaysian telecommunications firms featured high on the list of top digital list of

Malaysia’s top digital brands (TNS 2009), This implies that Malaysian

telecommunications firms are emphasising on the importance of a strong brand strategy,

However, the involvement of Malaysian telecommunications firms in external markets is

through equity ownership and joint ventures with leading operators in the external

markets. This is reflected by the Maxis partnership with Aircel and Idea in India and

Axiata with Dialog in Sri Lanka, XL in Indonesia. Due to this entry mode, both Axiata

and Maxis operate under the brand names of their respective partners in the countries

concerned. Axiata’s heavy investment in rebranding the firm is reflected in its integrated

marketing initiatives for supporting its regional presence (TNS 2009).

4.9.6 Innovation and R&D

Innovation involves amalgamating knowledge to transform and improve ideas, products,

services or processes with significant improvements to be competitive (Prahalad &

Hamel 1990; Luecke & Katz 2003; Baragheh et al. 2009). Innovation creates new wealth

and societal well-being in addition to providing adaptive talent, enabling Malaysian

companies to be competitive (Krishna 2011). While innovation brings opportunities in

today’s competitive environment, it also creates uncertainties and risks if resisted

(Ahmed 1998).

The telecommunications industry is dynamic and innovation for network technologies is

undertaken by infrastructure providers which are potentially adopted by operators that

primarily focus on innovation of services. Price regulations impact decisions on timing

and market entry as well as revenues and therefore the pace of innovation (Bourreau &

Dogan 2007). In line with the Government’s commitment of, “People First Performance

Now”, Innovating Malaysia was launched in 2010 as shown in Figure 4.6. Its objectives

115

include nurturing and developing intellectual capital for wealth creation, inclusiveness,

enhancing education as well as developing world-class research institutes (GoM 2011).

Figure 4.6: NIP Framework

Source: GoM 2011

Innovation results in greater productivity and has a positive impact on a firms revenue

and performance. Research and development (R&D) is critical to the innovation process

as it supports business expansion, drives new business and broadens and deepens

technological capabilities. Accordingly, Malaysian telecommunications firms have

invested in research to innovate. These include TM which has a dedicated Research

subsidiary; Celcom which has a research lab to focus on customer insight. However,

there are also firms which are failing to innovate (pc.com 2010). Malaysia is lagging

behind in Innovation as reflected by the Malaysia being granted 181 patents by UPSTO

in 2009 as compared to Taiwan (7,781), Singapore (493), South Korea (9,566), Japan

(38,066) and China (2,270) (Wong 2012).

Innovation is vital for survival and success of Malaysian firms and move out of the

middle income trap. “Moving to High-Income status requires growth in Malaysia to

result increasingly from knowledge, innovation, combined with a deeper stock of

physical and human assets” (Zeufack et al. 2011). To meet the international

116

recommendations for sustainable technological innovation, Malaysia needs to increase

the R&D expenditure to 2.5% of GDP (The Star, 9 April, 2010) as well as foster a culture

for investing in human capital and knowledge accumulation.

4.9.7 The Financial Challenges

The telecommunications sector is a capital intensive sector and access to capital impacts

the growth strategies for Malaysian telecommunications players. While

telecommunications spending in the country is expected to increase by 5.3% in 2011 to

USD7.3 billion (NITC 2011), much of the investment is in the domestic market.

Furthermore, recent results indicate that Malaysia telecommunication firms are facing

financial challenges. Maxis Q2 profit fell 16% reporting a profit of RM464 m compared

to RM551M a year ago. However, the CEO stated “In line with growing demand for data

and mobile internet, we will continue to offer innovative products, the latest devices and

smartphones to market”. Greenpacket also reported a further loss from RM15.24m a year

ago to RM17.9m in Q2 2012. However, Axiata reported a slight Q2 net profit rise

RM666.6 m from RM 663.1m a year ago (The Sun, 31 August, 2012) and it had RM6.5 b

in cash.

Although several firms have attracted inward FDI to support growth, there are only a few

telecommunications firms which have invested in international markets.

Telecommunications firms require capital for the following:

R&D for product innovation and processes

Knowledgeable Human resources

Strategic brand and marketing development

Relocation of key management team

To succeed in international markets, Malaysian telecommunications firms need a

financial discipline culture underpinned by economic and risk based analytics (Bingham

2007).

117

4.10 Chapter Summary

This Section highlighted the challenges that Malaysian telecommunications firms now

face in a liberalising world. Local firms have to contend with challenges and seize the

opportunities for growth in international markets. There are several factors that impede

successful international penetration. These include the need for firms to have a global

strategic outlook, utilise relationships, manage risks and the choice and timing of entry

mode in selected relevant markets. These require supportive knowledgeable human

resources, professional management structures, access to capital for branding and

marketing as well as research and development for new product innovation and

technology upgrading. The next Chapter, analyses the secondary data that emerged from

the literature review. The discussion led to the selection of an appropriate theoretical

model for this research. It then identifies identified the research gaps which serve as the

basis for the development of the research questions.

118

Chapter 5 - Research Issues and Research

Questions Development

5.1 Introduction

The earlier Chapter reviewed the pertinent literature on the research topic. This chapter

focuses on the development of the research questions which necessitate the collection of

primary qualitative data through the personal interviews as detailed in Section 6.4.1.

Accordingly, this Chapter has three (3) sections. It begins with an introduction in Section

5.1. Section 5.2. discusses the key research issues that emerged from the literature review

and identifies the gaps in body of knowledge. These serve as the basis for the

development of the research questions. Section 5.3. sets out the conclusions.

Figure 5.1: Structure of Chapter Five


5.1: Introduction

5.2: Key Research Issues, Gaps, Questions Development


119

5.2 Research Issues, Research Questions

There was much scholarship and prior research on the pertinent background theories on

international market penetration. There was also much literature on the global

telecommunications industry in terms of the market, products and services, the key

players, the nature of competition and identifies the trends emerging from the

liberalisation of the telecommunications sector. However, as depicted in Table 5.1 there

were gaps in the existing scholarship with respect to four pertinent issues for this

research that emerged from the literature and these are:

i) The push and pull factors that impact on the internationalisation of Malaysian

telecommunications firms

ii) The appropriate corporate strategies for successful internationalisation by Malaysian


iii) The challenges that must be addressed by Malaysian telecommunications firms for

successful internationalisation

iv) The Malaysian Government’s policies for supporting the internationalisation efforts

of Malaysian telecommunications firms.

These gaps in the literature show that there is a limited prior research on these issues

despite their importance to the Malaysian economy. These therefore reaffirm the

relevance of the Research Problem as stated in Section 1.4 – ‘Addressing the Critical

Success Factors for the Successful International market penetration by Malaysian

telecommunications Firms’.

120

Table 5.1: Identification of Research Gaps

RESEARCH ISSUES PRIOR

LITERATURE RESEARCH GAPS

Malaysian Economic Policies Adequate

Internationalisation Theories Adequate

Trends in the Global Telecommunications Industry

Adequate

The Malaysian Telecommunications Industry

Adequate

Competitive positioning of Malaysian Telecommunication Firms under WTO National legislation

Inadequate

Inadequate

Yes

Yes

Competences, expertise and strengths to compete in world markets

Inadequate

Yes

Industry preparedness for internationalisation

Inadequate Yes

The Malaysian Government’s support policies and programmes for the export of telecommunication services

Adequate

Adequacy of Malaysian Government support policies and programmes for Telecommunications exports.

Inadequate

Yes

Effective Policy frameworks

Inadequate Yes

International promotion Inadequate

Yes

Support schemes Inadequate Yes

Appropriate strategies for venturing abroad Strategy adoption for SCA

Inadequate Inadequate

Yes

Yes

Competent staff: global mindsets

Effective leadership

Inadequate

Inadequate

Yes

Yes


Research Questions Development

‘Empirical research is driven by research questions’ (Punch 2005, p. 34). Research

questions ‘define an investigation, set boundaries, provide direction, and act as a frame of

121

reference for assessing the research work’ (O’Leary 2005, p. 33). To address this

research problem and based on the research gaps identified from the research issues, four

research questions are developed in this Section.

5.2.1. Key Determinants for the Internationalisation of Malaysian


Worldwide telecommunications revenues are predicted to grow from an estimated $3.3

trillion in 2011 to over $5.1 trillion in 2016 of which carrier revenue alone is predicted to

grow from $1.9 trillion in 2010 to nearly $5 trillion in 2015. Worldwide mobile

subscriptions reached an estimated 5.9 billion in 2012, equivalent to nearly 85% of the

world’s population, compared to 1.41 billion in 2003 (ITU 2011 via mobithinking 2012;

Pyramid Research 2012). However, telecommunications operators, now have to contend

with the issues of convergence, regulatory developments, changing consumer demands,

business transformation (Laanti, 2009; Bain & Company 2012). The emergence of new

and adjacent players has forced firms to review their value chains due to new market

entrants, including equipment and handset suppliers, MVNO’s and Media players and the

resulting increased competition This is changing the telecommunications landscape

(Salazar 2007; Ure 2009; Accenture 2010; McKinsey 2012).

Another major change agent is consumer behaviour as telecommunications operators

strive to maintain customer loyalty. They also have to unlock customer value through the

delivery of innovative, multi-media rich services (Sandberg 2008; Bain & Company

2010). In a world of Facebook, blogging and tweeting, industry players are under

pressure to meet ongoing demands for data, speed and ubiquitous connectivity which

require technological innovation. Furthermore, the increase in a number of industry

players, combined with low switching costs creates the challenges of creating customer

loyalty. Staying abreast with changing consumer demands, results in short product life

cycles, and consequently, increases the financial resource requirements for research and

development to create new products and services (Mathews 2010; Deloitte 2012; IBM

2011).

The Malaysian telecommunications sector is experiencing dramatic growth. Mobile

subscribers, led by the 4 main mobile telecommunications players, Maxis, Celcom

122

Axiata, DiGi and U Mobile achieved over 137% mobile penetration rate with over 39

million mobile subscribers as at Q3 2012 (BMI 2011; MCMC 2012). The market is

dominated by pre-paid subscribers, largely from Generation Y who are demanding

content and value added services.

The domestic market is reaching saturation and future growth has to be dependent on the

increased demand for new services. The Malaysian telecommunications firms face the

challenges of a limited domestic market, increased competition, price wars and, declining

revenues. The small market size, structural, cyclical and institutional factors now compel

Malaysian firms to actively internationalise (Ariff & Lopez 2007; Salazar 2007; Curwen

& Whalley 2008; Shankar et al. 2010). Accordingly, Malaysian telecommunications

firms actively pursued internationalisation strategies in the 1990’s through acquisitions

and the purchase of equity (Sarkar et al. 1999; Curwen & Whalley 2008).

The internationalisation of Malaysian telecommunications firms is also influenced by

pull factors. These include reduced transaction costs, economies of scale, increased

revenue from foreign markets, internationalising customers and technological advances.

These provide opportunities for growth and profitability in developing countries with

market potential.

Another factor is the lowering or removal of the barriers of entry brought about by

Malaysia’s participation in the WTO, ASEAN and the bilateral free trade agreements as

well as Government to Government arrangements under South-South Cooperation

Agreements have also encouraged Malaysian telecommunications firms to venture

abroad (Salazar 2007).

However, there is limited literature on the extent to how the external environmental

factors, particularly, the changing global telecommunications landscape impact on the

motivation and strategies that Malaysian telecommunications firms should adopt for

successful international market penetration. This research gap leads to Research Q1

which is:

RQ1: How are the Dynamic changes in the global telecommunications industry

influencing the strategic choices of Malaysian telecommunication firms?

123

5.2.2 Corporate Strategies for Successful International Market

Penetration

The global landscape in which telecommunications firms operate has changed radically.

The dynamic situation requires firms to emphasise on competitive strategy (Oviatt &

McDougall 1994; Dunning 1997; Fletcher 2001; Friedman 2005; IMF 2008).

For the firm to compete globally it has to develop a global strategy which has three

essential elements (Yip 2003). First, the development of the core strategy – the basis of

sustainable competitive advantage. It is usually first developed in the home country.

Second, it has to internationalise the core strategy through the international expansion of

activities. Third, it has to globalise its international strategy by integrating its strategies

across countries (Yip 2003).

Internationalisation decisions are guided by three important considerations. The first is

foreign market selection as this is critical for successful internationalisation (Driscoll

1995). The second relates to the financial resources to invest in R&D, physical

infrastructure and marketing development (Bain & Company 2010; Deloitte 2010). The

third is regulatory compliance. This involves obtaining licences, spectrum or buying

bandwidth from network operators in the targeted country (Freeman & McVea 2001).

As discussed in Section 2.2, there are several pertinent theories and frameworks for

internationalisation. However, few reflect the dynamic nature of the industry and the

impact of external environmental factors, including globalisation and the role of

Governments in this regulated sector. As discussed in Section 2.3.1.7, the network theory

which proposes a more recent behaviourial approach to the internationalisation was

considered appropriate for this study.

Malaysian telecommunications firms ventured into overseas markets in the 1990’s with

the state-owned TM being the first telecommunications firm to internationalise. The

internationalisation process was reinforced by G2G relationships during the Mahatir era

(Ure 2000; Zita 2005; Salazar 2007). TM’s internationalisation process accelerated as the

firm invested in several ventures in Africa, as part of its vision to be a leader of south-

south trade agreement, however, it has had to subsequently withdraw from many of its

124

earlier ventures (Zita 2005). While Maxis had to dilute its shareholding in its Indonesian

operation, it now faces problems in India (BMI 2012). Other firms that have faced

problems with their internationalisation alliances and partnerships include U Mobile, P1,

RedTone, DiGi and Merchantrade.

The cited examples point to the need for Malaysian telecommunications firms to review

their internationalisation strategies. However, the literature is limited on the

internationalisation strategies of Malaysian firms; particularly in respect of market

selection, network partners, choice of entry mode, and timing. This research gap leads to

Research Question 2, can be posed as:

What are the appropriate corporate strategies for successful international market


5.2.3 Challenges faced by Internationalising Malaysian Telecommunications

Firms

As discussed earlier, there are several motives for internationalisation. These include,

market opportunities, cost benefits, competitors moves and Government drivers (Yip

2003). The telecommunications sector is a technology and capital intensive sector and

access to capital impacts the growth strategies for Malaysian telecommunications

players. Increased competition, ongoing liberalisation and technology innovation in the

TMT sector, requires firms to address issues relating to shortening product life cycles,

market differentiation, and cost-optimisation. Motivated by the need to secure new

revenue sources and managing customer demands, telecommunications firms are

rethinking their business models to remain competitive (Schoener 2008; IHS Global

Insight Research Corporation 2009). The situation also applies to Malaysian

telecommunications firms. Due to the emerging challenges that threaten their growth and

sustainability, they are giving more emphasis to increase their overseas presence by

venturing into new markets.

As discussed in Section 4.9, Malaysian telecommunications firms seeking growth from

international ventures.

125

Require effective leadership with a global mindset (Nesadurai 2011), sound

understanding of diverse cultures, and a good command of the English language

as this is the international language for business.

Have to address the issue of trust and ability to build relationships as well as to

manage cooperation and competition across network relationships (Gulati et al

2000; Kim et al, 2009; 2011).

Should have access to knowledge and capable human resources for successful

international operations (Kanapathi 2001).

Require R&D capabilities for technological innovations, to meet consumer needs

(Baragheh et al. 2009).

Should have access to the capital required for successful international ventures

(Ernst & Young 2011)

However, there was limited literature on the challenges that Malaysian

telecommunications face in international venture and the impact on their respective

performance. Accordingly, this leads to Research Question 3, which can be posed as:

What are the challenges that Malaysian telecommunications firms face in


5.2.4 Government Support for Internationalising Malaysian


The forces of globalisation have led to market liberalisation, structural reforms and de-

regulation of the sector in several markets (Wolf 2004, Ure & Lovelock 2009). The

lowering of trade barriers, the growing interdependence among world markets and

increased connectivity have generated opportunities as well as challenges. The industry

has moved from a situation of sectoral dominance, to a ‘boom and bust’ scenario

(Curwen 2002; Curwen & Whalley 2008), as evidenced by the market capitalisation of

the dominant telecommunications firms plummeting in the early 2000’s. This triggered

126

structural reforms as well as further mergers and acquisitions, consolidation,

infrastructure sharing and managed services (IBM 2010). The structural reforms

contributed to economic sustainability and flexibility and the resulting benefits are

greater than the gains from trade liberalisation (Lee, Ure & Lee 2010).

The literature indicates that the Malaysian Government recognises the strategic

importance of the telecommunications sector for Malaysia’s social and economic

development. This is reflected by the reforms in the telecommunications sector as

evidenced by (Ure 2000). The National IT Agenda launched in 1996, and the National

Telecommunications policy (1994-2020) which is aimed at encouraging competition.

Other supportive policies of the Government include the establishment of the MCMC in

1999, MSC, the Malaysian Information Communications Masterplan, MyI886 and the

HSBB.

There was much literature on the Malaysian Government’s policies and the institutional

framework, however, there was little information on the adequacy of government

policies in respect of Malaysian telecommunications firms entering new international

markets. Based on this research gap, Research Question 4 reads as :

How adequate are the Government policies and initiatives for supporting the

internationalisation efforts of Malaysian telecommunications Firms ?

5.3 Summary

This Section critically analysed the secondary data that emerged from the literature

review which indicated that while worldwide telecommunications revenues are predicted

to grow rapidly, the emergence of new competitors, changing consumer behaviour,

domestic market saturation and the dynamic telecommunications landscape, compel

firms to review their internationalisation strategies, impact of changes and Government

policies. It focused on the identification and the development of the research questions

for the qualitative and exploratory stage of the research. The next Chapter discusses the

research methodology and design.

127

Chapter 6 - Research Methodology

6.1 Introduction

Chapter 5 reviewed the literature that was pertinent to the research topic (Berg 2004;

Neuman 2006). It rationalised the significance of the problem; identified the key research

issues and how they have been previously addressed.

This Chapter presents the methodology selected for this research including the research

approach, the research design and the research plan. It then discusses the data collection

instruments and the measures taken to ensure the quality and validation of the findings.

The chapter proceeds with a description of the data analysis techniques used in this

research before concluding with a section on ethical considerations.

Accordingly, as shown in Figure 6.1, this chapter has ten (10) sections. Section 6.1,

provides an introduction and overview of the chapter.

Section 6.2 outlines data theory. It examines the research approaches and describes the

theoretical paradigms that were considered for this research. The chapter proceeds to

justify the preferred mixed methodology for achieving the objectives of this research.

Section 6.3 discusses the research design, the research plan and the dimensions of the

research.

The discussion in Section 6.4 details the exploratory stage of the research which utilises a

qualitative approach whereby data was collected through the literature review and personal

interviews. Section 6.5 explains the analysis for each of the two stages.

Section 6.6 details the descriptive and confirmatory stage of the research, focusing on the

collection and analysis of quantitative data though a questionnaire, namely a web survey,

using a five (5) point Lickert scale for attitude measurement. This Section also discusses

the administration of the survey, including the pilot testing of the questionnaire.

128

Section 6.7 examines the procedures for establishing the reliability and validity of the

findings and Section 6.8 presents the data analysis procedures for the collected qualitative

and quantitative data.

Section 6.9 addresses the pertinent ethical considerations with the final Section, 6.10,

presenting the conclusions.

Figure 6.1: Structure of Chapter 6


6.1: Introduction

6.2: Research Methodologies

6.3: The Research Design and The Research Plan

6.4: Stage I: Exploratory, Qualitative Theory

Generation

6.5: Stage II: Descriptive, Theory Testing

6.6: Stage III: Confirmatory, Theory Confirmation

6.7: Research Quality

6.8: Data Analysis

6.9: Ethical Considerations


129

6.2 Justification for the Selected Paradigm and Research

Methodology

This Section justifies the paradigm for this research, the methodology and the research

design.

6.2.1 Theoretical Paradigms

‘Paradigms are the lenses through which we choose to view the social world’ (McMurray

2008, p.23). An appropriate paradigm underpins good research and provides a set of

guidelines as to how research is conducted (Guba & Lincoln 1994; Hussey & Hussey

1997).

There are several definitions of the term paradigm and its meaning varies in different

contexts (Kuhn 1962; Patton 1990; Guba & Lincoln 1994; Babbie 1995; Perry, Reige &

Brown 1998; Neuman, Ticehurst & Veal 2000; Patton & Applebaum 2003; Mertens 2005;

Denzin & Lincoln 2008). A pertinent definition is that of, Kuhn (1970, p.11), who viewed

it as a “framework of beliefs, values, orientations and techniques shared by the members of

a specific professional community”.

There are a number of paradigms to guide research. The choice of paradigm is influenced

by several factors as shown in Figure 6.2. The starting point is the researcher’s ontology,

which is a philosophical stance reflected by the researchers nature at form of reality.

Ontology specifies ‘what’ and ‘how’ reality exists (Parkhe 1993; Bryman & Bell 2007;

McMurray 2009).The researcher’s ontology influences his or her epistemology which

refers to the process of how knowledge is acquired and the relationship between the

researcher and that which is to be known (Guba & Lincoln 1994). This in turn, influences

the methodology or the techniques the researcher selects to acquire data required for the

research (Zikmund 2003; Guba & Lincoln 2004).

130

Figure 6.2: Business Research Approach and Influencing Factors

Source: Adapted from Bryman and Bell 2007; McMurray 2009

There are four main scientific paradigms, positivism, realism, critical theory, and

constructivism (Guba & Lincoln 1994). Underpinned by the need to create knowledge,

they are generally grouped into two methodological approaches; qualitative and

quantitative (Zikmund 2003). inductive and deductive as well as; positivist versus

interpretivist paradigms (Patton 1990; Easterby-Smith, Thorpe & Lowe 1991; Parkhe

1993; McMurray 2009). The typology, as shown in Table 6.1 merits elaboration.

Ontology

Researchers Values

Epistemology

Practical considerations

Prior Theory

Selected Research Topic

Research Design and Approach

131

Table 6.1: Comparative Research Approaches

Quantitative – Deductive Qualitative – Inductive

Research

Problem

What How

Why

Paradigm Positivist Critical Realism/Interpretivist

Ontology Reality is real, but apprehensible Reality is “real”, but only

imperfectly, however,

probabilistically apprehensible.

Truth is subjective, multiple

realities

Epistemology Objective: finding the truth, values

free

Modified objectivist: findings

probably true; value-mediated

findings as researcher is involved

in the research process

Purpose Generalisability Contextualisation

Methodology Deductive - reductionalist: Testing

of theory; surveys, experiments,

verification of hypotheses.

Generalisation

Inductive – holistic: Case studies,

convergent interviews.

Triangulation of methods using

structural equation modelling.

Contextualisation

Researcher’s

Role

Researcher is independent,

objective and remote

Researcher is close, involved to a

degree

Respondent’s

Perspective

Respondent is distanced from the

data

Respondent is part of the research

process

Data Collection Statistical, numerical data,

Verification orientated

Contextual, discovery orientated

data, non-statistical, based on

participants viewpoints

Data Analysis Statistical, objective Subjective, interpretive

Quality

assessment

Rigour, reliability, internal and

external validity

Transferability, credibility,

construct validity

Source : Adapted from Guba and Lincoln 1994; Moser 1999; Perry, Riege & Brown;

1999; Thomas and Perry 2004; Sobh and Perry 2006; McMurray 2009.

6.2.1.1 The Qualitative Paradigm

The qualitative research paradigm is inductive in nature and focuses on examining data for

generating theory (Glaser & Strauss 1967; Veal 2005). It is concerned with the role of

human perceptions in understanding reality (Cavana et al. 2001). The ontological stance

of this paradigm assumes that a real world exists out there, albeit, an imperfect one

(Tsoukas 1989; Guba & Lincoln 1994; Perry, Alizadeh & Riege 1997; Perry et al, 1999). It

does not believe that perception alone is reality, and posits that there are ‘multiple realities’

(Hirshman 1986; Perry, Alizadeh & Riege 1997).

132

The epistemology of this paradigm is characterised by the researcher being involved in the

research process. With the researcher being a passionate participant, the researcher’s

values and motives could influence the research process and this may result in subjective

findings (Denzin & Lincoln, 2003; Pauwels & Mattheysens 2004; Guba & Lincoln 2005).

Triangulation addresses this weakness by providing for objectivity and the opportunity to

examine more complex situations (Guba & Lincoln 1994; Leedy & Ormrod 2005).

Qualitative research is concerned with structures and mechanisms in experiences to

understand new phenomena rather than frequency. The data which is generally non-

statistical, and focused on the perceptions of people or organisations are collected through

case studies, analyses of text and interviews (Ticehurst & Veal 2000; Silverman 2001;

Maxwell 2002).

Qualitative research has several advantages and these include: (i) providing more in-depth

insights and perspectives into the phenomena in question for new theory development. (ii)

identify causal links in complex situations (Guba & Lincoln 1994; Miles & Huberman

1994; Creswell 2003; Ghauri 2004; McGaughey 2004).

This paradigm also has limitations with the findings being subjective and interpretive

(Sekaran 2000) and therefore generalisable only to theoretical hypotheses, and not to

populations (Yin 1989). (iii) concerns relating to reliability and validity. Silverman defines

validity as “by validity, I mean truth: interpreted as the extent to which an account

accurately represents the social phenomena to which it refers”: (Silverman 1990, p.57).

This paradigm depends on the triangulation of several perceptions of reality to achieve an

objective account of events. Denzin and Lincoln (2003) support the use of triangulation to

address the limitations of qualitative research.

6.2.1.2 The Quantitative Paradigm

Quantitative research is based on deductive interpretation with the objective of measuring

a phenomenon (Patton 1990; Perry et al, 1999). Positivists are focused on testing

theoretical hypotheses to determine if such hypotheses are true (Easterby-Smith, Thorpe,

& Lowe 1991).

133

Underpinned by an ontology of naive realism, the positivist perspective assumes that only

science is able to discover the true nature of reality. This paradigm views reality and real

knowledge as external, precise, measureable and objectively determined rather than

subjective (Perry, Alizadeh & Riege 1997; Gephart 1999).

The epistemological point of view of the positivist paradigm is that the researcher is

considered to be independent, objective and remote from the research process. According

to positivist perspectives, this results in findings which are values-free and theory free

(Guba & Lincoln 1994; Denzin & Lincoln 2003; Cameron & Miller 2008). The aim of the

quantitative, positivist approach is focused on confirmation of the existing theory rather

than discovery and confirmation of new theory (Guba & Lincoln 1994).

The quantitative or positivist approach is concerned with numerical or statistical analysis,

emphasising relatively large-scale and representative sets of data to ensure rigour, external

and internal validity (Easterby-Smith, Thorpe & Lowe 1991). The researcher is

independent from the research process and the findings can be replicable and be

generalised in different contexts (Blaxter, Hughes & Tight 2006). This paradigm’s

methodology focuses on quantitative measurement and analysis of causal relationships

between variables (Tsoukast 1989; Neuman 2006).

The quantitative paradigm has several strengths. It can generate results from large data

samples and considers causal relationships through rigorous research design and control of

extraneous variables. However, it also has weaknesses. The use of values-free data infers

that the researcher is unable to benefit from the use of personal judgment (Easterby-Smith,

Thorpe, & Lowe 1991).

6.2.1.3 Discussion on the Theoretical Paradigms

The earlier Section reviewed the strengths and weaknesses of both qualitative and

quantitative approaches. While the quantitative approach provides objective, values-free

findings which can be replicated and generalised (Limerick & Cunnington 1993; Blaxter et

al. 2006), a purely quantitative approach alone was considered to be unsuitable for this

research for the following reasons.

134

First, although there is a recent emergence of studies on internationalisation of the services

sector and network industries like the telecommunications sector (Gerpott 2006; Curwen &

Whalley 2008; Jakopin 2008; Whalley 2008; Kenny 2009; Laanti 2009; Ure 2009;

Gabrielsson 2010), as discussed in Chapter Two (2), there is limited theory on the

international market penetration of telecommunications firms, particularly in the

Malaysian context. Accordingly, this makes theory testing alone unsuitable.

Furthermore, a purely quantitative approach alone is not suitable as positivism does not

take into account the influence of human factors and social contexts upon individual

actions. (Cavana et al. 2001; Machengete 2004). Internationalisation strategies and

decisions, including market selection and choice of entry mode, rely on people’s

motivations, prior experience, knowledge and perceptions (Laanti 2009).

In contrast, the qualitative research methods are suitable for understanding complex and

specific social phenomena as well as the discovery or development of new theory (Miles &

Huberman 1984; Bonoma 1985; Parkhe 1993; Cavana et al. 2000; Deshpande 2003;

Ghauri 2005). This research requires an understanding of the critical success factors that

impact the international market penetration of Malaysian telecommunications firms. The

qualitative approach is therefore more suited for providing new information on the critical

factors. However, the researcher could not subscribe to a purely qualitative approach due

to its subjective nature with interpretation based on multiple realities which limit its

credibility in the real world (Gephart 1999).

6.2.2 Justification for the Mixed Methodology

As discussed, the quantitative methods weaknesses are the strengths of the qualitative

methods (Bonoma 1985; Eisenhardt 1989). Guided by this, the researcher adopted a mixed

methods approach which is an emerging methodological choice for social and business

research (Brannen 1992; Creswell 2003; Creswell & Plano Clark 2007, 2011; Molina-

Azorin, 2007; Cameron & Miller 2009; Bryman 2010; Sharlene, Nagy Hesse, Biber &

Levy 2010; Miller & Selvanathan 2011).The mixed methods philosophy is underpinned in

pragmatism.

135

Regardless of the controversy using mixed methods (Mingers 2001; Tashakorri & Teddlie

2003; Onwuekbuzie & Collins 2007 cited in Cameron 2011), an integration of both

qualitative and quantitative methods provides different dimensions and perspectives of the

phenomenon and organisational behaviours being investigated (Das 1983; Amaratunga et

al. 2002; Johnson et al, 2007; Easterby & Smith et al. 2008,). Triangulation removes any

potential bias of a single method approach (Collis & Hussey 2003). Based on these

considerations, both research methods were used in a complimentary manner at different

phases of this research to provide a more complete picture (Miles & Huberman 1984;

Brannen 1992; Stekler et al. 1992; Zikmund 2000; Yin 2003; Bryman 2010).

However, guided by the objectives of the research, the qualitative stage of the research can

be considered to be more dominant as the research relied heavily on the secondary data

from the literature review as detailed in Chapter 5, and the primary data from the personal

interviews as detailed in Chapter 7.

6.2.2.1 The Preferred Type of Mixed Methodology

There are several types of mixed methods and the next step was to decide on the

appropriate one for this research. A number of topologies were considered (Greene &

Caracelli 1997; Angell & Test 2002; Creswell 2003; Tashakkori & Teddlie 2003;

Cresswell & Plano Clark 2007). Guided by the objectives and the purpose of this research,

the researcher adopted the priority sequence model offered by Morgan, (1998). As shown

in Table 6.2, there are four basic research designs depending on, (i) whether the principal

method is qualitative or quantitative and (ii) whether the complementary method is a

preliminary follow up stage of the principal method. Since this research was fundamentally

aimed at generating new theory, it emphasised on the qualitative approach with a

complementary quantitative follow up stage. This was for the purpose of confirming the

initial findings and to enhance the trustworthiness of the finding from the research

(Caracelli & Greene 1997; Morgan 1998; Creswell & Plano Clark 2007).

136

Table 6.2: Mixed Method Design Types

Priority Decision

Principal Methods : Principal Methods:

Quantitative Qualitative

Qualitative Preliminary

Quantitative Preliminary

Complementary Method:

Preliminary

Qual QUANT quant QUAL

Sequence Decision

Qualitative Follow-up

Quantitative Follow-up

Complementary Method:

Follow Up

QUANT qual

QUAL quant

Source: Adapted from Morgan 1998

This was further justified by the exploratory design type in the Mixed Methods Design

Types defined by Creswell (2003) as shown in Table 6.3. The exploratory design

emphasises that the qualitative stage is sequentially followed by the quantitative stage and

the data between the two phases is connected. This is detailed in Section 6.3.1.4.

Table 6.3: Creswell - Mixed Method Design Types

Design Type Timing Mix Weighting/Notation

Triangulation Concurrent:

Qualitative and

Quantitative at the

same time

Merge the data

during the

interpretation of the

analysis

QUAN + QUAL

Embedded Concurrent and

Sequential

Embed one type of

data within a larger

design using the

other type of data

QUAN (qual)

Or

QUAL (quan)

Explanatory Sequential:

Quantitative

followed by

Qualitative

Connect the data

between the two

phases

QUAN qual

Exploratory Sequential:

Qualitative followed

by Quantitative

Connect the data

between the two

phases

QUAL quant

QUAL = Qualitative; QUAN = Quantitative

Source: Adapted from Creswell & Plano Clark, 2007, P.85

137

The secondary data emerging from the literature review was analysed and is presented in

Chapter 5. The analysis of the primary qualitative and quantitative data which was

undertaken sequentially are presented in Chapters 7 and 8 of this thesis.

6.3 Research Design

The earlier sub-section discussed the preferred methodology for this research. This Section

outlines the research design or the framework and structure for the collection and analysis

of the required data to address the research problem (Zikmund 2003; Bryman & Bell

2007). In essence, it outlines the “plan on how the study will be conducted” (Berg 2004,

p.31). In designing the research, the researcher gave full consideration to the dimensions of

the research and these are discussed next.

6.3.1 Dimensions of Research

Research can be categorised into three main types, namely, exploratory, descriptive, and

explanatory or causal. The purpose and characteristics of each are outlined in Table 6.4.

below.

Table 6.4: Dimensions of Research Design

Exploratory Research Descriptive Research Explanatory or

Causal Research

Purpose Clarifying

ambiguous problems

Generate new ideas

and hypothesis

Preliminary research

Research problem is

known

Describing the

characteristics of the

market, population

or phenomena

Clear definition of

research problem

Identification of

cause and effect

relationships

Features/

Characteristi

cs

Identifies important

variables to be

studied

Flexible

Pre-planned and

structured design Manipulation of

one or more

variables

Control of

mediating variables

Methods Pilot studies

Experience surveys

Secondary data

Focus groups

Secondary data

Surveys

Panels and

observational data

Experiments

Source : Adapted from Neuman 2006, Easterby-Smith et al, 1991, Malhotra 1999

138

6.3.1.1 Exploratory Research

This research is useful for gaining background information about the research problem,

clarifying the problem and for generating hypotheses for subsequent research (Babbie

1998; Denzin & Lincoln 2003; Sekaran 2010). It is characterised by its flexibility,

identifying patterns of interest to the research topic and serves as a basis for future research

(Rubin & Babbie 1994; McDaniel & Gates 1996).

6.3.1.2 Descriptive Research

Descriptive research is aimed at ascertaining and describing ‘the characteristics of the

variables of interest in a specific situation’ (Sekaran 2000, p.123), and seeks answers to

the ‘who’, ‘what’, ‘when’, ‘where’ and ‘how’ questions (Zikmund 2000). The outcomes of

descriptive studies can assist in understanding characteristics of a group in a given

situation, understand aspects of that situation, present ideas and information for further

research (Malhotra 1996; Cavana, Delahye & Sekaran 2000).

6.3.1.3 Explanatory or Causal Research

Explanatory studies are concerned with the question of ‘why’ and identifying the actual

reasons why a phenomenon occurs. It explores ‘cause and effect’ relationships between

variables (Sekaran 2000). Based on experiments, explanatory research is conducted in an

environment which is controlled. Explanatory research is usually undertaken subsequent to

an exploratory or descriptive study (Zikmund 2003).

6.3.1.4 Combining Research Approaches

A key justification for this research as discussed in Section 1.4 was the need to extend the

existing body of knowledge on Malaysian telecommunications firms that venture abroad.

The discussion in Chapter 5 identified several research gaps which indicated that the

research problem was ambiguous (Zikmund 2009). This highlighted the need for an

exploratory approach with the purpose of determining the research problem. However, the

purpose of this research extended beyond the mere identification of the research problem.

It was also aimed to secure important descriptive information on the Malaysian

139

telecommunications sector in order to address research objectives 1-5 that were listed in

Section 1.2. This necessitated the use of a descriptive stage. The research also considered

important for a confirmatory stage that permits the validation of the findings on the critical

issues for the successful international market penetration by the Malaysian

telecommunications sector. The three stage approach is shown in Figure 6.3 below.

Figure 6.3: The Three Stage Research Approach

Stage 1 Stage 2 Stage 3

Inductive Deductive

Exploratory Descriptive Confirmatory

Review Prior Theory

Establish Research Problem

Developing Theoretical

Framework

Appraising critical issues

impacting successful

international market Refine

penetration Theoretical

Model

Research

Questions

Research

Propositions

Initial Theory

Preliminary Theoretical Model

Web Survey

Develop

Hypotheses

CFA

Develop Structural

Equation Model

Confirm theoretical

Model

Generalise

Research Findings

Source : Adapted from Carson et al, 2011

As set out in the outline research plan which is shown in Table 6.5, the first and

exploratory stage commenced with a critical review of the existing literature with the aims

Personal

Interviews

Test Research Model

Test Theoretical Model

140

of (i) selecting the preferred theoretical model for the study, (ii) identifying the key

research issues and (iii) developing the research questions. It then involved the conduct of

personal interviews for the collection of qualitative data. This activity was followed by an

analysis of the qualitative data that emerged from the literature review and the personal

interviews for the purpose of refining the theoretical model identified for this research and

the crafting of the research propositions for the second stage of the research (Easterby-

Smith Thorpe & Lowe 1991; Parkhe 1993; Miles & Huberman, 1994; Carson et al. 2001;

Zikmund 2003).

The second and descriptive stage of the research involved the testing of the refined

theoretical. As presented in Table 6.5, the process involved the (i) The definition of

variables and constructs for testing the model (ii) Designing the web survey (iii) Validating

the survey questionnaire through the use of knowledgeable persons and the Delphi

technique and (iv) Administering the survey and analysing the collected data through the

use of SPSS. For this purpose, four propositions were crafted based on the research

questions that were developed from the literature review. This is discussed in Section 6.5.

The third stage also presented in Table 6.5, was confirmatory in nature. For this purpose,

four hypotheses were developed based on the findings from the first two stages of the

research and CFA as well as SEM were used to seek confirmation of the tested theoretical

model.

The three stage approach involved a 17 step process. These are presented in the outline

research plan which is shown in Table 6.5. The methodology for each of the three stages

are elaborated upon in Section 6.4.

6.3.1.5 The Outline Research Plan

The outlined research plan, based on the research master plan, is shown in Table 6.5. It

outlines a 17 step process for the research.

141

Table 6.5: The Outline Research Plan

Research

Stage

Step Process Desired Outcome

Stage 1

Exploratory

1 Literature Review. Familiarisation with the background and

focus theories to set the theoretical

foundations for this research. 2 Critical Review of pertinent

theories and models.

Identification of the preferred theoretical

model for this study.

3 Development of Research

questions.

Developed Research Questions.

4 Research Protocol and Ethics

approval.

Participants for the personal interviews and

web survey.

Ethics committee approval.

5 Conduct interviews Refining the theoretical model 6 Analysis of qualitative data

(literature review and

interviews).

Refined research model

7 Crafting of Research of

Propositions

Developed Research Propositions

Research

Stage


8 Definition of variables and

constructs for testing the

model.

Linking Exploratory Stage to Descriptive

Stage of the research

9 Web Survey design and

sample selection.

Comprehensive survey designed, adequate

representative sample. 10 Knowledgeable persons for

Delphi technique.

Increased Validation of the survey

questionnaire. 11 Pilot test of questionnaire. Increased Validation of the survey

questionnaire. 12 Administer and conduct

survey.

Adequate respondents for comprehensive

analysis. 13 Analysis of quantitative data,

questionnaire using SPSS

Tested theoretical model.

Research

Stage


Stage 3

Confirmatory

14 Development of Hypotheses

for confirmatory stage

Hypotheses

15 Authorities supporting

hypotheses

Increased Validation: constructs &

hypotheses

16 CFA and SEM for testing

hypotheses and model.

Confirmation of the final model

17 Conclusions and

Recommendations.

Conclusions on each research proposition

and the research problem.

Confirmation of proposed model for

international market penetration.

Implications for theory, recommendations

for policy and further research.


142

6.4 Methodology for Stage 1: Exploratory

As discussed in Section 6.3, a three-stage mixed methodology was selected for this

research. The first and exploratory stage required the collection of qualitative data. The

second and descriptive stage focused on testing the theory and the collection of

quantitative data. The third, confirmatory stage, used CFA and SEM for analysis for

confirmation of the model. This section describes the framework and methodology for the

qualitative stage of the study as shown in Table 6.6 below.

Table 6.6: Stage 1: Steps in the qualitative research process

Step Process The Targeted Outcome

1 Design, qualitative data

collection methods

Define and select the most appropriate design for the

qualitative exploratory stage.

Determine the most suitable qualitative data collection

methods for this study.

2 Protocol and Questions Determine information required, craft protocol and

design questions for the qualitative data collection

process. 3 Sampling strategy Determine adequate sample for qualitative stage

Source: Adopted from Fontana and Frey 2008; Mason 199; Krueger 1988

6.4.1 Qualitative Design and Data Collection methods

The design of the qualitative exploratory stage and data collection methods took into

consideration the epistemology and ontology of the researcher. The choice of instruments

was also dependent on time and cost constraints (Sekaran 2003). The researcher was

mindful that due to the intense competition in the Malaysian telecommunications sector

staff members of the identified firms could be reluctant to disclose much information

regarding their strategic choices, particularly with reference to international ventures.

Guided by this, the data collection instruments that were considered are shown in Table

6.7.

143

Table 6.7: Qualitative Data Collection Methods

Type Description

Literature Review The literature review is analysed using textual analysis

which is a methodology used to analyse how human beings

make sense of the world (McKee 2003). Generally used in

cultural studies, media studies and mass communications,

texts are analysed to ascertain the most likely interpretation

that may be made of the text. Texts “provide rich, naturally

occurring, accessible data which have real effects in the

world” (Silverman, 2001, p. 152)

Case Studies “Case study methodology is an empirical enquiry in which

the focus is on a phenomena within its real life context”

(Yin, 2003, p.13)

Interviews Interviews are used in both qualitative and quantitative

research. Qualitative interviews are becoming prominent

research method in social sciences and generally use small

samples. They can be structured on unstructured using

open-ended or fixed questions (Silverman, 2001; Hair et al,

2007; Denzin & Lincoln 2008; King & Horrocks 2010)

Focus Groups Focus Groups are a form of group interview that capitalises

on communication between research participants to

generate data (Kitzinger 1995). “Focus groups rely on

interaction within a group based on topics supplied by the

researcher” (Morgan, 1997, p.12). The groups consist of 7-

10 participants and are used to gather information which

would be challenging to obtain using other data collection

techniques (Krueger 1988).

Content Analysis Content analysis involves investigating content of

communication media, including interviews The researcher

compares content across texts and can analyse the data

using quantitative techniques (Gillham 2000; Neuman

2006).


The researcher considered the various tools for the collection of qualitative data described

in Table 6.7 and the selected data collection instruments are outlined below.

1) Literature Review

A comprehensive literature review is an essential first step in building the foundation for a

research project (Boote & Beile 2005; Neuman 2006). Accordingly, as discussed in

Chapter 2, and as guided by Yin, (2003) the review included internationalisation theories

and models, telecommunications trends. Several sources including, books; journals;

newspaper articles; web articles; blogs; press releases; analyst papers; analyst reports;

144

investor relations presentations; company annual reports; academic journals and papers;

conference papers; Government economic plans and reports, and webinars were utilised to

investigate the body of knowledge to ensure coverage, relevance, authority and currency of

the information.

ii) Case Studies as a Data Collection Tool

In selecting the number and type of cases, the researcher took into consideration views of

several authorities (Guba & Lincoln 1985; Hedges 1985; Romano 1987; Perry 1988;

Pettigrew 1988; Eisenhardt 1989; Yin 1989; Patton 1990). Firstly, the criteria for case

selection was based on the purpose of replication or cases that predict contrary results

(Cavana et al. 2001; Ghauri 2004). The researcher was mindful that the cases must

constitute extreme situations and polar types as well as be rich in information to offer

insights pertinent to the research issues (Pettigrew 1989).

Hedges, (1985), recommends that in practice four to six cases form a reasonable minimum

for a serious project. Accordingly, six companies were selected. Representatives from the

chosen cases participated in the interviews, and the web survey.

iii) The Personal Interviews

“The purpose of interviewing is what is in and on somebodies mind” (Patton 2002, p.208).

Qualitative research interviews seek to describe and comprehend central themes in the life

world of subjects (Kvale 1996). Interviews have the potential to offer a access to “a rich

source of data” (Silverman 2001, p.114) and are well suited for collecting comprehensive

and valuable data from the target population (Cavana, Delahaye & Sekaran 2001). The

researchers role, and personality impacts engagement with the respondent. Researchers

benefit from participants views and experiences as they probe to pursue in-depth

information around a topic (McNamara 1999; Rubin & Rubin 2005; Fontana & Frey

2008).

There are various types of interviews. These include: (i) face-to-face; (ii) telephone

interviews; (iii) computer mediated communication tools using tools like messenger and

145

electronic mail (Opdenakker 2006). These techniques are compared and the advantages

and disadvantages are shown in Table 6.8.

Table 6.8: Summary of Interview Types

Criteria Face-to-face Telephone Computer

Systems Data Collection Speed Moderate Very Fast Instantaneous

Geographical

Location

Limited and

confined

Unlimited Unlimited

Respondent

Cooperation

Very high Good Variable

Versatility of

questioning

Very versatile Moderate Modest

Respondent

misunderstanding

Low Average High

Interviewer influence High Moderate None

Anonymity of

respondent

Low Moderate High

Ease of call back or

follow up

Difficult Easy Difficult

Cost Very high Low Low

Source: Adapted from Zikmund 2000

The researcher considered several factors including the nature of the topic, and resources

available, when selecting the modality for data collection. In respect of the former, the

researcher was mindful the cross-cultural interviewing is intriguing, challenging rewarding

and if not a little precarious (Rheingold 1988, p.59). Particular attention was given to

respondent cooperation and the versatility of questioning. It was also considered important

for the researcher to select a modality that provides for probing for in-depth information

and the opportunity to clarify details where required (Patton 1990; Zikmund 2003; Berg,

2004; Hair et al. 2007; Sekaran 2010). For these reasons, the researcher selected

individual face-to-face interviews. Although they were costly to conduct.

Approaches to qualitative interviewing fall into three broad categories (Patton 2002). The

characteristics, strengths and weaknesses of each are summarised in Table 6.9 below.

146

Table 6.9: Interview Approaches Summary

Type Characteristics Strengths Weaknesses

Informal

conversation

al interview

No predetermination of

topics or questions;

emerge as interview

progresses.

Interviews can be

context specific,

matched to individuals.

Less systematic and

comprehensive. Data

analysis & organisation

can be difficult.

Interview

guide

approach

Outline topics are

defined in advance. The

researcher determines

question sequence &

wording during the

interview.

Outline provides

comprehensive and

system data collection.

Interview,

conversational.

Differing responses can

result in important

points being omitted.

Comparability is

reduced.

Standardised

open-ended

interview

Topics, wording and

sequence of questions

are determined in

advance.

Complete data for

respondents -

comparable. Reduces

interview bias.

Little flexibility for

individuals and

circumstances.

Source: Adapted from Patton 2002

The nature of the study involved collecting sensitive and often confidential information on

strategies for international market penetration which vary from firm to firm. Based on this,

the researcher combined the interview guide with standardised open-ended questions. This

semi-structured approach involved a number of basic questions, however, enabling the

interviewer to probe and explore specific areas in greater depth when appropriate (Yin

1994; Remenyi et al. 1996; Mason 2002). This had the advantage of permitting an open

dialogue, flexibility and a flowing conversation rather than a more rigid structured format.

It also added credibility to the data collected whilst reducing interview bias where strategic

issues of international market penetration may be perceived to be sensitive.

6.4.2 The Target Population: Composition and Selection of the Personal

Interviews

Neuman (2006) defines the target population as the ‘the concretely specified large group of

many cases from which a researcher draws a sample and to which results from a sample

are ‘generalised’ (Neuman 2006, p. 224). Accordingly, the target population had to

comprise individuals who were fully familiar of the range of issues that impact upon the

TMT firms that are internationalising their operations.

147

Particular attention was given to culture and language differences. In respect of the former,

the researcher was mindful as the cross-cultural interviewing is intriguing, challenging,

rewarding and a little precarious (Rheingold 1988, p.59).

As the Malaysian population is heterogeneous, each of the three principal racial groups,

namely, Malays, Chinese and Indians, take pride in their individual cultures. Furthermore,

not all Malaysians are fully familiar with the English language and the researcher was

aware that an interview conducted in the English language could have its limitations

(Rheingold 1988; Hofstede 2001; Patton 2002).

A pre-qualification exercise was undertaken to ensure that the opinions and responses of

those participating in the personal interviews were both relevant and valid. For this

purpose, profiles were established for each of the 4 groups of interview participants as

shown in Table 6.10.

Table 6.10: Profile of Interview Participants

Group Category Description

A Operational Staff Staff from the selected case study firms and related industry firms

who are involved in operational matters.

B Management Senior Managers from the selected case study firms who are

responsible for management. This included the firms which had

been involved in international operations.

C Industry Experts Knowledgeable persons including industry experts, consultants,

individuals involved in academia who had interest and knowledge

about internationalisation.

D Government and

Regulators

Participants from Government and regulatory bodies. The

participants selected were involved in policy matters pertaining to

internationalisation and the telecommunications sector.


Guided by this, the researcher used her industry contacts to seek the assistance of the

MCMC and MDeC for the identification of persons who fell within the defined target

population. Participants were selected based on their knowledge and experience. The

contacted agencies offered useful suggestions on suitable interview participants from the

regulatory bodies, academia, Government agencies and the telecommunications firms. The

researcher then wrote to each nominated participant to secure their support and

148

involvement with the research. 35 prospective participants were identified and approached,

however, the process resulted in 20 positive responses and the breakdown is shown in the

Table 6.11 below.

Table 6.11: Interview Participants

Group Category Number of

Participants

A Operational Staff 3

B Management 8

C Industry Experts 5

D Government and

Regulators

4


The prequalification exercise that was undertaken contributed to the selection of the

interview participants who were both relevant and valid for the research since they

comprised management and operational staff of the case study firms as well as industry

experts and regulators, they were well positioned to participate in the interviews. However,

the respondents were not anonymous and therefore could well have been reluctant to

provide honest and straight answers to questions that were sensitive. Furthermore

Malaysians, like most Asians, consider it inappropriate to relate to strangers their personal

views on the political situation and Governments (Hofstede 2007; Patton 2002). This could

be termed as a weakness for the interview exercise.

6.4.3 Conducting the Interviews

The face-to-face interviews were held in the respective offices of the interview

respondents or at a suitable hotel location. The duration of the interviews were wide-

ranging and lasted from an hour to two hours and the researcher took detailed notes during

the interviews. The researcher expressed the wish to record the interviews to capture the

data in its entire form including quotations. However, as discussed in Section 6.4.2 cross-

cultural challenges along with the request for anonymity and confidentiality excluded the

149

use of recording devices. The researcher followed an interview protocol which is discussed

in Section 6.4.4.

6.4.4 Interview Protocol and Questions

An interview guide with open-ended questions was adopted for this research. The semi-

structured approach was designed to engage participants to share insights, challenges and

dimensions of internationalisation of Malaysian telecommunications firms. Guided by

authorities, an interview protocol was designed and used to increase reliability and

credibility in the data collection (Eisenhardt 1989; Yin 1994; Perry 1998). It provided a

level of environmental control and objectivity and retained objectivity while maintaining

empathy and a “personable” demeanour (Hair et al. 2007). As stated earlier, the researcher

combined the interview guide approach with standardised open-ended questions as this had

the advantage of permitting an open dialogue, flexibility and flow in conversation. The

key discussion points as well as the questions in respect of each of the research

propositions are shown in Table 6.12.

The researcher adhered strictly to the designed interview protocol in order to retain

objectivity while maintaining empathy.

150

Table 6.12: Key Discussion Points and Interview Questions

Research Questions Some Interview Questions

Research Question 1 IQ1

IQ2

IQ3

What are your views on the current state of the global market

and emerging trends? How do you believe these influence the

Malaysian market

In your view, do you consider it necessary for Malaysian

telecommunications firms to venture abroad? If so, what are

the push/pull factors for them to do so?

In your view, are Malaysian telecommunications firms well

positioned to compete globally?


IQ5

IQ6

IQ7

IQ8

IQ9

What strategies do Malaysian telecommunications firms

employ for international market penetration? Do these

strategies take into consideration, product and operations

strategies? If so, please describe.

How do Malaysian telecommunications firms select

international markets, Entry mode and timing?

How important is it have strong leadership and a global

mindset?

What benefits do you believe can be gleaned from

establishing network relationships?

How important are the attributes of. Trust, Commitment, and

Learning for successful international market penetration?

What is the role of knowledge and how easy is it to transfer?


IQ11

IQ12

IQ13

IQ14

IQ15

What are the challenges that Malaysian telecommunications

firms face in international ventures?

How are Malaysian telecommunications firms financing their

international ventures?

In your view, how effective are the brands of Malaysian

telecommunications firms for successful overseas ventures?

How effective are the efforts of telecommunications firms in

building international network relationships?

How innovative are Malaysian telco firms products and

services?

How adequate are the structures and resources to address the

challenges that Malaysian Telco’s face in international

ventures?


IQ17

IQ18

What are the Government’s initiatives and policies for

encouraging telecommunications firms to enter international

markets?

What is your view on the regulatory authority and how

effective are regulatory policies?

What are your thoughts on improving the regulatory

environment?


The key discussion points and questions were mapped to the four research propositions as

shown in Table 6.13.

151

Table 6.13: Mapping Interview Questions to Research propositions

Interview Questions

Research Proposition 1 2 3 4

RP1: The dynamic changes in the global

telecommunications industry have a

strong influence on the competitive

strategies of Malaysian


X X

RP2: Malaysian telecommunications

firms have appropriate strategies for

successfully internationalising their

operations

X X X

RP3: Malaysian telecommunications

firms that are internationalising their

operations face significant challenges.

X X X

RP4: The Malaysian Government is

fully supportive of the efforts of the

Malaysian telecommunications firms to

internationalise their operations

X X


6.5 Methodology for Stage 2: Descriptive

This Section describes the methodology for the descriptive stage of the study. The

findings from the exploratory stage resulted in a refined theoretical model and the

development of four research questions. These were translated into propositions for

testing by a web survey in the second and descriptive stage of the research. Descriptive

statistics were used to analyse the responses and these permitted the testing of the refined

theoretical model. The hypotheses for this research was also developed during this stage

and this is detailed in Section 6.6.1.

6.5.1 Defining the Variables and Constructs

The preliminary findings from the qualitative, exploratory stage, enabled the definition of

variables and constructs to test the proposed research model. SEM is based on multivariate

regression models with the aim of studying relationships among variables. Accordingly,

152

guided by Tabachnick and Fidell, (2001) and Hair et al (1998, 2010) four constructs and

three to five indicators for each variable were determined. These are shown in Table 6.14

Table 6.14: SEM Variables and Constructs

Variable Defined By Construct

Dynamic Market

Landscape

The belief that Malaysian Telco firms take into

account the external environment and are

successfully positioned to compete in international

ventures in the new economy.

Positioning

The belief that Malaysian Telco firms have strategies

and leadership to take into consideration the dynamic

trends and evolving landscape.

Capability

The belief that Malaysian Telco firms will be

challenged to survive if they rely on the domestic

market for growth.

Strategic Intent

The belief that Malaysian Telco firms are innovative

taking into consideration that dynamic sector and

consumer demands.

Customer-Orientation


Strategy

The belief that Malaysian Telco firms are focusing on

emerging markets for growth.

Market Selection

The belief that Malaysian Telco firms are directed by

leaders with a global mindset, experience, knowledge

and are motivated to drive international growth.

Global Outlook

The belief that Malaysian Telco firms strategies

include international market penetration and markets

are selected based on risk analysis.

Risk

The belief that Malaysian Telco firms have effective

network relationships to support international

ventures.

Network Relationships

Challenges

The belief of the business community that Malaysian

Telco firms have capable leaders to drive

international ventures successfully.

Leadership

The belief that Malaysian Telco firms do not require

research and development or innovation.

Insight

The belief that Malaysian Telco firms brands are

effective in international markets.

Trust

The belief that Malaysian Telco firms have adequate

HR strategies for firing and retaining skilled

resources required for international markets.

Knowledgeable

Resources

Government

The belief that the Malaysian Government has

adequate policies for internationalisation and nit will

encourage and support Telco firms to venture

overseas.

Policies

The belief that Malaysian Telco firms are encouraged

and incentivised to venture overseas.

Incentives

The belief that the Government plays a proactive role

to support growth and development of Malaysian

Telco firms in international ventures.

Governments Role

The belief that the Government are independent of

the regulatory body.

Independent Regulation


153

6.5.2 The Web Survey

The descriptive stage used a web survey as the main data collection method. Surveys are

commonly used as a quantitative data collection instrument where a relatively large

representative sample of a wider target population is required (Ticehurst & Veal 2000;

Zikmund 2001). The selection of the type of survey is dependent on the research

propositions, the research questions and time and resources available. Accordingly, the

researcher selected a cross-sectional survey which is ‘a one-shot survey as data is gathered

just once to answer a research question’ (Sekaran, 2000, p. 137). The researcher used a

self-administered online web survey tool, Zoomerang, as the main response mechanism.

Invitations to participate were emailed separately containing a link whereby contact details

of the respondent were not collected in Zoomerang, thereby assuring anonymity.

The web survey process shown in Figure 6.4 comprised six steps as below. The first step

was to determine the information required and to develop the research propositions for

testing by the web survey. The propositions based on the research questions that emerged

from the literature review were developed in Section 7.5

Figure 6.4: The Web Survey Process


Determine Information Required

Theoretical Propositions

Modality Design Measurement

Feedback: Delphi method; Refine

Questionnaire Design

Sampling Design

Target Population Sample Size Select Sample

Identify respondents: pilot test and finalize

Administration of the Survey

E-Survey Record Data Data Entry

Statistical Analysis of Data

Data Analysis

Reliability Validity Credibility

Reliability and integrity of data

Findings

Refinement of model; SPSS for confirmatory stage

154

The second step was the scripting and design of questionnaires Particular attention was

given to ensure that the questions were linked to the information requirements identified.

A five point Likert scale was selected as the attitude measurement tool. The draft design

was tested using the Delphi method. The questionnaire was amended in line with the peer

review. Third, the target population was identified and a sample of 1025 prospective

respondents were selected. The survey was pilot tested and finalised. Fourth, the e-survey

was administered using Zoomerang and data collected as it requires each individual to

respond to the same set of questions in a predetermined order (De Vaus 2002).The data

was entered into SPSS v 17. Fifth, the data was checked for reliability and validity and

analysed. Finally, the findings were used for the confirmatory stage of this study.

Additionally, invitations to participate were emailed separately containing a link whereby

contact details of the respondent were not collected in Zoomerang, thereby assuring

anonymity. However, a questionnaire is only as good as a questions it asks (Zikmund

2003). Therefore, several factors may impact the rate of response for surveys. These are

discussed next.

6.5.2.1 Scripting Questions for the Web Survey

The questionnaire for the web survey comprised 16 questions. As shown in Table 6.15,

they were linked to the four propositions that were developed to test the refined theoretical

model during the descriptive stage of the research.

155

Table 6.15: Scripting Questions for the Web Survey

Proposition Interview

Q’s

Scripted Web Survey Statement Construct Tested

The dynamic changes

in the global

telecommunications

industry have a strong

influence on the

competitive strategies

of Malaysian

telecommunications

firms

1, 2, 4 and

5

1 Malaysian telecommunications firms are well

positioned to achieve sustainable competitive

advantage in the highly competitive global


Positioning

1,2 and 3 2 Malaysian telecommunications firms have the

strategic capabilities to accommodate the changes in

the global telecommunications industry.

Capability

4,5, and 10 3 The intense competition in a saturated domestic

market compels Malaysian telecommunications

firms to venture into overseas markets.

Strategic Intent

1,10, 4 Malaysian telecommunications firms are meeting

the challenges presented by changing consumer

demands in the global marketplace by providing

new products and services

Customer-

Orientation

Malaysian

telecommunications

firms have

appropriate strategies

for successfully

internationalising

their operations

1,4, 12 and

13

5 Emerging countries with low penetration rates and

high growth potential are the preferred investment

destinations for Malaysian telecommunications

firms.

Market Selection

2,4,6, and 8 6 Malaysian telecommunications firms have the

required global strategic outlook to successfully

venture into international markets.

Global Outlook

5 7 The internationalisation strategies of Malaysian

telecommunications firms take full account of the

risk factors in the targeted international markets.

Risk

7,8,9 and 13 8 Malaysian telecommunications firms have strong

external networks and effective foreign partnerships

for successfully venturing into new international

markets.

Network

Relationships

Malaysian

telecommunications

firms that are

internationalising

their operations face

significant challenges.

6,8,12 9 Malaysian telecommunications firms benefit from

capable leadership for successfully operating in

international markets

Leadership

4, and 14 10 Malaysian telecommunications firms are not giving

adequate emphasis to research and development for

creating innovative market driven products and

services.

R & D

6,8, and 12 11 Malaysian telecommunications firms benefit from

reputational and brand advantage for competing in

overseas markets.

Brand

6 and 15 12 Malaysian telecommunications firms have qualified

staff with demonstrated knowledge and capabilities

to effectively operate in international markets.

Knowledgeable

Human Resources

The Malaysian

Government is fully

supportive of the

efforts of the

Malaysian

telecommunications

sector to

internationalise their

operations

16 13 The Malaysian Government’s policies for the

telecommunications sector create a conducive

environment to enable them to become key regional

players.

Policies

16 14 The Malaysian Government has adequate measures

and incentives to support the growth and

development of Malaysian telecommunications

firms.

Incentive

17 15 Malaysian Government agencies can play a more

proactive role for supporting the internationalisation

efforts of Malaysian telecommunications firms.

Role

18 16 The Malaysian Government has a strong

administrative machinery to enhance the

competitive positioning of Malaysian

telecommunications firms that are competing in the

global arena..

Independent

Regulation


156

6.5.2.2 Questionnaire Design

Questionnaire design is critical to ensure the validity, reliability and accuracy of findings.

Guided by numerous authorities, (Tanur 1992; Blair & Presser 1994; Ticehurst & Veal

2000; Zikmund 2003; Neuman 2006), the researcher took into account the following

factors for designing the questionnaire.

Significance of the questions

Wording of the questions

Number of questions and length of the questionnaire

Order of the questions

Attitude measurement

Appearance of the questionnaire

Significance of the questions

In designing the questionnaire, the researcher considered the relevancy of the questions.

Only questions that related directly to testing the research hypotheses were considered

significant and were included (Singh 2000; Sekaran 2000). Additionally questions which

provided an option for ‘neutral - no opinion’, were included (Neuman 2006). These

enabled the respondent to assume a neutral stance on aspects to accommodate individuals

who were reluctant to express their views or opinion.

Wording of the questions

The researcher gave much attention to the language and phrasing used in the questionnaire

(Zikmund 1993; Sekaran 1999; Neuman 2006). To achieve accuracy, questions were

phrased clearly and specifically to avoid ambiguity. Leading and emotionally sensitive

questions were avoided. As the target population consists of several races, whereby

English may not be the first language, double barrelled questions were also avoided. In

summary, the language of the questionnaire was matched with the level of understanding

of the respondent (Cavana, Delahaye & Sekaran 2001). Closed ended questions which

made little demands on the respondents memory were used and were phrased negatively

and positively.

157

Number of questions and length of the Questionnaire

Recent research publications reveal that 20 minutes is the critical time for survey

respondents. Rathod (2004) argues, ‘if researchers work to keep their surveys shorter, this

will help achieve quality and more motivated respondents’. Taking into consideration the

environment and the nature of the research, the researcher, drafted a 4 page questionnaire

consisting of 16 questions. This was tested using the Delphi technique as discussed in

Section 6.5.1.3. The finalised questionnaire was pilot-tested before being sent to the survey

participants.

Order of the questions

Due care was given to the sequence of the questionnaire. The questions were aligned with

the four Propositions being tested. Taking into consideration the target population and the

research objectives, the researcher selected the funnel approach (Festinger & Katz 1966).

Neutral questions were placed at the beginning of the questionnaire and ones which

required further thought were placed at the end.

Attitude Measurement

The aim of the questionnaire was to collect quantitative data. Responses are based on the

attitudes and beliefs of participants. An attitude is an inferred construct from peoples

reality whereby there is an indisposition towards responding in a consistent manner

(Summers 1973; Zikmund 2003). Measuring participants responses required the researcher

to select an appropriate measurement tool.

Ranking scales were not considered for this research as the questionnaire did not require

participants to rank responses. The questionnaire required respondents to select the most

suitable category reflecting their attitude. Accordingly, rating scales were considered the

most appropriate for this research (Sekaran 2000). There are several rating scales which

are used in business research and these are outlined in Table 6.16. below.

158

Table 6.16: Attitude Rating Scales

Rating Scale Type Nature Advantages Disadvantages

Simple Attitude State their

agreement or

disagreement to a

question or

statement.

Ease of Response Fails to provide a

fine distinction in

the attitudes of

respondents.

No provision for a

neutral reply.

Category Scale Several response

categories requiring

respondents’

agreement of

disagreement

Flexible and

sensitive measure

Wording is crucial

and statements

require different

descriptive

dimensions. May

cause ambiguity.

Likert Scale Statements

evaluated on a five

point scale

Easy to administer.

Able to draw

distinctions in the

attitudes of

respondents

Challenging to

judge what a single

score means

Source : Cavana, Delahaye & Sekaran 2000; Zikmund 2000

The Likert scale, simple and versatile was considered the most suitable for this survey as it

has the advantage of being able to draw distinctions in the attitudes of the respondents.

Additionally, it presented the respondent with an option to adapt a neutral stance on

matters of which they were uncertain or had no opinion. The five point Likert scale used in

this research is shown in Figure 6.5.

Figure 6.5: Likert Scale

Source : Developed for this Research (Likert 1932).

159

Appearance of the questionnaire

The layout and appearance of the survey is important. The questionnaire was designed in a

clear and concise manner to enable a smooth process for completion. The researcher used

Zoomerang to design the questionnaire.

6.5.2.3 The Delphi Technique

The Delphi method is an iterative process that is used to reduce anonymity and to improve

the understanding of a phenomenon or problem (Skulmoski, Hartman & Krahn 2007). The

researcher identified eight individuals with in depth knowledge about the strategic issues

impacting the successful internationalisation of Malaysian telecommunications firms

comprising a cross section of academia, Government, industry and consulting firms. They

provided feedback on the questionnaire. Amendments were made before pilot testing the

questionnaire.

6.5.2.4 Pilot testing the questionnaire

A pilot test collects data from a small population of a research project to serve as a guide

for the larger study (Zikmund, 2003). Guided by Sekaran (2000) and Zikmund (2003), the

researcher selected a sample of 20 participants to pilot test the questionnaire before

releasing it to the target population. The purpose was to gain feedback on various aspects

of the questionnaire including, relevancy, clarity, ethics, look and feel, wording,

questionnaire length, sequence and flow. The feedback suggested reordering some of the

questions and adding a box for additional comments. Amendments were made and the

questionnaire was finalised.

6.5.2.5 The Finalised Questionnaire

The finalised Questionnaire consisted of four research propositions and 16 close-ended

questions and these are attached as Appendix V.

160

6.5.2.6 Sampling Design

A sample is a subset of a population selected to estimate the behaviour or characteristics of

the population (Sekaran 2000; Babbie & Mouton 2001). It is important to design a sample

properly to reduce gaps between the selected sample and its population (Kumar 1996 cited

in Abang 2009). A population is the total collection of elements about which we wish to

make some inference (Cooper & Schindler 2003, p.179). Accordingly, the researcher gave

due care and consideration to the sampling method to determine the survey sample size

and composition.

6.5.2.7 Sampling Methodology

There are three main types of sampling techniques. These are simple random sampling,

stratified sampling and purposive sampling. Random sampling technique is where every

element of the population has a known and equal probability of being included in the

sample. It is the simplest form of sampling and is the least bias. Stratified sampling is used

when some significant characteristics of the population are already known. This enables

the selection of a sample which can mathematically represent significant characteristics.

Purposive sampling is a selection of a group that is typical of the population as a whole.

Data from purposive sampling are adequate for indicating conclusions (Sekaran 2000).

These techniques fall into two main categories of sampling methods, namely, probability

and non-probability sampling (Saunders, Lewis & Thornbill 2003 cited in Chew 2007).

Probability Sampling

In probability sampling, each member of the population has a chance to be selected into

the sample. This method includes random, stratified sampling discussed in the previous

section as well as cluster sampling. Cluster sampling involves aggregating units of the

population into larger sampling units, clusters. Although probability sampling reduces

bias, it is costly to conduct and requires planning. Therefore, the researcher considered it

inappropriate for this study.

161

Non-Probabil ity Sampling

In non-probability sampling, the chance of an element of the population to be chosen is

unknown and therefore difficult to generalise to the population (Tan 2008). However,

Non-probability sampling is preferred by qualitative researchers since the distribution of

characteristics is not important, neither its relevance to the research topic. The types of

non-probability sampling are shown in Table 6.17.

Table 6.17: Non-Probability Sampling

Type Characteristics

Convenience Sampling Relies on available respondents and

can be the most convenient methods

as it the respondents can be selected

quickly and inexpensively.

Judgmental Sampling

Purposive Sampling

The selection of the respondent is

based on their knowledge or expertise.

Generally inexpensive.

Quota Sampling A stratified convenience sampling

strategy. There is a fixed quote for

each subgroup.

Snowball Sampling Primary used for exploratory

purposes. It involves recruiting an

initial respondent by a probability

method who then identifies further

respondents for participation.

Source : Adapted from Zikmund 2003; Sekaran 2003; Davies 2005

Convenience Sampling is the most convenient method of collecting information from

members of the population who are conveniently available. Members of the target

population can be selected quickly and inexpensively. However, the findings may lack

objectivity and do not lend themselves for generalisation. Convenience samples are often

used for qualitative research where time and money are critical constraints (Zikmund

2000; Davies 2005).

Judgmental or Purposive Sampling involves gathering information pertinent to the

research from specific target groups (Cavana, Delahaye & Sekaran 2000). It involves “a

162

highly specific difficult – to reach population” with a specific purpose in mind (Neuman

2006, pp. 222). The researcher selects subjects who are best suited to provide the

information required. While this type of sampling may limit the generalisability of the

findings, in view of the nature of the investigation, it was appropriate for this research.

Quota Sampling involves the selection of predetermined categories to reflect the diversity

of the target population (Neuman 2006). While it limits generalisability of the findings, it

is necessary when a sub-set of population is under-represented in the target population

(Davies 2005).

Snowball Sampling is used when the characteristics of the desired sample is rare. It relies

on initial participants referring additional subjects. While this sampling method can be low

in cost, an element of bias exists and the cross section in the sample is likely to be limited

(Neuman 2006).

Guided by the research problem and the research objectives, the researcher selected non-

probability sampling for this research. As it was necessary to select individuals who were

knowledgeable about the telecommunications industry, selection was based on relevance

rather than representativeness (Flick 1998). Taking into consideration time and cost

constraints to obtain the large sample of data required, the researcher adopted a

combination of judgment and quota sampling. By using i) Judgment sampling allowed the

researcher to reach specific target groups for pertinent information regarding the research

and ii) quota sampling the researcher was able to include participants from pertinent group.

6.5.2.8 The Target Population and the Survey Sample

There are several players in the Malaysian telecommunications sector. Furthermore, the

nature of the research topic required responses to strategic issues and challenges. Due to

cultural attitudes, the majority of Malaysians find it difficult to freely and candidly express

their views on contentious issues (Hofstede 2001; Salazar 2007). Government officials in

particular are not permitted to express their personals opinions on issues related to their

official duties and responsibilities. Mindful of this, the researcher wrote to industry

committees, Malaysian telecommunications firms and associated firms requesting

163

assistance with identifying suitable participants. The researcher then contacted individuals

as per the details provided.

Roscoe (1975) suggested that sample sizes ranging between 30 and less than 500 are

appropriate for most research. Accordingly, the researcher identified 1025 persons to

constitute the sample size. The target population comprised Malaysian telecommunications

firms, Government, Academia and Knowledgeable persons, that included industry experts

and consultants. The composition of the survey sample size is shown in Table 6.18.

Table 6.18: Survey Sample Composition

Telco

Operational

Telco

Management

Knowledgeable

Experts

Academia

Government Total

Group A B C D

Sample Size 305 370 210 140 1025

% Sample Size 29.76% 36.09% 20.49% 13.66% 100%

Source : Developed for this Research

Group A: This group comprised Staff from the selected case study firms and related

industry firms who were involved in operational matters.

Group B: Senior Managers from the selected case study firms who were in

management positions.

Group C: This comprised knowledgeable persons including industry experts,

consultants, and academics who were knowledgeable about internationalisation issues.

Group D: This constituted participants from Government agencies and the regulatory

bodies. The selected participants were familiar with policy matters pertaining to

internationalisation and the telecommunications sector.

6.5.2.9 Administration of the Web Survey

This recruitment and selection of participants for this study was guided by the National

Statement on Ethical Conduct in Human Research

164

(www.nhrmc.gov.au/publications/synopses/e35syn.htm). This is discussed further in

Section 6.9.

As discussed earlier, the survey was designed and administered through Zoomerang.

Potential respondents were sent an email to participate in the research. This included a

brief summary, the objectives of the research and the link to the web survey which

included the information sheet and ethics statement. The survey was administered using

the dedicated Gmail account set up for this purpose. This ensured confidentiality as

Zoomerang has specific features which allow for the anonymity of respondents. The

response rates were monitored regularly to provide an indication of the expected outcomes

and also acted as a trigger for reminders to be sent out as required. The overall response

rate for this survey was 20% as shown in Table 6.19.

Table 6.19: Survey Response Results

Group Sample Size Response

Rate

Percentage

Telco Firms Operational - A 305 30 9.84%

Telco Firms Management - B 370 104 28.11%

Knowledgeable Experts Academia -

C 210 55 26.19%

Government - D 140 15 10.71%

Total 1025 204 20%


While the response rate of 20% was adequate for the purpose of quantitative data analysis,

it is significant that more than half of the 204 respondents were in Group B which

comprised the management of the telecommunications firms. Another 55 were from Group

C comprising the knowledgeable experts and academia. The participants of both these two

groups accounted for 77.9% of the total web survey participants. The research

acknowledges that this could result in skewed responses. The next Section discusses the

confirmatory stage, Stage 3 of this research.

165

6.6 Methodology for Stage 3 : Confirmatory

The findings that emerged from the exploratory and descriptive stage of this research

permitted the defining of the variables and constructs. CFA and SEM was to confirm the

refined model that was tested during the descriptive stage of this research. Guided by

Tabachnick and Fidell, (2001) and Hair et al (1998, 2010) four constructs and three to five

indicators for each variable were determined.

6.6.1 Development of the Hypotheses

Four research hypotheses were also developed from the findings of the literature review.

The four hypotheses, coded H1 to H4 inter-relate the four variables of ‘Dynamic Market

Landscape’, ‘Strategy’, ‘Challenges’, ‘Government’.

H1: The “Dynamic Market” Landscape influences Internationalisation strategy

H2: “Internationalisation Strategy” is influenced by the dynamic market landscape

combined with the ability to overcome challenges

H3: “Challenges” impact the successful international market penetration of


H4: The “Government” plays a moderating role in the international market

penetration of Malaysian telecommunications firms

The defined variables and hypotheses are supported by the body of knowledge from the

literature review. These are shown in Table 6.20.

166

Table 6.20: Authority References supporting Variables and Research Propositions

Variable Supporting Authorities The Dynamic

Market Landscape

Laanti 2009; Ure 2009; Curwen & Whalley 2010; Kenny 2010;

Ovum 2010; Pyramid 2010; Arthur D. Little 2011; Bain & Company

2011; BMI 2011; IBM 2011; IDC 2011; ITU 2011; Kagan 2011;

Budde.com 2011; TIA 2011; Deloitte 2012;


Strategies

Johanson & Mattson 1988; Gabrielsson 2007; Johnson & Valhne

2009; Dunning & Lundan 2008; Ure 2009; Laanti 2009; Curwen &

Whalley 2008, 2010; Asgari, Ahmad & Gurrib 2010; Mathews 2010;

Oswal 2010

Challenges Ahmad & Hashim 2007; Markova 2008; Juniper 2009; Ure &

Lovelock 2009; EY 2010; IBM 2010; Accenture 2010; MCMC 2010;

The Yankee Group 2010; Alcatel-Lucent 2012

Government’s Role

and Policy

Ure 2001; Li & Whalley 2002; Zita 2005; Salazar 2007; Ure, Lee, &

Lee, 2009; MCMC 2010; Sivalingam 2007; Laanti 2009; McKinsey

2010; Oxford Business Group 2010


‘Dynamic Market Landscape’ is supported by various authorities and is described

as one of the most dynamic industry sectors. It is characterised by technological

advances which are shaping the future of the global telecommunications industry as

consumer demand for seamless, ubiquitous access intensifies amid increasing

competition. Industry players have to review their positions and participation in

the value network as they strive to achieve growth and competitive advantage,

often in international markets.

‘Strategy’ considers a firm’s ability to achieve competitive advantage and

sustainable growth. Factors requiring consideration include market selection,

timing of entry, consideration of the risk factors and the importance of building

trust and commitment in network relationships for integration.

‘Challenges’ reflects the critical internal and external factors that impact successful

international market penetration by Malaysian telecommunications firms. The

regulatory authorities in both the Host and Home Government’s play a critical role

in growth and ensuring that firms meet their obligations to consumers.

‘Government’ considers the impact of public policy, incentives and independent

regulation.

167

6.6.2 Confirmatory Factor Analysis (CFA)

Confirmatory Factor Analysis (CFA) is a statistical technique that verifies the factor

structure of a set of observed variables. CFA tests the uni-dimensionality to establish a

valid measurement model (Byrne 2001) and allows the researcher to test the measurement

of relationships of indicators (observed variables) to factors (latent variables). CFA relies

on statistical methods and explains the relationships among variables and the fit indices.

The chi-square indicates the amount of difference between expected and covariance

matrices; a value close to zero indicates little or no difference. It measures the goodness of

fit of the model, however, is unsuitable for smaller sample sizes.

The Goodness of Fit Index (GFI) measures the “relative amount of variances and

covariances jointly accounted for by the model” (Joreskog & Sorbom 1986, p.41). The

closer the GFI to 1.00, the better the model fit.

The Comparative Fit Index (CFI) (Bentler 1990) makes adjustments for the discrepancy in

smaller sample sizes. The values fall between 0 and 1 and a score of above 0.90 is

considered to be an acceptable fit.

Root Mean Square Error of Approximation (RMSEA) relates to the residual in the model

with values ranging from 0 to 1. It takes parsimony into account and values of 0.06

indicate a better model fit (Hu & Bentler 1999; Hair et al. 2006).

168

6.6.3 Structural Equation Modelling (SEM)

Structural Equation Modelling is a statistical tool for testing and estimating the causal

relationships between variables. The aim of SEM is to study complex relationships among

variables, where some variables can be hypothetical or unobserved (Wothike 2010). SEM

is confirmatory rather than exploratory.

The responses from the web survey were ascribed numerical values and were subjected to

CFA using AMOS 20.0 SEM software. Guided by several authorities, the process had two

phases. The first, CFA which was discussed in Section in 6.6.5, was used to assess

construct validity and second SEM, which consists of two stages, was used to empirically

test the hypotheses (Andersen & Gerbing 1988; Hair et al, 2010). The first stage was a

measurement model which considered the variations between the dependent and

exogenous variables in the model for maximum reliability. The second stage involved a

structural model to review and define the relationships and correlations between the

variables (Byrne 2001).The goodness of fit of the model to the observed data was tested

using AMOS 20.0 SEM. The outputs and findings of the confirmatory stage are detailed in

Chapter 8.

6.7 Research Quality

An important element of any research is to ensure its quality and credibility. Accordingly,

this Section discusses the pertinent issues relating to the quality assessment of research.

This includes the possibility of errors, reliability and validity (Kothari 1990; Bryman &

Bell 2007).

6.7.1 Minimising Errors

The researcher adopted several measures to minimise errors. The questionnaire was tested

with the Delphi technique to obtain feedback from selected knowledgeable persons (Witt

& Moutinho 1994). This was then further pilot tested through a representative sample.

Based on the feedback, the questionnaire was finalised and then distributed to the target

population. Additionally, to minimise error source, respondents with comparable positions

169

were selected for each group (Cooper & Schindler 2003; Flick, Kardoff & Steinke 2004;

Kumar 2005).

All interview participants benefited from an information guide which outlined the research

objectives, expectations and confidentiality. It also stated the expected outcomes and

benefits of the research.

6.7.2 Reliability

Reliability in research is concerned with consistency and stability in the research process

(Riege & Nair 1996). It aims to reduce errors and bias in measurement (Sekaran 2000; Yin

2003) by demonstrating that the research procedures and process can be replicated with

similar outcomes and findings. The researcher took the following measures to ensure

reliability. i) The questionnaires were tested using the Delphi technique to gain feedback

on clarity, length and look of the questionnaire. ii) pilot-tested by using a small

representative sample. iii) the administration of the survey was through Zoomerang, a

specialist data collection software tool which provided for anonymity and accurate data

collection and iv) All interviews were documented.

6.7.3 Validity

Validity focuses on the right concept being measured for addressing the identified research

problem (Chew 2007). Construct validity is the extent to which a measuring instrument

measures what it intends to measure. There are two aspects to validity, internal validity

and external validity.

External validity is concerned with the generalisability of the findings to the external

environment (Zikmund 2000). The researcher took the following measures to ensure

validity. First, a large sample size was collected. In this environment, a response rate of

20% is considered adequate. Second, the Questionnaire was comprehensive and covered

the issues being investigated. Third, interview participants and knowledgeable persons,

including industry experts and academics provided valuable feedback on the research

topic. Finally, Multiple sources of evidence were used as well as an. electronic audit trail.

170

Internal validity is concerned with inferences regarding causal relationships between two

variables The researcher addressed the issues of internal validity by ensuring that the

Questionnaire and interviews were comprehensive in their coverage of the content

pertinent to the research problem (Kumar 2005).

6.7.4 Triangulation

‘Triangulation is an attempt to map out, or explain more fully, the richness and complexity

of human behaviour by studying it from more than one standpoint’ (Cohen & Manian 2003

cited in Kennedy 2009). The quality of research is enhanced by triangulation as it

improves accuracy (Neuman 2006). Accordingly, the researcher triangulated the findings

in the following ways.

The researcher used a mixed methodology of quantitative and qualitative methods in a

complementary manner (Greene & Caracelli 1997). Qualitative data was collected through

a comprehensive literature review, and interviews. These provided insights into prior

research, methods used and identified gaps in the study of internationalisation of the

telecommunications sector. Values-free quantitative data was collected in the second

stage. The amalgamation of the qualitative and quantitative data strengthened internal and

external validity.

6.8 Data Analysis

Data collected is generally in the raw form and has to be converted into information for

analysis and interpretation (Malhotra 1999). The analysis procedures for the collected

qualitative and quantitative data are discussed next.

6.8.1 Qualitative Data Analysis

Qualitative data consists of words not numbers and is a dynamic and intuitive process of

inductive reasoning and theorising (Basit 2003; Neuman 2006). It involves translating

words into meaningful information that can be interpreted. The qualitative data analysis

process comprised the following sequential steps:

171

Data Reduction: The first step of the qualitative data analysis process was to

understand the information collected. Detailed notes from the interviews and the

literature review were condensed and summarised to make sense of the information

collected (Taylor-Powell & Renner 2003).

Coding: The data was coded to identify themes and categories. The developed codes

were then examined in terms of possible causes and consequences, conditions, and

interactions to permit further analytic categories or concepts that cluster together

(Neuman 2006).

Content Analysis: The third stage was content analysis, including the examination of

the content of interviews and the communicative medium (Neuman 2006). The objective

of content analysis was to distinguish patterns in the display tables (Patton 1990;

Cavana, Delahye & Sekaran 2000; Yin 2003).

Conclusions: Finally, the themes between the categories were investigated for inducing

conclusions on each research question and these are presented in Chapters 7.

6.8.2 Quantitative Data Analysis

Guided by Malhotra (1999), the quantitative data analysis process included checking,

editing, coding, categorising, transcribing and data cleaning. The data was keyed into

SPSS version 17.0 for the descriptive stage of the research and Structural Equation

Modelling was used for the confirmatory stage. The analysis process is outlined below.

Editing : The questionnaires were reviewed to identify eligible, incomplete, inconsistent

or ambiguous responses to increase accuracy.

Coding :The collected data was translated into codes for the purpose of computer

analysis.

Transcribed: Survey responses were converted into a format that could be analysed by

the computer.

Cleaned: Cleaning was done for consistency and to identify and treat the missing data.

172

Descriptive statistical analysis techniques were used to calculate the mean, standard

deviations and cross tabulation of the results. This involved the use of SPSS version 17 for

the descriptive stage of the research:

The SPSS data were subjected to Confirmatory Factor Analysis (CFA) using AMOS 20.0

SEM software. Guided by several authorities, the process involved CFA to test construct

validity and model fit and SEM to test the hypotheses.

6.9 Ethical Considerations

This research entailed the collection and distribution of information pertaining to several

parties, the respondent and the University. It was necessary to meet ethical and moral

standards and assure that no harm was caused to the respective parties involved (Ticehurst

& Veal 1999). Accordingly, the research was guided by the provisions of the ‘National

Statement on Ethical Conduct in Research Involving Humans’. The researcher required

ethics approval before commencing primary data collection and had to meet the following

requirements.

Voluntary Participation: The researcher stressed that participation was purely

voluntary with no offer of financial remuneration. The participant had the option to

withdraw from the research at any time without explanation (Neuman 2006).

Informed Consent: Research participants were fully informed of the nature and

objectives of the research. Information sheets for participants of the Expert Panel and

Interviews were provided.

Confidentiality and Anonymity: Anonymity and Confidentiality were guaranteed to

the participants as the respondents contact details were withheld when responding

through Zoomerang.

Integrity: Guided by Cooper & Schindler, (2003) and Zikmund (2003), the researcher

undertook precautions to ensured that data was accurate and objective underpinned by

scientific investigation.

173

The data collection phase only commenced after the researcher was awarded ethics

approval which was granted on 19 July 2010, Ethics approval number ECN-10-122.

6.10 Chapter Summary

This Chapter presented and justified the selected research methodology and research

design including the data collection instruments for a three-stage approach. The first was

exploratory to identify the theoretical model for the research and reaffirm the relevance of

the research problem. The second and descriptive stage, was to test the theoretical model.

The third and confirmatory stage was to validate the refined theoretical model. The

Chapter discussed the data analysis procedures, research quality as well as the measures

taken to address ethical concerns.

174

Chapter 7 - Qualitative Data Analysis

7.1 Introduction

The earlier Chapter presented the methodology and research design for this research on

Addressing the critical issues for successful international market penetration by

Malaysian telecommunications firms. As discussed in Section 6.3.1.4, this research

comprised three stages. The first, exploratory and qualitative stage was aimed at refining

the theoretical model that emerged from the literature review. The second and descriptive

stage tested the refined theoretical model. The final and confirmatory stage permitted the

validation of the tested model.

In line with the outline Research Master Plan presented in Chapter 6, this Chapter has two

primary aims. First, to analyse the primary data from the personal interviews for the

purpose of refining the proposed theoretical model. Second, to develop the research

propositions for testing through a web survey in the descriptive stage of this research.

7.1.1 Chapter Structure

This Chapter has six Sections as shown in Figure 7.1. This Section provides an

introduction and overview of the Chapter.

Section 7.2 presents the results and analysis of the data sourced from the personal

interviews for refining the preferred theoretical model that emerged from the literature

review. Section 7.3 outlines the coding for content analysis and Section 7.4 links the

findings of the literature review with the findings of the personal interviews. Section 7.5

develops the propositions for testing by the web survey in the descriptive stage of this

research. The final Section 7.6 is a summary of this Chapter.

175

Figure 7.1: Structure of Chapter Seven


7.2 Analysis of the Primary Data: Personal Interviews

The analysis of the secondary data, as discussed in Chapter 5 permitted the development of

four research questions. Primary qualitative data were collected from the personal

interviews to address the research questions which are restated for ease of reference.

Research Question 1

How are the dynamic changes in the global telecommunications industry influencing the

strategic choices of Malaysian telecommunications firms?

Research Question 2

What are the appropriate corporate strategies for successful international market


7.2: Analysis of the Personal Interviews

7.3: Coding for Content Analysis

7.1: Introduction

7.4: Refining the Theoretical Model

7.5: Crafting the Research Propositions


176

Research Question 3

What are the challenges that Malaysian telecommunications firms face in international

markets?

Research Question 4

How adequate are the Government’s policies and initiatives for supporting the

internationalisation efforts of Malaysian telecommunications firms?

Personal face-to-face interviews were conducted with 20 participants who were involved

in the telecommunications sector in Malaysia. As discussed in Chapter 4, these were pre-

qualified in alignment with the criteria shown in Table 7.1

Table 7.1: Personal Interview Participants

Group Category Description Number of

Participants A Operational

Staff

Staff from the selected case study firms and related

industry firms who are involved in operational

matters.

3

B Management Senior Managers from the selected case study firms

who are responsible for management. This included

the firms which had been involved in international

operations.

8

C Industry

Experts

Knowledgeable persons including industry experts,

consultants, individuals involved in academia who

had interest and knowledge about

internationalisation.

5

D Government

and

Regulators

Participants from Government and regulatory

bodies. The participants selected were involved in

policy matters pertaining to internationalisation and

the telecommunications sector.

4


Several key discussion points, framed as 18 interview questions, were drawn up to cater to

each of the four developed research questions and these are shown in Table 7.2. The

interview participants were also encouraged to express their views on issues that they

considered to be important and which fell outside the framework of the 18 interview

questions.

177

Table 7.2: Research Questions and Related Interview Questions

Research Questions Some Interview Questions Research Question 1 IQ1

IQ2

IQ3

What are your views on the current state of the global market and

emerging trends? How do you believe these influence the Malaysian

market

In your view, do you consider it necessary for Malaysian

telecommunications firms to venture abroad? If so, what are the

push/pull factors for them to do so?

In your view, are Malaysian telecommunications firms well

positioned to compete globally?


IQ5

IQ6

IQ7

IQ8

IQ9

What strategies do Malaysian telecommunications firms employ for

international market penetration? Do these strategies take into

consideration, product and operations strategies? If so, please

describe.

How do Malaysian telecommunications firms select international

markets, Entry mode and timing?

How important is it have strong leadership and a global mindset?

What benefits do you believe can be gleaned from establishing

network relationships?

How important are the attributes of. Trust, Commitment, and

Learning for successful international market penetration?



IQ11

IQ12

IQ13

IQ14

IQ15

What are the challenges that Malaysian telecommunications firms

face in international ventures?

How are Malaysian telecommunications firms financing their


In your view, how effective are the brands of Malaysian

telecommunications firms for successful overseas ventures?

How effective are the efforts of telecommunications firms in building

international network relationships?

How innovative are Malaysian telco firms products and services?

How adequate are the structures and resources to address the

challenges that Malaysian Telco’s face in international ventures?


IQ17

IQ18

What are the Government’s initiatives and policies for encouraging

telecommunications firms to enter international markets?

What is your view on the regulatory authority and how effective are

regulatory policies?

What are your thoughts on improving the regulatory environment?


As discussed in Section 6.8.1, the analysis process for the data collected from the personal

interviews involved translating words into meaningful information to permit interpretation.

For this purpose, detailed notes were taken during the interviews and summarised to make

sense of the information collected (Taylor-Powell & Renner 2003). These were then coded

to identify themes and categories. The final stage was content analysis to identify patterns

as a basis for drawing conclusions on each research question.

178

7.2.1 Data Analysis for Research Question 1

How are the dynamic changes in the global telecommunications industry influencing

the strategic choices of Malaysian telecommunications firms?

The interview participants offered useful views on the three interview questions that were

related to this research question and these are restated below.

IQ1: What are your views on the current state of the global market and emerging trends

and how do you believe these influence the Malaysian market

IQ2: Do you consider it necessary for Malaysian telecommunications firms to venture

abroad? If so, what are the push/pull factors for them to do so?

IQ3: In your view, are Malaysian telecommunications firms well positioned to compete

globally?

7.2.1.1 Analysis of responses to IQ 1:

What are your views on the current state of the global market and emerging trends and

how do you believe these influence the Malaysian market.

The majority of interview participants were of the view that the global market was

undergoing constant change and highlighted several emerging trends. These included

convergence, challenges in managing consumer expectations; security; entry of non-

traditional industry players; emerging technologies, cloud computing, challenges to

monetise content; changes in regulation globally. The trends applied to both the fixed and

mobile segments. Liberalisation and regulatory reforms globally are impacting the industry

and creating a dynamic market landscape. The ITU continues to foster economic, social,

political and technological regulation. With spectrum remaining a finite resource,

regulatory bodies are tasked with balancing market structures for a competitive landscape,

price regulation while ensuring operators deliver quality of service to consumers (Markova

2008). Advances in technology are directed towards consumer led demand for mobility

and data (McKinsey 2012).

179

One participant highlighted that “fixed players were in survival mode” as mobile was

dominating the sector. This is in alignment with the surge in mobile connections in

Malaysia which have soared from 21.8% in 2000 to over 136% as at the end of Q3 2012

(MCMC 2012).

An industry participant commented that for telecommunications firms “voice revenue in

the medium term was declining and data was the future”. This was reflected by the

declining downturn trend of -2% y-o-y in voice revenue among Axiata, Maxis and DiGi

which reported from an estimated RM14bn revenue in 2010 to RM13bn revenues in 2011

(ECM Libra 2012). Another participant maintained that although voice revenue would

decline, this would not be uniform for all countries. While another stated “voice revenues

would continue to grow, however, the technology which supports voice will be different

e.g. VoIP”. Although VoIP services such as Skype have increased in popularity, Analysis

Mason (2010) argue that VoIP traffic will have minimal impact on total network traffic

until LTE deployment in developed markets in 2015. A similar view is shared by the CEO

of DiGi who stated “in Malaysia, with the advent of 4G technology and smartphones,

long-term evolution (LTE) networks also play an integral part in the industry. This will

enable substantially higher speed, stability and internet access to more Malaysians through

greater coverage”.

Furthermore, fixed operators remain under pressure to unbundle the local loop. Salazar

(2007) argues that the Malaysian telecommunications sector lacks transparency and rent-

seekers have hindered competition and growth in the industry. Telekom Malaysia remains

the dominant fixed line player in Malaysia and continues to receive support from the

Government. Regulators on a global basis face challenges of ensuring bottlenecks are

administered effectively. Whilst remaining flexible, governance in licensing, spectrum

allocation, price regulation, infrastructure sharing, dispute resolution and mediation, net

neutrality, convergence, universal access along with enforcement remains challenging

(ITU 2010). Malaysia’s regulatory authority, MCMC, faces similar challenges.

Some of the participants maintained that the global trends were generally driven by

innovation from vendor organisations who supply the equipment rather than the

telecommunications providers. Innovation as identified by these industry players remains

key to competitive advantage. This is supported by several authorities (Baragheh et al.

180

2009; McKinsey 2012; The World Bank 2010; GoM 2012). However, Malaysian firms as

outlined in Section 4.96 face challenges with innovation and R&D.

Participants agreed that ARPU’s were declining in most parts of the world and technology

trends were driving innovation. This is supported by evidence in ARPU in Malaysia

declining at a CAGR of 6.3 per cent for the period between 2005 and 2010. As at 2012,

average industry ARPU stood at RM52 (BMI 2012). The decline in ARPU also suggested

that competition in the voice market space had a significant impact as the rates pressure set

in (The Borneo Post, 4 September 2011).

The challenging economic climate made it necessary for the industry to become more cost-

efficient and consider infrastructure sharing. The situation was also conducive for mergers

and acquisitions on a global basis. Several participants stated that Malaysia is likely to see

further consolidation. This is supported by views from industry analysts and players which

highlighted that talks have begun on mergers and acquisition. An industry analyst stated

“There are clearly too many players for a market like Malaysia and it would naturally

result in some form of consolidation” (The Star, 22 February 2012). In terms of global

growth, all participants maintained that the emerging markets like China, India and

Indonesia would lead the way due to rapidly growing domestic demand.

The participants were divided on how these trends influence the Malaysian market. One

participant stated “Although some are following the trends, others are thinking about what

to do”. Another made the pertinent comment, “knowing and doing are different things;

preparation may not necessarily lead to success”. Several participants were of the view

that Malaysian firms were lagging behind the global trends, however, Malaysia is reported

to be ranked in the top three in a study conducted by McKinsey & Company on the

economic impact of the Internet on the Gross Domestic Product (GDP) of nine aspiring

countries (NST Malaysia, 1 February, 2012).

A participant stated “Malaysian telecommunications firms need to understand that global

business is growing rapidly because of governmental policies on international trade and

resources. Malaysia needs to catch up”. Other participants were of the view that the

Malaysian market is still protected and more needs to be done to create a level playing

field.

181

Convergence is also providing customers with greater choice and new market entrants with

opportunities. This is reflected by the pertinent response that “Malaysian firms are

following the trends and as an organisation, as a firm we have transformed ourselves to

meet the changes in the global marketplace and this is evident in our results”.

Those interviewed believed that Malaysian customers, like their global counterparts were

always seeking new mobile gadgets with multi-function capabilities. Dynamic consumer

demands made it necessary for telecommunications firms to give priority attention to the

next generation networks. This is reflected by the pertinent comment:

“it’s challenging to differentiate to meet customer needs. Customers can be fickle and tend

to wait for the next technology trend. They are also price conscious and it is detrimental to

enter a price war in the limited domestic market of Malaysia. We need to get close to our

customers to gain some form of loyalty”.

Furthermore, several participants commented that Malaysian firms lacked adequate

resources to be competitive as reflected by the comment “Unfortunately, like the majority

of Malaysian businesses, the local management do not understand the need to look

outward to become a sustainable and successful business”.


In your view, do you consider it necessary for Malaysian telecommunications firms to

venture abroad? If so, what are the push/pull factors for them to do so?

The industry participants believed that the domestic market, with its many players is

highly competitive. While liberalisation and privatisation have provided opportunities for

inward investment in Malaysia, several participants were of the view that the Malaysian

market structure needs to be reviewed to allow for fair competition to strengthen firms

capabilities to enable them to compete in the regional and global markets. Whilst mobile

penetration reaches near saturation, industry players grapple with the challenge of

sustainable growth in an evolving industry. One participant commented “My observation is

that the Malaysian market is saturated and for Malaysian telecoms to sustain their growth

in the telecom business, there is need for them to internationalise into emerging (markets)

182

countries where cultural differences are not a barrier. There is need for Government to

give the required support to them while going international”.

Majority of the participants were of the view that the push factors for Malaysian

telecommunications firms was domestic competition. Firms were challenged to achieve

ongoing growth as ARPU’s were declining and firms had to achieve cost-efficiencies. The

issuance of LTE licences to 9 players was also identified as a likely push factor as this

would intensify domestic competition and lead to Malaysian telecommunications players

venturing abroad. One participant stated “The licences were not issued on meritocracy”

However, participants agreed that successful international market penetration was

dependent on a firm’s ability to build long term relationships as reflected by the comment,

“its challenging to build relationships with strategic partners. It means that both parties

have to trust each other”. One participant stated “we envisage mergers and acquisitions

to take place as there are too many players for the limited domestic market size”.

The pull factors stated by most participants were market liberalisation, technology

advances, increased revenue and leveraging on economies of scale. Several participants

considered governmental support to be a determining factor for Malaysian

telecommunications firms to successfully venture abroad. A participant from Group D,

which comprised the Government and Regulators, maintained that the Governments

policies were aimed at encouraging Malaysian telecommunications firms to venture abroad

as this would generate export earnings for the country. Another participant from Group C

comprising the industry experts stated that despite such policies, “few firms have

international markets on their radar as part of their strategy - they are ‘comfortable’ in

Malaysia”. While a participant from Group B commented “Malaysian

telecommunications operators are opportunistic rather than strategic in terms of regional

expansion and Malaysian telcos are still not ready for international market penetration”.

This is reflected by only two firms venturing into overseas markets, namely, Axiata and

Maxis. Axiata, formerly TM, commenced its international ventures in 1994 as a result of

Government to Government opportunities and it subsequently divest its interest in its

African ventures to focus on the region (Ahmad & Hashim 2007). Several participants

were quick to highlight TM’s failures in its ventures in Africa.

183


In your view, are the Malaysian telecommunications firms well positioned to compete

globally?

Four criteria were considered as being important for successful entry into global markets.

The first related to knowledge and competencies to create innovation. The industry experts

and a few senior managers from the telecommunications firms believed that the firms

lacked the necessary capabilities to effectively and successfully penetrate international

markets. Among the cited reasons were inadequate knowledge of global markets and the

inability to build long term sustainable business relationships. This is reflected by TM

having to withdraw from its ventures in Ghana and more recently, Etisalat announcing

plans to sell most of its stake in Indonesian mobile operator XL Axiata, aiming to raise up

to USD502 million in what will be the Asian country’s biggest block offering since

December 2010. The UAE-based group owns 13.29% of the Indonesian company, which it

acquired in 2007 for USD440 million, but has struggled to develop a working relationship

with XL Axiata’s main shareholder, Axiata Group of Malaysia (Telegeography 2012).

One participant commented

“The telecommunications sector locally has a lot more to grow in order to compete

internationally. It must learn from other well established companies overseas in order not

to be left behind” while another commented “Malaysia "continues to struggle" the

availability and quality of talent. Skills and acumen in technical, communication and

business management domains are underdeveloped, and resource allocation for talent

development and retention is insufficient to meet the needs”

The second was the importance of effective leadership with managerial and visionary

attributes as these were considered as key factors for achieving international

competitiveness. This was illustrated by the comment, “if Malaysian telecommunications

firms had the capabilities, then more firms would have been successful in international

ventures”. Competitive advantage is dependent on a firm’s ability to build intellectual

capital (David 2005; Marr & Shuima 2001). Leaders need a global mindset to compete

effectively in the new economy (Jeannette 2000). A participant commented “The executive

184

leadership and strategy concerned with international investment is generally driven by

non-Malaysians as opposed to 'home grown' talent”.

The third related to reputational advantage and the promise of a strong recognisable global

brand. Several participants were of the view that Malaysia Inc. as a global/regional brand

needs to be developed. These were considered to be constraining factors for Malaysian

firms operating abroad as reflected by the comment, “how many Malaysian brands are

recognised in the global arena?”. A participant commented “from a consumer perspective,

brands equate to trust”.

The fourth was customer responsiveness. Several participants believed that Malaysian

firms need to be more customer focused as reflected by the comment “The ability to

understand customer needs and wants and achieve customer satisfaction was generally

given ‘lip service’ in Malaysia”.

7.2.1.4 Summary of Findings on Research Question 1

The analysis of the responses to all the three interview questions revealed common themes

and these were the basis for the following findings:

The global telecommunications market is undergoing dramatic changes fueled by market

liberalisation, mergers and acquisitions, technological advances and increasing consumer

demands. Trends in telecommunications lean towards mobility, wireless and convergence.

These emerging trends are underpinned by technology innovation, particularly

convergence and NGN, regulatory reforms and consumer demand. The desire to remain

“always connected” is fostering a culture of ubiquitous connectivity and impacts social and

economic activity. Although there was an apparent awareness of the dynamic changes

and emerging trends in the global telecommunications industry, there was limited

empirical evidence to confirm the level of influence of these trends on the selection of

competitive strategies of Malaysian telecommunications firms to achieve sustainable

competitive advantage.

Global market liberalisation has permitted Malaysian telecommunications firms to

internationalise. Growing competition in the domestic market is also compelling the major

185

Malaysian players to venture abroad for long term growth and sustainability. The pull

factors are privatisation, reduced transaction costs, increased revenue and leverage on

economies of scale, however, while these present opportunities, only two firms have

ventured into international markets.

To compete globally, firms must have knowledge and competencies to build intellectual

capital, effective leadership and reputational and brand advantage. Malaysian

telecommunications firms have to develop their knowledge base competencies in order to

better position themselves to successfully venture into foreign markets.

Majority of the interview participants were of the view that Malaysian telecommunications

firms, while aware of the dynamic trends in the global marketplace, presented little

evidence that these trends were influencing their strategic choices to remain competitive.

Accordingly, on the basis of these views, the interview participants rejected Proposition 1.


RQ2: What are the appropriate corporate strategies for successful international market


The six interview questions that were related to this research question are restated below.

IQ4: What strategies do Malaysian telecommunications firms employ for international

market penetration? Do these strategies take into consideration, product and operations

strategies? If so, please describe.

IQ5: How do Malaysian telecommunications firms select international markets? Entry

Mode and Timing?

IQ6: How important is it to have strong leadership and a global mindset

IQ7: What benefits do you believe can be gleaned benefit from establishing network

relationships

186

IQ8: How important are the attributes of Trust, Commitment, and Learning for successful

international market penetration?

IQ9: What is the role of knowledge and how easy is it to transfer?


What are the strategies that Malaysian telecommunications firms employ for

international market penetration? Do these strategies take into consideration, product,

operations and marketing strategies? If so, please describe.

Malaysian telecommunications firms, being large corporate bodies have business plans

and strategies. While many firms are focused on the domestic market, the effectiveness of

the strategies for international market penetration were questionable as evidenced by the

losses incurred by TM when it ventured into African countries. “TM had to retract from

its early ventures as these were really opportunistic supported by Mahatir wanted to

leverage on the South-South corporation”. Another participant highlighted “while we had

Government assistance in the early days, we were forced to review our initial international

ventures and have had to subsequently retract from some of the markets we initially

entered as they were not commercially viable. Our focus is now on the region”.

Furthermore, TM faced challenges with its bureaucratic culture (Salazar 2007).

One participant cited the problems faced by Maxis in Indonesia and regarded it as a case of

“poor strategic planning”. The participants offered several reasons for this. These included

poor market selection due to lack of knowledge about market opportunities; wrong entry

modes; poor relationships with host Governments and the selection of network partners

who were unable to discharge their commitments. This is reflected by the comment “one

needs an understanding and knowledge of cultural diversity and how business is done in

an international arena, not just Malaysia”. However, “most Malaysian firms tend to think

short term and remain complacent about sustainable growth; they will eventually have to

change if they want to compete in the global economy”.

Of the firms that have ventured overseas, industry participants stressed that their strategies

were driven by leaders with an orientation towards international growth. The attributes of

187

these leaders include having a global strategic outlook, the ability to build relationships

through trust, foster innovation, build international knowledgeable teams and be customer

focused (Abang 2009; Wong 2012). This is reflected by the comment “driving successful

internationalisation of the telco sector in Malaysia is highly dependent upon the nature of

the leaders and their employees capabilities”.

Participants considered market entry to be reliant on licensing requirements which meant

that all strategies involved relationships with network partners, mainly through a JV

involving the purchase of an equity stake.

Participants had divided views on product strategies and these, ranged from providing

professional services to focusing on network service partnerships. However, they agreed

that these were dependent on the selected local market. While one participant commented

“we need to stick to our core competency” another stressed “we need to move with the

times and although our focus is mobile, we need to consider value added services and

content along with bundling opportunities”. However, all participants agreed that

innovation should command more emphasis as this was necessary to address the

challenges of convergence. A few participants were of the view that it is very hard to find

good people in product development in Malaysia and the industry was reliant of foreign

expertise.

The interviews revealed that operation strategies were generally through joint ventures

and equity purchase. This is illustrated by the comment “we need to have skin in the game.

Even if we have an initial minority stake and then increase this as we progress, it’s

important that we have a lock-in value”. All participants stressed that they were guided by

the foreign ownership regulations of selected markets. One participant shared “our

philosophy is to work with partners who share our values and are keen to build long term

relationships. We require majority stakes in most markets that we enter. This is to support

our product development and management control structure”.


How do Malaysian telecommunications firms select international markets? Entry Mode

and Timing

188

Participants were of the view that strategies were based on a phased approach which took

into account economies of scale and foreign ownership guidelines. Accordingly, the

markets selected were close in culture and geography in alignment with Ahmad and

Hashim (2007). This is illustrated by the comment “our focus is on the region, not just for

cultural reasons, but also because of the distance”. One of the participants stated that

entry mode was through joint ventures and they selected “Partners which have attained a

top three position in their respective market”. However, they were mindful of “poorly

regulated emerging markets”. In this context, the participants commented on TM’s

failures in venturing into poorly regulated and unfamiliar markets in Africa. Several

participants believed that market selection was based Government to Government

relationships and were opportunistic rather than based on market knowledge, local culture

and understanding of consumers. Most participants agreed that timing of entry was

determined by the leadership and was a key determinant to success. One participant

commented “TM’s timing of entry into Africa was all wrong – the market wasn’t ready”,

and another reaffirmed “Axiata (formerly TMI) was now focusing on region where we

have easier reach and cultural affinity”.

Participants were also of the view that although trade agreements were important, there

was little reliance on Government and most markets were selected through individual

relationships. However, ventures built on individual relationships have also faced

challenges. Two international firms, NTT Do Co Mo and KT Freetel have withdrawn from

its ventures with U Mobile in Malaysia. NTT docomo cited a difference of opinion related

to the cellco’s management between the Japanese company and other stakeholders

(telegeography 2009). while KT Freetel withdrew to avoid further losses.


How important is it to have strong leadership and a global mindset?

Strong leadership and a global mindset are intrinsic for a firm to be successful. Participants

believed that the firms that were successful in the overseas ventures were driven by leaders

with a growth orientated international outlook. This was illustrated by the comment “just

take a look at the CEO’s of the firms which have been successful internationally; all of

them have worked overseas”. Strong leaders were also focused on market selection which

189

included entry modes and timing and consider the risk factors as part of their corporate

strategy. Another pertinent comment was “the international telecommunications firms in

Malaysia have leaders with a global outlook and seem to be able to guide their respective

firms to compete successfully”. A strategic global outlook and a global mindset is

important to support an understanding of diverse cultures, foster innovation, and

internationalisation. It is noteworthy that Axiata has employed a number of expatriates for

its international ventures. A participant commented. “Axiata under the capable leadership

of Datuk Jamaluddin (ex Maxis) in recent years has made significant inroads into the

regional telecommunication market”.

7.2.2.4 Analysis of responses to IQ 7 :

What benefits do you believe can be gleaned from establishing network relationships

and how effective are Malaysian firms in building such relationships?

Network relationships are critical for venturing abroad. This was reflected by the comment

“licences are hard to come by, therefore, it’s important to build a relationship with

someone who has a network licence”. A related comment was “our philosophy is to work

with partners who share our values and are keen to build long term relationships. We

require majority stakes in most markets that we enter. This is to support our consistent

branding and management control structure”.

In line with Ahokangsas (1998) participants were also of the view that access to resources

and knowledge could be gained through network relationships as reflected by the

following comments, “it’s good to gain an insight into how other companies work, both

domestically and internationally” and “we anticipate cost-savings by sharing

infrastructure with one of the local partners”. However, while several participants

acknowledged the importance of building international network relationships for

internationalisation, few had been successful in achieving in building effective

relationships.

190


How important are the Attributes of Trust, Commitment and Learning for Successful


There are several definitions of trust. Kim et al., (2011) suggest that trust involves

cooperative acts, catalyses networks and reduces conflicts between organisations and

unnecessary cost. Previous studies provide definitions of trust based around the opponent.

Doney and Cannon (1997) suggested that it has confidence in the opponent whereas Mayer

et al (1995) defined trust as enduring damage from the opponent’s action and Schurr and

Ozanne (1985) defined trust as confidence in the opponent’s intention to develop a faithful

business relationship and the reliability of his or her words or appointments. In simple

terms, Moorman, Desphandé and Zaltman, (1993) define trust as the willingness to rely on

an exchange partner.

Trust is an important aspect of the relationship between two entities and is critical in

coordinating activities across networks and building relationships (Adali et al, 2010).

Telecommunications operators build trust across countries in several ways. Trust is

developed over time with persistence of communications to gather information and

identify prospective partners and their capabilities (Gulati 1995b). Operators identify areas

of participation and coordinating activities and resources for partners to engage in

collaboration over time. Trust is important for knowledge transfer (Johnson et al 1997,

Abrams et al 2003) and a major driving force for collaboration and reducing reduce

contracting costs in network industries like telecommunications (Kenny 2010).

‘Trust’ is important in building relationships and penetrating international markets. This is

illustrated by the comment that “we often deal with individuals, namely, leaders, with

whom the relationship is built with. Therefore, it is the individual’s integrity that we rely

on and trust”.

Some believed that “commitment means different things to different people, particularly in

different cultures”. A few were of the view that the degree and nature of commitment is

based on earlier experiences and the lessons learnt from network relationship in

international markets. This was reflected by the comment: “if we are doing well, then we

191

will increase our commitment and resources; if we are not, then our commitment will

decrease”.

Firms can gain knowledge about overseas market through continuous learning. This would

make them better placed to make decisions on market selection and mode of entry. This is

reflected by the comment “learning and sharing information is critical to ensure we

succeed. We need to understand local customers and once we enter a market, knowledge

transfer is critical to ensure brand consistency”. However, “although our people are

hungry for knowledge, it’s not always easy to get them to transfer knowledge – it’s a

cultural thing”.



Innovative knowledge enables a firm to lead its industry and competitors and to

significantly differentiate itself from its competitors (Zack 1999). Knowledge is a source

of competitive advantage. Several participants acknowledged that Malaysia was striving to

becoming a knowledge economy and knowledge is the driver for growth. However,

participants were of the view that few firms were successful in implementing a knowledge

management strategy. This was reflected by the comment “Unless its part of your KPI’s

employees are reluctant to share their knowledge”. Furthermore, another participant stated

“tacit knowledge is challenging to acquire in the Malaysian marketplace and employees

often walk away with valuable information in their heads”. Overall, majority of

participants were of the view that transferring knowledge was challenging. However,

knowledge will continue to be important in the internationalisation process. Particularly

knowledge about markets, partners and customers.

7.2.2.7 Summary of Findings on Question 2

The analysis of the responses to all the six interview questions could be summarised as

follows:

192

The strategies of Malaysian telecommunications firms are variable. While there are several

push and pull factors for Malaysian telecommunications firms to enter international

markets, including, technological advances, network externalities and a limited domestic

market size, few have ventured abroad. “most Malaysian firms tend to think short term

and remain complacent about sustainable growth; they will eventually have to change if

they want to compete in the global economy”. While Product strategies of firms that have

penetrated international markets vary, firms need to innovate to address the challenges of

convergence.

Market selection is supported by psychic distance “our focus is on the region, not just for

cultural reasons, but also because of the distance”. However, firms have to consider

foreign ownership regulation and network partners reflecting their operation strategies

which are generally through JV’s and equity purchase. This often starts of as a minority

stake and is increased as trust is built thereby increasing commitment to the venture. While

network relationships bring many benefits, including, resources, cost-efficiencies and

knowledge, they require strong leaders with global mindsets. Trust, commitment learning

through knowledge sharing are key determinants to successful international market

penetration.


firms, firms have yet to develop appropriate internationalisation strategies and appropriate

resources for innovation and international marketing. Accordingly, on the basis of these

views, the interview participants rejected Proposition 2.


What are the challenges that Malaysian telecommunications firms face in


The interview participants offered valuable insights on the six interview questions that

were related to this research question and these are restated below.

IQ10: What are the challenges that Malaysian telecommunications firms face in


193

IQ11: How are Malaysian telecommunications firms financing their international

ventures?

IQ12: In your view, how effective are the brands of Malaysian telecommunications firms

for successful overseas ventures?

IQ13: How effective are the efforts of telecommunications firms in building international

network relationships?

IQ14: How innovative are Malaysian telco firms products and services?

IQ15: How adequate are the structures and resources to address the challenges that

Malaysian Telco’s face in international ventures?


What are the challenges that Malaysian telecommunications firms face in international

ventures?

The participants agreed that internationalising Malaysian telecommunications firms face

several challenges. This is reflective of only two firms having ventured into overseas

markets. The challenges included acquiring knowledgeable resources; appropriate business

models; knowledge about foreign markets; developing sustainable relationships; keeping

pace with technological innovations ; securing licences; developing branding and effective

marketing to meet changing consumer demands. Malaysian telecommunications firms in

international ventures have to comply with regulatory requirements with host

Governments. Furthermore, they are often reliant on local partners and need to build

trusting relationships.

Although the firms that have penetrated international markets had capable leadership, they

faced challenges. This was illustrated by the pertinent comment “it’s challenging to

manage teams remotely and adapt to differing cultures”. However, another participant

reflected “you can build an international team based on meritocracy. You have to manage

diverse cultures and idiosyncrasies by keeping an open mind”.

194

Several participants also believed that leaders who had exposure to international markets

were better equipped to build relationships and gain trust over time; therefore it was

“beneficial to be open to recruiting expatriates”. However, some participants were of the

view that Malaysia had adequate talent, however, “institutional policies were forcing

talented individuals to leave the country”. This is supported by the brain drain report by

Schellekens (2011).

Majority of the participants believed that the competitive landscape and consumer demand

required them to be innovative and differentiate. However, the ability to drive innovation

was highlighted as an obstacle. This was reflected by a participants comment “Malaysian

telcos are way to inwardly driven and not market driven”. Another stated “Research &

development in Malaysia in the area of telecommunications is lacking in terms of the value

that it brings to overseas ventures”. Several participants stated were of the view that there

should be more emphasis and focus on content and bundling of solutions and not just

products.

While highlighting the importance of business models, the participants also believed that

firms should give emphasis to seeking suitable network partners. Branding and marketing

in different cultural environments were also considered to be challenging as well as the

difficulties arising from regulatory changes as reflected by “it’s challenging when the rules

of the game keep changing”.


How are Malaysian telecommunications firms financing their international ventures?

Adequate capital for funding overseas ventures is a key factor for successful international

ventures. Firms should have access to the capital required to buy up equity stakes in the

target country, promote the brand name and conduct operations. They should also have the

required funds for investments in research and development for product offerings and

services that meet consumer demands in new overseas markets.

All participants concurred that access to capital was not an issue for Malaysian

telecommunications firms as firms were generally cash-rich or had attracted sufficient

195

investments to venture overseas. However, few have selected to do so. A few commented

that “firms like Axiata and Time dotCom have Government backing and are supported by

Khazanah”. However, some of the view that with declining ARPU’s firms were

challenged to remain profitable. Furthermore, several operators were entering into

infrastructure deals and joint ventures, particularly with regard to LTE deployment.

Furthermore, one participant commented “Market structure and the role of foreign

investment will be important in the future. Additional funds to support new advancements

may be challenging as a result of diminishing foreign participation”.


How effective are Malaysian telecommunications brands for competing overseas?

All participants stated that brand advantage was useful when venturing overseas, namely

for building effective relationships and trust with network partners. However, brand

recognition was not considered to be a key success factor as firms operated under different

brands in different countries. A pertinent example stated was Axiata which operates under

several brands in various countries. However, it underwent a rebranding exercise in 2008

and all its subsidiaries are now prefixed with Axiata. Maxis also uses its local partners

brands in India and Indonesia, namely Aircel and Indosat.

Differing perspectives were offered on the importance of branding and the brand promise,

brand equity and awareness. While the majority agreed that brand reputation was critical

for building network relationships as it implied trust, the responses on the importance of

delivering the brand promise were varied. Nonetheless, all agreed on the importance of

having a customer-focused philosophy to address the challenges of “churn” and customer

loyalty. A few held the view that more needs to be done to understand consumer buying

behaviour and market opportunities.

196


How important is psychic distance to Malaysian telco firms venturing overseas?

Most participants outlined that this was only a recent phenomenon in the Malaysian

context. Majority stated that early international ventures, namely TM, were opportunity

led, generally originating from Government trade missions.

Firms which had entered international ventures highlighted “Our focus remains on the

region and we place emphasis on psychic distance as we have better cultural affinity.

However, industry experts stated that Asian countries were so different that challenges still

existed.


How innovative are Malaysian telecommunications firms’ products and services?

Industry players are faced with challenges of innovation, increased investment in R&D,

shortened product life cycle times and time to market, whilst attempting to differentiate

(EY 2010; IBM 2010). Several participants were of the view that Malaysia's telecom

companies are followers not innovators, hence will have disadvantages in introducing new

innovative products/services. Malaysian telecommunications firms need to do more for

offering innovative products and services. One participant stated that “innovation should

be left to the equipment suppliers and handset manufacturers”, whilst others stated that

R&D should be left to the vendors. However, the majority of the participants did agree that

more firms needed to undertake “consumer research” to enable them to be more

innovative in their services and product offerings.

Furthermore one participant commented “Local firms lack cohesive marketing and

product development of a regional synergistic rollout”. While another participant believed

that “An open market and adequate support from the Government can spur innovation and

lower the access cost for consumers”. Operators require knowledge in balancing price vs.

innovation and making services profitable for them while making them affordable for

customers. While Malaysia launched the National Innovation Framework in 2010,

197

participants were of the view that there is a strong need for telecommunications companies

in Malaysia to conduct research to enable them to come up with innovative products and

offering like those in other countries like Korea. A few participants also took the position

that markets needed to be researched more thoroughly and due diligence should be

undertaken before entry consideration.


How adequate are the structures and resources to address the challenges that Malaysian

Telco’s face in international ventures?

Human resources are a source of competitive advantage and are critical for a firm to

compete in the new economy (Abang 2009). To address the challenges that Malaysian

several factors need to be considered. These include effective leadership, knowledge

management, adopting strategic global outlook to identify new products and markets,

hiring knowledge workers and creating an appropriate organisational culture and

introducing professional management structures (Tan 2008). However, several participants

were of the view that Malaysian telco firms lacked the competence and capacity to reach

global markets. A participant commented “More funding needs to be provided for

research and development particularly with respect to the development of new and

enhance worker/management competencies in the workforce”.

In line with David (2005), most participants believed that managers required strategic

capabilities to identify new opportunities and adapt to the competitive landscape to deliver

results on a global basis. Furthermore, a firm’s knowledge mainly resides in its human

capital and education and training is required to increase capabilities of employees in

Malaysia. Several participants were of the view that the greatest concern was whether

Malaysian telcos have distinctive competencies to venture and succeed in global markets

and a few believed that favouring Bumiputeras in line with the NEP was detrimental to

the growth of the industry.

198

7.2.3.7 Findings on Research Question 3

The analysis of the responses to all the six interview questions revealed common themes

and these were the basis for the following findings:

Malaysian telecommunications firms face several challenges in international markets.

Consequently, the ability to overcome these challenges impacts the success of these

ventures. While successful international market penetration is dependent on capital, an

equally pressing issue is regulatory compliance. Regulatory changes generates uncertainty

and increases the risks associated with operating in foreign markets.

Capable leadership is necessary to overcome the several challenges that Malaysian

telecommunications firms face in their international operations. Leaders are effective when

they have the competencies to understand diverse cultures and have the attributes to build

strong personal relationships based on trust and commitment in their business networks.

Furthermore, while some firms are keen to explore growth opportunities in overseas

markets, it is perceived that they are restricted by their competencies. Financial challenges

appear not to be a hindrance for the Malaysian telecommunications sector.

Changing consumer behaviour and technological advances are also challenges. These

require Malaysian telecommunications firms to offer more innovative products and

services to keep abreast of consumer demand. Successful international ventures require

Malaysian telecommunications firms to have leaders who are able to recruit knowledge

based staff with competencies to successfully discharge their functions in markets with

different business cultures, structures and consumer preferences. Firms which have

entered international markets have overcome some of these challenges through employing

leaders with international exposure. Consequently, their management decisions benefit

from a global strategic outlook. First, operators have invested in technology and network

infrastructure to meet consumer demand and leverage on technological advances and

partnerships. Second, Malaysian telecommunications firms have focused on the region

where they have cultural affinity. Third, operators are undertaking aggressive marketing

and promotion. Fourth, a few firms have invested in research and loyalty programmes to

understand their customers better. Fifth, several are embarking on infrastructure sharing

for cost reduction.

199

However, operators continue to face pressure on tariffs and operating margins. Maxis is

focused on innovation as reflected by the CEO “In line with the growing demand for data

and mobile Internet, we will continue to offer innovative products, bring in the latest

devices to the market, make smartphones adoption affordable and provide exciting

content, applications, Internet and bundle plans. Retention and customer loyalty

programmes will continue to be enhanced to reward our loyal customers with offers that

provide strong value propositions” (The Sun, 30 August 2012).While it was reported that

Axiata missed all of its headlines KPI’s in 2011 including revenue (KPI: 10% growth;

actual: 5.3%) and EBITDA (KPI: 10.3%; actual: 1%) due partly to foreign exchange losses

and changes in revenue mix along with its challenges in its Indonesian operations

(Business Times, 16 May 2012), the CEO of Axiata stated “The group has seen an

excellent first half with strong growth in all financial metrics. Moving into the second half

of the year we are pleased to note that we are very much on track to meet headline key

performance indicators (KPIs)”. This has been as a result of “strong performance across

major operating companies”. Time dotCom acquired three firms to expand its wholesale

and data centre business across the region. Of significance is that both Axiata and Time

dotCom are owned by Khazanah, the Malaysian Governments investment firm.

DiGi, part of Telenor, reported an increase of 37% in its net profit in Q2 2012 which rose

to RM324.2m from RM236.3m. The CEO commented that DiGi had embarked on a

business transformation initiative. “Apart from modernising our network, we have also

refreshed our retail presence with the introduction of the new DiGi Store Express concept

and an online store. We believe these efforts will significantly enhance the customer

experience across touch points, and enable better access to mobile Internet for more

customers.” (The Sun, 24 July 2012).


firms that are internationalising face significant challenges Accordingly, on the basis of

these views, the interview participants accepted Proposition 3.


How adequate are the Government’s policies and initiatives for supporting the

internationalisation efforts of Malaysian telecommunications firms?

200

The interview participants offered useful views on the three interview questions that were

related to this research question and these are restated below

IQ 16: What are the Government’s initiatives and policies for encouraging

telecommunications firms to enter international markets?

IQ 17: What is your view on the regulatory authority and its regulatory policies?

IQ 18: What are your thoughts on improving the regulatory environment?

7.2.4.1 Analysis of responses to IQ16:

What are the Government’s initiatives and policies for encouraging telecommunications

firms to enter international markets?

The role of the Malaysian Government, both home and host, is important for achieving

success in overseas ventures. However, “these policies are failing to support the sector”

and there are few incentives for firms venturing into international markets. Accordingly,

firms had to rely on their own relationships to explore new markets as reflected by the

comment, “we have utilised our own contacts and built relationships with overseas

partners; we could not rely on the Malaysian Government”. Another participant

highlighted “while we had Government assistance in the early days, we were forced to

review our initial international ventures and have had to subsequently retract from some

of the markets we initially entered as they were not commercially viable. Our focus is now

on the region”.

Several participants generally agreed that there were incentives for firms to venture into

international markets. However, some commented that they were not available to all. This

was reflected by the comment “more needs to be done to educate the market on

availability of funds, which should not be restricted to Bumiputeras”. Another industry

expert stated “Government incentives and policies to support regional expansion seem to

be absent”.

201

Participants were also of the view that Government agencies lacked meritocracy and

transparency, “the Government needs to be transparent with incentives and support the

sector. How can you award licences to individuals who have little knowledge of our

industry, particularly when spectrum is limited”. Furthermore, another participant

highlighted “An open market and support from the Government can support innovation”.

A noteworthy point is that majority of the participants highlighted the need for funding and

transparency to support Malaysian telecommunications firms to compete in international

markets.

Significantly, the views of participants are supported by Salazar (2007) who argues that

that development and improvement of the telecommunications sector in Malaysia has been

hindered by the conflict of the Government striving to achieve the goals of the NEP.

Patronage has been provided to rent seekers to create a ‘Bumiputera business class’ along

with a few politically connected businessmen in the form or Malays being granted senior

posts in telecommunications firms along with selected firms or ‘trustee institutions’ being

awarded contracts for turnkey projects. This is further reflected by the recent award of the

nine LTE licences, particularly where Puncak Semangat Sdn. Bhd., owned by the

prominent businessman, Tan Sri Syed Mokhtar, a newcomer to the scene being awarded

the biggest bite of 30MHz as compared to the 20MHz block allocated to the seven named

firms. (The Star, 6 December 6 2011).


What is your view on the regulatory authority and how effective are their policies?

Several participants stated that the principles underpinning the regulatory policies were

good. However, implementation modalities and the role of the regulatory body requires

review. Furthermore, the body should be independent of the Government. One participant

quoted, “The regulatory body fails to protect consumers and telecommunications firms’

alike when compromised. This extends to issuance of licensing and penalties”. The reasons

stated include the regulatory authority lacked independence and suffers ongoing

interference from the Government. Another industry participant pointed out that “it needs

to play a more active role by undertaking market research to identify foreign market

openings and to provide updated statistics”.

202


What more could be done to improve regulation?

The participants were generally of the view that the enabling regulatory legislation

required reform to fully cater to the rapidly changing telecommunication landscape. They

also considered it timely to review the functions and responsibilities of the regulatory

bodies and suggested that more attention be given to introducing measures to improve

service standards and consumer protection. A few participants were of the view that

Government support on a bilateral level was critical for success, citing policy changes by

the Indian Government as an example. One commented “Malaysian needs to open up its

market and not just support bumiputera companies like TM if Malaysian telcos are to

succeed in the global marketplace”. Significantly, several participants commented that the

Government needs to better understand the consequences of telecommunications firms not

performing and the implications for global commerce.

7.2.4.4 Findings on Research Question 4

The analysis of the personal interviews revealed that Malaysian telecommunications firms

benefit from several policies, however, the adequacy and relevance of these policies is in

question. The pertinent policies failing the sector include:

(i). Regulatory Policies: The regulatory authority appears to be non-independent and

passive and overall it is viewed that much more could be done to improve regulation of the

sector in Malaysia with further support for firms penetrating international markets.

Domestically, licences are issued to politically connected businessmen and rent-seekers.

(ii). The NEP: Income distribution via rent seeking and transfer of licences for market

entry to support the goals of the NEP, specifically, to create a bumiputera business class

was prevalent in the 1990’s. However, the overcrowded, highly competitive market

resulted in local firms without capabilities having to be bailed out, resulting in

consolidation of the sector (Salazar 2007). Today, market entry is still reliant on political

connections as reflected by the case of issuance of the nine LTE licences in 2011.

203

(iii). Bi-lateral Trade Agreements: The industry can benefit from further Government to

Government relationships. Bilateral trade agreements can support and facilitate market

entry for Malaysian telecommunications firms.

(iv). Market Structure: The Government needs to present an open market structure

supporting a competitive environment.

(v). Funding: Several participants highlighted the need for funding to be made available to

all firms, not just bumiputera firms. Funding is required for Research; training and

development to support knowledgeable resources and marketing.

In line with Wong (2012), while the Malaysian Government has good policy intentions in

formulating support measures to promote the competitive positioning of all Malaysian

service industries, its activities were viewed as being unfocused, diffused and ineffective.

Majority of the interview participants were of the view that the Government’s policies and

initiatives for supporting the internationalisation efforts of Malaysian telecommunications

firms were inadequate. Accordingly, on the basis of these views, the interview participants

rejected Proposition 4.

7.3. Coding for Content Analysis

This Section describes the analysis of the qualitative data collated through the 20 semi-

structured interviews through content analysis. The researcher adopted an inductive

approach to uncover themes and patterns important to a social reality (Neuman 2006).

“Inductive analysis means that the patterns, themes, and categories of analysis come from

the data; they emerge out of the data rather than being imposed on them prior to data

collection and analysis” (Patton 1980, p. 306). The aim was to identify consistencies and

meanings emerging from the data (Patton 2002). Analysis was conducted using open

coding where preliminary codes were assigned. These open codes were then categorised

into similar groups as shown in Table 7.3. The interview transcripts served as the primary

source of data for the content analysis. Guided by Rogers (1990), the codes and categories

204

were verified by an independent party to check for relevance, comprehensiveness and

appropriateness.

Table 7.3: Coding Process

Respondent Micro Codes Frequency Respondent Macro Codes

Global market trends 12 Strategy

Strategic direction 11

Product strategy 15

Operation strategy 12

Marketing strategy 10

Internationalisation 20

Network relationships 12

Selected markets regionally 18

Market selection 9

JV’s and Alliances 16

Trust 16

Domestic competition 20 Sustainable Competitive Advantage

Emerging markets 14

Dynamic market 8

Compete globally 8

Positioning 14

Strategic outlook 6 Organisation Capability

Cultural diversity 7

Leadership 13

International exposure 10

Global thinking 13

Learning 8

Government assistance 19

Capabilities 14

Technology - NGN 16

Knowledge economy 17

Risk management 6

Innovation 18

Branding 4

TM failures 15 Government and Regulation

Bumiputera policies 14

Standards - ITU 9

Transparency 20

Brain Drain 19

Market liberalisation 8


205

7.4. Refining the Theoretical Model

The pertinent literature to this research was reviewed in Chapter 2, and the analysis of the

data led to the selection of the network model, shown in figure 2.7 as the preferred model

for this research.

As discussed in Section 7.1, an important aim of this Chapter was to refine the selected

theoretical model on the basis of the views expressed by the interview participants as

presented in the earlier sections of this Chapter. The key outcomes and the factors that

impact on the theoretical model are as follows.

The findings of the personal interviews revealed that:

i) Malaysian telecommunications firms with international operations are guided by

strategies. However, poor strategic planning can prove to be a costly exercise as

evidenced by the losses incurred by TM when they ventured into African countries.

Market selection was based on Government to Government relationships and time

of entry was based on leveraging the south-south corporation. The importance of

market assessment and sustainable relationships impacts successful international

market penetration. A more recent example is that of Maxis and Axiata and

difficulties they have faced in the Indonesian market. Etisalat cited differences

with their local partner Axiata in the market and subsequently withdrew. Maxis

faced ongoing challenges Axis in Indonesia. Viewed in this context, sound and

effective internationalisation strategies are necessary for successful international

market penetration.

ii) The global telecommunications market is undergoing dynamic change. The key

emerging trends include convergence, challenges in managing consumer

expectations; security; entry of non-traditional industry players; emerging

technologies, cloud computing, challenges to monetise content and regulatory

changes. These dynamic changes are impacting on the Malaysian

telecommunication sector with global market liberalisation being a pull factor for

Malaysian firms to venture abroad. The push factor is growing competition in the

domestic market.

206

iii) Internationalising Malaysian telecommunications firms face several challenges.

These include acquiring knowledgeable resources; appropriate business models;

knowledge about foreign markets; developing sustainable relationships; keeping

pace with technological innovations; securing licences; developing branding and

effective marketing to meet changing consumer demands.

iv) Government support, as reflected by policies and incentives, are important for

assisting Malaysian telecommunications firms with their internationalisation

efforts.

On the basis of these findings, there are additional four key variables that impact on the

theoretical model. These are (i) Strategies (ii) Challenges (iii) Dynamic Market Landscape

and (iv) The Role of Government. The theoretical model was accordingly amended to take

account of these four identified variables and the refined model is shown as Figure 7.2.

Figure 7.2: Refined Theoretical Model


Domestic

Operators

Market

Knowledge

Market Structure

Leadership

Market Selection

Psychic Distance

Relationships,

Trust

Customers, Network

externalities

Position

FME Mode

Global Strategic

Outlook

FME: Equity,

Non-equity, JV

Network partner

Selection, Risk

Financial Strength

Leadership, Trust

Relationships,

Knowledgeable

Resources

Culture

Information

Sharing

Trust

Organisation

Capabilities

Commitment

Leadership

Brand

Socialisation

International

Operators

INTERNATIONAL

EXTENSION

Extension of

exchange

relationships to include foreign

markets

INTERNATIONAL

PENETRATION

Developing positions and

increasing

resource commitments to

existing

networks for market

penetration

INTERNATIONAL

INTEGRATION

Integration of

networks that the

company is a member of

indifferent

locations

Strategy

Dynamic

Market

Landscape

Government

Challenges

Represents new relevant factors

Strategic Considera

tions

Industry

Character

istics

Internal

Factors

Host/ Home

Country

207

7.5 Crafting The Propositions

Cooper and Schindler (1998) define a proposition as a statement about concepts that may

be judged true or false if it refers to observable phenomena. Research propositions are

concerned with relationships between concepts (Maxfield & Babbie 2001; Zikmund 2003).

They are testable and are evaluated against empirical evidence or data (Neuman 2006).

Guided by these authorities, the four questions identified in Chapter 5 were translated into

corresponding propositions for empirical testing in the second and descriptive stage of this

research. These are:

P1: The dynamic changes in the global telecommunications industry have a strong

influence on the competitive strategies of Malaysian telecommunications firms.

P2: Malaysian telecommunications firms have appropriate strategies for successfully


P3: Malaysian telecommunications firms that are internationalising their operations face

significant challenges.

P4: The Malaysian Government is fully supportive of the efforts of the Malaysian

telecommunications firms that are internationalising their operations.

7.6 Chapter Summary

This Chapter presented and analysis and findings of the primary qualitative data. It

presented the results of the personal interviews with respect to each research question. This

was followed by refining the theoretical model. The propositions were then developed for

the testing of the refined model during the descriptive stage of the research. The next

Chapter presents the analysis of the quantitative data for the descriptive and confirmatory

stages of this research.

208

Chapter 8 - Data Analysis Quantitative

8.1 Introduction

The earlier Chapter presented the analysis of the qualitative data. This Chapter discusses

the descriptive and the confirmatory stage of this research.

It has seven (7) Sections as shown in Figure 8.1. Section 8.1, provides an introduction and

overview of the chapter. Section 8.2 presents the descriptive analysis of the web survey

responses. The Chapter then proceeds to the confirmatory stage with Section 8.3

discussing the reliability of the sample data and the variables. Section 8.4 details the

findings of CFA of the hypotheses and outlines how these were validated and tested.

Section 8.5 presents the generated SEM model detailing the fundamental findings central

to the model. Section 6.6 triangulates the findings with the personal interviews and the

literature review before concluding with Section 8.7.

Figure 8.1: Structure of Chapter Eight


8.1: Introduction

8.2: Descriptive Analysis of the Web Survey

8.3: Reliability of the Sample Data and Variables

8.4: Confirmatory Factor Analysis

8.5: Generated SEM Model

8.6: Triangulation

8.7: Chapter Summary and Conclusions

209

8.2 Descriptive Analysis of the Web Survey Responses

The responses from the participants of the Web Survey provided rich perspectives on the

research propositions. They also provided valuable and useful insights into the research

problem. The analysis process involved the determination of i) the Combined Survey

Responses and ii) the Combined Mean Responses by Groups for each of the four

propositions.

8.2.1 Profile and Composition of the Web Survey Respondents

The web survey generated 205 responses as shown in Table 8.1. Over 70% of the

respondents were male, and less that 30% were female which is reflective of the industry

in Malaysia which is dominated by males. The majority of the respondents were between

the ages of 41-50. The age distribution was as follows: 9.3% were between the ages of 20-

30. 27.8% were between the ages of 31-40. 32.2% were between the ages of 41-50 while

the above 50 group constituted 30% of participants. This is reflective of the industry and

the nature of the topic which requires an understanding of strategy and internationalisation.

The profile also indicated that the respondents are experienced professionals who are in the

mid-late stages of their career development. All respondents declared an understanding of

the subject.

As stated in Section 6.5.1.9 and shown in Table 8.1, it is significant that more than half of

the 205 respondents were in Group B which comprised the management of the

telecommunications firms. Another 55 were from Group C comprising the knowledgeable

experts and academia. The participants of both these two groups accounted for 77.9% of

the total web survey participants. The research acknowledges that this could have resulted

in skewed responses.

210

Table 8.1: Profile of the Web Survey Respondents

VALID FREQUENCY PERCENT VALID % CUMULATIVE %

GENDER Male 149 72.7 72.7 72.7

Female 56 27.3 27.3 100.0

Total 205 100.0 100.0 N/A


AGE

20-30 19 9.3 9.3 9.3

31-40 57 27.8 27.8 37.1

41-50 66 32.2 32.2 69.3

Above 50 63 30.7 30.1 100.0

Total 205 100.0 100.0 N/A


BACK

GROUND

Operations 30 14.6 14.6 14.6

Management 105 51.2 51.2 65.9

Industry

Experts

55 26.8 26.8 92.7

Government 15 7.3 7.3 100.0

Total 205 100.0 100.0 N/A


UNDER

STOOD Yes 205 100.0 100.0 100.0

Total 205 100.0 100.0 N/A

Source: Based on the web survey for this Research

The profile also indicated that the respondents are experienced professionals who are in the

mid-late stages of their career development. All respondents declared an understanding of

the subject.

8 .2.2 Statement 1: On “Positioning”

Malaysian telecommunications firms are well positioned to achieve sustainable

competitive advantage in the highly competitive global telecommunications sector.

Table 8.2 shows the case summary of the responses to this Statement. The Total mean of

3.11 indicates moderate acceptance of the Statement. The range of support varied with the

highest being registered by the management group at 3.47 as compared to 3.05 for the

211

Industry Experts Group. However, the relatively high Standard Deviation of 1.001 reflects

the varying opinions between the Groups.

Table 8.2: Case Summary for Statement 1 on “Positioning”

GROUP TYPE N MEAN MEDIAN STANDARD

DEVIATION A

OPERATIONS 30 3.30 4.00 .877

B

MANAGEMENT 105 3.04 3.00 1.046

C

INDUSTRY EXPERTS 55 3.05 3.00 .970

D

GOVERNMENT 15 3.47 4.00 .990

TOTAL

205 3.11 3.00 1.001

Source: Developed from the Survey Data

Sustainable competitive advantage refers to situation when “a company achieves

sustainable competitive advantage when an attractive number of buyers prefer its products

or services over the offerings of competitors and when the basis for this preference is

durable.” (Thompson, Strickland & Gamble, 2005, p.7). Several factors contribute to the

achievement of sustainable competitive advantage. These include knowledgeable resources

in line with Grant (1991), RBV view of the firm, Culture (Hexter, Stoin & Phillips 2010),

intellectual capital linked to the firms knowledge management processes (Drucker 1993).

The Cross tabulation of survey responses to this statement is shown in Table 8.3. It reveals

that a total of 48.7% agreed with this Statement. However, Management and Industry

Expert Groups presented divided views. While 22.4% of the Management Group agreed

on the Statement, 19.5% disagreed. This suggests that the respondents from the firms are

unclear on their positioning or their strategic capabilities. Alternatively, respondents may

have been of the view that positioning for competitive advantage in the home market was

essential to the core strategy considering few operators have ventured into overseas

markets. Furthermore, 5.9% of the Management Group either remained neutral on this

Statement. This could also reflect that they are of the view that more could be done to

achieve SCA. Of significance is that 77 respondents, 37.5%, were of the view that

Malaysian telecommunications firms were not well positioned to successfully compete in

the global environment. This percentage is significant to support the limited number of

212

telecommunications firms venturing overseas. While Malaysian FDI outflows are

increasing, few telecommunications firms are penetrating international markets.

Significantly, 11.2% of the Industry Experts supported the Statement with 9.8%

disagreeing with the statement. The participants in the Operations and Government Groups

generally agreed with the Statement. The variation could also be indicative of individuals

understanding of competitive advantage.

Table 8.3: Cross Tabulation of Survey Responses to Statement 1 on “Positioning”

STATEMENT 1: POSITIONING

GROUP

TYPE

STATISTICS STRONGLY

DISAGREE DISAGREE NEUTRAL

– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 8 5 17 0 30

% within Group Type 0.0% 26.7% 16.6.% 56.7% 0.0% 100.0%

% within Statement 1 0.0% 11.1% 24.1% 17.9% 0.0% 14.6%

% of Total 0.0% 3.9.% 2.4% 8.3% 0.0% 14.6%

B

MANAGEMENT

COUNT 4 40 12 46 3 105 % within Group Type 3.8% 38.1% 11.4% 43.8% 2.9% 100.0% % within Statement 1 80.0% 55.6% 42.9% 48.4% 60.0% 51.2% % of Total 2.0% 19.5% 5.9% 22.4% 1.5% 51.2%

C

INDUSTRY

EXPERTS


D

GOVERNMENT

COUNT 0 4 1 9 1 15 % within Group Type 0.0% 26.7% 6.7% 60.0% 6.7% 100.0% % within Statement 1 0.0% 5.6% 3.6% 9.5% 20% 7.3% % of Total 0.0% 2.9% 1.0% 10.2% 0.5% 7.3%

TOTAL

% WITHIN

STATEMENT



213

Table 8.4: Weighted Average - Positioning

1 2 3 4 5 TOT WA

a' 0 16 15 68 0 99 3.3

b' 4 80 36 184 15 319 3.038095

c' 1 40 30 92 5 168 3.054545

d' 0 8 3 36 5 52 3.466667

3.214827


The most support for this statement was from the Government Group, followed by

Operations staff and then the Industry Experts and Management. Accordingly Government

are of the view that Malaysian telecommunications firms are positioned to achieve

Sustainable competitive advantage in the global competitive landscape.

Outcome: Figure 8.2 presents the combined responses to Statement 1. It shows that there

were mixed views on this Statement.

Figure 8.2: Combined Responses to Statement 1 on “Positioning”


8 .2.3 Statement 2: On “Capability”

Malaysian telecommunications firms have the strategic capabilities to accommodate the

changes in the global telecommunications industry.

37.50%

13.70%

48.70% Disagree

Neutral – No Opinion

Agree

214

Table 8.5 shows the case summary of the responses to Statement 2. The Total mean of

3.25 implies moderate acceptance of the Statement. The Government Group indicated the

highest support registering 3.73, while the least support was registered by Industry Experts

at 3.09. There were mixed views within the groups as reflected by the Standard Deviation

of 1.021.

Table 8.5: Case Summary for Statement 2 on “Capability”


DEVIATION A

OPERATIONS 30 3.43 4.00 .935

B

MANAGEMENT 105 3.22 4.00 1.074

C


D

GOVERNMENT 15 3.73 4.00 1.100

TOTAL

205 3.25 4.00 1.021


A leader with a global strategic outlook is able to use the innate strengths of the firm to

compete effectively in the new economy by adapting to the external environment (David

2005). The Cross tabulation of Survey Responses to this Statement is shown in Table 8.5.

Just over half, or 52.6%, of the total respondents generally agreed with this Statement and

were of the view that Malaysian telecommunications firms have the strategic capabilities

to accommodate the changes in the global telecommunications industry. This is reflective

of firms following trends towards mobility, convergence, infrastructure upgrading and

sharing to address the consumer demand for data and speed in the Malaysian market.

However, a third, or 64 respondents, disagreed with this Statement. While there were

mixed views within the Management and Industry Expert Groups, the Statement was

generally supported.

215

Table 8.6: Cross Tabulation of Survey Responses to Statement 2 on “Capability”

STATEMENT 2: CAPABILITY

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 1 6 2 21 0 30

% within Group Type 3.3% 20.0% 6.7% 70.0% 0.0% 100.0%


% of Total 0.5% 2.9% 1.0% 10.2% 0.0% 14.6%

B

MANAGEMENT


C

INDUSTRY

EXPERTS


D

GOVERNMENT


TOTAL

% WITHIN

STATEMENT



Table 8.7: Weighted Average – Capability

1 2 3 4 5 TOT WA

a' 1 12 6 84 0 103 3.433333

b' 4 62 48 184 40 338 3.219048

c' 0 38 39 88 5 170 3.090909

d' 0 6 6 24 20 56 3.733333

3.369156


216

This outlined the strongest support from Group D, Government. They are of the view that

Malaysian telecommunications firms have the strategic capabilities to accommodate

changes in the global telecommunications market. This is followed by the operations

group, Management and Industry experts.

Outcome: Figure 8.3 presents the combined responses to Statement 2. It shows that just

over half, 52.6%, of all the Survey participants agreed that Malaysian telecommunications

firms have the capabilities to accommodate the changes in the global telecommunications

industry. Accordingly, the Researcher concluded that the participants supported this

Statement.

Figure 8.3: Combined Responses to Statement 2 on “Capability”


31.20%

16.10% 52.60%

Disagree


Agree

217

8.2.4 Statement 3: On “Strategic Intent”

The intense competition in a saturated domestic market compels Malaysian

telecommunications firms to venture into overseas markets.

The case summary of the responses to Statement 3 are shown in Table 8.8. The Total mean

of 3.77 indicates modest acceptance of the Statement. The Industry Experts, with a score

of 3.85 were the most supportive while the Operations Group were the least supportive

with a mean of 3.60.

Table 8.8: Case Summary for Statement 3 on “Strategic Intent”


DEVIATION A

OPERATIONS 30 3.60 4.00 .894

B

MANAGEMENT 105 3.78 4.00 1.047

C


D

GOVERNMENT 15 3.73 4.00 1.163

TOTAL

205 3.77 4.00 .996


A push factor for internationalisation is the intense competition in the Malaysian market

resulting in pressure on operating margins (Shankar et al 2010). Additionally, the issuance

of LTE licences to 9 players is likely to further intensify domestic competition and lead to

Malaysian telecommunications players venturing abroad. While the cross-tabulation of the

Responses to Statement 3 indicates that almost three-quarters of the participants within all

Groups supported the Statement with 22% strongly agreeing that the competitive

landscape in Malaysia is compelling firms to venture overseas, few firms have ventured

abroad. The strongest support was from the Management and Industry Experts with only

32 respondents disagreeing with the Statement. These views were representative across all

four groups. Accordingly, while it is acknowledged that the limited domestic market size

is a push factor, few firms are internationalising.

218

Table 8.9: Cross Tabulation of Survey Responses to Statement 3 on “Strategic

Intent”

STATEMENT 3: STRATEGIC INTENT

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 5 5 17 3 30



% of Total 0.0% 2.4% 2.4% 8.3% 1.5% 14.6%

B

MANAGEMENT

COUNT 2 17 8 53 25 105



% of Total 1.0% 8.3% 3.9% 25.9% 12.2% 51.2%

C

INDUSTRY

EXPERTS

COUNT 1 4 9 29 12 55



% of Total 0.5% 2.0% 4.4% 14.1% 5.9% 26.8%

D

GOVERNMENT

COUNT 0 3 3 4 5 15



% of Total 0.0% 1.5% 1.5% 2.0% 2.4% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 3 29 25 103 45 205



% of Total 1.5% 14.1% 12.2% 50.2% 22.0% 100.0%


Table 8.10: Weighted Average – Strategic Intent

1 2 3 4 5 TOT WA

a' 0 10 15 68 15 108 3.6

b' 2 34 24 220 125 405 3.857143

c' 1 8 27 116 60 212 3.854545

d' 0 6 9 16 25 56 3.733333

3.761255


219

This outlined the strongest support from Groups B and C. Industry players consider the

intense competition in the domestic market to be a push factor for venturing into overseas

markets. The Government is also supportive of this statement while the operations group

is the least supportive. This implies that the operations group remain focused on

operational matters or may not have the strategic capabilities to understand the push

factors.

Outcome: Figure 8.4 shows support for this Statement that the competitive landscape in

Malaysia compels firms to venture overseas.

Figure 8.4: Combined Responses to Statement 3 on “Strategic Intent”


8.2.5 Statement 4: On “Customer -Orientation”

Malaysian telecommunications firms are meeting the challenges presented by changing

consumer demands in the global marketplace by providing new products and services.

Table 8.11 shows the case summary of the responses to Statement 4. The Total Mean of

3.32 indicates moderate acceptance of the Statement. The Government Representatives

registered the highest Mean of 3.93 compared to the Management Group with a Mean of

3.25. The Government Group also recorded a low Standard Deviation of 0.799 suggesting

that the Group generally agreed that Malaysian telecommunications firms are meeting

customer demands. The notable high Standard Deviation amongst the other Groups infers

mixed views on this Statement.

14.60%

12.20%

72.20%

Disagree


Agree

220

Table 8.11: Case Summary for Statement 4 on “Customer Orientation”


DEVIATION A

OPERATIONS 30 3.30 4.00 1.088

B

MANAGEMENT 105 3.25 4.00 1.099

C

INDUSTRY EXPERTS 55 3.29 3.00 1.012

D

GOVERNMENT 15 3.93 4.00 .799

TOTAL

205 3.32 4.00 1.063


The statement was generally supported and this is reflected by operators statements to

commit to customer needs. Celcom have dedicated a research lab to consumer research

and Maxis is focused on innovation as reflected by the CEO “In line with the growing

demand for data and mobile Internet, we will continue to offer innovative products, bring

in the latest devices to the market, make smartphones adoption affordable and provide

exciting content, applications, Internet and bundle plans. Retention and customer loyalty

programmes will continue to be enhanced to reward our loyal customers with offers that

provide strong value propositions” (The Sun, 30 August 2012).

Furthermore, DiGi’s has embarked on a business transformation initiative. “Apart from

modernising our network, we have also refreshed our retail presence with the introduction

of the new DiGi Store Express concept and an online store. We believe these efforts will

significantly enhance the customer experience across touch-points, and enable better

access to mobile Internet for more customers.” (The Sun, 24 July 2012).

It is also likely that participants as consumers have the latest gadgets. However, it is

pertinent that nearly a third of the participants disagreed with this Statement, mostly from

the Operations Group and 17% of total respondents maintained a neutral stance.

Significantly, the majority of participants from the Government Group supported this

Statement.

221

The spread of responses is shown in Table 8.12. The responses suggest that just over half

of the respondents, or 54.7%, supported the Statement that Malaysian telecommunications

firms and provide new products and services to meet consumer needs.

Table 8.12: Cross Tabulation of Survey Responses to Statement 4 on “Customer

Orientation”

STATEMENT 4: CUSTOMER ORIENTATION

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 11 2 14 3 30



% of Total 0.0% 5.4% 1.0% 6.8% 1.5% 14.6%

B

MANAGEMENT

COUNT 7 24 18 48 8 105



% of Total 3.4% 11.7% 8.8% 23.4% 3.9% 51.2%

C

INDUSTRY

EXPERTS

COUNT 1 14 13 22 5 55



% of Total 0.5% 6.8% 6.3% 10.7% 2.4% 26.8%

D

GOVERNMENT

COUNT 0 1 2 9 3 15



% of Total 0.0% 0.5% 1.0% 4.4% 1.5% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 8 50 35 93 19 205



% of Total 3.9% 24.4% 17.1% 45.4% 9.3% 100.0%


222

Table 8.13: Weighted Average – Customer Orientation

1 2 3 4 5 TOT WA

a' 0 22 6 56 15 99 3.3

b' 7 48 54 192 40 341 3.247619

c' 1 28 39 88 25 181 3.290909

d' 0 2 6 36 15 59 3.933333

3.442965


The Government group are strongly supporting that Malaysian telecommunications firms

are meeting the challenges presented by changing consumer demands in the global

marketplace. The remaining 3 groups presented similar support.

Outcome: As shown in 8.5, this Statement was generally supported.

Figure 8.5: Responses to Statement 4 on “Customer Orientation”


8.2.6 Analysis of the Combined Survey Responses for Proposition 1

The Dynamic Changes in the global telecommunications industry strongly influence the

competitive strategies of Malaysian Telecommunications firms for sustainable competitive

advantage.

28.30%

17.10% 54.70%

Disagree


Agree

223

The combined Survey responses to Proposition 1 are shown in Figure 8.6. 60.5% of the

Survey participants agreed with Proposition 1 agreed that the dynamic changes in the

global telecommunications industry influence the strategic choices of Malaysian

telecommunications firms for sustainable competitive advantage. However, it is

noteworthy that a quarter, 25.4%, disagreed with this Proposition while 14.1% remained

neutral and offered no opinions.

Figure 8.6: Combined Responses to Proposition 1


The combined responses by Groups are depicted in Table 8.14 and Figure 8.7 respectively.

The Table indicates modest support from the Management Group while representatives

from the Industry Expert and Operations groups showed moderate support. However, the

Government Group showed strong support for this Proposition.

Table 8.14: Combined Survey Responses to Proposition 1

GROUP TYPE STATISTICS DISAGREE NEUTRAL – NO

OPINION AGREE TOTAL

A

OPERATIONS

COUNT 7 2 21 30

% Within Proposition 1 3.4% 1.0% 10.2% 14.6%

B

MANAGEMENT

COUNT 31 14 60 105

% of Total 15.1% 6.8% 29.3% 51.2%

C

INDUSTRY EXPERTS

COUNT 10 13 32 55

% of Total 4.9% 6.3% 15.6% 26.8%

D

GOVERNMENT

COUNT 4 0 11 15

% of Total 2.0% 0.0% 5.4% 7.3%

TOTAL

COUNT 52 29 124 205

% of Total 25.4% 14.1% 60.5% 100.0%


25.40%

14.10% 60.50%

Disagree


Agree

224

Figure 8.7: Combined Responses to Proposition 1 – By Group Type


8.2.7 Testing of Proposition 1

There were divided views on how the changes to the industry have influenced the

strategies of operators for sustainable competitive advantage. The dynamic market changes

have created push and pull factors for Malaysian telecommunications firms. The push

factors include limited market size, increase in domestic competition and pressure on

operating margins. The pull factors include market liberalisation, advances in technology,

increased connectivity reduced transaction costs, economies of scale, increased revenue

from foreign markets and internationalising customers. However, only two firms have an

international presence of any significance, namely, Axiata (Formerly TM) and Maxis

(Asgari, Gurrib & Zyed 2010; Kitchen & Ahmad 2008).

However, technological advances have spurred growth in the domestic market, particularly

in the mobile and data sector. Furthermore in line with global trends, the market is

witnessing the emergence of MVNO’s and operators entering infrastructure sharing deals

as LTE paves the way for NGN (BMI 2012).

225

While FDI outflows in Malaysia are increasing as firms seek growth in regional markets

(World Bank 2011), the telecommunications sector appears to remain focused on the

domestic market. The survey participants were divided on statement 1, expressed support

for statement 2, strong support for statement 3 and moderate support for statement 4.

Accordingly, as depicted in Figure 8.10, 60.5% supported the proposition.

8.2.8 Statement 5: On “Market Selection”

Emerging countries with low penetration rates and high growth potential are the preferred

investment destinations for Malaysian telecommunications firms.

Table 8.15 shows the case summary of the responses to Statement 5. The Total Mean of

3.95 indicates modest acceptance of the Statement. The Government Representatives

registered the highest Mean of 4.07 compared to the Operations Group with a Mean of

3.83. The relatively low standard deviation of .809 implies that all groups generally agreed

that emerging markets with low penetration rates and high growth areas are preferred

destinations for Malaysian telecommunications firms.

Table 8.15: Case Summary for Statement 5 on “Market Selection”


DEVIATION A

OPERATIONS 30 3.83 4.00 .834

B

MANAGEMENT 105 3.95 4.00 .813

C


D

GOVERNMENT 15 4.07 4.00 .704

TOTAL

205 3.95 4.00 .809


As shown in Table 8.16 the majority or 82% of the respondents, across all groups,

supported the Statement, with a quarter of them expressing strong agreement particularly

with strong support from the Government Group. This is reflective of Malaysian

telecommunications firms that have internationalised. Axiata has a presence in 9 countries

226

across the region and Maxis is also present in India and Indonesia along with Time

dotCom which completed three acquisitions in the regional market in 2012. In line with

Ahmad & Hashim (2007), Malaysian firms have cultural affinity with the region along

with ASEAN trade agreements. Furthermore, emerging economies present growth

potential and this enables Malaysian firms which come from a developing nation to better

understand the needs of other developing nations. Accordingly, emerging markets with

low penetration rates are the preferred investment destination for Malaysian

telecommunication firms. The few respondents that disagreed were generally from the

Management and Industry Expert Groups.

Table 8.16: Cross Tabulation of Survey Responses to Statement 5 on “Market

Selection”

STATEMENT 5: MARKET SELECTION

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 4 1 21 4 30



% of Total 0.0% 2.0% 0.5% 10.2% 2.0% 14.6%

B

MANAGEMENT

COUNT 1 7 10 65 22 105



% of Total 0.5% 3.4% 4.9% 31.7% 10.7% 51.2%

C

INDUSTRY

EXPERTS

COUNT 0 4 7 30 14 55



% of Total 0.0% 2.0% 3.4% 14.6% 6.8% 26.8%

D

GOVERNMENT

COUNT 0 0 3 8 4 15



% of Total 0.0% 0.0% 1.5% 3.9% 2.0% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 1 15 21 124 44 205



% of Total 0.5% 7.3% 10.2% 60.5% 21.5% 100.0%

Source: Based on the Web Survey for this Research

227

Table 8.17: Weighted Average – Market Selection

1 2 3 4 5 TOT WA

a' 0 8 3 84 20 115 3.833333

b' 1 14 30 260 110 415 3.952381

c' 0 8 21 120 70 219 3.981818

d' 0 0 9 32 20 61 4.066667

3.95855


The Government group are strongly supporting that emerging economies with low

penetration rates are the preferred investments destinations for Malaysian

telecommunications firms. This was followed by the Management group and the Industry

experts.

Outcome: As shown in Figure 8.8, this Statement was strongly supported.

Figure 8.8: Responses to Statement 5 on “Market Selection”


8.2.9 Statement 6: On “Global Outlook”

Malaysian telecommunications firms have the required global strategic outlook to

successfully venture into international markets.

7.80%

10.20%

82.00%

Disagree


Agree

228

The Total Mean of 3.19 as shown in Table 8.18 indicates moderate acceptance of the

Statement. The Industry Experts registered the lowest Mean of 3.13 compared to the

Government Group which recorded a Mean of 3.33. The Standard Deviation of 0.799 -

suggests that there are varying views within the groups with regards to Malaysian

telecommunications firms having the required global strategic outlook for successful


Table 8.18: Case Summary for Statement 4 on “Global Outlook”


DEVIATION A

OPERATIONS 30 3.27 4.00 .907

B

MANAGEMENT 105 3.17 4.00 1.051

C


D

GOVERNMENT 15 3.33 4.00 .900

TOTAL

205 3.19 4.00 .983


Globalisation has removed trade barriers. This implies that Malaysian telecommunications

firms are open to global market forces. This requires leaders to have a global strategic

outlook with the ability to make sound management decisions, create a culture to support

innovation in the new economy and recruit and build teams with knowledge, skills and

capabilities along with being able to identify market opportunities to build intellectual

capital for competitive advantage (Wong 2011). This statement was supported by nearly

half of the respondents from all Groups. The support was largely from the Management

and Operations Groups as the statement can be perceived to be a reflection on them. In

Asian culture ‘keeping face’ is imperative. However, the Industry Experts, many who are

international had mixed views with 10.2% expressing agreement and 8.8% disagreeing.

229

Table 8.19: Cross Tabulation of Survey Responses to Statement 6 on “Global

Outlook”

STATEMENT 6: GLOBAL OUTLOOK

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 9 4 17 0 30



% of Total 0.0% 4.4% 2.0% 8.3% 0.0% 14.6%

B

MANAGEMENT

COUNT 6 28 17 50 4 105



% of Total 2.9% 13.7% 8.3% 24.4% 2.0% 51.2%

C

INDUSTRY

EXPERTS

COUNT 0 18 14 21 2 55



% of Total 0.0% 8.8% 6.8% 10.2% 1.0% 26.8%

D

GOVERNMENT

COUNT 0 4 2 9 0 15



% of Total 0.0% 2.0% 1.0% 4.4% 0.0% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 6 59 37 97 6 205



% of Total 2.9% 28.8% 18.0% 47.3% 2.9% 100.0%


Table 8.20: Weighted Average – Global Outlook

1 2 3 4 5 TOT WA

a' 0 18 12 68 0 98 3.266667

b' 6 56 51 200 20 333 3.171429

c' 0 36 42 84 10 172 3.127273

d' 0 8 6 36 0 50 3.333333

3.224675


230

The Government group were the most supportive for this statement implying that they

viewed that Malaysian telecommunications firms had the required global outlook for

Malaysian telecommunications firms to penetrate international markets successfully. This

was followed by the Operations group with the management and the Industry experts

groups having similar views.

Outcome: As shown in Figure 8.9, this Statement was generally supported by the majority

of the participants.

Figure 8.9: Responses to Statement 6 on “Global Outlook”


8.2.10 Statement 7: On “Risk”

The internationalisation strategies of Malaysian telecommunications firms take full

account of the risk factors in the targeted international markets.

Table 8.21 shows the case summary for this Statement. The Total Mean of 3.16 indicates

moderate acceptance of the Statement. While respondents from the Government Group

registered a Mean of 3.67, the Operations Group recorded a Mean of 2.97. The Standard

Deviation of 0.0.894 infers that the survey participants offered varying perspectives on the

internationalisation strategies of Malaysian telecommunications firms.

31.70%

18.00% 50.20%

Disagree


Agree

231

Table 8.21: Case Summary for Statement 7 on “Risk”


DEVIATION A

OPERATIONS 30 2.97 3.00 .809

B

MANAGEMENT 105 3.13 3.00 .878

C


D

GOVERNMENT 15 3.67 4.00 .900

TOTAL

205 3.16 3.00 .894


As shown in Table 8.22, nearly 40% of the respondents were of the view that Malaysian

telecommunications firms consider risk factors when internationalising and over a third of

the participants remained neutral on this Statement. The majority of these were from the

Management category. Industry Experts expressed mixed views on this Statement.

Malaysian telecommunications firms have to consider several risk factors in international

markets. These factors include:

Governance and CSR: Malaysian telecommunications firms need to take into

consideration international standards for transparency and good governance. Malaysian

firms are urged to commit to collaborative development of corporate governance.

Furthermore, GLC’s, TM, Axiata, Time dotCom – are required to discharge their social

obligations as required by the NEP (Abang 2009).

A financial discipline culture: Firms are required to manage risks for optimum financial

performance. Accordingly, Malaysian telecommunications firms require economic and

risk management practices to support the decision making process. (Bingham 2007),

particularly in international ventures.

Knowledgeable Resources: Knowledge based resources provide firms with competitive

advantage (Nonaka & Takeuchi 1995). However, resources require international exposure

and a global mindset to manage risk and be successful in international ventures.

Building Relationships: Entering international markets is dependent on the ability to

build relationships with host and home Governments and partners alike. Accordingly, the

232

importance of managing sustainable relationships, building trust, learning and commitment

is critical to success (Kenny 2009). This is pertinent in the case of Maxis and Axiata in

India whereby the Government withdrew 122 2G licences in 2011 (TRAI 2011).

As shown in Table 8.22 nearly 40% of the respondents were of the view that Malaysian

telecommunications firms consider risk factors when internationalising and over a third of

the participants remained neutral on this Statement. The majority of these were from the

Management category. Industry Experts expressed mixed views on this Statement. Taking

into consideration the risk factors outlined above, the mixed views may be as a result of

differing views on risk, along with limited firms having internationalised.

Table 8.22: Cross Tabulation of Survey Responses to Statement 7 on “Risk”

STATEMENT 7: RISK

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 10 11 9 0 30



% of Total 0.0% 4.9% 5.4% 4.4% 0.0% 14.6%

B

MANAGEMENT

COUNT 3 24 35 42 1 105



% of Total 1.5% 11.7% 17.1% 20.5% 0.5% 51.2%

C

INDUSTRY

EXPERTS

COUNT 1 14 18 19 3 55



% of Total 0.5% 6.8% 8.8% 9.3% 1.5% 26.8%

D

GOVERNMENT

COUNT 0 1 6 5 3 15



% of Total 0.0% 0.5% 2.9% 2.4% 1.5% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 4 49 70 75 7 205



% of Total 2.0% 23.9% 34.1% 36.6% 3.4% 100.0%


233

Table 8.23: Weighted Average – Risk

1 2 3 4 5 TOT WA

a' 0 20 33 36 0 89 2.966667

b' 3 48 105 168 5 329 3.133333

c' 1 28 54 76 5 164 2.981818

d' 0 2 18 20 15 55 3.666667

3.187121



viewed that Malaysian telecommunications consider risks before entering foreign markets.

This was followed by the Operations group. The management and the Industry experts

groups having similar views and were less supportive of the risk management capabilities

of Malaysian telecommunications firms.

Outcome: As depicted in Figure 8.10, the majority of the respondents were either uncertain

or offered no opinion on whether Malaysian telecommunications firms took full account of

the risks associated with internationalisation.

Figure 8.10: Responses to Statement 7 on “Risk”


25.90%

34.10%

40.00% Disagree


Agree

234

8.2.11 Statement 8: On “Network Relationships”

Malaysian telecommunications firms have strong external networks and effective foreign

partnerships for successfully venturing into new international markets.

Table 8.24 shows the case summary for this Statement. The Total Mean of 3.06 indicates

moderate acceptance of the Statement. In contrast to the Operations Group which showed

a Mean of 3.13, the Government Group registered a Mean of 2.93. The Standard Deviation

of 0.991 implies that the Groups had varying views on the effectiveness of external

networks and partnerships.

Table 8.24: Case Summary for Statement 8 on “Network Relationships”


DEVIATION A

OPERATIONS 30 3.13 3.50 1.008

B

MANAGEMENT 105 3.07 3.00 .983

C


D

GOVERNMENT 15 2.93 3.00 1.033

TOTAL

205 3.06 3.00 .991


As discussed in Section 2.37 and 2.3.7.1, networks are critical to the Malaysian

telecommunications industry. Networks and effective partnerships require trust

commitment and learning (Johanson & Valhne 2009). Table 8.25 shows the cross

tabulation of the responses to this Statement. It shows that all Groups had mixed views on

the subject of Network Relationships. This is supported by the challenges faced by Axiata

with its Indonesian partner, Etisalat and Maxis with its Indian ventures. Furthermore

UMobile also faced challenges with foreign partnerships when NTT DoCo Mo and KT

Freetel both sold their respective stakes in the local firm within 2 years of entering the

venture. Significantly, nearly 20% of all respondents adopted a neutral position on the

Statement. Again, this may be as a result of only two firms having ventured

internationally.

235

Table 8.25: Cross Tabulation of Survey Responses to Statement 8 on “Network

Relationships”

STATEMENT 8: NETWORK RELATIONSHIPS

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 12 3 14 1 30



% of Total 0.0% 5.9% 1.5% 6.8% 0.5% 14.6%

B

MANAGEMENT

COUNT 3 35 22 42 3 105



% of Total 1.5% 17.1% 10.7% 20.5% 1.5% 51.2%

C

INDUSTRY

EXPERTS

COUNT 2 18 12 21 2 55



% of Total 1.0% 8.8% 5.9% 10.2% 1.0% 26.8%

D

GOVERNMENT

COUNT 1 5 3 6 0 15



% of Total 0.5% 2.4% 1.5% 2.9% 0.0% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 6 70 40 83 6 205



% of Total 2.9% 34.1% 19.5% 40.5% 2.9% 100.0%


Table 8.26: Weighted Average – Network Relationships

1 2 3 4 5 TOT WA

a' 0 24 9 56 5 94 3.133333

b' 3 30 66 168 15 282 2.685714

c' 2 36 36 84 35 193 3.509091

d' 1 10 9 24 0 44 2.933333

3.065368


236


viewed that Malaysian telecommunications firms were successful in building strong

external relationships. This was followed by the management and then the industry experts

and the operations group.

Outcome: Figure 8.11, presents the analysis for this Statement. It indicates that there the

participants were divided on the effectiveness of network relationships and partnerships

that Malaysian telecommunications firms have for venturing into international markets.

Figure 8.11: Responses to Statement 8 on “Network Relationships”



Malaysian Telecommunications firms have appropriate strategies for successfully


The combined Survey responses to Proposition 2 are shown in Figure 8.12. Proposition 2

was supported by over 60% of the Survey Participants who were of the view that

Malaysian telecommunications firms have appropriate strategies for successful

internationalisation. However, nearly a quarter of all respondents disagreed with this

Statement and 13.7% remained neutral.

37.00%

19.50%

43.30% Disagree


Agree

237

Figure 8.12: Responses to Proposition 2


The combined responses by Groups are depicted in Table 8.27. The Table indicates modest

support from the Management and Industry Expert Groups while the Operations and

Government Industry Expert groups showed moderate support.

Table 8.27: Combined Survey Responses to Proposition 2 by Group Type


OPINION AGREE TOTAL

A

OPERATIONS

COUNT 8 5 17 30

% Within Proposition 1 3.9% 2.4% 8.3% 14.6%

B

MANAGEMENT

COUNT 22 16 67 105

10.7% 7.8% 32.7% 51.2%

C

INDUSTRY EXPERTS

COUNT 15 7 33 55

% of Total 7.3% 3.4% 16.1% 26.8%

D

GOVERNMENT

COUNT 3 0 12 15

% of Total 1.5% 0.0% 5.9% 7.3%

TOTAL

COUNT 48 28 129 205

% of Total 23.4% 13.7% 62.9% 100.0%


23.40%

13.70% 62.90%

Disagree


Agree

238




Proposition 2 was supported by over 60% of the Survey Participants who were of the view

that Malaysian telecommunications firms have appropriate strategies for successful

internationalisation. There are several factors for successful international market

penetration. The pertinent ones tested for this proposition include market selection, having

a global strategic outlook, considering risk factors in the targeted international markets,

and having strong external networks and effective foreign partnerships. A key factor to

successful international market penetration is entry mode, market selection as well as

timing of entry (Curwen & Whalley 2008).

The first statement reflected that emerging economies with low penetration rates were

preferred destinations for Malaysian telecommunications firms. This is reflected by both

Maxis and Axiata who have entered regional developing markets. Leaders with a global

outlook generally drive internationalisation. Again this is reflected by the leadership in the

Malaysian telecommunications firms that have ventured overseas. There are several risk

factors which require consideration before venturing into international markets. These

include Governance, a financial discipline culture, market knowledge and the ability to

239

build sustainable relationships. While Malaysian firms have ventured abroad, they have

faced challenges in risk mitigation as reflected by the early ventures of TM into Africa and

more recently, the Indian 2G scandal.

The survey participants strongly supported statement 5, moderate support for statement 6,

were divided on statement 7, and were divided on statement 8. Accordingly, as depicted in

Figure 8.12, 62.90% supported the proposition.

8.2.14 Statement 9: On “Leadership”

Malaysian telecommunications firms benefit from capable leadership for successfully

operating in international markets.

Table 8.28 shows the case summary of the Responses to this Statement. The overall Mean

of 3.37 and Standard Deviation of 1.009 indicates moderate acceptance of the Statement.

Table 8.28: Case Summary for Statement 9 on “Leadership”


DEVIATION A

OPERATIONS 30 3.20 3.50 1.064

B

MANAGEMENT 105 3.49 4.00 1.020

C


D

GOVERNMENT 15 3.33 4.00 1.047

TOTAL

205 3.37 4.00 1.009


Leadership competencies are imperative to compete and grow in the new economy

(Morino 1999). Leaders require a global mindset, be able to identify new market and

business opportunities as well as make management decisions on recruiting capable

knowledgeable resource for sustainable competitive advantage. Table 8.29 shows the cross

tabulation of the responses to this Statement. It shows the general acceptance of this

Statement particularly by the Industry Experts along with Government. This suggests that

240

firms which have successful operations in overseas markets have capable leadership. This

is reflected by Axiata and Maxis, led by individuals with international exposure. However,

a quarter of the respondents disagreed and were of the view that Malaysian

telecommunications firms lack capable leadership to succeed in international markets. Of

significance is the requirement to recruit Bumiputeras in line with the NEP. Accordingly,

this may impact the leadership of firms that have the potential to internationalise, however,

have not as yet done so.

Table 8.29: Cross Tabulation of Survey Responses to Statement 9 on “Leadership”

STATEMENT 9: LEADERSHIP

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 1 9 5 13 2 30



% of Total 0.5% 4.4% 2.4% 6.3% 1.0% 14.6%

B

MANAGEMENT

COUNT 1 24 17 49 14 105



% of Total 0.5% 11.7% 8.3% 23.9% 6.8% 51.2%

C

INDUSTRY

EXPERTS

COUNT 1 13 15 23 3 55



% of Total 0.5% 6.3% 7.3% 11.2% 1.5% 26.8%

D

GOVERNMENT

COUNT 0 5 1 8 1 15



% of Total 0.0% 2.4% 0.5% 3.9% 0.5% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 3 51 38 93 20 205



% of Total 1.5% 24.9% 18.5% 45.4% 9.8% 100.0%

Source: Based on the Web Survey for this Research

241

Table 8.30: Weighted Average – Leadership

1 2 3 4 5 TOT WA

a' 1 18 15 52 10 96 3.2

b' 1 48 51 196 70 366 3.485714

c' 1 26 45 92 15 179 3.254545

d' 0 10 3 32 5 50 3.333333

3.318398


The operations group were the most supportive for this statement implying that they

viewed leaders in the industry as being capable of operationalising successfully in

international markets. The other three groups shared similar views.

Outcome: The analysis for this Statement, depicted in Figure 8.14, indicates moderate

support for this Statement.

Figure 8.14: Responses to Statement 9 on “Leadership”


8.2.15 Statement 10: On “Insight”

Malaysian telecommunications firms are not giving adequate emphasis to research and

development for creating innovative market driven products and services.

26.40%

18.50% 54.90%

Disagree


Agree

242

The overall Mean of 3.75 as shown in Table 8.31 reflects modest support for this

Statement. All groups supported the Statement with a Mean ranging from the 3.40

registered by participants from the Government to a Mean of 3.85 by Industry Experts.

Table 8.31: Case Summary for Statement 10 on “Insight”


DEVIATION A

OPERATIONS 30 3.50 4.00 .900

B

MANAGEMENT 105 3.81 4.00 .982

C


D

GOVERNMENT 15 3.40 4.00 1.242

TOTAL

205 3.75 4.00 1.007


Table 8.32 shows the cross tabulation of the responses to this Statement. The analysis

revealed that 67.3% Survey Respondents supported this Statement. This suggests that

Malaysian telecommunications firms need to place more emphasis on R&D for innovation.

This is reflective of Malaysia’s investment in R&D which is far less than its regional

counterparts. While Malaysian telecommunications firms have invested in research labs

much more needs to be done to innovate.

243

Table 8.32: Cross Tabulation of Survey Responses to Statement 10 on “Insight”

STATEMENT 10: INSIGHT

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 5 8 14 3 30



% of Total 0.0% 2.4% 3.9% 6.8% 1.5% 14.6%

B

MANAGEMENT

COUNT 1 13 17 48 26 105



% of Total 0.5% 6.3% 8.3% 23.4% 12.7% 51.2%

C

INDUSTRY

EXPERTS

COUNT 0 8 9 21 17 55



% of Total 0.0% 3.9% 4.4% 10.2% 8.3% 26.8%

D

GOVERNMENT

COUNT 2 1 3 7 2 15



% of Total 1.0% 0.5% 1.5% 3.4% 1.0% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 3 27 37 90 48 205



% of Total 1.5% 13.2% 18.0% 43.9% 23.4% 100.0%


Table 8.33: Weighted Average – Insight

1 2 3 4 5 TOT WA

a' 0 10 24 56 15 105 3.5

b' 1 26 51 192 130 400 3.809524

c' 0 16 27 84 85 212 3.854545

d' 2 2 9 28 10 51 3.4

3.641017


244

The industry experts and Government groups were the most supportive for this statement

implying that they more research needs to be undertaken for innovation.

Outcome: As depicted in Figure 8.15, 67.3% of Respondents agreed with this Statement

indicating strong support

Figure 8.15: Responses to Statement 10 on “Insight”


8.2.16 Statement 11: On “Trust”

Malaysian telecommunications firms benefit from reputational and brand advantage for

competing in overseas markets.

The overall Mean of 2.98 as shown in Table 8.34 indicates that this Statement was

rejected. However, the overall Standard Deviation suggests variations in the views of the

respondents. with the Government representatives expressing support.

Table 8.34: Case Summary for Statement 11 on “Trust”


DEVIATION A

OPERATIONS 30 2.90 2.00 1.094

B

MANAGEMENT 105 3.00 3.00 1.092

C


D

GOVERNMENT 15 3.20 3.00 1.014

TOTAL

205 2.98 3.00 1.045


14.70%

18.00%

67.30%

Disagree


Agree

245

Table 8.35 shows that the respondents had mixed views on branding. While just over 40%

disagreed, fewer than 40% supported the Statement and a fifth of all participants offered

‘no opinion’. This suggests that this Statement was only partially supported. There were

divided views on brand advantage in international markets. Malaysian telecommunications

firms featured high on the list of Malaysia’s top digital brands (TNS 2009). This implies

that Malaysian telecommunications firms are emphasising on the importance of a strong

brand strategy, however, the involvement of Malaysian telecommunications firms in

external markets is through equity ownership and joint ventures with leading operators in

the external markets. This is reflected by the Maxis partnership with Aircel and in India

and Axis in Indonesia. Due to this entry mode, both Axiata and Maxis operate under the

brand names of their respective partners in the countries concerned. Axiata’s heavy

investment in rebranding the firm is reflected in its integrated marketing initiatives for

supporting its regional presence (TNS 2009).

Table 8.35: Cross Tabulation of Survey Responses to Statement 11 on “Trust”

STATEMENT 11: TRUST

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 1 15 1 12 1 30



% of Total 0.5% 7.3% 0.5% 5.9% 0.5% 14.6%

B

MANAGEMENT

COUNT 6 37 20 35 7 105



% of Total 2.9% 18.0% 9.8% 17.1% 3.4% 51.2%

C

INDUSTRY

EXPERTS

COUNT 3 17 18 16 1 55



% of Total 1.5% 8.3% 8.8% 7.8% 0.5% 26.8%

D

GOVERNMENT

COUNT 0 5 3 6 1 15



% of Total 0.0% 2.4% 1.5% 2.9% 0.5% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 10 74 42 69 10 205



% of Total 4.9% 36.1% 20.5% 33.7% 4.9% 100.0%


246

Table 8.36: Weighted Average – Trust

1 2 3 4 5 TOT WA

a' 1 30 3 48 5 87 2.9

b' 6 74 60 140 35 315 3

c' 3 34 54 64 5 160 2.909091

d' 0 10 9 24 5 48 3.2

3.002273


The Government group were most supportive in their view of Malaysian firms being

trusted in international markets. This is followed by the operations groups with the other

two groups offering similar views.

Outcome: Accordingly, as shown in Figure 8.16, there was partial support for the

Statement.

Figure 8.16: Responses to Statement 11 on “Trust”


8.2.17 Statement 12: On “Knowledgeable Resources”

Malaysian telecommunications firms have qualified staff with demonstrated knowledge

and capabilities to effectively operate in international markets.

41.00%

20.50%

38.60% Disagree


Agree

247

As shown in Table 8.37, The overall Mean of 2.94 and the Standard Deviation of 1.058

indicated divided responses to this Statement. The Mean of 3.27 from the Government

Group implied that the Respondents believed that Malaysian telecommunications firms

have qualified staff for their international operations. However, this was rejected by the

Industry Experts who registered a Mean of 2.7 as well as the Operations and Management

Groups.

Table 8.37: Case Summary for Statement 12 on “Knowledgeable Resources”


DEVIATION A

OPERATIONS 30 2.97 3.00 1.098

B

MANAGEMENT 105 2.97 3.00 1.105

C


D

GOVERNMENT 15 3.27 4.00 1.223

TOTAL

205 2.94 3.00 1.058


The cross tabulation of the Survey Responses to this Statement, shown in Table 8.38, also

reveals mixed responses with 40% of the Respondents disagreeing and another 40%

expressing support. Furthermore, 22.0% of the respondents remained neutral.

Knowledgeable resources are required to build intellectual capital for competitive

advantage in a global environment. Malaysian employees are rarely empowered to express

their views and opinions openly. In accordance with Schellekens (2011) Malaysia faces a

drastic skills shortage compounded by the Brain Drain. Furthermore, there is a disparity in

requirements between university graduates and industry needs.

248

Table 8.38: Cross Tabulation of Survey Responses to Statement 12 on

“Knowledgeable Resources”

STATEMENT 12: KNOWLEDGEABLE RESOURCES

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 3 8 7 11 1 30



% of Total 1.5% 3.9% 3.4% 5.4% 0.5% 14.6%

B

MANAGEMENT

COUNT 9 33 20 38 5 105



% of Total 4.4% 16.1% 9.8% 18.5% 2.4% 51.2%

C

INDUSTRY

EXPERTS

COUNT 2 23 16 14 0 55



% of Total 1.0% 11.2% 7.8% 6.8% 0.0% 26.8%

D

GOVERNMENT

COUNT 1 4 2 6 2 15



% of Total 0.5% 2.0% 1.0% 2.9% 1.0% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 15 68 45 69 8 205



% of Total 7.3% 33.2% 22.0% 33.7% 3.9% 100.0%


Table 8.39: Weighted Average – Knowledgeable Resources

1 2 3 4 5 TOT WA

a' 3 16 21 44 5 89 2.966667

b' 9 66 60 152 25 312 2.971429

c' 2 46 48 56 0 152 2.763636

d' 1 8 6 24 10 49 3.266667

2.9921


249

Again, the Government group were most supportive in their view of Malaysian firms

having knowledgeable resources. This is followed by the operations and management

groups, while the industry experts were in least agreement with the statement.

Outcome: As shown in Figure 8.17 there was marginal support for this Statement, with a

significant number offering ‘no opinion’. The researcher therefore concluded that the

Survey respondents were divided on this Statement.

Figure 8.17: Responses to Statement 12 on “Knowledgeable Resources”



Malaysian Telecommunications firms that are internationalising face significant

challenges.

The combined Survey responses to Proposition 3 are shown in Figure 8.18. Proposition 3

was supported by over 60% of the Survey Participants who were of the view that

Malaysian telecommunications firms that are internationalising face significant challenges.

However, nearly a quarter of all respondents disagreed with this Statement with 13.7%

remaining neutral.

40.50%

22.00%

37.60% Disagree


Agree

250



The combined responses by Groups are depicted in Table 8.40. The Table indicates modest

support from the Management and Industry Expert Groups while the Operations,

Government and Industry groups showed moderate support.



OPINION AGREE TOTAL

A

OPERATIONS

COUNT 9 6 15 30

% of Total 4.4% 2.9% 7.3% 14.6%

B

MANAGEMENT

COUNT 24 15 66 105

% of Total 11.7% 7.3% 32.2% 51.2%

C

INDUSTRY EXPERTS

COUNT 15 5 35 55

% of Total 7.3% 2.4% 17.1% 26.8%

D

GOVERNMENT

COUNT 3 2 10 15

% of Total 1.5% 1.0% 4.9% 7.3%

TOTAL

COUNT 51 28 126 205

% of Total 24.9% 13.7% 61.5% 100.0%


24.90%

13.70% 61.50%

Disagree


Agree

251




Proposition 3 was supported by over 61.50% of the Survey Participants who were of the

view that Malaysian telecommunications that are internationalising face significant

challenges. These challenges include adequate R&D for innovation, capable staff to be

part of an international team, leadership as well as build trust through brand and reputation

management. The survey participants show moderate support for statement 9, stronger

support for statement 10, were divided on statement 11, and were divided on statement 12.

Accordingly, as depicted in Figure 8.16, 61.50% supported the proposition.

8.2.20 Statement 13: On “Government Policies”

The Malaysian Government’s policies for the telecommunications sector create a

conducive environment to enable them to be key regional players.

As shown in Table 8.41, the overall Mean of 3.00 and Standard Deviation of 1.015

indicates mixed views on this Statement. However, it was supported by the Government

representatives.

252

Table 8.41: Case Summary for Statement 13 on “Government Policies”


DEVIATION A

OPERATIONS 30 3.07 3.00 .980

B

MANAGEMENT 105 2.95 3.00 1.023

C


D

GOVERNMENT 15 3.47 4.00 .990

TOTAL

205 3.00 3.00 1.015


Table 8.42 shows the cross tabulation of survey responses for Statement 13. It also shows

that the respondents have mixed views on Government Policies. While 39% agreed with

this Statement, 37.1% disagreed with it and 23.9% of all participants offered ‘no opinion’.

Although two thirds of the representatives from the Government Group expressed support,

this Statement was only partially supported. There are several Government policies to

support the Telecommunications industry; however, their adequacy to support regional

growth is in question. These policies were outlined in Chapter 2. While the Malaysian

Governments penchant for ICT remains, in comparison to its counterparts, it lags in

outward FDI flows (World Bank 2011).

253

Table 8.42: Cross Tabulation of Survey Responses to Statement 13 on “Government

Policies”

STATEMENT 13: GOVERNMENT POLICIES

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 2 7 8 13 0 30



% of Total 1.0% 3.4% 3.9% 6.3% 0.0% 14.6%

B

MANAGEMENT

COUNT 6 36 23 37 3 105



% of Total 2.9% 17.6% 11.2% 18.0% 1.5% 51.2%

C

INDUSTRY

EXPERTS

COUNT 3 18 17 14 3 55



% of Total 1.5% 8.8% 8.3% 6.8% 1.5% 26.8%

D

GOVERNMENT

COUNT 0 4 1 9 1 15



% of Total 0.0% 2.0% 0.5% 4.4% 0.5% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 11 65 49 73 7 205



% of Total 5.4% 31.7% 23.9% 35.6% 3.4% 100.0%


Table 8.43: Weighted Average – Government Policies

1 2 3 4 5 TOT WA

a' 2 14 24 52 0 92 3.066667

b' 6 72 69 148 15 310 2.952381

c' 3 36 51 56 5 151 2.745455

d' 0 8 3 36 5 52 3.466667

3.057792


254

The Government group were most supportive in their view of the policies available to

support internationalisation. This view was less supported by the other groups.

Outcome: Figure 8.20 shows that the Survey respondents were divided on this Statement.

Figure 8.20: Responses to Statement 13 on “Government Policies”


8.2.21 Statement 14: On “Government Incentives”

The Malaysian Government has adequate measures and incentives to support the growth

and development of Malaysian telecommunications firms.

As shown in Table 8.44, the analysis of the data revealed an overall Mean of 2.92 and a

Standard Deviation of 1.007. While the Statement was rejected, it received support from

the Government and the Operations Group.

37.10%

23.90%

39.00% Disagree


Agree

255

Table 8.44: Case Summary for Statement 14 on “Government Incentives”


DEVIATION A

OPERATIONS 30 3.00 3.00 1.017

B

MANAGEMENT 105 2.84 3.00 1.020

C


D

GOVERNMENT 15 3.27 4.00 1.033

TOTAL

205 2.92 3.00 1.007


As shown in Table 8.45, the analysis of the data revealed an overall Mean of 2.92 and a

Standard Deviation of 1.007. While the Statement was rejected, it received support from

the Government and the Operations Group. While the Government has incentives and

measures to support the growth of the telecommunications sectors, much funding is tied in

red tape and preferential treatment given to Bumiputera firms in line with the NEP.

Accordingly, the sector’s growth in Malaysia has been hindered by the NEP (Salazar

2007).

256

Table 8.45: Cross Tabulation of Survey Responses to Statement 14 on “Government

Incentives”

STATEMENT 14: GOVERNMENT INCENTIVES

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 2 9 6 13 0 30



% of Total 1.0% 4.4% 2.9% 6.3% 0.0% 14.6%

B

MANAGEMENT

COUNT 7 39 27 28 4 105



% of Total 3.4% 19.0% 13.2% 13.7% 2.0% 51.2%

C

INDUSTRY

EXPERTS

COUNT 4 12 25 11 3 55



% of Total 2.0% 5.9% 12.2% 5.4% 1.5% 26.8%

D

GOVERNMENT

COUNT 0 5 2 7 1 15



% of Total 0.0% 2.4% 1.0% 3.4% 0.5% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 13 65 60 59 8 205



% of Total 6.3% 31.7% 29.3% 28.8% 3.9% 100.0%


Table 8.46: Weighted Average – Government Incentives

1 2 3 4 5 TOT WA

a' 2 18 18 52 0 90 3

b' 7 78 81 112 20 298 2.838095

c' 4 24 75 44 15 162 2.945455

d' 0 10 6 28 5 49 3.266667

3.012554


257

The Government group were most supportive in their view that adequate incentives are

available to support internationalisation. This view was less supported by the other groups.

Outcome: The analysis of the data revealed that the Survey respondents remain divided on

this Statement

Figure 8.21: Responses to Statement 14 on “Government Incentives”


8.2.22 Statement 15: On “Government’s Role”

Malaysian Government agencies can play a more proactive role for supporting the

internationalisation efforts of Malaysian telecommunications firms.

As shown in Table 8.47, the overall Mean of 4.01 indicates strong support for this

Statement. The low Standard Deviation of 0.786 suggests there was little variation

amongst the groups. The strongest support came from the Management Group with a

Mean of 4.10. All groups were therefore of the view that Malaysian Government

Agencies can play a more active role in supporting the internationalisation efforts of


38.00%

29.30%

32.70%

Disagree


Agree

258

Table 8.47: Case Summary for Statement 15 on “Government’s Role”


DEVIATION A

OPERATIONS 30 3.77 4.00 .817

B

MANAGEMENT 105 4.10 4.00 .808

C


D

GOVERNMENT 15 4.07 4.00 .884

TOTAL

205 4.01 4.00 .786


Over 80% of respondents supported this Statement as shown in Table 8.48. This shows

that more can be done by the Government to support Malaysian telecommunications firms

venturing overseas. Home and Host Governments are critical to the telecommunications

industry. While FDI outflows are on the increase, this is not reflective of the

telecommunications industry where only a few firms have internationalised. Accordingly,

the Government can support the growth of the industry with G2G relationships and bi-

lateral trade agreements.

259

Table 8.48: Cross Tabulation of Survey Responses to Statement 15 on “Government’s

Role”

STATEMENT 15: GOVERNMENTS ROLE

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 0 3 5 18 4 30



% of Total 0.0% 1.5% 2.4% 8.8% 2.0% 14.6%

B

MANAGEMENT

COUNT 1 3 14 53 34 105



% of Total 0.5% 1.5% 6.8% 25.9% 16.6% 51.2%

C

INDUSTRY

EXPERTS

COUNT 0 3 5 39 8 55



% of Total 0.0% 1.5% 2.4% 19.0% 3.9% 26.8%

D

GOVERNMENT

COUNT 0 1 2 7 5 15



% of Total 0.0% 0.5% 1.0% 3.4% 2.4% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 1 10 26 117 51 205



% of Total 0.5% 4.9% 12.7% 57.1% 24.9% 100.0%


Table 8.49: Weighted Average – Governments Role

1 2 3 4 5 TOT WA

a' 0 6 15 72 20 113 3.766667

b' 1 6 42 212 170 431 4.104762

c' 0 6 15 156 40 217 3.945455

d' 0 2 6 28 25 61 4.066667

3.970887


260

All groups agreed that the Government can play a more active role in Malaysian firms

internationalisation efforts. The most support is from Government and operations groups.

Outcome: This Statement was strongly supported.

Figure 8.22: Responses to Statement 15 on “Governments Role”


8.2.23 Statement 16: On “Independent Regulation”

The Malaysian Government has a strong administrative machinery to enhance the

competitive positioning of Malaysian telecommunications firms that are competing in the

global arena.

As shown in Table 8.50, the overall Mean of 2.58 reflected the rejection of this Statement.

Furthermore, The low Standard Deviation of 0.995 suggests there was little variation

amongst the groups, Apart from the representatives in the Government Group, the

responses imply that the Malaysian Government does not have a strong administrative

machinery to enhance the competitive positioning of Malaysian telecommunications firms

in the global arena.

5.40% 12.70%

82.00%

Disagree


Agree

261

Table 8.50: Case Summary for Statement 16 on “Independent Regulation”


DEVIATION A

OPERATIONS 30 2.60 2.50 .968

B

MANAGEMENT 105 2.51 2.00 .982

C


D

GOVERNMENT 15 3.13 3.00 1.187

TOTAL

205 2.58 2.00 .995


Table 8.51 shows the cross tabulation of responses. Over half of the Survey participants

disagreed with this Statement. This implies that it is perceived that the regulatory authority

could do more to support the industry in Malaysia. A fifth of respondents remained neutral

on the statement while 20% supported the Statement. The regulatory authority in Malaysia

was one of the most advanced in the world as it was the first to address convergence in

1998. However, ongoing interference from Government to support the goals of the NEP

has resulted in a regulatory body with a perception of being bureaucratic, outdated policies

and ineffective in its role as a regulator.

262

Table 8.51: Cross Tabulation of Survey Responses to Statement 16 on “Independent

Regulation”

STATEMENT 16: INDEPENDENT REGULATION

GROUP

TYPE

STATISTICS STRONGLY


– NO

OPINION

AGREE STRONGLY

AGREE TOTAL %

WITHIN

GROUP

TYPE A

OPERATIONS

COUNT 3 12 10 4 1 30



% of Total 1.5% 5.9% 4.9% 2.0% 0.5% 14.6%

B

MANAGEMENT

COUNT 12 50 22 19 2 105



% of Total 5.9% 24.4% 10.7% 9.3% 1.0% 51.2%

C

INDUSTRY

EXPERTS

COUNT 6 25 14 9 1 55



% of Total 2.9% 12.2% 6.8% 4.4% 0.5% 26.8%

D

GOVERNMENT

COUNT 1 4 4 4 2 15



% of Total 0.5% 2.0% 2.0% 2.0% 1.0% 7.3%

TOTAL

% WITHIN

STATEMENT

COUNT 22 91 50 36 6 205



% of Total 10.7% 44.4% 24.4% 17.6% 2.9% 100.0%


Table 8.52: Weighted Average – Independent Regulation

1 2 3 4 5 TOT WA

a' 3 24 30 16 5 78 2.6

b' 12 100 66 76 10 264 2.514286

c' 6 50 42 36 5 139 2.527273

d' 1 8 12 16 10 47 3.133333

2.693723


263

The Government supported this statement, however, the other groups were less supportive.

Outcome: Overall, this statement is rejected as shown in Figure 8.23.

Figure 8.23: Responses to Statement 16 on “Independent Regulation”



The Malaysian Government is fully supportive of the efforts of the Malaysian

Telecommunications sector to internationalise their operations.

The combined Survey responses to Proposition 4 are shown in Figure 8.24. As it was

supported by just over half of the survey participants, it indicates that the Malaysian

Government is fully supportive of the efforts of the Malaysian telecommunications firms

to internationalise their operations. It is however significant that 38% of all respondents

disagreed with this Statement, with another 10% remaining neutral.

55.20% 24.40%

20.50%

Disagree


Agree

264



The combined responses by Groups are depicted in Table 8.53. The Table indicates there

was moderate support from all groups except representatives from the Government Group

who showed modest support.



OPINION AGREE TOTAL

A

OPERATIONS

COUNT 11 4 15 30

% of Total 5.4% 2.0% 7.3% 14.6%

B

MANAGEMENT

COUNT 41 8 56 105

% of Total 20.0% 3.9% 27.3% 51.2%

C

INDUSTRY EXPERTS

COUNT 22 8 25 55

% of Total 10.7% 3.9% 12.2% 26.8%

D

GOVERNMENT

COUNT 4 1 10 15

% of Total 2.0% 0.5% 4.9% 7.3%

TOTAL

COUNT 78 21 106 205

% of Total 38.0% 10.2% 51.7% 100.0%


38.00%

10.20% 51.70%

Disagree


Agree

265




Majority of participants rejected that “The Malaysian Government has a strong

administrative machinery to enhance the competitive positioning of Malaysian

telecommunications firms that are competing in the global arena”.

In line with Wong (2011), while the Malaysian Government has good policy intentions in

formulating support measures to promote the competitive positioning of all Malaysian

service industries, its activities were viewed as being unfocused, diffused and ineffective.

The pertinent policies failing the sector include:

(i). Regulatory Policies: The regulatory authority appears to be non-independent and

passive and overall it is viewed that much more could be done to improve regulation of the

sector in Malaysia to support internationalisation.

(ii). The NEP still impacts the sector as reflected by the case of issuance of the nine LTE

licences in 2011.

266

(iii). Bi-lateral Trade Agreements can support and facilitate market entry for Malaysian


(iv). Market Structure: The Government needs to present an open market structure

supporting a competitive environment.

(v). Funding: For Research; training and development to support knowledgeable resources

and marketing.

The survey participants were divided on statement 13 and 14, strongly supported statement

15, and rejected statement 16. Accordingly, as depicted in Figure 8.25, minimal support

for the proposition.

267

8.2.26 Summary of the Survey Responses

A summary of the Survey Responses to each statement is shown in Table 8.54.

Table 8.54: Summary of Survey Responses

# Scripted Web Survey Statement Construct

Tested

Response Outcome

1 Malaysian telecommunications firms are well positioned to achieve sustainable competitive advantage in the

highly competitive global telecommunications sector.

Positioning 48.7% Agreed 13.7% Neutral

37.5.% Disagreed

Divided

2 Malaysian telecommunications firms have the strategic

capabilities to accommodate the changes in the global

telecommunications industry.

Capability 52.6% Agreed

16.1% Neutral

31.2% Disagreed

Moderate Support

3 The intense competition in a saturated domestic market

compels Malaysian telecommunications firms to venture into overseas markets.

Strategic Intent 72.2% Agreed

12.2% Neutral 14.6% Disagreed

Modest Support

4 Malaysian telecommunications firms are meeting the

challenges presented by changing consumer demands in the global marketplace by providing new products and

services.

Customer

Orientation

54.7% Agreed


Moderate Support

PROPOSITION 1

5 Emerging countries with low penetration rates and high growth potential are the preferred investment destinations

for Malaysian telecommunications firms.

Market Selection 82.0% Agreed 10.2% Neutral

7.8% Disagreed

Strong Support

6 Malaysian telecommunications firms have the required

global strategic outlook to successfully venture into international markets.

Global Outlook 50.2% Agreed


Mixed Views

7 The internationalisation strategies of Malaysian

telecommunications firms take full account of the risk factors in the targeted international markets.

Risk 40% Agreed


Mixed Views

8 Malaysian telecommunications firms have strong external networks and effective foreign partnerships for

successfully venturing into new international markets.


43.4% Agreed 19.5% No Opinion

37% Disagreed

Mixed Views

PROPOSITION 2

9 Malaysian telecommunications firms benefit from

capable leadership for successfully operating in international markets.

Leadership 54.9% Agreed


Moderate Support

10 Malaysian telecommunications firms are not giving

adequate emphasis to research and development for

creating innovative market driven products and services.

Insight 67.4% Agreed

18.0% Neutral

14.7% Disagree

Modest Support



overseas markets.

Trust 38.6% Agreed

20.5% Neutral

41% Disagreed

Divided

12 Malaysian telecommunications firms have qualified staff

with demonstrated knowledge and capabilities to

effectively operate in international markets.

Knowledgeable

Human

Resources

37.6% Agreed

22.0% Neutral

40.5% Disagreed

Divided

PROPOSITION 3

13 The Malaysian Government’s policies for the

telecommunications sector create a conducive environment to enable them to become key regional

players.

Policies 39% Agreed


Divided

14 The Malaysian Government has adequate measures and

incentives to support the growth and development of Malaysian telecommunications firms.

Incentives 32.7% Agreed

29.3% Neutral 38% Disagreed

Divided

15 Malaysian Government agencies can play a more

proactive role for supporting the internationalisation efforts of Malaysian telecommunications firms.

Role 82% Agreed


Modest – Strong

Support

16 The Malaysian Government has a strong administrative

machinery to enhance the competitive positioning of

Malaysian telecommunications firms that are competing in the global arena.

Independent

Regulation

20.5% Agree

24.4% Neutral

55.10% Disagreed

Rejected

PROPOSITION 4


268

The next section discusses the Confirmatory stage of this research. It begins with

reliability testing using Cronbachs Alpha. It then adopts a three-stage SEM approach. The

first stage, uses CFA to test and refine the factors. The second is a measurement model

which tests the relationships among the variables. The third is a structural model which

assesses the relationships and the level of influence of the variables in the model.

8.3 Triangulation of the Findings

To strengthen the validity of the findings in this mixed methods approach, the findings of

the content analysis of the personal interviews were triangulated against the web survey

responses. As shown in Table 8.55 below, the researcher explored the alignment in

opinions of the web survey participants with the interview participants. The final column

presents the triangulated responses in terms of concurrence and divergence.

The analysis revealed that the respondents from the web survey and with the interview

participants adopted common positions in respect of 13 scripted web statements. They

had divergent views on the remaining three statements as follows.

The web survey participants were of the view that Malaysian telecommunications

firms have the strategic capabilities to accommodate the changes in the global

telecommunications industry. The interview respondents had an opposing view.

Although the web survey participants were of the view that Malaysian

telecommunications firms are meeting the challenges presented by consumer demand

in the global marketplace, the interview participants had contrary views.

There was also a deviation of views of Statement 10. The interview participants and the

web survey participants had differing views on the emphasis given by Malaysian

telecommunications firms to research and development for creating innovative market

driven products and services and were unable to agree on this point.

Significantly, the participants in the web survey and in the interviews jointly disagreed and

rejected statements 7-8, statements 11-14 and statement 16. This implies that

269

there were divided views in propositions 2 and 3 and

they rejected proposition 4 which stated that The Malaysian Government is fully

supportive of the efforts of the Malaysian telecommunications sector to

internationalise their operations

270

Table 8.55: Triangulation of the Findings:

Proposition Scripted Web Survey Statement Interview Web

Survey

Triangulated

Findings

The dynamic

changes in the global

telecommunications

industry have a

strong influence on

the competitive

strategies of

Malaysian

telecommunications

firms

1 Malaysian telecommunications firms are well

positioned to achieve sustainable competitive

advantage in the highly competitive global


Disagreed Disagreed Concurred

2 Malaysian telecommunications firms have the

strategic capabilities to accommodate the changes

in the global telecommunications industry.

Disagreed Agreed

Divergent

3 The intense competition in a saturated domestic

market compels Malaysian telecommunications

firms to venture into overseas markets.

Agreed Agreed

Concurred

4 Malaysian telecommunications firms are meeting

the challenges presented by changing consumer

demands in the global marketplace by providing

new products and services

Disagreed Agreed

Divergent

Malaysian

telecommunications

firms have

appropriate strategies

for successfully

internationalising

their operations

5 Emerging countries with low penetration rates and

high growth potential are the preferred investment

destinations for Malaysian telecommunications

firms.

Agreed Agreed

Concurred

6 Malaysian telecommunications firms have the

required global strategic outlook to successfully

venture into international markets.

Agreed Agreed

Concurred

7 The internationalisation strategies of Malaysian

telecommunications firms take full account of the

risk factors in the targeted international markets.


8 Malaysian telecommunications firms have strong

external networks and effective foreign

partnerships for successfully venturing into new

international markets.


Malaysian

telecommunications

firms that are

internationalising

their operations face

significant

challenges.


capable leadership for successfully operating in

international markets

Agreed Agreed

Concurred

10 Malaysian telecommunications firms are not

giving adequate emphasis to research and

development for creating innovative market driven

products and services.

Disagreed Agreed

Divergent



overseas markets.


12 Malaysian telecommunications firms have

qualified staff with demonstrated knowledge and

capabilities to effectively operate in international

markets.


The Malaysian

Government is fully

supportive of the

efforts of the

Malaysian

telecommunications

sector to

internationalise their

operations

13 The Malaysian Government’s policies for the

telecommunications sector create a conducive

environment to enable them to become key

regional players.


14 The Malaysian Government has adequate

measures and incentives to support the growth and

development of Malaysian telecommunications

firms.


15 Malaysian Government agencies can play a more

proactive role for supporting the

internationalisation efforts of Malaysian


Agreed Agreed

Concurred

16 The Malaysian Government has a strong

administrative machinery to enhance the

competitive positioning of Malaysian

telecommunications firms that are competing in

the global arena.



271

8.4 Reliability of the Sample Data and the Variables

This Section addresses the reliability of the data and the variables. The reliability of valid

measures is dependent on internal consistency and dimensionality of measurement scales.

By establishing reliability and validity of measures the researcher minimises errors.

The statistical reliability of the measures was assessed by testing internal consistency and

reliability of the measurement scale before subjecting the items to validation analysis. The

constructs for this study were defined in Section 6.5.1 Cronbach’s alpha was used to

estimate the reliability of the measures (Cronbach 1951). Cronbach’s Alpha coefficient

measures the correlation of scale items and the strength of relationships between one item

and others in the scale (Kenny 2009). There are differing schools of thought on Cronbach’s

Alpha coefficient output. While Hair et al (2006) consider alpha values > 0.6 acceptable,

Nunnally, (1978) consider > 0.7 to be adequate and Bryman and Bell (2003) consider 0.80

being ‘acceptable’ and 0.90 is considered ‘excellent’ (Bentler & Chou 1987).

Table 8.56 below shows the alpha values for the constructs defined in this study. These

are, Dynamic Market Landscape, Strategy, Challenges and Government. All constructs

had values of over 0.7 and therefore all constructs were considered to be internally

consistent and reliable.

Table 8.56: Additional Comments provided by Web Survey Participants

VARIABLE TYPE VARIABLE NAME CRONBACH’S ALPHA

INDEPENDENT DYNAMIC MARKET

LANDSCAPE

.852

OUTCOME STRATEGY .771

INDEPENDENT CHALLENGES .849

MODERATING GOVERNMENT .873


272

8.4.1 Reliability of “Dynamic Market Landscape”

Table 8.57: Reliability Measure For “Dynamic Market Landscape” Variable

N %

CASE

PROCESSING

SUMMARY

Valid 205 100.0

Excluded (a) 0 0

Total 205 100.0

(a) Listwise deletion based on all variables in the procedure

CRONBACH’S

ALPHA

N OF ITEMS

RELIABILITY

STATISTICS .852 4

ITEM MEAN STANDARD

DEVIATION

N

ITEM

STATISTICS

Positioning 3.88 .808 205

Capability 3.77 .841 205

Strategic Intent 3.81 .862 205

Customer

Orientation

3.76 .867 205

ITEM SCALE MEAN

IF ITEM

DELETED

SCALE

VARIANCE IF

ITEM DELETED

CORRECTED

ITEM – TOTAL

CORRELATION

CRONBACH’S

ALPHA IF ITEM

DELETED

ITEM TOTAL

STATISTICS

Positioning 11.34 4.795 .696 .811

Capability 11.45 4.778 .660 .826

Strategic Intent 11.41 4.646 .679 .818

Customer

Orientation

11.46 4.456 .739 .792


273

8.4.2 Reliability of “Strategy”

Table 8.58: Reliability Measure For “Strategy” Variable

N %

CASE

PROCESSING

SUMMARY

Valid 205 100.0

Excluded (a) 0 0

Total 205 100.0


CRONBACH’S

ALPHA

N OF ITEMS

RELIABILITY

STATISTICS .849 4

ITEM MEAN STANDARD

DEVIATION

N

ITEM

STATISTICS

Market

Selection

3.96 .859 205

Global Strategic

Outlook

3.94 .823 205

Risk Factors 3.91 .878 205

Network

Relationships

3.95 .856 205

ITEM SCALE MEAN

IF ITEM

DELETED

SCALE

VARIANCE IF

ITEM DELETED

CORRECTED

ITEM – TOTAL

CORRELATION

CRONBACH’S

ALPHA IF ITEM

DELETED

ITEM TOTAL

STATISTICS

Market

Selection

11.80 4.742 .684 .810

Global Strategic

Outlook

11.81 4.877 .684 .810

Risk Factors 11.84 4.750 .658 .822

Network

Relationships

11.80 4.631 .726 .792


274

8.4.3 Rel iability of “Challenges”

Table 8.59: Reliability Measure For “Challenges” Variable

N %

CASE

PROCESSING

SUMMARY

Valid 205 100.0

Excluded (a) 0 0

Total 205 100.0


CRONBACH’S

ALPHA

N OF ITEMS

RELIABILITY

STATISTICS .771 4

ITEM MEAN STANDARD

DEVIATION

N

ITEM

STATISTICS

Leadership 3.87 1.061 205

Insight 3.92 1.050 205

Trust 3.85 1.075 205

Knowledgeable

Resources

3.83 1.076 205

ITEM SCALE MEAN

IF ITEM

DELETED

SCALE

VARIANCE IF

ITEM DELETED

CORRECTED

ITEM – TOTAL

CORRELATION

CRONBACH’S

ALPHA IF ITEM

DELETED

ITEM TOTAL

STATISTICS

Leadership 11.61 6.514 .579 .714

Insight 11.56 6.523 .587 .709

Trust 11.62 6.549 .557 .725

Knowledgeable

Resources

11.64 6.495 .568 .719


275

8.4.4 Reliability of “Government”

Table 8.60: Reliability Measure For “Government” Variable

N %

CASE

PROCESSING

SUMMARY

Valid 205 100.0

Excluded (a) 0 0

Total 205 100.0


CRONBACH’S

ALPHA

N OF ITEMS

RELIABILITY

STATISTICS .873 4

ITEM MEAN STANDARD

DEVIATION

N

ITEM

STATISTICS

Policies 3.90 .843 205

Incentives 3.95 .898 205

Governments

Role

3.93 .934 205

Independent

Regulation

3.94 .886 205

ITEM SCALE MEAN

IF ITEM

DELETED

SCALE

VARIANCE IF

ITEM DELETED

CORRECTED

ITEM – TOTAL

CORRELATION

CRONBACH’S

ALPHA IF ITEM

DELETED

ITEM TOTAL

STATISTICS

Policies 11.81 5.606 .720 .841

Incentives 11.76 5.408 .712 .843

Governments

Role

11.78 5.388 .676 .859

Independent

Regulation

11.77 5.148 .810 .804


276

8.5 Confirmatory Factor Analysis of Propositions

Confirmatory factor analysis (CFA) is used to test and refine measures by testing the uni-

dimensionality of each factor. It measures the relationships of indicators (observed

variables) to factors (latent variables). Latent variables may be correlated or be constrained

to 0 covariance (orthogonal factors).

In CFA, the analysis is based on error terms of the observed variables. It focuses on the

consistency of the hypothesised factor structure with the correlation among the variables. It

evaluates constructs and convergent validity of the measures. The CFA approach restricts

which indicator will be loaded on which factor. It also specifies which factors will be

correlated (Kenny 2009). In a one factor standard model where each factor has three or

more indicators, each indicator is specified to load only one factor and all factors are

allowed to correlate with each other. Error terms are specified to be uncorrelated. (Hair et

al. 2010). A multi-factor model involves each factor having two or more indicators.

The traditional chi-square measure is unsuitable for small sample sizes as it may not yield

a valid test of model fit (Bentler 1990). Accordingly, in addition to the chi-square,

multiple measures were used to assess goodness of fit between the data and the model

interrelations (Kline 2005). As discussed in Section 6.6.3, these additional measures were

the CFI, p Value, GFI and RMSEA. These were then used to assess the CFA on each

factor. The actual factor loadings were taken into consideration, rather than assuming that

each item is equally weighted in the composite load determination. These are discussed

next.

277

8 .5.1 CFA on Proposition 1: “Dynamic Market Landscape”

The result of the estimation of the CFA on Dynamic Market Landscape is shown in Table

8.61.

Table 8.61: Goodness of Fit of Dynamic Market Landscape

CONSTRUCTS (N=4) STANDARDISED

REGRESSION

WEIGHT

MODEL FIT INDICATOR

DYNAMIC

MARKET

LANDSCAPE

Positioning 0.77 CMIN (x2) 0.779

Capability 0.72 DF 2

Strategic Intent 0.75 CMIN/DF 0.389

Customer

Orientation

0.83 P VALUE 0.677

GFI 0.998

RMSEA 0.000


The model fit indices showed that all items were loaded on their specified constructs and

that the data fit of the measurement and the model are valid. Guided by Hair et al, (2006),

this is supported by the chi-square/df = 0.389; P = 0.677; GFI = 0.995 and RMSEA =

0.000.

The CFA of Dynamic Market Landscape was then conducted on the four items as shown

in Figure 8.26. The validity of the items as the factor loading, as demonstrated by the P

Value exceeded 0.5, therefore the data fitted the model.

Figure 8.26: CFA on Dynamic Market Landscape: Proposition 1


Standardized estimates

Chi-Square : .779

DF : 2

Ratio : .389

P Value : .677

GFI : .998

RMSEA : .000

Dynamic Market

Landscape

Positioning e5.77

Capability e6.72

Strategic

Intente7

.75

Customer

Orientatione8

.83

278

8 .5.2 CFA on Proposition 2: “Strategy”

The result of the estimation of the CFA on Strategy is shown in Table 8.62.

Table 8.62: Goodness of Fit of Strategy


REGRESSION

WEIGHT

MODEL FIT INDICATOR

STRATEGY

Market

Selection

0.76 CMIN (x2) 4.384

Global Strategic

Outlook

0.76 DF 2

Risk Factors 0.73 CMIN/DF 2.192

Network

Relationships

0.81 P VALUE 0.112

GFI 0.989

RMSEA 0.076


The model fit indices showed that all items loaded on their specified constructs and that

the data fit of the measurement and the model are valid. Guided by Hair et al, (2006), this

is supported by the chi-square/df = 2.192; P = 0.112; GFI = 0.989 and RMSEA = 0.076.

The CFA of Strategy was then conducted on the four items as shown in Figure 8.27. The

validity of the items as the factor loading, as demonstrated by the P Value exceeded 0.5,

therefore the data fitted the model.

Figure 8.27: CFA on Strategy: Proposition 2



Chi-Square : 4.384

DF : 2

Ratio : 2.192

P Value : .112

GFI : .989

RMSEA : .076

Strategies

Market

Selectione13

.76

Global

Outlooke14.76

Risk e15

.73

Network

Relationshipe16

.81

279

8.5.3 CFA on Proposition 3: “Challenges”

The result of the estimation of the CFA on Challenges is shown in Table 8.63.

Table 8.63: Goodness of Fit of Challenges


REGRESSION

WEIGHT

MODEL FIT INDICATOR

CHALLENGES

Leadership 0.67 CMIN (x2) 0.471

Insight 0.65 DF 2

Trust 0.70 CMIN/DF 0.236

Knowledgeable

Resources

0.69 P VALUE 0.79

GFI 0.999

RMSEA 0.000





The CFA of Challenges was then conducted on the four items as shown in Figure 8.28.

The validity of the items as the factor loading, as demonstrated by the P Value exceeded

0.5, therefore the data fitted the model.

Figure 8.28: CFA on Challenges: Proposition 3


Challenges


Chi-Square : .471

DF : 2

Ratio : .236

P Value : .790

GFI : .999

RMSEA : .000

Leadershipe9

.69Insighte10

.70

Truste11 .65

Knowledgeable

Resourcese12

.67

280

8 .5.4 CFA on Proposition 4: “Government”

The result of the estimation of the CFA on Government is shown in Table 8.64.

Table 8.64: Goodness of Fit of Government


REGRESSION

WEIGHT

MODEL FIT INDICATOR

GOVERNMENT

Policies 0.90 CMIN (x2) 1.108

Incentives 0.73 DF 2

Governments

Role

0.77 CMIN/DF 0.554

Independent

Regulation

0.79 P VALUE 0.575

GFI 0.997

RMSEA 0.000





The CFA of Government was then conducted on the four items as shown in Figure 8.29.

The validity of the items as the factor loading, as demonstrated by the P Value exceeded

0.5, therefore the data fitted the model.

Figure 8.29: CFA on Government: Proposition 4



Chi-Square : 1.108

DF : 2

Ratio : .554

P Value : .575

GFI : .997

RMSEA : .000

Government

Policiese1

.79Incentivese2

.77

Government

Rolee3 .73

Independent

Regulatione4

.90

281

8.6 Generated SEM Models

The second stage of the analysis was conducted with a structural equation model (SEM) as

it increases reliability and validity by providing the ability to analyse the relationships

between observed and latent variables. Regression may be preferred to structural equation

modelling when there are substantial departures from the SEM assumptions of multivariate

normality of the indicators and/or small sample sizes, and when measurement error is less

of a concern because the measures have high reliability (Jaccard & Wan 1996). The model

in this research was based on a complete path model as all the variables are measured by

multiple indicators (Hair et al. 2010). These have associated error terms in addition to the

residual error factor associated with the latent dependent variable. The Summary of the

Goodness of fit indices of the variables, as shown in Table 8.65 below, indicates that the

items were valid and reliable.

Table 8.65: Summary of Goodness of Fit indices of Variables

VARIABLE

GOODNESS OF FIT

CHI-SQUARE

CMIN2

DF RATIO

(CMIN/DF)

P VALUE GFI RMSEA

Dynamic

Market

Landscape

0.779 2 0.389 0.677 0.998 0.000

Strategy 4.383 2 2.192 0.112 0.989 0.076

Challenges 0.471 2 0.236 0.79 0.999 0.000

Government 1.108 2 0.554 0.575 0.997 0.000


A generated model was extracted after the CFA order analysis in which all the constructs

were measured and accepted as a good model fit.

As shown the constructs, that emerged from the exploratory stage of this study for each of

the four variables of Dynamic Market Landscape, Challenges, Strategy and Government.

The four constructs for each of these four variables are shown in Table 8.66. as follows:

282

Table 8.66: Summary of Variables and Constructs

Variable Constructs

Dynamic Market Landscape

Positioning

Capability

Strategic Intent

Customer Orientation

Strategy

Market Selection

Global Outlook

Risk


Challenges

Knowledgeable Resources

Trust

Insight

Leadership

Government

Independent Regulation

Government Role

Incentives

Policies


As shown in Figure 8.30. The SEM model is presented in a diagram in which the measured

variables, indicators, are in rectangles and the factors, latent variables are in ellipses and

residual terms are circles. The lines connecting these depict causal relationships. A single

arrowhead represents unidirectional causation, from a latent variable to its indicators and a

double headed arrow represent correlations between indicators or exogenous latents. Path

coefficient values are placed on the arrows from latent to indicators, or from one latent to

another, or from an error term to an indicator or from a residual term to a latent (Bryne

2010). A sample covariance matrix is calculated from the path coefficients using the

multiplication rule in path analysis: the effect size of a path is the product of its path

coefficients. The multiplication rule for any given model generates the implied matrix,

from which the actual covariance matrix is subtracted, yielding the residual matrix (Hair et

283

al, 1998). The smaller the value in the residual matrix, the better fitting the model. The

hypothesised model is shown in Figure 8.30.

Figure 8.30: Generated SEM Model


Figure 8.30 shows that the preliminary conclusions that can be drawn from this model

indicate that the Dynamic Market Landscape, Government and Challenges are predictors

on Strategy. The generated model confirmed the influence of Government (Factor Loading

= 0.54) as being greater than Dynamic Market Landscape (Factor Loading = 0.22) and

Challenges (Factor Loading = 0.31). The results of the overall fit are shown in Table 8.67

below.

Challenges


Chi-Square : 294.785

DF : 101

Ratio : 2.919

P Value : .000

GFI : .851

RMSEA : .097

Dynamic Market

Landscape

.43

Strategies

.22

.31

Government

.63

Policiese1

.79

.60

Incentivese2

.77

.53

Government

Rolee3 .73

.80

Independent

Regulatione4

.89

.54

.59

Positioning

e5

.77

.52

Capability

e6

.72

.56

Strategic

Intent

e7

.75

.70

Customer

Orientation

e8

.83

.47

Leadership

e9

.68

.50

Insight

e10

.71

.41

Trust

e11

.64

.45

Knowledgeable

Resources

e12

.67

.52

Market

Selectione13

.72 .50

Global

Outlooke14.71

.45

Risk e15

.67

.58

Network

Relationshipe16

.76

R01

284

Table 8.67: Goodness of Fit of Generated Model

GOODNESS OF FIT

CHI-SQUARE

CMIN2

DF RATIO

(CMIN/DF)

P VALUE GFI RMSEA

Generated

Model

294.785 101 2.919 0.000 0.851 0.097


A good model fit should result in the following values: P>0.05; GFI>0.90 and

RMSEA<0.08. Accordingly, the values in the generated model indicated a poor model fit.

While the model confirmed the influence of the three predictors on Strategy, it is based on

linear relationships and does not consider the interrelationships between the variables. The

generated model was tested again for the goodness of fit. This resulted in a re-specified

model which is discussed next.

8.6.1 Re-specified Model

The Re-specified model as shown in Figure 8.31 links the observed variables to the latent

variables. . The analysis of the data for each of the regression weights, and each construct

resulted in a P value of 0.000 which indicates that all the items were significant.

Additionally, the factor loading for each construct was >0.5 indicating convergent validity.

The data also revealed a correlation among the variables. The highest correlation is

between Challenges and Government which is estimated at 0.81, followed by Government

and Strategy estimated at 0.73 with the lowest correlation between Dynamic Market

Landscape and Strategy, estimated at 0.56. The variances explains the interaction among

the four variables and how well they fit to explain the propositions. The data revealed that

the highest variance was indicated by the Government Variable at 61.7% with Challenges

at 53.1% followed by Strategy at 47.6% with Dynamic Market Landscape registering a

variance of 38.1%.

285

Figure 8.31: Re-specified Model


Therefore, with the P value of 0.000 indicates that all items are significant and the data fits

the model as shown in Table 8.68 below.

Table 8.68: Goodness of Fit of Re-specified Model

GOODNESS OF FIT

CHI-

SQUARE

CMIN2

DF RATIO

(CMIN/DF)

P VALUE GFI AGFI NFI RMSEA

Generated

Model

94.898 98 0.968 0.570 0.946 0.925 0.945 0.000


Challenges


Chi-Square : 94.898

DF : 98

Ratio : .968

P Value : .570

GFI : .946

RMSEA : .000

Dynamic Market

Landscape

Government

Positioning

e5

.77

Capability

e6

.71

Strategic

Intent

e7

.78

Customer

Orientation

e8

.82

Leadershipe9

.69Insighte10

.70

Truste11 .65

Knowledgeable

Resourcese12

.66

.59

.81

.63

Strategy

Network

Relationship

e13

.81

Risk

e14

.72

Global

Outlook

e15

.76

Market

Selection

e16

.77

.70

.73

.56

Independent

Regulatione17

.89

Government

Rolee18

.72

Incentivese19 .76

Policiese20.81

286

Accordingly, the values in the Measurement model indicate convergent validity of the

model. All scores fell within the acceptable parameter of 0.7 and the P value is above 0.05

(Hair et al, 2010; Bryne 2010). The loadings of the measurements and GFI’s confirmed

the interaction among predictors on the outcome variable. The research succeeded in

supporting the fundamental findings of Challenges and Dynamic Market Landscape with

Government being a moderating factor on Internationalisation Strategy.

Hypothesis 1

The Dynamic Market Landscape influences Internationalisation strategy.

Hypothesis 2

Internationalisation Strategy is influenced by the Dynamic Market Landscape, the ability

to overcome Challenges.

Hypothesis 3

Challenges impact the successful international market penetration of Malaysian


Hypothesis 4

The Government plays a moderating role in the international market penetration of


8.7 Chapter Summary and Conclusions

This Chapter analysed the primary data from the web survey. It discussed the findings

from the descriptive and confirmatory stages. The quantitative data from the Web Survey

were tested for reliability and internal consistency using Cronbach’s Alpha. The data was

found to be reliable and was used in the confirmatory stage.

The confirmatory stage commenced with the use of multiple measures to test the goodness

of fit between the data and the model interrelations for each factor. CFA was conducted for

287

each of the four propositions, each respective variable and its component constructs. The

data fitted the model and the variables were confirmed as being relevant and valid for

testing in SEM. SEM created a Generated Model of Dynamic Market Landscape,

Challenges as predictors on Strategy and confirmed the influence of Government as a

moderating factor on Internationalisation Strategy.

288

Chapter 9 - Research Conclusions and

Implications

9.1 Introduction

This research investigated the critical issues for successful international market penetration

by the Malaysian telecommunications firms.

Chapter One introduced the research topic. It also laid the foundation for this research.

Chapter Two reviewed the literature pertinent to the research topic. These Chapter

focused on the theoretical foundation and explored the background theories of


Chapter Three reviewed the literature pertinent to the Global Telecommunications

industry.

Chapter Four reviewed the focus theory of the Malaysian telecommunications sector.

Chapter Five analysed the data that emerged from the literature review and identified a

theoretical model for this research. The analysis revealed several gaps in the existing body

of knowledge and these were the basis for the development of four research questions.

Chapter Six presented the methodology for this study. It justified the adoption of a mixed

methodology using qualitative and quantitative approaches. It also discussed the adoption

of a three-stage study comprising an exploratory stage, a descriptive stage and a

confirmatory stage.

Chapter Seven analysed the qualitative data from the personal interviews and refined the

preliminary theoretical model. The chapter concluded with the crafting of the research

propositions for the testing of the refined theoretical model.

289

Chapter Eight analysed the quantitative data from the web survey for the descriptive and

confirmatory stages of the research. The findings permitted the testing of the refined

model.

This final Chapter, Chapter Nine, with seven sections presents the research conclusions

and implications.

Figure 9.1: Structure of Chapter Nine


It has seven (7) Sections as shown in Figure 9.1. Section 9.1, provides an introduction and

overview of the chapter. Section 9.2 presents the conclusion on the research propositions.

The Chapter then proceeds to present the conclusions on the research problem. with

Section 9.3 discussing the reliability of the sample data and the variables. Section 9.4 sets

out the contribution of the research to new theory development and Section 9.5 discusses

the implications for policy and practice. Section 9.6 sets out the limitations of this

research. Section 9.7 discusses the opportunity for further research and Section 9.8

presents the summary and conclusions.

9.1: Introduction

9.2: Conclusions on Research Propositions

9.3: Conclusions about the Research Problem

9.4: Theory Development

9.5: Implications for Policy and Practice

9.6: Limitations

9.7: Implications for Further Research

9.8: Summary and Conclusions

290

9.2 Conclusions on the Research Propositions

This Section presents the conclusions from the analysis of the secondary and primary data

relating to each of the four research propositions. This was the first step for addressing the

research problems which is detailed in the next section.

9.2.1 Conclusions on Research Proposition 1

This Section summarises the findings on Research Proposition 1 which was stated as

“The dynamic changes in the global telecommunications industry have a strong influence

on the competitive strategies of Malaysian telecommunications firms”

The discussion takes into account the findings emerging from the analysis of the secondary

data in Chapter 5, the analysis of the data from the personal interviews, presented in

Chapter 7 and the analysis of the quantitative data from the web survey which was

discussed in Chapter 8.

Literature Review:

The literature review revealed that the telecommunications industry is undergoing

transformation with technological advances and market liberalisation generating intense

competition. telecommunications firms are compelled to review their strategies and

business models to address the issues of convergence, regulatory developments, changing

consumer demands and business transformation. (Laanti 2009; Ure 2009; Bain &

Company 2010; ITU 2012). The dynamic market landscape has also resulted in changing

consumer demands, shortening product life cycles, and consequently, increasing the

financial resource requirements for research and development to create new products and

services (Jacobs 2007; Mathews 2010; IBM 2011 Deloitte 2012).

The industry continues to witness mergers and acquisitions as firms strive to achieve

sustainable growth and explore international markets. The Malaysian telecommunications

landscape is dominated by pre-paid subscribers, largely from Generation Y who are

demanding data, content and value added services. The small market size, structural,

291

cyclical and institutional factors now compel Malaysian firms to actively internationalise

(Shankar 2006; Salazar 2007; Curwen & Whalley 2008; Asgari, Gurrib & Ahmad 2010;

BMI 2012). This challenging environment is eroding future earnings prospects and serving

as the push factor for telecommunications firms to seek new external markets for corporate

growth and sustainability

However, as discussed in Chapter 5, the available literature was silent on three important

research issues

i. whether Malaysian telecommunications firms that venture abroad are well

positioned to achieve sustainable competitive advantage in a rapidly changing and

liberalising global landscape in which there are a greater number of competitors

(Salazar 2007).

ii. the push factors that compel Malaysian telecommunications firms to

internationalise. These factors include intense domestic competition in a saturated

Malaysian domestic market that is leading to price wars and declining revenues

(Salazar 2007; Shankar et al 2010).

iii. the responses by Malaysian telecommunications firms to meeting changing

consumer demands which are now underpinned by data, speed and ubiquitous

connectivity (BMI 2012; Deloitte 2012) are providing new products and services

to meet changing consumer demands in the global marketplace.

These research gaps were addressed by the collection and analysis of the primary data

from the personal interviews and the web survey.

Personal Interviews:

The analysis of the responses to the issues that related to this Research Proposition

revealed that:

i) The global telecommunications market is undergoing dramatic changes fueled by

market liberalisation, mergers and acquisitions, technological advances and

292

increasing consumer demands for next generation networks which focus on both

voice services and data. The “fixed players were in survival mode” as the mobile

was dominating the sector. However, “voice revenue in the medium term was

declining and data was the future”.

ii) The dynamic changes in the global market are impacting on the Malaysian

telecommunications sector. Global market liberalisation and growing competition

in the domestic market are compelling the major Malaysian players to venture

abroad for long term growth and sustainability. “The Malaysian market is

saturated and for Malaysian telecoms firms to sustain their growth thee is a need

for them to internationalise”

iii) The interview participants had mixed views on whether Malaysian

telecommunication firms have the required strategic capabilities for successful

internationalisation. Some other participants cited the example of TM entering

several countries in Africa for political reasons under government-to-government

arrangements rather than for increasing revenues through strategic investments.

Accordingly, TM and subsequently Axiata incurred heavy losses which

necessitated its withdrawal from the African market and Iran. The interview

respondents were also divided on whether the firms were customer orientated for

long term sustainability. “If Malaysian firms had the capabilities then more firms

would have been successful in international ventures”.

iv) Malaysian telecommunications firms have to develop their knowledge base and

competencies in order to better position themselves to successfully venture into

foreign markets. This is also dependent on building and delivering the brand

promise and having access to adequate capital to finance their overseas ventures.

293

Web Survey:

As discussed in Section 8.2.21, the participants in the web survey expressed agreement to

all the four statements.

Table 9.1: Research Proposition 1 Response Pattern

Issues Literature

Review

Personal Interviews Web Survey

Dynamic Changes in the

Global Telecommunications

Landscape

Known Disagreed Mixed Views

Malaysian Telecommunication

Firms have Strategic

Capabilities

Silent Disagreed Mixed Views

Saturated Malaysian Domestic

Market is a Push Factor for


Silent Agreed Agreed

Malaysian Telecommunication

Firms are Customer Orientated

for Long Term Sustainability

Silent Disagreed Disagreed


Conclusion:

The response patterns to Research Proposition 1 from the perspectives of the literature

review, the personal interviews and the web survey are shown in Table 9.1. Based on

these, it can be concluded that “The dynamic changes in the global telecommunications

industry have a strong influence on the competitive strategies of Malaysian

telecommunications firms”. However, as voiced by interview participants, only two

Malaysian telecommunications firms have ventured overseas, This suggests that although,

well-intentioned, current efforts to adopt a market-orientated approach are not being

realised.



“Malaysian telecommunications have appropriate strategies for successfully

internationalising their operations”

294

The discussion takes into account the findings emerging from the analysis of the secondary

data in Chapter 5, the analysis of the data from the personal interviews which was

presented in Chapter 7 and the analysis of the quantitative data from the web survey which

was discussed in Chapter 8.

Literature Review:

The review discussed several theories and models relating to the internationalisation

strategies of telecommunications firms. These included the economic and process based

theories. While recent theories have incorporated the field of strategic management with

internationalisation (Kenny 2009; Laanti 2009; Mathews 2010), the internationalisation

strategies of telecommunications firms are variable (Curwen & Whalley 2008). The

network theory (Johanson & Mattsson 1988) was considered appropriate for this research

as it proposes that when a firm enters a foreign market, it entails international extension

penetration or international integration and coordination of networks (Johanson & Mattson

1988). Foreign market selection and timing of market entry are also important for firms.

(Evans & Mavondo 2002; Johanson & Vahlne 1977).

TM, the first Malaysian telecommunications firms that ventured abroad initially moved

into regional markets through the joint venture entry mode into Sri Lanka in 1994,

Bangladesh in 1995, Thailand 1997, and Cambodia in 1998, as these were psychically

close. The relative proximity and in most cases a cultural affinity provided comfort

(Ahmad & Hashim 2008).

However, there were gaps in the literature on whether the Malaysian telecommunication

firms:

i. had appropriate market selection strategies for venturing abroad.

ii. have a strategic global outlook for successful international ventures.

iii. take full account of the risk factors when deciding on market selection and entry

mode.

iv. have developed strong external networks and effective foreign partnerships for

successfully venturing into international markets.

295

These research gaps were addressed by the collection and analysis of the primary data

from the personal interviews and the web survey.


The analysis of the issues that related to this Proposition revealed common themes which

led to the following findings.

Internationalisation strategies of “Malaysian telecommunication firms were

motivated by opportunities emerging from the South-South Corporation and

bilateral trade relations rather than on strategic considerations. The absence of

sound strategies based on appropriate entry modes and timing of entry has resulted

in failure. This is reflected by TM’s entry and subsequent withdrawal from its

African operations as well as Axiata’s; the exit by Maxis from its Indonesian

operations and the withdrawal and the challenges faced by Axiata in India. These

cited examples reflect the need for Malaysian telecommunications firms to adopt

appropriate, strategic approaches to achieve sustainable long term growth.

Malaysian telecommunications firms that have entered international markets have

adopted varied strategies. However, they did not appear to have taken full account

of all risks factors in their internationalisation strategies as evidenced by the

difficulties faced by Maxis in India and in Indonesia.

Malaysian telecommunication firms have to review their product strategies in

international markets and emphasise on innovation to address the challenges of

convergence. Furthermore, product reviews and price regulations impact decisions

on timing and market entry as well as revenues and therefore the pace of

innovation (Bourreau & Dogan 2007).

Market selection is supported by psychic distance “for cultural reasons, and also

because of proximity advantages”. However, firms also have to consider foreign

ownership regulation and suitable network partners. Effective leadership is also

critical for creating and maintaining successful network relationships. “Leaders

296

with a global outlook seem to be able to guide their respective firms to compete

successfully”

Web Survey:

As discussed in Section 8.2.21, the web participants had mixed views on the four

statements that related to this Proposition. Statements 5 was strongly supported and there

were mixed views on statement 6 which had the themes of market selection and global

outlook respectively. As they disagreed with Statements 7 and 8, it can be concluded that

the internationalisation strategies of Malaysian telecommunications firms did not fully

address risk factors and the importance of effective network relationships.

Conclusion:


review, the personal interviews and the web survey are shown in Table 9.2. Significantly,

the interview participants disagreed on whether Malaysian telecommunications firms took

full account of all risks factors in their internationalisation strategies. The Web Survey

participants also had mixed views on the statements related to this Proposition. It can be

concluded that there was mixed support for Proposition 2. This is reflected by only two

firms entering achieving some success in international markets.


Issues Literature

Review



prefer emerging countries as

investment destinations.

Inadequate Agreed Agreed


have appropriate strategies for

successful international ventures.



take full account of all risk factors in

their targeted international markets.



have strong external networks for


Silent Mixed Disagreed


297



“Malaysian telecommunications firms that are internationalising their operations face

significant challenges”

The discussion takes into account the findings of the literature review in Chapter 3, the

analysis of the data from the personal interviews which was presented in Chapter 5 and the

analysis of the quantitative data from the web survey which was discussed in Chapter 6.

Literature Review:

As detailed in Chapter 3, the literature revealed “that many telecoms companies are

confronting the dual challenges of a maturing industry and an increasingly ‘tech savvy’

consumer base. (Ure & Lovelock, 2009, p.3). They also have to address the challenges of

effective leadership, global mindsets, access to financial resources; network externalities;

network relationships; knowledge about markets; knowledgeable resources to operate in

international markets, regulatory changes, the ability to understand diversifying cultures

and investments in R&D for new products and services to meet customer preferences

(Curwen & Whalley 2008; Abang 2009; Laanti 2009; Hansen 2010; Khoo 2011; MCE

2011).

However, there were limited literature on the challenges faced by Malaysian

telecommunications firms venturing abroad. The resulting research gaps were addressed

by the collection and analysis of the primary data from the personal interviews and the

Web Surveys.


The analysis of the responses to the issues that related to this Proposition revealed

common themes and these led to the following findings:

i. Malaysian telecommunications firms that have entered international markets face

several challenges. A significant one is effective leadership with international

298

experience to address the critical issues that impact on successful international

market penetration.

ii. Reputational advantage and brand development are important success factors when

competing in overseas market. However, Malaysian telecommunications firms

have yet to develop their brand names in international market.

iii. a firm’s success in international ventures includes the rapid pace of technological

development and evolving consumer demands. Convergence is presenting

challenges and requires financial commitments for R&D and marketing. Therefore,

firms need to engage with partners who employ a customer-orientated philosophy

to deliver the brand promise and are committed to ongoing technological

advancement.

iv. Successful international market penetration also hinges on Malaysian

telecommunications firms having capable staff who have the ability to manage

diverse cultures and build effective relationships. They should also have a global

outlook for establishing effective network partnerships where knowledge,

information and resources can be shared. “it is an individual’s integrity that we

rely on”.

Web Survey:

As discussed in Section 8.2.21, the web survey participants generally agreed with

Statements 9 and 10 which indicates that Malaysian telecommunications firms have

capable leadership and give adequate emphasis to research and development. However,

they were not supportive of Statements 11 and 12 which related to Malaysian

telecommunications firms having reputational advantage and qualified staff.

Conclusion:



the interview participants were of the view that Malaysian telecommunications firms

299

provide inadequate emphasis to research and development and do face challenges in

international markets. Furthermore, they do not benefit from brand advantage and qualified

staff for competing effectively in overseas market.

Factor analysis of the constructs of Knowledgeable Resources, Trust, Insight and

Leadership, which together establish the variable Challenges, confirms that the constructs

of this variable influence successful international market penetration. Therefore, the

likelihood of achieving success in international markets will be greatly increased if these

challenges are addressed.

Since the web survey participants also had mixed views on the statements related to this

Proposition, it can be concluded that there was moderate support for Proposition 3.


Issues Literature

Review



have capable leadership for




give adequate emphasis to research

and development.

Silent Disagreed Agreed


have reputational and brand

advantage for competing in overseas

markets.



have qualified staff for international

markets.





“The Malaysian Government is fully supportive of the efforts of the Malaysian

telecommunications sector to internationalise their operations.”

300

The discussion takes into account the findings emerging from the literature review in

Chapter 5, the analysis of the data from the personal interviews which was presented in

Chapter 7 and the analysis of the quantitative data from the web survey which was

discussed in Chapter 8.

Literature Review:

The Malaysian Government recognises the strategic importance of the telecommunications

sector which benefit from neo – liberal reform and technological advances (Ure 2000;

Salazar 2007). The General Framework for Interconnection and Access (GFIA) in 1996 is

aimed at providing efficient services at low prices (Ure 2000). The Framework provides

for the operational guidelines and principles for the interconnection between Malaysian

telecommunication networks with the benefit of externality. The National IT Agenda

(1996) and the National Telecommunication Policy (1994 - 2020) create a well regulated,

open and competitive telecommunication market (Poh 2007; NTIC 2010).

Despite the laudable aims of the Government’s policy and initiatives, the benefits were

eroded by the new economic policy and the privatisation policy, which as discussed in

Section 4.2, were directed at ensuring that the Malay community dominated the

telecommunications sector (Kitchen & Ahmad 2008). Furthermore, political liberalisation

appeared to be a driver for the liberalisation of the industry in which rent seekers played

central roles (Salazar 2007).

However, the literature was relatively silent on the effectiveness of the Malaysian

Government’s policies to support the internationalisation efforts of Malaysian

telecommunications firms. These gaps in the literature were addressed by the collection

and analysis of the primary data from the personal interviews and the web survey.


The analysis of the responses to the issues related to this proposition revealed common

themes and these led to the following findings:

301

i. The telecommunications sector is viewed as an important sector by the Malaysian

Government for export earnings and socio-economic development. However, the

Government has to play a proactive role and establish an institutional setup that is

suited to support Malaysian telecommunications firms with their international

ventures.

ii. The Government has policies and several incentives to support the sector.

However, they are perceived to be discriminatory ““more needs to be done to

educate the market on availability of funds, which should not be restricted to

Bumiputeras”. While Malaysia was perceived to be innovative in its regulatory

policies in the late 1990’s the country has since lagged in its implementation of

independent regulation, consumer protection and transparent licensing.

Web Survey:

As discussed in Section 8.2.21, the web survey participants generally disagreed with two

of the four statements related to this Proposition. Although they expressed some support

for the Statement that the Government had the administrative machinery to support the

efforts of the sector, it can be concluded that the Malaysian Government’s policies were

inadequate to support the internationalisation efforts of Malaysian telecommunications

firms.

Conclusion:



the interview participants were not supportive of all the four statements that related to this

Proposition. Although the Web Survey participants had mixed views, it can be concluded

that this Proposition was rejected. Factor analysis of the constructs of Independent

Regulation, Governments Role, Incentives and Policies which together establish the

variable Government confirms that this variable acts as a moderating variable influencing

Malaysian telecommunications firms success in international markets. Therefore,

internationalisation efforts can be greatly increased by Government incentives or policies

302

as well as Governments role in supporting Malaysian firms venturing overseas to be

reviewed.


Issues Literature

Review


The Malaysian Government has

supportive policies for



The Malaysian Government has

adequate measures and incentives to

support the growth of Malaysian



The Malaysian Government plays a

proactive role for supporting the

internationalisation efforts of

Malaysian telecommunications

firms.


The Malaysian Government has a

strong administrative machinery to

assist Malaysian telecommunications

firms in their international ventures.

Known Disagreed Agreed


9.2.5 Summary

This Section examined the findings of the data analysis that were discussed in chapters 5,

7 and 8 and presented the conclusions on each of the four propositions. These were based

on the views expressed by the participants in the personal interviews and the findings that

emerged from the web survey during the descriptive stage of the research.

The next Section draws conclusions developed during the research.

9.3 Conclusions About The Research Problem

This Section discusses the findings emerging from the research on to the Research

Problem which was developed in Chapter 5 and stated as ‘Addressing the critical issues

for successful international market penetration by the Malaysian telecommunications

firms. ’

303

The literature review in Chapter Two identified the key research issues and the pertinent

theories that underpinned the parent and immediate disciplines of the research. The

findings of earlier scholarship and related research revealed that:

The Malaysian Government recognises the strategic importance of the

telecommunication sector as evidenced by the reforms that were made (Ure 2009,

MCMC 2011; Pyramid 2011).

The domestic market is reaching saturation and the Malaysian telecommunications

firms face the challenges of increased competition, price wars and declining

revenues. These compel them to seek new external markets for growth and

sustainability (Salazar 2007; Curwen & Whalley 2008).

The lowering or the removal of the barriers of the entry, resulting from Malaysia’s

participation in the WTO, ASEAN and bilateral free trade agreements have also

encouraged Malaysian telecommunication firms to venture abroad (Salazar 2007).

The critical success factors for successful international market penetration require

Government support and policies which addresses the challenges faced by

Malaysian telecommunications firms internationalisation. These should support all

firms instead of a selected well connected Bumiputeras (Salazar 2007).

The ability of leaders to overcome challenges as well as respond to the dynamic

market landscape are critical to successful international market penetration by


304

Table 9.5: Summary of Research Propositions Conclusions

Research Proposition Summary Conclusion

Research Proposition 1

The dynamic changes in the global

telecommunications industry have a strong

influence on the competitive strategies of


Supported. Moderate

While it is perceived that many firms are

aware of the external dynamic

environment, few firms have the strategic

capabilities to translate the impact of the

external environment into competitive

advantage.


Malaysian telecommunications firms have

appropriate strategies for successfully


Supported. Moderate

Malaysian telecommunications firms that

have internationalised have appropriate

strategies. However, only two

telecommunications firms have

internationalised their operations

successfully. Firms fail to adequately

address the risk factors including market

selection, timing of entry and the ability to

build sustainable relationships.


Malaysian telecommunications firms that

are internationalising their operations face

significant challenges

Supported.


internationalising their face significant

challenges in international markets. These

include leadership and the ability to

compete in global markets.


The Malaysian Government is fully

supportive of the efforts of Malaysian

telecommunications firms that are


Not Supported.

The Government has several policies to

support international trade and the

telecommunications sector. However, these

are perceived to be discriminatory and

Government efforts do not address the

challenges faced by Malaysian

telecommunications firms in international

markets.


305

Notwithstanding, the existing body of knowledge was relatively silent on several key

issues that influence the successful internationalisation of Malaysian telecommunications

firms. The resulting research gaps were presented in Table 5.1 and are summarised as

follows.

i) The competitive positioning of Malaysian telecommunication firms under the

WTO and the adequacy of national legislation.

ii) The competencies, expertise and strengths of Malaysian telecommunication firms

for operating successfully in global markets.

iii) The Malaysian Government support policies for the export of telecommunications

services.

iv) The strategies adopted by Malaysian telecommunication firms for venturing

abroad.

306

Table 9.6: Findings on Research Gaps

Research Issues

Prior Literature

Research Gaps

Findings

Malaysian Economic Policies

Adequate

Internationalisation Theories

Adequate

Trends in the Global Telecommunication Industry

Adequate

The Malaysian Telecommunication Industry

Adequate

Competitive positioning of Malaysian Telecommunication Firms under WTO

National legislation

Inadequate

Inadequate

Yes

Yes

Yes

Yes

Competences, expertise and strengths to compete in world markets

Inadequate Yes Yes

Industry preparedness for internationalisation

Inadequate Yes Yes

The Malaysian Government’s support policies and programmes for the export of telecommunication services

Adequate

Adequacy of Malaysian Government support policies and programmes for Telecommunication exports.

Effective Policy frameworks

Inadequate

Inadequate

Yes

Yes

Yes

Yes

International promotion Inadequate

Yes Yes

Support schemes Inadequate Yes Yes

Appropriate strategies for venturing abroad

Strategy adoption for SCA

Inadequate

Inadequate

Yes

Yes

Yes

Yes

Competent staff with global mindsets

Effective leadership

Inadequate

Inadequate

Yes

Yes

Yes

Yes


307

The research gaps led to the development of the Research Propositions that were tested

during the descriptive stage by this research. Qualitative and quantitative data were

collected through personal interviews and a web survey. The analysis of the literature

review as well as the qualitative and quantifiable primary research data, yielded

comprehensive and useful insights on the research gaps as set out in Table 9.5. These

underline the relevance of the Research Problem.

9.3.1 Summary

This Section summarised the findings of this research and matched them with the gaps in

the existing literature. The research findings enabled the research gaps to be bridged and

permitted the reaffirmation of the relevance of the Research Problem. The next Section

discusses the implications of this research on theory development.

9.4 Contribution and Theory Development

There have been several studies on internationalisation of telecommunications firms,

however, much of this previous work has been focused on perspectives of established

MNCs from developed economies. This study focused on addressing the critical success

factors that impact successful international market penetration. Accordingly, this research

has implications for Malaysian telecommunications firms seeking growth in international

markets.

As discussed in Section 6.2.2, this research adopted a mixed methodology. The qualitative

and exploratory stage was dominant since the research relied heavily on the secondary data

from the literature review and the primary data from the personal interviews. Accordingly,

this research fits into the interpretive paradigm and provides useful insights for theory

building (Perry 1995).

The literature review identified the pertinent theories, as listed below, for the

internationalisation of Malaysian telecommunications firms.

i) The resource based view.

308

ii) Stage models of internationalisation.

iii) Network approaches to internationalisation.

iv) The flagship firms.

v) The strategic states model.

The network approach which proposes a more behaviourial approach to the

internationalisation of a firm was considered to be appropriate for this study. This is

discussed in Section 2.7.3.1 and depicted in Figure 2.7.

A key objective of the first and exploratory stage of the study, was to refine the network

model on the basis of the views expressed by the participants of the personal interviews.

The findings revealed that the network model warranted amendment to take account of

four important factors. These were strategy, challenges, the dynamic market landscape and

the role of Government. These factors were incorporated into the preliminary theoretical

model and the outcome was a refined network model which was shown in Figure 7.2.

The refined model was then tested by a web survey during the descriptive stage of the

research. As discussed in Section 6.6.3, the third and confirmatory stage of this research

involved the generation of an SEM model, shown in Figure 8.31 which was based on the

four variables of Strategy, Challenges, the Dynamic Market Landscape and the role of

Government. The research identified the Dynamic Market Landscape, Government and

Challenges are predictors on Strategy. The generated model also confirmed the influence

of Government being greater than the Dynamic Market Landscape and Challenges. The

relationships between these variables in the context of the network model that was

identified as being most appropriate for this research were examined and the findings, as

shown in Figure 9.2, revealed that:

i. “Strategy” is the dependent variable and central to the successful adoption and use

of the network model for Malaysian telecommunications firms venturing into

overseas markets.

309

ii. “Dynamic Market Landscape” is an independent variable with a positive and a high

direct significant influence on Strategy, the dependent variable.

iii. “Challenges” is the second independent variable. It also has a positive influence

and direct influence on Strategy.

iv. “Government” is the moderating variable and the role of Government leads to the

“dynamic market landscape” having a higher influence on strategies as compared

to “challenges”.

Figure 9.2: Relationship between the additional variables to the Network Model

generated by the SEM Model


Domestic

Operations

Dynamic Market

Landscape

Independent variables

Positioning

Moderating variables

International

Operations

Capability

Strategic Intent

Customer

Orientation

Dependent variable

Challenges

Trust

Knowledgeable

Resources

Insight

Leadership

Strategy

Market

Selection

Global Outlook

Risk

Network

Relationships

Government

Policies

Incentives

Role

Independent

Regulation

310

The specific contribution of this research extended the literature by identifying a more

precise understanding of the critical issues and complex inter-relationships impacting

internationalisation of Malaysian telecommunications firms. This allows recommendations

to be made for addressing the critical issues for successful internationalisation by

Malaysian telecommunications firms and the Malaysian Government.

A generalised contribution of this research is a modified network model for

internationalisation defining the attributes that require consideration to meet the dynamic

market landscape and address the challenges for successful internationalisation. The

constructs identified are empirically supported and provide a deeper understanding of the

inter-relationships. The evidence supported Government as a moderating variable.

9.5 Implications for Policy and Practice

As stated in Section 1.4, this research was justified on the grounds that the findings could

offer recommendations for improving the policies and programs of the

Malaysian Government for supporting the internationalisation efforts of

Malaysian telecommunications firms It highlights the need for good business

practices that meet international expectations.

lead to recommendations on appropriate corporate strategies for successful


Accordingly, this Section offers recommendations based on the findings of the research, to

support the efforts of the Malaysian telecommunications firms to successfully compete in

international markets. As these recommendations are for consideration by the government

policy makers and Malaysian telecommunications firms, this Section has two parts. The

first relates to public policies and the second, offers recommendations for consideration by

the Malaysian telecommunications firms.

311

9.5.1 Implications for Policy

The research findings revealed that the Malaysian Government has to provide effective

policy support for Malaysian telecommunications firms that are export ready or already

operating in overseas markets. In this regard, six areas merit critical review.

i) Supporting Malaysian telecommunications firms with their internationalisation

efforts.

ii) Addressing the human capital needs of Malaysian telecommunications firms.

iii) Encouraging the development of an R&D culture for new products and service

offerings to meet changing customer preferences.

i) Supporting Malaysian telecommunications firms with their internationalization

efforts

The Malaysian Government recognises the strategic importance of the telecommunication

sector for the country’s social and economic development (Ure 2000). Several reforms

have been undertaken over the past two decades which are aimed at encouraging

competition and improved quality of services at reasonable cost (Salazar 2007; Sivalingam

2007).

The findings of the literature review and primary data analysis revealed that the domestic

market is reaching saturation and the resulting challenging environment is eroding future

earnings prospects. This requires firms to move into new external markets for corporate

growth and sustainability. However, the dynamic changes in the global

telecommunications industry also create challenges for Malaysian telecommunications

firms. They have to contend with the issues of convergence, regulatory developments,

changing consumer demands and business transformation. Accordingly, this Section offers

recommendations on a prioritised basis on the findings of the research. The aim is to

support the efforts of the Malaysian telecommunications firms to successfully compete in

international markets. As these recommendations are for consideration by the Government

policy makers and Malaysian telecommunications firms, this Section has two parts. The

312

first relates to public policies and the second, offers recommendations for consideration by

the Malaysian telecommunications firms.

formulate and implement measures that are specifically designed to encourage

telecommunications firms to devise appropriate strategies for successful international

market penetration.

support the international operations of Malaysian telecommunications through the

Malaysian External Trade Development Corporation (MATRADE), the Government

agency responsible for export promotion.

work closely with the Malaysian telecommunications firms to inform them of the

opportunities for overseas investments with the implementation of WTO, the ASEAN

Free Trade Area and bilateral free trade agreements.

.

ii) Addressing the human capital needs of Malaysian telecommunications firms

As discussed in Sections 2.6.1 and 2.6.4, gaining competitive advantage is dependent on

the firms’ ability to attract a quality workforce categorised by intelligence, motivation,

creativity, commitment, analytical abilities and computer skills (Johansson & Larson,

2000). Malaysian telecommunications firms entering foreign markets must be knowledge

based (Gibbons et al, 1994; Ellis & Pecotich 2001). Specialised technical and professional

knowledge along with the ability to analyse and respond to market and customer needs are

critical to compete in the global arena (Homann, Koslowski & Luetge 2007).

However, Malaysia faces a shortage of knowledgeable and skilled resources (Khoo 2011;

Wahab 2011). In order to address the situation, the Government has to

give priority attention to human capital development to overcome the shortage of

knowledge workers.

align the industrial training system with the public training institutions with the aim

of making the training programmes and content more global market driven.

313

review foreign labour hiring policies in order to give Malaysian

telecommunications firms more latitude to recruit talented and experienced

expatriate staff to assist them with their internationalisation efforts.

iii) Encouraging the development of an R&D culture for new products and service

offerings to meet changing customer preferences.

Growing consumer demands for more choices of products and services have triggered

growth of social media channels, smart phones, SMS and Multimedia Messaging Service

(MMS). Telecommunications operators and related industry players therefore have to

offer new products and services to maintain customer loyalty. They also have to unlock

customer value through the delivery of innovative, multi-media rich services (EY 2010;

Bain & Company 2010; MCMC 2010).

New products and services however, require increased investments in R&D (Laanti 2009;

EY 2010; IBM 2010). The research findings indicated that Malaysian industry generally

lacks a research culture. This is also reflected by Malaysia having only a limited number of

researchers and spending only 0.64% of the annual GDP or MYR3.9 billion on research.

Malaysia needs to increase the R&D expenditure to 2.5% of GDP to meet the international

recommendations for sustainable technological innovation (The Star, 9 April, 2010).

In order to improve the situation, it is suggested that the Government

expand its support for the R&D activities undertaken by Malaysian

telecommunications firms through financial incentives and tax relief for R&D

expenditure.

encourage Malaysian telecommunications firms to engage closely with national

research institutions on their research endeavours for creating customer orientated

products and services.

encourage university linkages with the Malaysian telecommunications industry to

foster greater collaboration on R&D activities.

314

9.5.1.1 Recommended Policy Changes for the Successful

Internationalisation of Malaysian Telecommunications Firms

The earlier Section offered suggestions for consideration by the pertinent Malaysian

Agencies in respect of (i) Malaysian telecommunications firms overcoming the challenges

that impact upon their internationalisation efforts. (ii). Human capital developing and (iii)

fostering an R&D culture for new telecommunications products and services.

The findings of this research also point to a continuing need for the Government to

critically review the implementation aspects of the National Telecommunications Policy

(NTP) which was directed at reforming the telecommunications sector. As discussed in

Section 4.4, the benefits of are largely offset by the NEP and the Privatisation Policy

which were introduced to accelerate Bumiputera participation in the economy through

preferential treatment in in all aspects of business and industry. As these included the

issuance of new licences or permits in the telecommunications sector, it has created ‘rent-

seekers’ and hindered competition and growth (Salazar 2007; East Analytical Unit 1995).

Since Malaysian Telecommunications firms have to remain competitive in a dynamic and

challenging international marketplace, it is recommended that the Malaysia Government

critically review existing policies in order to create a more level playing field for all


The findings also revealed that the WTO Basic Telecommunications Agreement has

accelerated the pace of liberalisation in the global telecommunications market. However,

the Malaysian Government has yet to commit itself fully to the sections of the agreement

relating to the unbundling of the local loop. As a consequence TM continues to hold a

monopoly of the national network and is in a position to determine pricing and quality of

service.

9.5.2 Implications for the Malaysian Telecommunications Firms

The findings of the literature review, the personal interviews and the web survey revealed

dynamic changes in the global telecommunications industry. The domestic industry is also

315

undergoing much change with the emergence of new players, regulatory developments and

changing consumer demands (Bain & Co, 2010; Laanti 2009; Ure 2009). Industry players

are under pressure to meet on going demands for data, speed and ubiquitous connectivity.

Furthermore, low switching cost creates the challenge of creating customer loyalty

(Matthews 2010; Deloitte 2012). The small market size, structural, cyclical and

institutional factors now compel Malaysian firms to actively internationalise (Curwen &

Whalley 2008; Shankar 2006). Viewed in this context, the findings suggest that Malaysian

telecommunications firms:

benefit from effective leadership

adopt a strategic global outlook

hire staff with international business skills

develop strong external business networks

i) Effective Leadership

As discussed in Sections 2.6.1 and 5.2.2.3, effective leadership is important for shaping

and executing company strategies (Curwen & Whalley 2004). Strong leadership with a

global mind set are intrinsic for a firm to be successful. Success in the dynamic global

telecommunications landscape requires Malaysian leaders who are knowledgeable, agile

and able to adapt to the changing environment (Bhagat 2007; Carayol 2009). They should

also have the ability to identify opportunities for overseas investment, determine timing of

entry, the market entry mode, manage risk, communicate effectively, build a customer

orientated culture (Stoian & Rialp-Craido 2010). However, notwithstanding exposure to

diversity, cultural integration and often international education, there is a shortage of

Malaysian leaders with global mindsets (World Bank 2011). Furthermore, leadership

positions, in line with the New Economic Policy that favours Bumiputeras has often

resulted in leadership positions being based on quota system and not competencies.

In order to improve the situation, the findings of this research suggest that the Malaysian

telecommunications firms that venture abroad should:

316

engage leaders, regardless of country of origin, with a demonstrated competence to

understand different value systems, physical issues, address risks as well as be

sensitive to cultural differences.

be led by leaders with global mindsets which includes a positive attitude to global

business, local and international developments as well as an understanding of

organisational standards and processes.

appoint CEOs with the necessary professional and personal attributes to lead large

corporations. Such appointments must be on the basis of merit through an open

international recruitment system devoid of political influence and nepotism.

The fundamental nature of competition in many of the world’s industries is changing

(Tapscott 2001). due to the continuous globalisation of the world’s markets. This has

changed the telecommunications landscape (Contractor & Lorange 2002; Sanchez-Lorda

2008; Accenture 2010; McKinsey 2012). The dynamic situation points to the need for a

global management team with a global vision, culture and the skills to formulate

appropriate global strategies for obtaining best cost and market advantage (Lussier, Baeder

& Corman 1994).

Accordingly, it is suggested that the Malaysian telecommunications firms:

hire management teams with a global vision and culture with an ability to select

country targets strategically rather than opportunistically.

design global products that take consumer differences into account and develop global

brands.

i) adopt a strategic global outlook

The fundamental nature of competition in many of the world’s industries is changing

(Tapscott 2001). This is due to the continuous globalisation of the world’s markets fuelled

by the WTO. The outcome is increased competition with telecommunications operators

having to contend with the challenges of convergence, regulatory developments. Changing

317

consumer demands and business transformation. Industry players are also under pressure

to meet consumer demands for data, speed and connectivity in order to maintain customer

loyalty.

These dynamic changes in the global telecommunications industry which have to be

addressed by Malaysian telecommunications firms. (Contractor & Lorange 2002; Sanchez-

Lorda 2008; Accenture 2010; McKinsey 2010). The situation points to the need for a

global management team with a global vision, culture and the skills to formulate

appropriate global strategies for obtaining best cost and market advantage (Lussier, Baeder

& Corman 1994). The team should also have competencies to identify opportunities for

growth and profitability with market potential as well as to review their value chains due to

new market entrants, infrastructure and equipment suppliers, MVNO’s and media players

Accordingly, it is suggested that the Malaysian telecommunications firms hire

management teams with:

a global vision and culture with an ability to select country targets strategically

rather than opportunistically.

demonstrated competencies to closely monitor changing consumer needs and to

unlock customer value through the design and delivery of innovative global

products and innovative multimedia rich services

iii) knowledge based professional management structures

Knowledge is a key for business and corporate success (Nonaka & Teece 2001; Stehr

2005). Gaining global competitive advantage is dependent on the firms’ ability to attract a

quality workforce categorised by intelligence, motivation, creativity, commitment,

analytical abilities and computer skills (Johansson & Larsson 2000). This also underlines

the importance of developing managers who are capable of formulating and managing

strategy the division, national and international level (Curwen & Whalley 2004).

It is necessary for Malaysian telecommunications firms entering foreign markets to be

knowledge based (Gibbons et al 1994; Ellis & Pecotich 2001). These have to be

318

underpinned by flexible, professional management structures, policies, procedures and

processes that enhance competitive positioning (Tan 2008; David, 2005 cited in Abang

2009).

Accordingly, it is suggested that Malaysian telecommunications firms:

establish organisational management structures with specialised technical and

professional knowledge that are able to analyse and respond to market and customer

needs in the global arena.

map their knowledge resources and capabilities against their strategic opportunities and

threats for determining what knowledge should be developed or acquired.

iv) develop strong external business networks

The network approach involves interactions and relationships between firms in the

internationalisation process (Foster & Karin 2002; Johanson & Vahlne 1990). The

assumption of the network model is that an individual firm is dependent on skills and

resources from another firm, and firms are motivated to engage and establish partners in

their networks to gain access to required resources through exchange relationships

(Whalley 2001).

The participants in the web survey and the personal interviews were of the view that

network relationships are critical for venturing abroad. They also considered it important

to work with partners with similar values and who are keen to build long term relationships

on the basis of trust and commitment.

Accordingly, it is suggested that Malaysian telecommunications firms:

emphasise on social interactions and personal contacts for developing significant cross

country networks based on integrity and trust in order to build long term sustainable

partnerships.

319

utilise networks for gaining access to physical infrastructure in the target overseas

markets and use the network relationships to expand the customer base.

9.6 Limitations

Some limitations associated with this research were identified in Chapter 1. During the

course of this research, four other significant limitations became apparent.

First, the use of a mixture of judgment and quota sampling for the selection of the

participants for the personal interviews and the web survey. As discussed in Chapter 6, this

was considered necessary because of cost constraints. The use of quota sampling could

also have resulted in “researcher bias” and eroded the trustworthiness of the research.

Second, the sensitive and confidential nature of some of the questions that were posed to

the participants in the personal interview and the web survey. This may have constrained

some of the participants to express their candid views.

Third, the staff of the telecommunications firms that participated in the personal interviews

occupied senior management positions. However, their views may not necessarily be fully

reflective of the positions taken by their organisations.

Fourth, the draft thesis was completed in March 2012. It was therefore not possible for the

researcher to take full account of the developments in the dynamic telecommunications

sector after that date.

9.7 Implications for Further Research

This research was aimed at “Addressing the critical issues for successful international

market penetration by Malaysian telecommunications firms ”. It presented a pre-

paradigmatic body of knowledge that required inductive theory building. Furthermore, this

research was largely exploratory and preliminary in nature and this provides opportunities

for further research on areas related to the internationalisation of telecommunications

firms. This final Section of the thesis outlines two suggestions for further research.

320

The first is a follow up study with a larger survey sample size to confirm the validity of the

SEM Model that was generated during the quantitative and confirmatory stage of this

research. This was discussed in Section 7.4. The findings could provide more insights on

the relationship between the identified additional variables relating to the relevance of the

network model for the successful internationalisation of Malaysian telecommunications

firms.

The second is a replication of the study in neighbouring countries where

telecommunications firms are important drivers of economic growth. The findings could

contribute to the scholarship on the internationalisation of telecommunications firms from

a regional perspective.

9.8 Summary and Conclusions

This final Chapter summarised the conclusions based on the research findings for each of

the four Research Propositions and the Research Problem, reaffirming that

internationalisation is a complex process, particularly in emerging markets. It reaffirms

that the Malaysian Government recognises the strategic importance of the

telecommunications sector for the country’s social and economic development (Ure 2000).

The study revealed and discussed the support for 3 of the 4 propositions and confirmed

that network relationships are critical to succeeding in foreign markets. It then discussed

the implications of the findings and their contributions to theory development.

Recommendations were also offered for consideration by Government policy makers and

the senior management of Malaysian telecommunications firms. The role of Government

continues to be a critical factor in the internationalisation process, both host and home

markets. The Chapter then discussed the limitations that emerged during the course of the

research and outlined the opportunities for further research.

321

BIBLIOGRAPHY

ABANG, N. D. (2009). The Critical Success Factors for the Effective Performance of

Malaysian Government Linked Companies. DBA, Southern Cross University,

Australia.

ACCENTURE. (2008). BELLIN, J.B. & PHAM, C.T. Global Mindset: An Overview.

[Online]. Available:

http://www.accenture.com/SiteCollectionDocuments/PDF/ACC_3780_rn_global_mi

ndsets_022508FINAL.pdf . [Accessed 10 April 2010].

ACCENTURE. (2010). What are Telco’s Waiting For? Outlook Journal 2010.

ACCENTURE. (2010). Who is Taking your business across borders? Harnessing human

capital for successful regionalisation in Asia [Online]. Available:

http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Who_is_Takin

g_Your_business_Across_Summary.pdf. [Accessed 3 January 2011].

ADALI, S., R. ESCRIVA, M.K. GOLDBERG, M. HAYVANOVYCH & M.MAGDON-

ISMAIL (2010). Measuring behavioral trust in social networks. Proceedings of

the IEEE International Conference on Intelligence and Security Informatics (ISI),

May, 23-26. IEEE Xplore Press, Vancouver, BC, Canada,

ADHAM, K.A., SAID, F.M., RAMLEE, S. & HANNINEN, S. (2008). ePay Malaysia:

Asian Expansion and Challenges. Asian Journal of case Research, 1 (2), 101-129.

AHARONI, Y. & NACHNOMI, L. (2000). Globalisation of Services: some implications

for theory and practice. London: Routledge.

AHMAD & HASHIM (2007). Internationalisation of MNCs from Developing Economies:

Case of Malaysia’. International Review of Business Research Papers, 3 (5), 1-20.

AHMAD, S.Z. (2008). The Internationalisation Process of Third-World Multinational

Firms: A Study of Malaysia Government linked corporations. International Journal

of Business Research, 8 (5), 35-47.

AHOKANGAS, P. (1998). Internationalisation and Resources: An analysis of Process In

Nordic SME’s. Doctoral Dissertation, Universitas Wasaensis, Vaasa.

AIRCEL (2012) . Available: http://aircel.com

[Accessed 30 November 2012]

ALAM, Q., YOUSOF, M. A. & COGHILL, K. 2010. Unilateral Liberalisation and WTO

and GATS commitments: the telecommunications sector in selected countries. Asia-

Pacific Economic Literature, 24 (1), 43-64.

ALI, A. (2000). Globalisation of Business Practice and Theory. New York: International

Business Press.

http://www.accenture.com/SiteCollectionDocuments/PDF/ACC_3780_rn_global_mindsets_022508FINAL.pdf

http://www.accenture.com/SiteCollectionDocuments/PDF/ACC_3780_rn_global_mindsets_022508FINAL.pdf

http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Who_is_Taking_Your_business_Across_Summary.pdf

http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Who_is_Taking_Your_business_Across_Summary.pdf

http://aircel.com/

322

ALCATEL-LUCENT (2012). The Coming Carrier Network Infrastructure: A very

different landscape. Strategic White Paper, Alcatel-Lucent.

ALSAGOFF, S. A. & HAMZAH, A. (2007). Media Convergence Environment: Conflicts

and Challenges. The Malaysian Experience. WCA 2007, Conference paper,

Brisbane, Australia. July 2007.

AMIT, R. & SCHOEMAKER, P. J. (1993). Strategic Assets and Organisational Rent.

Strategic Management Journal, 14 (Jan), 33-46.

ANDAYA, B.W. & ANDAYA, L.Y. (1982). A History of Malaysia. Hong Kong:

MacMillan Education.

ANDERSEN, O. (1993). On the Internationalisation of The Firm: A Critical Analysis.

Journal of International Business Studies, 24 (2), 209-231.

ANDERSEN, O. (1997). Internationalisation and Market Entry Mode: A Review of

Theories and Conceptual frameworks. Management International Review, 37, 27-42.

ANDERSEN, O. & BUVIK, A. (2002). ‘Firms’ Internationalization and Alternative

Approaches to the International Customer Selection. International Business Review,

11, (2), 347-363.

ANDERSON, E. & GATIGNON, H. (1986). Modes of Foreign Entry; A Transaction Cost

Analysis and Propositions. Journal of International Business Studies, 17, 1-26.

ANDERSON, J. & GERBING, D. (1988). Structural Equation Modeling in Practice: A

Review and Recommended Two-Step Approach. Psychological Bulletin, 103, 411-

423.

ANDERSSEN, S. (2000). The Internationalisation of The Firm From an Entrepreneurial

Perspective. International Studies of Management & Organisation, 30 (1), 63-93.

ANDERSSON, S. & WICTOR, I. (2003). INNOVATIVE Internationalisation in New Firms:

born globals – the Swedish case. Journal of Small Business and Enterprise

Development, 13 (4), 249-276.

ANTONCIC, B. & HISRICH, R.D. (2000). ‘An Integrative Conceptual Model’ In DANA,

L. (Ed.). Global Marketing Co-operation And Networks. New York: International

Business Press.

ARIFF, I. & GOH, C.C. (1998). Multimedia Super Corridor. Kuala Lumpur: Leeds.

ARIFF, M. & LOPEZ, G.P. (2007). Outward Foreign Direct Investment: The Malaysian

Experience. Paper presented at international workshop on Intra-Asian FDI flows:

Magnitude, Trends, Prospects and Policy Implications, April-25-26, New Delhi,

India.

ARTHUR D. LITTLE. (2011). Are Suppliers Poised for a Turnaround? [Online].

Available;

323

http://www.adlittle.com/downloads/tx_adlreports/ADL_The_Future_for_Telecom_S

uppliers_02.pdf. [Accessed 3 January 2012]

ASGARI, A., AHMAD, S. Z. & GURRIB, M.I. (2010). Explaining the

Internationalization Process of Malaysian Service Firms. International Journal of

Trade, Economics and Finance, 1(1), June 2010.

ASIA DEVELOPMENT BANK (ADB). (2010). Asia Economic Monitor [Online].

Available: http://aric.adb.org/pdf/aem/dec10/Dec_AEM_complete.pdf

[Accessed 5 January 2011].


Available: http://aric.adb.org/pdf/aem/dec11/Dec_AEM_complete.pdf

[Accessed 3 February 2012].


Available: http:/adb.com

[Accessed 30 November 2012].

ASIAN PRODUCTIVITY ORGANISATION (APO). www.apo-tokyo.org

ASEANSEC: ASSOCIATION OF SOUTH EAST ASIAN NATIONS. ASEAN ICT

Masterplan. Available at: http://www.aseansec.org/Fact%20Sheet/AEC/AEC-09.pdf

[Accessed 6 December 2010].

ATHUKORALA, P & WAGLE, S 2011, 'Foreign Direct Investment in Southeast Asia: Is

Malaysia Falling Behind?', Asean Economic Bulletin, 28 (2), pp. 115-33

ATKEARNEY (2010). Connecting The Dots [Online]. Available:

http://www.atkearney.com/images/global/pdf/EAXI_1_connectthedots.pdf


AXIATA (2010). Annual Report [Online]. Available:

http://axiata.listedcompany.com/misc/ar2010.pdf

[Accessed 1 July 2011].

AXIATA (2011). Investor Relations Presentations 2011 [Online]. Available:

http://www.axiata.com/sites/default/files/ir/presentations.html

[Accessed 1 March 2012].

AXIATA (2012). Investor Relations Presentations, Q4 2011 Results [Online]. Available:


[Accessed 1 March 2012].

AXIATA (2012). Investor Relations Presentations, Q3 2012 Results [Online]. Available:



AXIS (2011). Available: http://www.axisworld.co.id/AboutAXIS [Accessed 1 March

2012].

http://www.adlittle.com/downloads/tx_adlreports/ADL_The_Future_for_Telecom_Suppliers_02.pdf

http://www.adlittle.com/downloads/tx_adlreports/ADL_The_Future_for_Telecom_Suppliers_02.pdf

http://aric.adb.org/pdf/aem/dec10/Dec_AEM_complete.pdf



http://www.apo-tokyo.org/

http://www.aseansec.org/Fact%20Sheet/AEC/AEC-09.pdf

http://www.atkearney.com/images/global/pdf/EAXI_1_connectthedots.pdf

http://axiata.listedcompany.com/misc/ar2010.pdf




http://www.axisworld.co.id/AboutAXIS

324

AUBERT, B. and WEBER, R. (2001) Transaction Cost Theory, The Resource based

View, And Information Technology Sourcing Decisions: A Re-examination Of

Lacity et al.'s Findings Institute of Applied Economics, May, 2001.

BABBIE, E. (1998). The Practice of Social Research; Belmont CA: Wadsworth.

BAIN & COMPANY (2009). Trends in Telecommunications. [Online]. Available:

http://www.bain.com/publications/industry-insights/telecommunications.aspx

[Accessed 6 December 2009]

BAIN & COMPANY (2010). Enabling Growth: Horizontal opportunities for the ICT

Sector. [Online].

Available: http://www.bain.com/Images/Enabling_Growth_BB.pdf

[Accessed 3 May 2010]

BAKER, M, J. (2000). Writing a Literature Review. The Marketing Review, 1, 21- 247.

BAKER, P. (2000). Telecommunications Joint Ventures. DBA Thesis. Southern Cross

University, Australia.

BAREGHEH, A., ROWLEY. & SAMBROOK, S. (2009). Towards a Multi-Disciplinary

Definition of Innovation. Management Decision, 47 (8), 1323-1339.

BARKEME, H.G. & VERMEULEN, F. (1998). International Expansion Through Start Up

or Acquisition: A learning Process. Academy of Management Journal, 41, 7-26.

BARNEY, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of

Management, 9 (4), 49-61.

BARNEY, J. (1995). Looking Inside Sustained Competitive Advantage, Academy of

Management Executives, 17 (1), 99-119.

BARNEY, J. (2001). Is the Resource-Based View a Useful Perspective for Strategic

Management Research? Yes. Academy of Management Review, 26 (1), 41-56.

BARONCHELLI, G. & CASSIA, F. (2010). Drivers of born-global companies’

international development: an empirical investigation among Italian companies. 10th

Global Conference on Business & Economics.

BASIT, T. N. (2003). Manual or electronic? The role of coding in qualitative data

analysis. Educational Research, 45(2), 143-154.

BEAMISH, P. (1990). The Internationalisation Process for Smaller Ontario firms: a

research agenda. Inn RUGMAN, A.M. (Ed). Research in Global Strategic

Management – International Business Research for the Twenty First Century:

Canada’s new research agenda. Greenwich: JAI Press Inc.77-92.

BECKERMAN, W. (1956). Distance and the Pattern of Intra-European Trade, Review of

Economics and Statistics, 28, 31-40.

http://www.bain.com/publications/industry-insights/telecommunications.aspx

http://www.bain.com/Images/Enabling_Growth_BB.pdf

325

BELL, J. (1995). The Internationalisation of Small Computer Firms: a further challenge to

stage theory. European Journal of Marketing, 29 (8), 60-75.

BELL, J. & YOUNG, S. (1998). Towards and Integrative of the Internationalisation of the

Firm. In HOOLEY, G, LOVERIDGE, R & WILSON.D, (Eds.). Internationalization:

process, context and markets, 5-28. Hampshire: MacMillan Press Ltd.

BENITO, G.R.G. & WELSCH, L.R. (1994). Foreign Market Servicing: Beyond choice of

Entry Mode. Journal of International Marketing, 2, 7-27.

BENTLER, P. M. (1990). Comparative Fit Indexes in Structural Models: Psychological

Bulletin. 238-246.

BENTLER, P. M. & CHOU, C.P. (1987). Practical Issues In Structural Modelling.

Sociological Methods Research, 16, 78-117.

BERG, B, L. (2004). Qualitative Research Methods For The Social Sciences, (Fifth Edn.),

Boston: Allyn and Bacon.

BHAGAT, R.S., MCDEVITT, A.S. & MCDEVITT, I. (2009). On Improving the

Robustness of Asian Management Theories: Theoretical anchors in the era of

globalization. Asia Pacific Journal of Management, 27, 179-192.

BHOWMICK, S. (2004). Towards understanding SME Internationalisation. Technology

based SME focus. PhD Research, University of Auckland.

BILKEY, W. & TESAR. G. (1977). The Export Behaviour of Small sized Wisconsin

Manufacturing firms. Journal of International Business Studies, 17, 41-57.

BLAXTER, L. HUGHES, C. & TIGHT, M. (2006). How To Research (3rd

Edn.). New

York: Open University Press.

BLOMQVIST, K., HURMELINNA-LAUKANEN, P., NUMMELA, N &

SAARENKETO, S. (2008). The role of trust and contracts in the internationalization

of technology-intensive born global firms. Journal of Engineering and Technology

Management, 25, 123-135.

BLOOMBERG (2011). Telefonica Cuts 2012 Dividend Amid Economic Turbulence in

Europe. [Online]. Available: http://www.businessweek.com/news/2011-12-

14/telefonica-cuts-2012-dividend-amid-economic-turbulence-in-europe.html

[Accessed: 14 December 2011]

BLOOMBERG (2012). Available: www.bloomberg.com

BONOMA, T. (1985). Case Research in Marketing: Opportunities, problems, and a

process. Journal of Marketing Research, 12, 199-208.

BOOTE, D.N. & BEILE, P. (2005). Scholars before researchers: On the centrality of the

dissertation literature review in research preparation. Educational Researcher 34 (6),

3-15.

http://www.businessweek.com/news/2011-12-14/telefonica-cuts-2012-dividend-amid-economic-turbulence-in-europe.html

http://www.businessweek.com/news/2011-12-14/telefonica-cuts-2012-dividend-amid-economic-turbulence-in-europe.html

http://www.bloomberg.com/

326

BOOZ & COMPANY. (2012). Available: http://www.booz.com

[Accessed: 30 November 2012]

BOSTON CONSULTING GROUP - BCG (2009). The Connected Harbour: How the

Internet is Transforming Hong Kong’s Economy. Hong Kong: BCG.

BOURREAU, M, DOGAN, P & MANANT, M (2007). Modularity and Product

Innovation in Digital Markets. Review of Network Economics, Berkeley Electronic

Press, 6(2), 6.

BRANNEN, J. (1992). Mixing Methods: Qualitative and Quantitative Research.

Brookfield, US: Avebury.

BROMILEY, P. (2005). The Behavioural Foundations of Strategic Management. Malden:

Blackwell Publishers.

BRYMAN, A. (2004). Social Research Methods (2nd

Edn.). Oxford: Oxford University

Press.

BRYMAN, A. & BELL, E. (2007). Business Research Methods. Oxford: Oxford

University Press.

BRYNE, B. (2001). Structural Equation Modeling With AMOS Basic Concept Application

and Programming. Lawerence Erlbaum Associates.

BUCKLEY, P.J. & CASSON, M. (1976). The Future of the Multinational Enterprise.

London: Macmillan.

BUCKLEY, P.J. & CASSON, M. (1985). The Economic Theory of the Multinational

Enterprise. London: Macmillan.

BUCKLEY, P.J. & CASSON, M. (1993). A Theory Of International Operations In

BUCKLEY, P.J. & GHAURI, P.N. (Eds.). The Internationalisation of a Firm: A

Reader. London: The Dryden Press.

BUCKLEY, P.J. & CASSON, M. (2009). The Internalisation Theory Of the Multinational

Enterprise. Journal of International Business Studies. 40, 1563-1580.

BUCKLEY, P.J., NEWBOULD, G.D. & THURWELL, J.C. (1979). Foreign Direct

Investment by Smaller UK firms: the Success and Failure of First Time Investors

Abroad, London: MacMillan.

BUDDE.COM (2010): Insights on the Asian Market.: Analysis, Forecast, and

Commentary. Chesham: TelecomsMarketResearch.com

BUDDE.COM (2011). [Online]. Available: http://www.budde.com.au/Research/Malaysia-

Telecoms-Mobile-Broadband-and-Forecasts.html. [Accessed 6 April, 2011].

BURSA MALAYSIA (2011), Available: http://www.bursamalaysia.gov.my.

http://www.booz.com/

http://ideas.repec.org/a/bpj/rneart/v6y2007i2n6.html

http://ideas.repec.org/a/bpj/rneart/v6y2007i2n6.html

http://ideas.repec.org/s/bpj/rneart.html

http://www.budde.com.au/Research/Malaysia-Telecoms-Mobile-Broadband-and-Forecasts.html

http://www.budde.com.au/Research/Malaysia-Telecoms-Mobile-Broadband-and-Forecasts.html

http://www.bursamalaysia.gov.my/

327

BUSINESS MONITOR INTERNATIONAL (BMI), (2009). Asia Telecommunications

Report. London: Business Monitor International.

BUSINESS MONITOR INTERNATIONAL (BMI), (2011). Malaysia

Telecommunications Report, Q4, 2011. London: Business Monitor International.

BUSINESS MONITOR INTERNATIONAL (BMI), (2012). Malaysia

Telecommunications Report, Q3, 2011. London: Business Monitor International.

CALOF, J. & BEAMISH, P.W. (1995). Adapting To Foreign Markets: Explaining

Internationalisation. International Business Review, 4 (2) 115-131.

CIA: Central Intelligence Agency. (2011): The World Fact Book. [Online]. Available:

http://www.cia.gov/library/publications/the-world-factbook [Accessed: 5 December

2011].

CAMERON, R. (2011). Mixed Methods Research: the Five P’s Framework. Electronic

Journal of Business Research Methods, 9 (2), 269.

CAMERON, R. & MILLER, P. (2010). Introducing Mixed Methods Into An Applied

Business And Policy Research, Sydney: Pearson Publishing.

CAP GEMINI (2010). Digital Transformation: A Roadmap for Billion-Dollar

Organizations. [Online].

Available:http://www.capgemini.com/m/en/t1/Digital_Transformation_A

_Roadmap_for_billion-dollar_organizations.pdf [Accessed 3 February 2011].

CARAYOL, R. & FIRTH, D. (2001). Corporate Voodoo: Principles for Business

Mavericks and Magicians. London: Gladstone Publishing.

CARSON, D., GILMORE, A., PERRY, C. & GRONHAUG, K. (2001). Qualitative

Market Research, London: Sage Publications.

CAVANA, R.Y., DELAHAYE, B.L & SEKARAN, U. (2001). Applied Business

Research: Qualitative and Quantitative Methods, Singapore: John Wiley & Sons.

CAVES, R. 1971. Industrial Corporations: the industrial economies of foreign investment.

Economica, 38, 1-27

CHANMONGKOLPANICH, K. (2009). The International Process of Telenor. A Case

Study of Telenor in Thailand’. Masters thesis, Malardalen University.

CHADEE,D. & MATTSSON (1998). Do service and merchandise exporters behave and

perform differently? : a New Zealand investigation, European journal of marketing,

vol. 32, (9/10), 830-842.

CHEW, S.P. (2007). Enhancing the Competitiveness of Malaysian Software Companies

Competing in the Global Market Place. DBA Thesis, Southern Cross University,

Australia.

http://www.cia.gov/library/publications/the-world-factbook

http://www.capgemini.com/m/en/t1/Digital_Transformation_A%20_Roadmap_for_billion-dollar_organizations.pdf

http://www.capgemini.com/m/en/t1/Digital_Transformation_A%20_Roadmap_for_billion-dollar_organizations.pdf

328

CHETTY, S.K. & HAMILTION, R.T. (1996). The Process of Exporting in Owner

Controlled Firms. International Small Business Journal, 14 (2), 12-25.

CHILD, J. RODRIGUES, S.B. & FRYNAS, J.G. (2009). Psychic Distance, Its Impact and

Coping Modes: Interpretations of SME decision makers. Management International

Review, 49 (2) 199-224.

CHING, W.S. JOMO, K.S. & FAY, C.K. (2005). Malaysian ‘Bail Outs’? Capital

Controls, Restructuring and Recovery, Singapore: Singapore University Press.

CHOO, S., & MAZZAROL, T., 2001. An Impact on Performance of Foreign Market Entry

Choices by Small and Medium-sized Enterprises. Journal of Enterprising Culture.

9(3), 291-312.

CLARK, T., PUGH, D. S. & MALLORY, G. (1997) ‘The Process of internationalisation

in the operating firm’, International Business Review, 6(6), 605 – 623.

CLARK, D. & PUGH, T. S. (2001). Foreign Country Priorities in the Internationalisation

Process: a measure and exploratory test on British Firms. International Business

Review, 10, 285-303.

CLARK, T. & KNOWLES, L. L. (2003). Global Myopia: Global Theory in International

Business. Journal of International Management, 9, 361-371.

CLIFTON, J., DANIEL, D.F., COMIN, F.C. (2011). “From national monopoly to

multinational corporation: how regulation shaped the road towards

telecommunications internationalisation”, MPRA paper 33017, University of library

of Munich, Germany.

COASE, R.H. (1937) ‘The Nature of the Firm’, Economica, New Series, 4, 386-405.

COLLIS, J. & HUSSEY, R. (2003). Business Research: A Practical Guide For

Undergraduate And Postgraduate Students. Great Britain: Palgrave Macmillan.

CONNER, K.R., PRAHALAD, C.K. (1996). A Resource-Based Theory of the Firm,

Organisation Science, 7 (5), 477-501.

CONTRACTOR, F.J. & LORANGE, P. (2002). The Growth of Alliances in the

Knowledge Based Economy. International Business Review, 11.

COOPER, D.R. & SCHINDLER, P.S. (2003). Business Research Methods (8th

Edn.).

McGraw Hill, Irwin.

COOPER, D.R. & SCHINDLER, P.S. (2006). Business Research Methods (9th

Edn.).

McGraw Hill, Irwin.

COVIELLO, N.E. & MCAULEY, A. (1999). Internationalization and the Smaller Firm: a

review of contemporary informal research. Management International Review, 39

(3), 223-256.

329

COVIELLO, N.E, & MUNRO, H.J. (1995). Environmental Marketing: A Source of

Reputational Competitive, and Financial Advantage, Journal of Business Ethics.

Dordrecht, The Netherlands.

COVIELLO, N.E. & MUNRO, H.J. (1997). Network Relationships and the

Internationalisation Process of Small Software Firms. International Business Review

6 (4), 361-386.

CRESWELL, J.W. (2003). Research Design: Qualitative, Quantitative And Mixed

Methods Approaches. London: Sage Publications.

CRESWELL, J.W. (2005). Educational Research: Planning, conduction and evaluating

Qualitative and Quantitative research (2nd

Ed.). Upper Saddle River. J, Pearson.

CRESWELL, J.W. & PLANO CLARK, V. L. (2007). Designing and Conducting Mixed

Methods Research. Thousand Oaks, CA: Sage Publications.

CRONBACH, L.J. (1951). Coefficient Alpha and the Internal Structure Of Tests.

Psychometrika, 16, 297- 334.

CRICK, D. (1995). An Investigation into the Targeting of UK export assistance. European

Journal of Marketing, 29 (8), 76-94.

CURWEN, P.J. (2002). The Future of Mobile Communications: Awaiting the Third

Generation., Palgrave Global Publishing.

CURWEN, P.J. & WHALLEY, J. L. (2004). Telecommunications Strategy – Cases,

Theory and Applications. London: Routledge.

CURWEN, P.J. & WHALLEY, J. L. (2005). An Investigation into internationalisation

among mobile telecommunication companies in 2003. The Journal of Policy,

Regulation and Strategy for Telecommunications, 7 (4), 21-29.

CURWEN, P.J. & WHALLEY, J. L. (2006). Measuring Internationalisation in the of

Mobile Telecommunications industry. International Business Review, 15, 660-681.

CURWEN, P.J. & WHALLEY, J. L. (2008). Mobile Communications in a High Speed

World, England: Gower Publishing.

CURWEN, P.J. & WHALLEY, J.L. (2010). The Internationalisation of Mobile

Telecommunications, Strategic Challenges in a Global Market. Cheltenham: Edward

Elgar Publishing.

CYERT, R. M., & MARCH, J.G. (1963/1992). A Behavioral Theory of the Firm. 2nd ed.

Prentice Hall, Englewood Cliffs, NJ.

CZINKOTA, M.R. (1982). Export Development Strategies: US Promotion Policy. New

York: Praeger.

330

DALY, H. (1999). Globalisation versus Internationalisation – Some Implications.

Ecological Economics, 31, 31-37.

DAS, T.H. (1983). Qualitative Research in Organizational behaviour. Journal of

Management Studies, 20 (3), 301-311.

DAVIS, D. (2005). Business Research for Decision Making (6th

Edn.). Canada:Thomson

Brooks/Cole.

DELOITTE (2010). Telecommunications Predictions Report 2010. Deloitte.

DELOITTE (2011).Telecommunications Predictions Report, 2011. [Online]. Available:

http://www.deloitte.com/assets/Dcom-

Global/Local%20Assets/Documents/TMT/Predictions%202011%20PDFs/8616A_T

MT_Predictions_LRLKD.pdf [Accessed: 3 February 2011]

DELOITTE (2012). Telecommunications Predictions Report, 2012. [Online]. Available:

http://www.deloitte.com/view/en_GX/global/industries/technology-media-

telecommunications/tmt-predictions-2012/index.htm

[Accessed: 20 February 2012]

DENZIN, N. & LINCOLN, V. (2003), Strategies of Qualitative Enquiry, London: Sage

Publications.

DENZIN, N., LINCOLN, V. & SMITH, L.T. (2008). Handbook of Critical and

Indigenous Methodologies, London: Sage.

DESHPANDE, R. (1983). Paradigm Lost: On Theory and Model In Research In

Marketing. Journal of Marketing, 47, 101-110.

DE VAUS, D.A. (2002) Surveys in Social Science: London: Routledge.

DONEY, P.M. & CANNON, J.P. (1997). An Examination of the Nature of Trust in Buyer-

Seller Relationships. Journal of Marketing 61 (2).

DOW, D. (2000). A Note of Psychological Distance and Export Market Selection. Journal

of International Management 8 (1), 51-64.

DOWLING, P. FESTING, M. & ENGLE. A. (2008). International Human Resource

Management (5th

Edn.). London: Thompson.

DRAPEAU, M. (2012). Social Networks for Scientists Wont Work. [Online]. Available:

http://www.huffingtonpost.com/mark-drapeau/social-networks-for-

scientists_b_1282692.html

[Accessed 20 February 2012].

DRISCOLL, A. (1995). Foreign Market Entry Modes: a mode choice framework. In

PALIWODA, S.J. & RYANS, J.K. (Eds.). International Marketing Reader. London:

Routledge.

http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/TMT/Predictions%202011%20PDFs/8616A_TMT_Predictions_LRLKD.pdf



http://www.deloitte.com/view/en_GX/global/industries/technology-media-telecommunications/tmt-predictions-2012/index.htm

http://www.deloitte.com/view/en_GX/global/industries/technology-media-telecommunications/tmt-predictions-2012/index.htm

http://www.huffingtonpost.com/mark-drapeau/social-networks-for-scientists_b_1282692.html

http://www.huffingtonpost.com/mark-drapeau/social-networks-for-scientists_b_1282692.html

331

DRUCKER, P. (1993). Post Capitalist Society. New York: Harper Collins.

DUBRIN, A.J. (2004). Applying Psychology: Industrial and organizational effectiveness,

(6th

Ed). Upper Saddle River, NJ: Pearson Prentice Hall.

DUNNING, J.H. (1980). Toward an Eclectic Theory of International Production; some

empirical tests: Journal of International Business Studies.11 pp. 9-31

DUNNING, J.H. (1985). Multinational Enterprises, Economic Structure, and

International Competitiveness. New York: John Wiley & Sons.

DUNNING, J.H. (1995). Reappraising the Eclectic Paradigm in an Age of Alliance

Capitalism. Journal of International Business Studies, 26, 461-491.

DUNNING, J.H. (1997). Governments, Globalisation and International Business. Oxford:

Oxford University Press.

DUNNING, J.H. (2001). The Eclectic (OLI) Paradigm of International Production: The

past, present and future. International Journal of Economics of Business, 8 (2), 173-

190.

DUNNING, J.H. & LUNDAN, S. M. (2008). Multinational Enterprises and the Global

Economy, 2nd

edn. Cheltenham: Edward Elgar Publishing.

EASTERBY-SMITH, M., THORPE, R. & LOWE, A. (1991). Management Research; An

Introduction, London: Sage.

EASTERBY-SMITH, M., THORPE, R. & LOWE, A. (2002). Management Research; An

Introduction, (2nd

Edn.), Sage, London.

ECONOMIDES N., S. (1999). The Telecommunications Act of 1996 and its Impact.

Japan and the World Economy, 11, 455-483.

ECM LIBRA (2012). Available: http://ecmlibra.com

ECONOMIC INTELLIGENCE UNIT (2011). Available: http://country.eiu.com/Malaysia

EISENHARDT, K.M. (1989). Building Theories From Case Study Research, Academy of

Management Review, 14, 532- 550.

EISENHARDT, K.M. & MARTIN J.A. (2000). Dynamic Capabilities: What are they?

Strategic Management Journal, 21, (Special issue), 1105-1121.

EKELEDO, I. & SIVAKUMAR, K. (2004) ‘International market entry mode strategies of

manufacturing firms and service firms: a resource-based perspective’, International

Marketing Review 21(1): 68-101.

ELLIS, P. & PECOTICH (2001), “Social factors influencing export initiation in small and

medium-sized enterprises,” Journal of Marketing Research, 38 (1), 119-31.

http://ecmlibra.com/

332

EPU (2010). Available: http://www.epu.gov.my

EPU (2011). Available: http://www.epu.gov.my

ERNST & YOUNG (2010). View from the Top: Global Technology Trends and

Performance, 1, October 2010.

ERNST & YOUNG (2011). Inside Telecommunications. [Online] Available:

http://www.ey.com/Publication/vwLUAssets/Inside_Telecommunications_4Q_2011/

$FILE/Quarterly%20talking%20points%20from%20EY.pdf [Accessed: 3 January

2012].

ERNST & YOUNG (2012). Top Ten Risks in Telecommunications [Online] Available:

www.ey.com/...telecommunications_2012/.../2012_TelecomsBusiness [Accessed: 30

November 2012].

ERIKSSON, K., JOHANSSON, J., MAJKGARD, A. & SHARMA, D.D. (1997).

Experiential Knowledge and Cost in the Internationalization Process. Journal of

International Business Studies, 28 (2), 337-360.

ERIKSSON, K., JOHANSSON, J., MAJKGARD, A. & SHARMA, D.D. (2000). Effect of

Variation on Knowledge Accumulation in the Internationalization Process.

International Studies of Management & Organization, 30, 26-44.

ESCAP, (2011). Asia Pacific Trade and Investment Report, 2011 [Online]. Available:

http://www.unescap.org/tid/ti_report2011/home.asp


EVANS, J. & MAVONDO, F.T. (2002). Psychic Distance and Organizational

Performance: an empirical examination of international retailing operations. Journal

of International Business Studies, 33 (3), 515-32.

FAALAND, J. PARKINSON, J. & SANIMAN, R. (1990). Growth and Ethnic Inequality:

Malaysia’s New Economic Policy. London: Hurst and Company.

FAHY, J. (2002). A resource-based analysis of sustainable competitive advantage in a

global environment. International Business Review, 11, 57-77.

FAHY, J. & SMITHEE, A. (1999). Strategic Marketing and the Resource Based View of

The Firm, Academy of Marketing Science Review, 1999 – 10.

FESTINGER, L. & KATZ, D. (1966). Research Methods in Behaviourial sciences

(Edn.).USA: Holt, Rinehart & Winston

FILIPESCU, D.A. (2007). Innovation and Internationalisation. A focus on the Spanish

exporting firms. Universitat Autonoma de Barcelona.

FILIPESCU, D. A. (2011). Internationalisation and Technological Innovation: Empirical

Evidence of their Relationships. PhD Thesis, University of Barcelona, Spain.

http://www.epu.gov.my/

http://www.epu.gov.my/

http://www.ey.com/Publication/vwLUAssets/Inside_Telecommunications_4Q_2011/$FILE/Quarterly%20talking%20points%20from%20EY.pdf

http://www.ey.com/Publication/vwLUAssets/Inside_Telecommunications_4Q_2011/$FILE/Quarterly%20talking%20points%20from%20EY.pdf

http://www.ey.com/...telecommunications_2012/.../2012_TelecomsBusiness

http://www.unescap.org/tid/ti_report2011/home.asp

333

FIOL C.M (2001). “Revisiting an identity-based view of sustainable competitive

advantage”. Journal of Management, 27 (6), pp. 691-699.

FJELDSTAD, O. BECCARA, M. & NARAYANNAN, S. (2004). Strategic action in

network industries; an empirical analysis of the European mobile phone industry.

Scandinavian Journal of Management, 20, 173-196.

FLETCHER, R. (2001). A Holistic Approach to Internationalisation. International

Business Review, 10, 25-49.

FLICK, U. (1988). An Introduction to Qualitative Research; Theory, Method and

Applications. London: Sage

FLICK, U. KARDORFF, E. & STEINKE ,I. (2004). A Companion to Qualitative

Research, Glasgow: Sage.

FLOYD, D. (2001). Globalisation or Europeanisation of Business Activity? Exploring the

Critical Issues’. European Business Review, 13 (2) 109-114.

FOK, W.K.P. (2007). Internationalisation of Higher Education in Hong Kong,

International Education Journal, 8 (i), 184-193.

FONTANA, A. & FREY, J.H. (2008). The Interview: From neutral stance to political

involvement. In DENZIN, N.K, & LINCOLN, Y.S. (Eds.). Collecting and

Interpreting Qualitative Materials. London: Sage.

FORSGREN, M. (2002). The concept of learning in the Uppsala internationalization

process model: a critical review. International Business Review, 11, 257-277.

FORSGREN, M. & HAAGSTROM, P. (2007). Ignorant and impatient

internationalization? The Uppsala model and internationalization patterns for

internet-related firms. Critical Perspective on International Business, 3 (3), 291-305.

FOSS, N. J. (2003). Bounded Rationality in the economics of an organisation “Much cited

and little used”. Journal of Economic Psychology, 24 (2), 245-264.

FREEMAN, R.E. & MCVEA, J. (2001). A Stakeholder Approach to Strategic

Management. Darden Business School Working Paper, 01-02. [Online]. Available:

http://papers.ssm.com/paper.taf?abstract_id=263511. [Accessed:

FRIEDMAN, T.L. (2005). The World is Flat. New York: Farrar, Strauss and Giroux

FROST AND SULLIVAN (2011). Malaysian Mobile Broadband market to be worth 9

billion [Online]. Available: http://www.frost.com/prod/servlet/press-

release.pag?docid=224135934 [Accessed: 11 February 2011].

FUNK J. L. (2009). The Emerging Value Network in the Mobile Phone Industry; The case

of Japan and its implications for the rest of the world. Telecommunications Policy,

33 (1-2), 4-18.

http://papers.ssm.com/paper.taf?abstract_id=263511

http://www.frost.com/prod/servlet/press-release.pag?docid=224135934

http://www.frost.com/prod/servlet/press-release.pag?docid=224135934

334

GABRIELSSON, P. (2004). Globalising Internationals – Product Strategies of ICT

Companies. Doctoral Thesis, Helsinki School of Economics, Helsinki.

GABRIELSSON, P. & GABRIELSSON, M. (2004). Globalising Internationals: business

portfolio and marketing strategies in the ICT fields. International Business Review,

13, 661-684.

GARCIA-CANAL, E. & SANCHEZ-LORDA, P. (2007). One more only if it is one of us.

The number of partners and the stock market reaction to domestic and international

alliance formation in EU telecom firms. International Business Review, 16.

GANKEMA, H.G. SNUIF. H.R. & ZWART, P.S. (2000). The internationalization process

of small and medium-sized enterprises: An evaluation of Stage theory. Journal of

Small Business Management, 38 (4), 15-27.

GEPHART, R. (1999). Paradigms and Research Methods [Online]. Available: http://www.

aom.pace.edu/rmd/1999_RMD_Forum_Paradigms_and_Research_Methods.htm.

[Accessed 30 June 2010]

GERPOTT, T.J. & JAKOPIN, N. J. (2005). The Degree of Internationalisation and

Financial Performance of European Mobile Network Operators. Telecommunications

Policy, 29, 635-661

GERPOTT, T.J. & JAKOPIN, N. J. (2007).Firm and Target Country Characteristics as

Factors Explaining Wealth Creation from International Expansion Moves of Mobile

Network Operators, Telecommunications Policy, 31, 77-92

GERPOTT, T.J. & JAKOPIN, N. J. (2008). Determinants of Mobile Operators: Choice of

cross-border entry modes. International Journal of Mobile Communications, 6 (2),

177-198.

GHAURI, P. (2004). Designing and Conducting Case studies in International Business

Research. In MARSCHAN-PIEKKARI, R. & WELSCH, C. (Eds.), Handbook of

qualitative research methods for international business. Cheltenham, UK: Edward

Elgar Publishing.

GIBBONS, M., LIMOGES, C., NOWOTNY, H., SCHWARTZMAN, S., SCOTT, P. &

TROW, M. (1994). The new production of knowledge. the dynamics of science and

research in contemporary societies. Sage: London.

GILLHAM, B. (2000). Case Study Research Methods, London: Continuum

GJELLERUP, P, (2000). SME Support Services in the Face of Globalisation. Concerted

Action Seminar, Opening Address, Conference Proceedings, Danish Agency for

Trade and Industry, Copenhagen.

GLASER, B.G. & STRAUSS, A.L. (1967). The discovery of grounded theory: strategies

for qualitative research, New York: Aldine Publications & Co.

335

GOMEZ, E.T. & JOMO, K.S. (1999). Malaysia’s Political Economy: Politics, Patronage

and Profits. Cambridge: Cambridge University Press.

GoM - Government Of Malaysia

1970 Outline perspective Plan, 1970-1990

1971 Second Malaysia Plan, 1971-1975

1975 Industrial Coordination Act

1976 Third Malaysia Plan, 1976 – 1980

1981 Fourth Malaysia Plan, 1981 – 1985

1986 Fifth Malaysia Plan, 1986 – 1990

1990 Year Book of Statistics, 1989

1991 Privatisation Master Plan

1991 Second Outline Perspective Plan, 1991 – 2000

2001 Eighth Malaysia Plan, 1991 – 2005

2002 K – Economy Master Plan

2004 Economic Planning Unit

2004 Ministry of Finance

2006 Department of Statistics

2006 Ninth Malaysia Plan, 2006 – 2010

2008 Ministry of Finance, Economic Report, 2007/2008

2009 Economic Planning Unit

2010 Department of statistics, Annual Handbook

2010 National Economic Advisory Council

2010 New Economic Model

2010 Tenth Malaysia Plan, 2011-2015

2011 Bank Negara Malaysia, Q4, Economic Performance Report

GRANT, R.M. (1991). A Resource Based Perspective of Competitive Advantage.

California Management Review, 33 (Spring), 114-135.

GREENE, J & CARACELLI, V. (Eds) (1997). Advances in Mixed- Method Evaluation:

The Challenges and Benefits of Integrating Diverse Paradigms, San Francisco:

Jossey- Bass.

GREENE, J. (1997). Mixed Methods in Social Inquiry, San Francisco: Jossey-Bass.

GRIFFIN, R.W. & PUSTAY, M.W. (2007). International Business. Upper Saddle River,

NJ: Pearson Prentice Hall.

GUBA, E. G. & LINCOLN, Y.S. (1994). Competing Paradigms in Qualitative Research,

In DENZIN, N.K. & LINCOLN, Y.S. Handbook of Qualitative Research. Thousand

Oaks: Sage.

336

GUBA, E. G. & LINCOLN, Y.S. (2005). Paradigmatic Controversies, Contradictions and

Emerging Confluences. In DENZIN, N.K. & LINCOLN, Y.S. (Eds.) The Sage

Handbook of Qualitative Research (3rd

Edn.). Thousand Oaks: Sage.

GUPTA, A.K. & GOVINDARAJAN, V.(2002). Cultivating a global mindset, Academy of

Management Executive, 16 (1), 116-126.

HAKANSSON, H. & JOHANSON, J. (1992): A Model of Industrial Networks, in B

Axelsson and G Easton (eds), Industrial Networks: A New View of Reality, London,

Routledge, 28-34.

HALL, R. (1992). The Strategic Analysis of Intangible Resources. Strategic Management

Journal, 13 (2), 125-144.

HAMEL, G. & PRAHALAD, C.K. (1994) Competing for the Future, Boston: Harvard

Business School Press.

HAGEDOORN, J. (1993). Understanding the Rationale of Strategic Technology

Partnering: Interorganisational modes of cooperation and sectoral differences.

Strategic Management Journal, 14 (5), 371-385.

HAIR, J.F., BLACK, W.C., BABIN, B.J., & ANDERSEN, R.E. (2007). Multivariate Data

Analysis: A global Perspective. New Jersey: Prentice Hall.

HAIR, J. F., BLACK, W.C., BABIN, B.J., & ANDERSEN, R.E. (2010). Multivariate

Data Analysis: A global Perspective. New Jersey: Prentice Hall.

HAKKANSON, H. (1987). Introduction In Hakkanson, H. Eds. Industrial Technological

Development: A Network Approach. London: Croom Helm.

HAKKANSON, H. (1989). Corporate Technological behaviour; Cooperation and

Networks. London: Routledge.

HARDY, A. (1980). The Role of the Telephone in Economic Development.

Telecommunications Policy, 4 (4), 278-286.

HART, C. (1998). Doing a Literature Review: Releasing the Social Science Research

Imagination. London: Sage Publications.

HEDGES, O. (1985), Statistical methods for meta-analysis, London; Academic Press.

HENDERSON, R. & COCKBURN, I. (1994). Measuring Competence? Exploring firm

effects in pharmaceutical research. Strategic Management Journal, 15, 63-84.

HESSE-BIBER, S.N (2010). Qualitative Approaches to Mixed Methods Practice.

Qualitative Inquiry, 16 (July 2010), 455-468.

337

HIRSCHMAN, E.C. (1986). Humanistic Inquiry in Marketing Research: Philosophy,

Method and Criteria. Journal of Marketing Research, 23, August, 237-49.

HOFER, C.W. & SCHENDEL, D. (1978). Strategy Formulation: Analytical Concepts. St.

Paul, Minnesota: West Publishing Company.

HOFSTEDE, G. (2001). Culture’s Consequences: Comparing Values, behaviours,

institutions, and Organisations across nations (2nd

Edn.). Thousand Oaks, CA, Sage

Publications.

HOFSTEDE, G. (2007). Asian Management in the 21st Century. Asia Pacific Journal of

Management, 24, 411-420.

HOLLENSEN, S. (2007). Global Marketing: A Decision-Orientation Approach. Harlow:

Pearson Education Limited.

HOMANN, K. KOSLOWSKI, P. & LUETGE, C. (2007). Globalisation and Business

Ethics. Hampshire: Ashgate Publishing.

HOSKISSON, R.E., HITT, M.A., IRELAND, R.D. & HARRISON, J.S. (2008).

Competing for Advantage. Mason, OH: Thomson, South-Western.

HU, L.T. & BENTLER P.M. (1999). Cutoff criteria for fit indexes in covariance structural

analysis: Conventional criteria versus new alternatives. Structural Equation

Modeling, 7, 431-441.

HUSSEY, J. & HUSSEY, R. (1997). Business Research. London: Macmillian.

HYMER, S.H. (1976). The international operations of national firms: a study of direct

foreign investment. Cambridge, MA: MIT Press.

IBM (2009) The changing face of communications. Social networking’s growing

influence on telecom providers.


http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03224usen/GBE03224USEN.PD

F . [Accessed 3 February 2010].

IBM (2010). The Changing face of communications. Challenges and opportunities for

carriers. 6th

Asian Carriers Conference, September 21-24, Philippines.

IBM 2010. Telco 2015; Five telling years, four future scenarios. [Online] Available:

http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03304usen/GBE03304USEN.PD

F


IDA (2011). Available: www.ida.gov.sg.

IDC January (2004). Press Release. IDC Announces Top Key Trends in ICT Market in

Malaysia.

http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03224usen/GBE03224USEN.PDF




http://www.ida.gov.sg/

338

IDC May (2010). Mobile Phone Recovery Continues with Nearly 22% Growth in First

Quarter, According to IDC [Online], Available:

http://www.idc.com/getdoc.jsp?containerId=prUS22322210, [Accessed 30 May

2010].

IDC (2011). Available: http://www.idc.com/prodserv/idc_telnet_isp.

IHS Global Insight (2010). Raimondi, M. & Watson, J. (Nov 2009). Preparing for

Challenges in Global Telecommunication Markets in 2010.

IMF (2008). Globalisation: A brief overview. [Online]. Available:

http://www.imf.org/external/np/exr/ib/2008/053008.htm

[Accessed 30 June 2009]

IMF (2011). World Economic Outlook [Online]. Available:

http://www.imf.org/external/pubs/ft/weo/2011/02/pdf/text.pdf


IMF (2012). World Economic Outlook [Online]. Available:

www.imf.org/external/pubs/ft/weo/2012/02/pdf/text.pdf


INDOSAT (2012). Available: http://indosat.com

INSIGHT RESEARCH CORPORATION (2010). The 2010 Telecommunications Industry

Review: An Anthology of Market Facts and Forecasts. New Jersey.

INTERNATIONAL TELECOMMUNICATIONS UNION (ITU):

ITU International Telecommunications Union (2002). Multimedia Malaysia. Internet

Case Study, ITU.

ITU, International Telecommunications Union (2003). The Evolution to 3G Mobile –

Status Report [Online]. Available:

http://www.itu.int/itunews/issue/2003/06/thirdgeneration.html

[Accessed 8 August 2008].

ITU, International Telecommunications Union & Korea Agency for Digital

Opportunity and Promotion (2004): Building Digital Bridges: The Case of Malaysia.

Symposium of building Digital Bridges. 10-11 September, 2004, Korea.

http://www.itu.int/osg/spu/ni/digitalbridges/docs/casestudies/malaysia-rv3.pdf.

[Accessed 3 February 2009]

ITU, International Telecommunications Union Feb (2010): Measuring the Information

Society 2010, Switzerland

ITU, International Telecommunications Union (2012): Measuring the Information

Society 2012, Switzerland.

http://www.idc.com/getdoc.jsp?containerId=prUS22322210

http://www.idc.com/prodserv/idc_telnet_isp

http://www.imf.org/external/np/exr/ib/2008/053008.htm

http://www.imf.org/external/pubs/ft/weo/2011/02/pdf/text.pdf

http://indosat.com/

http://www.itu.int/itunews/issue/2003/06/thirdgeneration.html

http://www.itu.int/osg/spu/ni/digitalbridges/docs/casestudies/malaysia-rv3.pdf

339

JACOBS, R.L. (1997). HRD is not the Research Problem. Human Resource Development

Quarterly, 8 (1), 1-4.

JAMISON, M.A. (1998). Emerging Patterns in Global Telecommunications: Alliances and

Mergers, Industrial and Corporate Change, 7 (4), 695-713.

JANSSON, H & SANDEBERG. S. (2008): “Internationalization of small and medium

sized enterprises in the Baltic Sea Region” Journal of International Management,

14, pp.65-77.

JAKOPIN, N.M. (2008). Internationalisation in the Telecommunications Service Industry:

Literature Review and Research Agenda. Telecommunications Policy, 32, 531-544.

JAVALGI, R.G. & MARTIN, C.L. (2007). Internationalization of Services : Identifying

the Building Blocks of Future Research, Journal of Services Marketing 21(6), 391-

397.

JEANNET, J.P. (2000) Managing with a Global Mindset. London: Prentice Hall

JESSY, J.S. (1985). History of South East Asia, 1824-1965, Lunas, Kedah. Malaysia:

Penerbitan Darulaman, 1985.

JOHANSSON, E. & LARSSON, P. (2000). Pole Position with Corporate Social

Responsibility: The Case of SKF in Malaysia. International Business Master Thesis

No. 2000:38, Goteborg University, Sweden.

JOHANSON, J. & MATTSSON, L.G. (1988). Internationalization in industrial systems –

a network approach. IN HOOD, N. AND VALHNE, J.E. (Eds), Strategies in Global

Competition. London: Croom Helm.

JOHANSON, J. & VALHNE, J.-E. (1977). The Internationalisation Process of the firm – a

Model of Knowledge Development and Increasing Foreign Market Commitments.

Journal of International Business, 8, 23-32.

JOHANSON, J. & VALHNE, J.E. (1990). The Mechanism of Internationalisation.

International Marketing Review, 7 (4), 11-24.

JOHANSON, J. & VALHNE, J.E. (2009). The Uppsala process model revisited: from

liability of foreignness to liability of outsidership. Journal of International Business

Studies, 40, 1411-1431.

JOHANSON, J. & WIEDERSHAM-PAUL, F. (1975). The internationalisation of the

Firm: Four Swedish Cases. Journal of Management Studies, 12, 305-322.

JOHANSSON, E. SCHORLING. J. & STRANDBERG, C. (2008): Selection of Foreign

Market Entry Mode by Knowledge-Intensive Soft-Service Companies: A Case Study

of the Staffing and Recruitment Industry in Norway and Sweden. Bachelors Thesis,

University of Lulea.

340

JOMO K.S. & GOMEZ, T. E. (1997). The Role of Government in East Asian Economic

Development. Oxford: Oxford Clarendon Press.

JOMO, K.S. (1991). Whither Malaysia’s New Economic Policy? Pacific Affairs,

University of British Columbia, 63, 31.

JOMO, K.S. (1995). Privatising Malaysia; Rents, Rhetoric, Realities. Boulder: Westview

Press.

JOMO, K.S. (1998). Malaysia’s Debacle: Whose fault? Cambridge Journal of Economic,

22 (6), 702-722.

JOMO, K.S. (2004). United Nations Research Institute for Social Development. The new

economic policy and interethnic relations in Malaysia. United Nations Research

Institute for Social Development, Geneva. [Online]. Available:

http://www.loc.gov/catdir/toc/fy053/2005424166.html

[Accessed: 9 March 2009].

JONES, M.V. & COVIELLO, N.E. (2005). Internationalisation: Conceptualising an

Entrepreneurial Process of Behaviour in Time. Journal of International Business

Studies, 36, 284-303.

JORESKOG & SORBOM (1986). LISREAL VI. Analysis of linear structural relationships

by maximum likelihood, instrumental variables and least squares methods (4th

ed.).

Uppsala, Sweden: University of Uppsala Department of Statistics.

JURAD, Y.I., YUSOF, N., NIKBIN, D. (2010).

A Review Paper on Organizational Culture and Organizational Performance

JUSSAWALLA, M. (1999). The impact of ICT convergence on development in the Asian

Region. Telecommunications Policy, 23 (23-24), 217-234.

KAGAN, J, (2010). State of the Industry 2010; Wireless and Telecom in Transition. Jeff

Kagan. [Online]. Available.

http://www.jeffkagan.com/REPORT-1331-StateofIndustry.htm. [Accessed: 5 June 2010]

KALFADELLIS, P. & GRAY, J. (2002). Are Proxies Valid Measures of Internalisation?

Paper presented at the 28th European International Business Academy Conference,

Athens, Greece.

KANNAPTHI, K. (2003). A Model for SMI Transition to Growth: A Case Study of the

effects of entrepreneurial characteristics and capability of Organisations in

transition to growth in Penang Free Trade Zone. DBA Thesis, Southern Cross


KANTER, R.M. (1995). World Class. Thriving locally in the Global Economy. New York;

Touchstone.

http://www.loc.gov/catdir/toc/fy053/2005424166.html

http://www.jeffkagan.com/REPORT-1331-StateofIndustry.htm

341

KENNY, B. (2009). A Network Perspective on International Business: Evidence from

SME’s in the Telecommunications Sector in Ireland. PhD Thesis, University of

Limerick.

KHOO, S.L. (2010). Challenges in Human Resource Development; the Case of Malaysian

Banks in peer-reviewed official conference proceedings, Pacific Employment

Relations Association (PERA), 168-175. (Conference organiser: the Australian

Institute of Social Research. University of Adelaide)

KIM, W.S., LEE, M. & KIM, K. (2009). Strategic Differentiation of Internationalisation in

the mobile telecommunications industry: Case Studies. ETRI Journal, 31 (1), 51-61.

KINDLBERGER, C.P. (1969). American Business Abroad : six lectures on direct

investment, New Haven: Yale University Press.

KING, N. & HORROCKS. C. (2010). Interviews in Qualitative Research. London: Sage.

KITCHEN, P.J., & AHMAD, S.Z. (2008). The Emergence of a Multinational corporation

from a developing country: A Case Study of TM Berhad International Expansion.

International Journal of Business Management, 3 (1), 93-105.

KITZINGER, J. (1995). Qualitative Research: Introducing Focus Groups. BMJ, 311 299 –

302.

KLINE R.B. (1998). Principles and Practice of Structural Equation Modelling. New

York: The Guildford Press

KOCH, A.J. (2001a) “Selecting overseas markets and entry modes: two decision processes

or one?,” Marketing Intelligence and Planning, 19 (1), pp. 65-75.

KOTHARI, C.R. (1990). Research Methodology: Methods and Techniques. (2nd

Edn).

Jaipur: New Age Publishers.

KNICKERBOCKER, F.T. (1973). Oligopolistic Reaction and Multinational Enterprise.

Boston, Division of Research, Graduate School of Business Administration, Harvard

University.

KNIGHT, G. & CAVUSGIL, S.T. (2004). Innovation, Organisation Capabilities and the

Born Global Firm. Journal of International Business Studies, 35 (2), 124-141.

KOGUT, B. & SINGH, B. (1988). The Effect of national culture on the choice of entry

mode. Journal of International business studies. 19, pp.411-432.

KOUTROUMPIS, P, (2009). The Economic Impact of Broadband on Growth; A

simultaneous approach. Telecommunications Policy, 33, 471-485.

KRAIJENBRINK, J., SPENDER, J.C. & GROEN, A. (2010). The Resource Based View:

a review and assessment of its critiques. Journal of Management, 36(1), 349-372.

342

KRISHNA, A. (2011). Changing the Rules of the Game Through Innovation: An interview

with Dr. Kamal Singh, CEO of the Malaysian Innovation Agency. Best Practice

Management, Hong Kong.

KRUEGER, R.A, (1988). Focus Group: A Practical Guide for Applied Research,

Newbury Park: CA: Sage Publications.

KUHN, T. S. (1970). The Structure of Scientific Revolution. USA: University of Chicago

Press.

KUMAR, R. (1998). Research Method: A step- by step for beginners, South Melbourne,

Australia, Addison Wesley Longman.

KUMAR, V. & SUBRAMANIAM, V. (1997). A Contingency Framework for the Entry

Mode Decision. Journal of World Business, 31 (1), 53-72.

KVALE, S. (1996). Interviews: An introduction to qualitative interviewing. London: Sage

Publications.

LAANTI, R.J. (2009). Internationalisation Strategies of Companies in Service Industries:

A study of National Communication Operators from Small and Open Economies

(SMOPECs). PhD Thesis, University of Adelaide, Australia.

LAANTI, R.J., McDougall, F. & Baume, G. (2009). “How well do traditional theories

explain the internationalisation process of service MNE’s from Small and Open

Economies (SMOPECs) - Case: National telecommunication companies.

Management International Review, 49, 1.

LAINE, A. & KOCK, S. (2000). A Process Model of Internationalization – New Times

Demand New Patterns. 16th

IMP Conference, Bath.

LEE, C (2001): “Telecommunications Reforms in Malaysia”, A research paper supported

by the Centre on Regulation and Competition at the Institute for Development Policy

and Management, University of Manchester.

LEE, C., (2002). Telecommunications Reforms in Malaysia, Annals of Public and

Cooperative Economics, 73 (4), 493-519.

LEE, J.S.K. (1992). Quantitative Versus Qualitative Research Methods: Two Approaches

to Organization Study. Asia Pacific Journal of Management, 9 (1), 87-94.

LEE URE LEE (2009). The Impacts and Benefits of Structural Reform in the Transport,

Energy and telecommunications Sectors in APEC Economies. APEC Policy Support

Unity, January, 2011.

LEEDY, P.D. & ORMROD, J.E. (2005). Practical Research: Planning and Design.

Australia: Pearson Prentice Hall,

LEEDY, P.D. (2001). Practical Research: Planning and Design. New Jersey: Prentice

Hall.

343

LEFF, N. H. (1984). Externalities, information costs and social-benefit cost analysis for

economic development: An example from telecommunications. Economic

Development and Cultural Change, 32 (2), 255-276.

LEUCKE, R. & KATZ, R. (2003). Managing Creativity and Innovation. Boston, MA:

Harvard Business School Press.

LI, F. & WHALLEY, J. (2002). Deconstruction of the Telecommunications Industry’:

From Value Chains to Value Networks, Telecommunications Policy, 26, pp. 451-

472.

LIM, D.H. 2010. A Case Study on the Degree of Internationalization in the Mobile

Telecommunications Industry. Communications and Convergence Review 2(2), 113-

128

LIM, J. S., SHARKEY, T. W. & KIM, K. I. (1991) ‘An empirical test of the export

adoption model’, Management International Review 31(1), 51-62.

LIMMERICK, D. & CUNNINGTON, B. (1993). Managing the New Organization: A

Blueprint for networks and strategic alliances. Sydney: Business and Professional

Publications.

LINCOLN, Y. & GUBA, E. (2000). Naturalistic Inquiry, Newbury Park, CA: Sage.

LIVINGSTONE, S. & HELSPER, E. (2011) Gradations in digital inclusion.

children, young people and the digital divide. New Media and Society

(9): 671-696, 2007.

LTEWORLD (2011). Available at www.lteworld.org

LOUSTARINEN, R., & WELSCH, L. (1990). International Business Operations.

Helsinki: Kyriiri Oy.

LOU, Y., & PENG, M. (1999). Learning to Compete in a Transition Economy: experience,

environment and performance. Journey of International Business Studies, 30, 269-

295.

LUSSIER, R.N., BAEDER, R.W. CORMAN, J. (1994). Global Practices: Global Strategic

Planning through Company Situational Analysis. Business Horizons, 37, 57.

MALHOTRA, N.K. (2010). Marketing Research: an Applied Orientation (6th

Edn.),Pearson Education.

MAKHAYA, G. (2002). The determinants of regulatory effectiveness in liberalized

markets: developing country experiences. Trade and Industry Policy Secretariat,

2002.

MARC 2007. Rating Approach to Telecommunications Companies. [Online]. Available:

http://www.marc.com.my/home/userfiles/file/Methodologies/RATING%20APPRO

ACH%20TO%20TELECOMMUNICATION%20COMPANIES.pdf...

[ACCESSED: 30 June 2008].

http://www.marc.com.my/home/userfiles/file/Methodologies/RATING%20APPROACH%20TO%20TELECOMMUNICATION%20COMPANIES.pdf

http://www.marc.com.my/home/userfiles/file/Methodologies/RATING%20APPROACH%20TO%20TELECOMMUNICATION%20COMPANIES.pdf

344

MAJARO, S. (1995). Creativity in the Search for Strategy. In CRAINER, S. (Ed). The

Financial Times Handbook on Management. London: Pitman Publishing.

MARREWIJK, A. (1999). Internationalisation, Cooperation and Ethnicity in the Telecom

sector. [Online]. Available: http://dao.anhviet.free.fr/Cross%20cultural/4578.pdf..

[ACCESSED: 3 February 2010]

MARR, B., SHUIMA, G. & NEELY, A. (2004). Intellectual Capital – defining key

performance indicators for organizational assets. Business Process Management

Journal, 5(10).

MARKOVA, I. (2008). The Epistemological Significance of the Theory of social

representations. Journal for the Theory of Social Behaviour, 38 (4) 461-487.

MASON, J., (2002). Qualitative Researching, 2nd

Ed. London: SAGE publications.

MATHEWS, S. (2010). Internetalisation; The Internet’s influence on international market

growth in the firms outward internationalization process. PhD Thesis. Queensland

University of Technology.

MAXWELL, J.A. (2005). Qualitative research design; an interactive approach (2nd

Edn.).

Thousand Oaks, CA: Sage Publications.

MAXFIELD, M.G., & BABBIE, E. (2001). Research Methods for Criminal Justice and

Criminology. Belmont, CA: Wadsworth.

MAXIS (2012): 3Q 2012 Results. [Online]. Available:

http://www.maxis.com.my/personal/about_us/investor/financial/4Q%202011%20IR

%20Pack%20FINAL%20v1.pdf [Accessed 20 December 2012].

MAXIS 2012: FY2011 and 4Q 2011 Results. [Online]. Available:

http://www.maxis.com.my/personal/about_us/investor/financial/4Q%202011%20IR

%20Pack%20FINAL%20v1.pdf [Accessed 24 February 2012].

MAXIS 2009 –Listing announcement. [Online]. Available:

http://www.maxis.com.my/personal/about_us/investor/Submitted%20Announcement

-Form29B.PDF [Accessed 12 October 2009].

MCDOUGALL, P.P., SHANE, S. & OVIATT, B.M. (1994). Explaining the Formation of

International New Ventures: The Limits of theories from International Business

Research. Journal of Business Venturing, 9, 469-487.

MCDOUGALL, P.P. & OVIATT, B.M. (2000b). International Entrepreneurship Literature

In The 1990’s and Direction For Future Research, In SEXTON, D.L. & SMILLOR,

R.W. (Eds.), Entrepreneurship 2000, Upstart Publishing, Chicago.

MCE; MANAGEMENT CENTRE EUROPE (2010). Telecom Services Industry. How

Telecom 2.0 will change your business model. MCE, The Executive Issue, 36, (10),

2010.

http://dao.anhviet.free.fr/Cross%20cultural/4578.pdf

http://www.maxis.com.my/personal/about_us/investor/financial/4Q%202011%20IR%20Pack%20FINAL%20v1.pdf




http://www.maxis.com.my/personal/about_us/investor/Submitted%20Announcement-Form29B.PDF

http://www.maxis.com.my/personal/about_us/investor/Submitted%20Announcement-Form29B.PDF

345

MCNAMARA, C. (1999). General Guidelines for Conducting Interviews. Minnesota.

MCKINSEY & COMPANY (2010): A New Route for Telecom Deregulation. McKinsey

Quarterly.[Online]. Available:

http://www.mckinseyquarterly.com/A_new_route_for_telecom_deregulation_1437

[Accessed: 24 November 2010]

MCKINSEY & COMPANY (2012): Business strategies for Indonesian telco’s.

MCMC: Available: www.skmm.gov.my

MCMC (SKMM): Communications and Multimedia, Pocket Book of Statistics, Q1, 2011.

Available at MCMC (SKMM): Communications and Multimedia, Pocket Book of

Statistics, Q1, 2011.

Available:http://www.skmm.gov.my/attachment/Statistics/Q2_2011_Eng.pdf


Available:http://www.skmm.gov.my/attachment/Statistics/Q2_2011_Eng.pdf


Available at MCMC (SKMM): Communications and Multimedia, Pocket Book of

Statistics, Q3, 2011. Available:

http://www.skmm.gov.my/attachment/Pocket%20Book/Q3_2011_Eng.pdf



http://www.skmm.gov.my/attachment/pdf/Q4%202011%20C&M%20Pocket%20Bo

ok%20of%20Statistics.pdf



http://www.skmm.gov.my/attachment/pdf/Q3%202012%20C&M%20Pocket%20Bo

ok%20of%20Statistics.pdf

MCMURRAY, D. (2009). MNG03047 Study Guide. Southern Cross University.

MDEC (2011): Available: http://www.mdec.com.my

MELODY, W., SUTHERLAND, E., & TADAYONI, R. (2005). Convergence, Internet

Protocol Telephony and Telecom Regulation: Challenges and Opportunities for

network development with particular reference to India. [Online]. Available:

http://infodev.org/files/2476_file_WM. [Accessed 30 November 2012 ].

MERRIAM, M.W. (2002). ‘Finding Performance. The new discipline of management’. In

Business Performance Management: Theory and Practice, ed. A Neely, Cambridge

University Press.

MESHER, G.M. & ZAJAC, E.E. (1997). The political economy of telecommunications in

Malaysia and Singapore: a structure-conduct-performance comparative analysis.

Information Economy and Policy, 9, 183-202.

http://www.mckinseyquarterly.com/A_new_route_for_telecom_deregulation_1437

http://www.skmm.gov.my/attachment/Statistics/Q2_2011_Eng.pdf

http://www.skmm.gov.my/attachment/Statistics/Q2_2011_Eng.pdf

http://www.skmm.gov.my/attachment/Pocket%20Book/Q3_2011_Eng.pdf

http://www.skmm.gov.my/attachment/pdf/Q4%202011%20C&M%20Pocket%20Book%20of%20Statistics.pdf




http://www.mdec.com.my/

http://infodev.org/files/2476_file_WM

346

MERTENS (2005). Research and Evaluation in Education and Psychology: Integrating

Diversity with Quantitative, Qualitative and Mixed Methods. Thousand Oaks, CA:

Sage.

MIDA, (2012). Key economic Indicators, Malaysia [Online]. Available:

http://www.mida.gov.my/env3/index.php?page=key-economic-indicators

[Accessed 30 November 2012]

MIER (2012): Malaysian Economic Outlook, 2012 [Online]. Available:

http://www.mier.org.my/outlook/ [Accessed 30 November 2012]

MILES, M.B. & HUBERMAN, A.M. (1994). Qualitative Data Analysis: An Expanded

Sourcebook. London: Sage.

MINTZBERG, H, (1979), The Structuring of Organisations. Englewood Cliffs:

Prentice-Hall,

MITI 2011: Free Trade

agreements..http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Secti

on_8ab55693-7f000010-72f772f7-46d4f042

MOBITHINKING (2011). Available: http://www.mobithinking.com

MOLINA-AZORIN, J. (2007). Mixed methods in strategy research: applications and

implications in the resource-based view, Research Methodology in Strategy and

International Review

MOTOLIO & TRUJILLIO (2012). What drives investments in telecommunications ? The

role of regulation, firms’ internationalisation and market knowledge. Institut

d’Econimia de Barcelona.

MOON, J. & LEE, H. (1990). On the internal correlates of export stage development: an

empirical investigation into the Korean electronics industry. International Marketing

Review, 7(5), 16-26.

MOORMAN, C. DEHPANDE, R., ZALTMAN, G. (1993). Factors Affecting Trust in

Market Research Relationships. Journal of Marketing, 57 (1). 81-101

MORGAN, D.L. (1998). Planning Focus Groups, Thousand Oaks: Sage.

MORGAN, R.M. & HUNT, S.D. (1994). The Commitment-Trust Theory of Relationship

Marketing. Journal of Marketing, 58 (July), 20-38.

MORGAN, R.E. & KATSIKEAS, C.S. 1997. Export Stimuli: Export Intention compared

with Export Activity. International Business Review, 6 (5).

MSC (2011): Available: http://www.msc.com.my

MUSA, M.B. (2007). Towards a Competitive Malaysia: Development Changes in the 21st

Century, Strategic Information and Research Centre, Malaysia.

http://www.mida.gov.my/env3/index.php?page=key-economic-indicators

http://www.mier.org.my/outlook/

http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_8ab55693-7f000010-72f772f7-46d4f042

http://www.miti.gov.my/cms/content.jsp?id=com.tms.cms.section.Section_8ab55693-7f000010-72f772f7-46d4f042

http://www.mobithinking.com/

http://www.msc.com.my/

347

MUSTAPHA, R. & ABDULLAH, A. (2005). “Malaysia Transitions Toward a

Knowledge-Based Economy”. The Journal of Technology Studies.

NACHUM, L. & ZAHEER, S. (2005) “The Persistence of Distance? The Impact of

Technology on MNE Motivations for Foreign Investment,” Strategic Management

Journal, 26(8): 747-768.

NAIDU, G. & LEE, C. (1997). “The Transition to Privatization: Malaysia” in Mody,

Ashoka Edn (1997). Infrastructure Strategies in East Asia; The untold story,

Washington, D.C.: World Bank, 27-49.

NELSON, R.R., & WINTER, S.G. (1982). An Evolutionary Theory of Economic Change,

Cambridge, Mass: Harvard University Press.

NESADURAI, Y. (2011) Adapting a Global Mindset. Malaysian Business, 16 February

2011.

NEUMAN, W.L. (2006). Qualitative and Quantitative Approaches. USA:, Pearson

Education, Inc.

NICHOLLS-NIXON, C. & JASINSKI, D. (1995). The Blurring of Industry Boundaries:

An Explanatory Model applied to Telecommunications. Industrial & Corporate

Change. 4, 755-767.

NITC (2010): Available: www.nitc.com.my

NOBLE, S.M., HAYTKO, D.L., PHILLIPS, J. (2009). What drives college-age

Generation Y consumers? Journal of Business Research. 62, 617-628.

NONAKA, I & TAKEUCHI, H. (1995). The Knowledge-Creating company, How

Japanese Companies Create the Dynamics of Innovation, Oxford University Press.

NUNNALLY, J.C, (1970). Introduction to Psychological measurement., New York.

McGraw Hill.

O’GRADY, S. & LANE, H.W. (1996). The Psychological Distance Paradox. Journal of


OGILVY (2012). Brand Architecture Indonesia.

OPDENAKKER, R. (2006). Advantages and Disadvantages of Four Interview Techniques

in Qualitative Research. Forum: Qualitative Social Research, 7 (4).

ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT. 2007.

EDUCATION AT A GLANCE:

OECD INDICATORS 2007. PARIS: OECD.

OSARENKHOE, A. (2008). A study of the enablers of non-sequential internationalization

process among small and medium-sized firms. Int. Journal of Business Science and

Applied Management, (3) 2.

http://www.nitc.com.my/

348

OSWAL, P. (2010). The Internationalization of Indian Firms: Strategic Issues,

Organizational Transformation, and Performance. PhD Thesis, University of St.

Gallen.

OVIATT, B.M. & MCDOUGALL, P. (2005). The internationalization of

entrepreneurship. Journal of International Business Studies, 36(1), pp. 2-8.

OVUM (2007): CANSFIELD, M. BT and ICT: Two case Studies. [Online]. Available:

http://www.btplc.com/Health/Templates/documents/BTandICTOvumreport.pdf

[Accessed 30 June 2008].

OVUM (2012): [Online]. Available: http://ovum.com/press_releases/ovum-reveals-

mobile-broadband-presents-the-largest-opportunity-for-operator-revenue-growth-

until-2016/

OXFORD BUSINESS GROUP, (2007). The Report; Malaysia 2007. Oxford Business

Group.

OXFORD BUSINESS GROUP, (2010). The Report: Malaysia 2010. Telecoms Chapter,

Oxford Business Group.

PARKHE, A. (1993). Messy Research, Methodological predisposition and theory

development in international joint-ventures. Academy of Management Review, 18

(2), 227-268.

PATTON, M.Q. & ABBLEBAUM, S.H. (1990). The Case for Case Studies in

Management Research. Management Research News, 26 (5), 60-71.

PATTON, M.Q. (1990). Qualitative Evaluation and Research Methods. USA: Sage.

PAWELS, P, & MATTHYSSENS, P. (2004). The Architecture of Multiple Case Study

Research in International Business. In MARSCHAN-PIEKKARI, R. & WELSCH,

C. (Eds.), Handbook of qualitative research methods for international business.

Cheltenham, UK: Edward Elgar Publishing.

PAWELS, P, & LOMMELEN, T. & MATTHYSSENS, P. (2004). The

Internationalization Process of the Firm: Progression through Institutionalization,

Exploitative and Exploratory Learning. Competitive Paper presented at the 46th

Annual Meeting of the Academy of International Business, Stockholm, Sweden.

PEHRSSON, A. (2001b). The Strategic States Model: optimum strategies to reach high

performance. Management Decision, 39 (6), 441-7.

PENNINS VANKRANENBURG ABD HAGEDORN, (2005). The Past, Present and

Future of the Telecommunications Industry. In DALZOTTO, C, 2005, The Aging

New Economy; The Growth and Dynamics of new media firms.

PENROSE, E. T. (1959). The Theory of the Growth of the Firm. New York: John Wiley.

http://www.btplc.com/Health/Templates/documents/BTandICTOvumreport.pdf

349

PEPPARED, J. & RYLANDER, A. (2006), From Value Chain to Value Network: Insight

for Mobile Operators. European Management Journal, 24.

PERLMUTTER, H.V, & HEENAN, D.A. (1994). ‘Cooperate to compete globally’ in

BARNEVIK, P, AND MOSS KANTER, R. eds. Global Strategies; Insights from the

Worlds Thinking Leaders. USA: Harvard Business Review.

PERRY, C., ALIZADEH, Y. & REIGE, A. (1997 ). Qualitative Methods in

Entrepreneurship Research. Small Enterprises Association of Australia and New

Zealand Annual Conference, 21-24 September 1997 Coffs Harbour, Australia. 547-

67.

PERRY, C., ALIZADEH, Y. & BROWN, L. (1990 ). Realism rules ok: Scientific

Paradigms in marketing research about networks. Australia and New Zealand

Marketing Academy Conference University of Otago, New Zealand.

PERRY. C. (2001). A Structured Approach to Presenting a PhD Thesis: Notes for

Candidates and Their Supervisors, Research Workshop Handout, Southern Cross


PETERAF, M. A (1993) ‘The Cornerstones of Competitive Advantage: A Resource-Based

View’, Strategic Management Journal, 14 (3), 179-191.

PETTIGREW, A.M. (1988). Longitudinal Field research on change: Theory and Practice.

National Science Foundation Conference on Longitudinal Research Methods in

Organizations. Austin.

PETTIGREW, A.M. (1988). The management of strategic change, Oxford: Basil

Blackwell.

PHILLIPS, E.M. & PUGH, D.S. (1987). How to get a PhD?, Milton Keynes: Open

University Press.

PLUNKETT RESEARCH (2011). Introduction to the Telecommunications Industry.

[Online]. Available: http://www.plunkettresearch.com/telecommunications-market-

research/industry-and-business-data. [Accessed: 30 June, 2011].

PORTER, M.E. (1995). Competitive advantage; creating and sustaining superior

performance, New York: Free Press.

PORTIO RESEARCH (2011) Mobile Factbook 2011.

PRAHALAD, C.K. & HAMEL, G. (1990). The Core Competency of the Corporation.

Harvard Business Review, May-June, 1990.

PRESSER.J. & BLAIR.J. (1994). Survey Protesting: Do different surveys produce

different results?. In, MARSDEN. P.V. (ed). Sociological Methodology, 24,

Washington DC. American Sociological Association.

http://www.plunkettresearch.com/telecommunications-market-research/industry-and-business-data

http://www.plunkettresearch.com/telecommunications-market-research/industry-and-business-data

350

PRIEM, R.L., & BUTLER, J.E. (2001a). Is the resource-based theory a useful perspective

for strategic management research? Academy of Management Research, 26 (1), 22-

40.

PRIEM, R.L., & BUTLER, J.E. (2001b). Tautology in the Resource-based view and

implications of externally determined resource value; further comments, Academy of

Management Research, 26 (1), 57-66.

PUNCH, K.F. (1998). From research Questions to Data. Introduction to Social Research,

London: Sage.

PYRAMID RESEARCH 2011: Malaysia Intelligence Report, 2011. London: Pyramid

Research 2011.

PWC (2012). Risk Assessment for Indonesia Telco’s.

QTEL (2012). Available: www.qtel.com

QUOCIRCA (2010). Telecoms reinvention – the death of the traditional telco [Online].

Available at: http://quocirca.com/reports/499/telecoms-reinvetiondeath-of-the-

traditional-telco. [Accessed 6 December 2010].

RAO, T. R. & NAIDU, G.M. (1992). Are the stages of internationalisation empirically

supportable? Journal of Global Marketing, 6 (1/2), 147-70.

RAGAHYA, M.Z. (1999). Malaysia Reverse Investments: Trends and Strategies. Journal

of International Business Studies, 16 (3) 469-96.

RATHOD, S. (2004). Questionnaire Length and Fatigue: Does size really matter.

Presented at the ESOMAR Panel Research Conference, 17-19 2005.

REMENYI, D., WILLIAMS, B., MONEY, A., SWARTZ, E. (1998). Doing Research in

Business and Management: an introduction to process and method. London: Sage

Publications.

REID, S. (1981) ‘The decision-maker and export entry and expansion’, Journal of


REID, S. (1983). Firm Internationalization, Transaction Costs and Strategic Choice.

International Marketing Review, I, 44-56.

REIGE, A.M., AND NAIR, (1996). “Criteria for judging the quality of case study

research”, Working Paper, School of Marketing, Queensland University of

Technology, Brisbane.

REUTERS. Available: www.reuters.com

RICKS, D.A., TOYNE, B., MARTINEZ, Z. (1990). Recent Developments in International

Management Research. Journal of Management, 16, 219-253.

http://www.qtel.com/

http://quocirca.com/reports/499/telecoms-reinvetiondeath-of-the-traditional-telco

http://quocirca.com/reports/499/telecoms-reinvetiondeath-of-the-traditional-telco

http://www.reuters.com/

351

RHEINGOLD, H.(1988). They have a Word For It. New York: St. Martins Press.

ROGERS, E. M. (1962) Diffusion of innovations New York: The Free Press.

ROLAND BERGER (2012). Telco 2020 – How Telcos transform for the "Smartphone

Society" 2012.

RONEN, S., & SHENKAR, O. (1985). Clustering countries on attitudinal dimensions: A

review and synthesis. Academy of Management Review, 10, 435–454.

ROOLAHT, T. (2002). The Internationalization of Estonian Companies: An Exploratory

Study of Relation Aspects. PhD (Economics), University of Tartu, Estonia.

ROOT, F.R. (1994). Entry Strategies for International Markets. Revised and Expanded

Edition, San Francisco: Jossey-Bass, Inc. Publishers.

ROSCOE, J.T. (1975). Fundamental Research Statistics for the Behavioural Sciences (2nd

Edn.)., New York: Holt, Rinehart and Winston.

RUBIN, A. & BABBIE, E. (1994). Research Methods for Social Work, Thompson

Information/publishing Group.

RUBIN, A. & RUBIN, A. (2005). Qualitative Interviewing: The art of hearing data. (2nd

edn.). Thousand Oaks: Sage.

RUGMAN, A.M. & D’CRUZ, J.R. (2000). Multinationals as Flagship Firms: A New

Theory of Regional Business Networks, Oxford: Oxford University Press.

RUMELT, R.P. (1991). How Much Does Industry Matter? Strategic Management Journal,

12 (3), 167-185.

RUZZIER, M. HISRICH, R.D. & ANTONICIC, B. (2006). SME Internationalisation

Research: Past, Present and Future. Journal of Small Business and Enterprise

Development, 13 (4), 476-496.

SAKARYA, S., ECKMAN, M. & HYLLEGARD, K. H. (2007). Market selection for

international expansion: Assessing opportunities in emerging markets. International

Marketing Review. 24 (2), pp. 208-238

SALAZAR, L.C. (2007). Getting a Dial Tone: Telecommunications Liberalisation in

Malaysia and The Philippines. Singapore: Institute of South Asian Studies.

SANCHEZ, M.Z. & HWA, A.P. (2003). Effective Regulators: A Response to the

International Telecommunication Union’s. Case Study on Singapore. –Asia Pacific

Law & Policy Journal 4 (1) Winter 2003.

SARKAR, M.B., CAVUSGIL, S.T., & AULAKH, P.S. (1999). International Expansion of

Telecommunication Carriers; the Influence of Market Structure, Network

Characteristics, and Entry Imperfections. Journal of International Business Studies,

30, 2. Pp.361-382.

352

SCHELLEKENS, P. (2011) ‘Whither Malaysia’s Brain Drain?’ World Bank,

Malaysia Economic Monitor 21 April 2011 (http://www.worldbank.org/my)


SCHOENER, M. (2008). Gartner: The next-gen telco: Telcos' future success will rely on

how rapidly they can evolve their business models in response to the constantly

changing business needs and rising customer expectations, brought by new

technologies and competitors

http://findarticles.com/p/articles/mi_m0FGI/is_6_19/ai_n31040929

SEKARAN, U, 1999. Research Methods for Business: A Skill Building Approach, John

Wiley & Sons.

SEKARAN, U, 2010. Research Methods for Business: A Skill Building Approach, John

Wiley & Sons.

SHANKAR, C., MOHAMED, S. & YUZLIZA, M.Y. (2010). Internationalization and

Performance: Small and Medium enterprises in Malaysia (SME’s). International

Journal of Business Management, 5 (6), 27-37.

SIVALINGHAM, G. (2007). Network Governance in Malaysia’s Telecommunications

Industry [Online]. Available:

http://www.hks.harvard.edu/netgov/files/NIPS/Paper_G_Sivalingam.pdf

[Accessed: 8 August 2008].

SILVERMAN, D. (2001). 2001. Intrerpreting Qualitative Data: Methods for analysing

talk, text and interaction )3nd En.). London: Sage.

SILVERMAN, D. (2005). Doing Qualitative Research (2nd

Edition), London: Sage

Publications.

SILVERMAN, D. (2006). Interpreting Qualitative Data: Methods for Analyzing Talk, Text

and Research (2nd

Edition), London: Sage Publications.

SINGTEL (2012). Annual Report. [Online] Available:

http://info.singtel.com/sites/default/files/fr.invrel/Q3FY12_Slides.pdf

SOBH, R. & PERRY, C. (2006). Research Design and Data Analysis in Realism Research.

European Journal of Marketing, 40 (11/12), 1194-1209.

SKULMOSKI, G.J. HARTMAN,F.T., & KRAHN.J. (2007). The Delphi Method for

Graduate Research. Journal of Information Technology Education, 6.

SMITH-DOERR, L. & POWELL, W.W. (2003). Networks and Economic Life. [Online].

Available:

http://www.stanford.edu/group/song/papers/NetworksandEconomicLife.pdf.

[Accessed: 3 January 2010]

http://findarticles.com/p/articles/mi_m0FGI/is_6_19/ai_n31040929

http://www.hks.harvard.edu/netgov/files/NIPS/Paper_G_Sivalingam.pdf

http://info.singtel.com/sites/default/files/fr.invrel/Q3FY12_Slides.pdf

http://www.stanford.edu/group/song/papers/NetworksandEconomicLife.pdf

353

SPIRE: ASEAN telco industry; Bahar, J. Amcham Singapore event, 8 September 2010.

[Online]. Available: http://www.slideshare.net/jeffreybahar/spire-asean-telco-

industry-8-sept-2010-final. [Accessed 1 November 2010].

STEGER, M.B. (2009). Globalisation: A Very Short Introduction. Oxford: Oxford

University Press.

STEINSTRA, M. ET AL. (2004). ‘Strategic renewal of Europes largest telecoms operators

(1992-2001): From herd behaviour to strategic choice?’. European Management

Journal,22, PP.273-280.

STRAUSS, A, L. (1990). Qualitative Research for Social Scientists. Cambridge University

Press.

STOIN, M. & RIALP-CRIADO, A. (2010). Analyzing export behaviour through

managerial characteristics and perceptions.: A multiple case-based research. Journal

of Global Marketing, 23(4), 333-348.

SUBRAMANIAM, M., & YOUNDT, M.A. (2005). The influence of intellectual capital on

innovative capabilities. Academy of Management Journal, 2005, vol. 48, pp. 450-

463.

SULLIVAN, D & BAUERSCHMIDT, A. (1990). Incremental Internationalization; A test

of Johanson and Vahlne’s Thesis. Management International Review, 30(1), pp. 19-

31.

SULLIVAN, D. (1994). Measuring the Degree of the Internationalisation of a Firm.

Journal of International Business Studies, Palgrave Macmillan Journals.

SULLIVAN, D. (1997). Theory Development in International Business Research. The

decline of culture. In TOYNE, B., & NIGH, B (Eds.). International Business: An

emerging Vision. Columbia: University of South Carolina Press.

TABACHNICK, B.G., & FIDELL, L.S. (2001). Using Multivariate Statistics, Needham

Heights, Allyn & Bacon.

TAN, L.L. (2008). The Internationalisation of Malaysian Manufacturing Small and

Medium Enterprises. DBA Thesis, Southern Cross University, Australia.

TANUR, J. M. (Ed.). (1992). Questions about questions. New York: Russel Sage.

TAPSCOTT, D. (2001). Rethinking Strategy in a Networked World (or Why Michael

Porter is Wrong about the Internet). Booz & Co, Issue 24.

TASHAKKORI, A. & TEDDLIE, C. (2003). Mixed Methodology: Combining Qualitative

and Quantitative Approaches. Thousand Oaks, CA, Sage.

TAYLOR-POWELL, E. & RENNER.M. (2003). Analysing Qualitative Data. [Online].

G3658-12., University of Wisconsin-Extension, Program Development and

http://www.slideshare.net/jeffreybahar/spire-asean-telco-industry-8-sept-2010-final.%20%5bAccessed%201%20November%202010

http://www.slideshare.net/jeffreybahar/spire-asean-telco-industry-8-sept-2010-final.%20%5bAccessed%201%20November%202010

354

Evaluation, Madison, Wisconsin. Available:

http://cecommerce.ewex.edu/pdfs/G3658-12.PDF. [Accessed: 30 June 2010]

TEECE, D. J., PISANO, G. & SHUEN, A. (1997). Dynamic Capabilities and Strategic

Management, Strategic Management Journal, 18 (7), 341-354.

TEECE, D. J. (2011). Dynamic Capabilities: A guide for managers, Ivey Business Journal,

Strategy – march/april.

Telecomasia.net

19 March, 2007

Telegeography.com

5 July, 2011,

13 December, 2011.

15 December, 2011.

27 March, 2012.

THAM, S.Y. 2006. Outward foreign direct investment from Malaysia: trends, patterns and

policy issues. Paper presented at the ASEAN-UNCTAD seminar, “Key issues of

FDI: Outward FDI from Asia.” Chang Mai, 10 April, 2006.

The New Straits Times:

21 May, 2011

14 February, 2012

The Business Times:

The Business Times, 22 Sept. 2010

The Business Times, 4 April, 2011

The Business Times, 22 October, 2011

The Business Times, 23 November, 2011

The Business Times, 26 December, 2011

The Business Times, 26 December, 2011

The Business Times, 14 May, 2012

The Business Times, 30 November, 2012

The Edge:

7 June, 2010

30 August, 2010

19 October, 2011

8 October, 2012

Financial Daily, 1 December, 2011

Financial Daily, 2 April, 2012.

The Jakarta Post, 16 May, 2011

http://cecommerce.ewex.edu/pdfs/G3658-12.PDF

355

The Malay Mail, 3 February, 2012

The Star:

25 March, 2010

20 November, 2010

22 September, 2010

28 January, 2011

21 April, 2011

30 April, 2011

26 May, 2011

2 June, 2011

6 October, 2011

6 December, 2011

13 December, 2011

28 December, 2011

4 February, 2012

8 February, 2012

14 February, 2012, p.2

22 February, 2012, p.2

4 April, 2012

The Sun:

24 July, 2012

30 August, 2012

THE WORLD BANK (2012). Available: http://www.worldbank.org/en/country/malaysia.

THE WORLD BANK (2011). Available: http://www.worldbank.org/en/country/malaysia.

THE WORLD BANK (2010). Malaysia Economic Monitor: Growth through Innovation.

April 2010.

THE WiMAX Guide, April (2009). [Online]. Available:

http://img.en25.com/Web/WiMaxBroadbandSolutions/WiMax.com_WiMAXGuide_

Apr09.pdf [Accessed 6 June 2010].

THE YANKEE GROUP (2010). How can the Telecom Industry Start Growing Again.

[Online]. Available: http://www.yankeegroup.com/ResearchDocument.do?id=54011


THOMPSON, A, STRICKLAND, A & GAMBLE, J, 2005. Crafting & Executing

Strategy: The Quest for Competitive Advantage; Concepts and Cases, (14th

Edn.),

Boston: McGraw Hill/Irwin.

THOMPSON, A., STRICKLAND, A. & GAMBLE, J. (2007). Crafting & Executing

Strategy, New York: McGraw Hill.

http://www.worldbank.org/en/country/malaysia

http://www.worldbank.org/en/country/malaysia

http://img.en25.com/Web/WiMaxBroadbandSolutions/WiMax.com_WiMAXGuide_Apr09.pdf

http://img.en25.com/Web/WiMaxBroadbandSolutions/WiMax.com_WiMAXGuide_Apr09.pdf

http://www.yankeegroup.com/ResearchDocument.do?id=54011

356

TIA: TELCOMS INDUSTRY ASSOCIATION. (2010). [Online]. Available:

www.tiaonline.org.


TICEHURST, G & VEAL, A. (2000). Business Research Methods: A Managerial

Approach, Longman.

TIME dotcom, Annual report (2006).

TIME dotcom Annual Report, (2010).

http://www.time.com.my/downloads/TIME_AR_2010.pdf

TIME dotcom (2012). Analyst Briefing

TIME dotcom 4Q FYE (2011). Performance Guide.

http://www.time.com.my/downloads/TIME%20dotCom%20Berhad%20Q4%20and

%20FY%202011%20Financial%20Performance%20Guide.pdf

TIME dotcom (2011): Analyst Briefing

Novemberhttp://www.time.com.my/downloads/20111129_TIME%20Q3%202011%

20Analysts%20Briefing%20-%2029%20Nov%202011.pdf

TNS (2009). TNS Global Telecoms insights, 2009.

TRAI (2012). Available: www.trai.gov.in

TRCSL (2012). Available: www.trscl.com

TRUIJENS, 0 (2003). "A Critical Review of the Resource-based View of the

Firm," University of Amsterdam, Netherlands . Sprouts: Working Papers on

Information systems, 3(6). http://sprouts.aisnet.org/3-6.

TSOUKAS. H. (1989). The Validity of Idiographic Explanations. Academy of

Management Review, 14.

TURNBULL, P. (1987). A Challenge to the Stages Theory of the Internationalization

Process, In ROSSON, P. & REID, S. (Eds.) Managing Export Entry and Expansion

– Concepts and Practice, New York: Praeger.

TURNBULL, P. & VALLA, J.P. (1986). Strategies for International Industrial Marketing,

London: Croom Helm.

UNCTAD (2012). World Investment Report 2012.

Available: http:// unctad.org/en/Publications Library/wir2012_embargoed_en.pdf.

[Accessed: 3 January 2010].

URE, J. (2000). Interconnection of Mobile to Fixed: The Case of Malaysia (ITU and

MCMC) [Online]. Available:

http://www.elearning.trpc.com.hk/bank/pdf/case_study_my.pdf

[Accessed: 4 December 2010].

http://www.tiaonline.org/

http://www.time.com.my/downloads/TIME_AR_2010.pdf

http://www.time.com.my/downloads/TIME%20dotCom%20Berhad%20Q4%20and%20FY%202011%20Financial%20Performance%20Guide.pdf

http://www.time.com.my/downloads/TIME%20dotCom%20Berhad%20Q4%20and%20FY%202011%20Financial%20Performance%20Guide.pdf

http://www.time.com.my/downloads/20111129_TIME%20Q3%202011%20Analysts%20Briefing%20-%2029%20Nov%202011.pdf

http://www.time.com.my/downloads/20111129_TIME%20Q3%202011%20Analysts%20Briefing%20-%2029%20Nov%202011.pdf

http://www.trai.gov.in/

http://www.trscl.com/

http://www.elearning.trpc.com.hk/bank/pdf/case_study_my.pdf

357

URE, J. (2005). Study on Malaysia’s National Strategic Framework for Bridging the

Digital Divide.

(UNDP, Economic Planning Unit (EPU), Government of Malaysia-2005).

URE J. (2008). Telecommunications Development in Asia. Hong Kong University Press.

URE.J. (2009). Trends in Telecommunications Across Asia pacific – A point KPMG –

TRPC study. [Online]. Available: -

http://www.kpmg.com.hk/en/virtual_library/Information_Communications_Entertain

ment/State_of_telecoms.pdf. [Accessed: 3 January 2010].

URE, J. & LOVELOCK (2009). Trends in Telecommunications Across Asia pacific – A

point KPMG – TRPC study. [Online]. Available:

http://www.kpmg.com.hk/en/virtual_library/Information_Communications_Entertain

ment/State_of_telecoms.pdf. [Accessed: 3 January 2010].

URE, J. AND VIVORAKIJ, A. (1997). Privatization of Telecoms in Asia. In RYAN.D.J.

(Ed.) Privatization and competition in telecommunications: international

developments, Westport, Conn: Praeger.

VAHLNE, J. & WEIDERSHAM-PAUL, F. (1973). Economic distance: model and

empirical investigation, In HORNELL, E. VAHLNE, & WEIDERSHAM-PAUL, F.

(Eds), Export and Foreign Establishments, Uppsala, 81-159.

VEAL A. J. (2005). Business Research Methods: A Managerial Approach, Frenchs Forest:

Pearson Addison Wesley.

VENTANA RESEARCH (2010). The Social Media Revolution in Industry Analyst

Community. [Online]. Available: http://www.ventanaresearch.com. [Accessed 26

November 2010].

VENUGOPAL, K. 2003. Telecommunication sector negotiations at the WTO: Case

Studies of India, Sri Lanka and Malaysia [Online]. Available:

http://www.unescap.org/tid/mtg/ituwtoesc_s51b.pdf

[Accessed:8 August 2008].

VERIZON, (2007). Telecommunications Industry Overview, 2007.

VERNON, R. 1966. International Trade and International Investment in the Product Life

Cycle. Quarterly Journal of Economics, 80, 190-207.

VODAFONE: Annual Report 2011.

WALKER, G.R. & FOX, M.A. (1996). Globalisation; An Analytical Framework. Indiana

Journal of Global Legal Studies. (2) 3, 375-412.

WELSCH, D & LUOSTARINEN, R. (1993). ‘Internationalisation: Evolution of A

Concept’, In BUCKLEY P.J. & GHAURI, P.N. (Eds.) The Internationalisation Of

The Firm: A Reader. London: Academic Press, 155-171.

http://www.kpmg.com.hk/en/virtual_library/Information_Communications_Entertainment/State_of_telecoms.pdf




http://www.ventanaresearch.com/

http://www.unescap.org/tid/mtg/ituwtoesc_s51b.pdf

358

WELSCH, D. & LUOSTARINEN, R. (1988). Internationalisation: Evolution of A

Concept. Journal of General Management,14 (2),34-55.

WERNERFELT, B. (1994). A Research-Based View of the Firm. Strategic Management

Journal, 5 (2) 171-180.

WHALLEY, J. (2001). 3G Auctions and Changing Collaborative Patterns Within the

Mobile Telecommunications Industry. Management Science, Theory Method and

Practice, 16 (1). Draft Paper presented at the 12th

International Telecommunications

Society. European Conference, Trinity College, Dublin, 1-3 September 2001.

WHALLEY, J. (2004). Flagship firms, consolidation and changing market structures

within the mobile communications market. Telecommunications Policy, 28 (2)161-

175.

WILD, J.J., WILD, K.L. & HAN, J.C.Y. (2008). International Business: The Challenges

of Globalization. 4th

Edition. New Jersey: Pearson Prentice Hall.

WILLIAMSON, O.E. (1973). “Markets and Hierarchies: Some Elementary

Considerations.” American Economic Review 63 (May): 316–25.

WILLIAMSON, O.E. (1974). “The Economics of Antitrust: Transaction Cost

Considerations.” University of Pennsylvania Law Review 122 (June): 1439–96.

WILLIAMSON, O.E. (1981). The Economics of Organizations: The Transaction Cost

Approach. The American Journal of Sociology, 87 (3), pp. 548-577

WILLIAMSON, O.E. (1985). The Economic Institutions of Capitalism. New York: Free

Press.

WILLIAMSON, O.E. (1991). “Comparative Economic Organization: The Analysis of

Discrete Structural Alternatives.” Administrative Science Quarterly 36 (June): 269–

96.

WILLIAMSON, O.E. (1996). “Efficiency, Power, Authority and Economic Organization.”

In John Groenewegen, ed., Transaction Cost Economics and Beyond. Boston:

Kluwer.

WITT, S. F. & MOUTINHO, L. (1994), Tourism Marketing and Management Handbook,

London: Prentice Hall.

WOLF, M. (2004). Why Globalization Works. USA: Yale University Press Publications

WONG, W.W. (2012): Internationalisation of Malaysian Engineering Consulting Services

Firms. DBA Thesis, Southern Cross University, Australia.

WORTZEL, L.H. & WORTZEL, H.V. (1981). Export marketing strategies for nic and ldc

based firms, Columbia Journal of World Business, Spring 51-60.

359

WORLD ECONOMIC FORUM. (2011). The Global Competitiveness Report – 2010-

2011. [Online]. Available:

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf


WORLD ECONOMIC FORUM. (2011). The Global Information Technology Report

2010-2011, Transformation 2.0. [Online]. Available:

http://www.ifap.ru/library/book494.pdf. [Accessed 3 December 2011].

WORLD ECONOMIC FORUM. (WEF) (2012). The Global Information Technology

Report 2012. [Online]. Available: http://www.weforum.org/reports/global-

information-technology-report-2013.

YIN, R.I., (1994). Case Study Research. Thousand Oaks, CA: Sage Publications, YIN,

R.K. (2003a). Case Study Research: Design and Methods (3rd

edn.), Thousand

Oaks: Sage.

YIN, R.K. (2003b). Applications of Case Study Research: (2nd edn.), Thousand Oaks:

Sage.

YIP, G. (2003). Total Global Strategy II: Updated for the Internet and Service Era Upper

Saddle River, NJ: Prentice Hall.

ZAIN, M. & NG. S.I. (2006). The Impact of network relationships on SME’s

internationalization process. Thunderbird International Business Review, 48 (2),

183-205.

ZDNET (2012). Available: www.zdnet.com

ZIKMUND, W.G, (2003), Business Research Methods (5th

Edn.), Ohio: Dryden Press,

Harcourt College Publishes, Chicago.

ZIMMERMAN, C. (2008). Can Dynamic Capabilities Explain idiosyncrasies in Process

Innovation? Comparative Case Insights into the Firms Institutional Level, Strategic

Management Society (SMS), Cologne, (with M.Horn and I.Wunderlich).

ZIMMERMAN, C., ZIMMERMANN, P., LANGE, D. (2009). “International Sourcing in

European Telecommunications: Capability Development and Reconfiguration”, in

"The Economics of Digital Markets”, Madden, G. and Cooper, R. (eds.),

Cheltenham: Edward Elgar.

ZITA, K. (2005). Malaysia Telecom Brief, Network Dynamics Associates, LLC. [Online].

Available: http://www.ndaventures.com/Malaysia_Telecom_Brief.pdf

[Accessed: 8 August 2008].

http://www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2010-11.pdf

http://www.ifap.ru/library/book494.pdf

http://www.zdnet.com/

http://www.ndaventures.com/Malaysia_Telecom_Brief.pdf

360

APPENDIX 1: Interview Invitation

Email Invitation:

Dear Ms. Krishna, I am writing with reference to my Doctoral thesis and would be very grateful for your kind assistance and participation. I am conducting research as part of my Doctor of Business Administration (DBA) degree at Southern Cross University, Australia. My thesis is investigating the strategic issues that impact the successful internationalisation of Malaysian telecommunications firms. Krishna from <Company X> kindly provided me with your details and has suggested that your knowledge and expertise will greatly assist me with my doctoral research. Accordingly, I am writing to request a meeting as part of this study and would very much welcome and appreciate your participation

My research aims to assess how the emerging trends in the global telecommunications sector influence strategies of Malaysian telco firms. It also aims to identify the challenges faced as they internationalise. The findings of this research, including knowledge collated from the interviews, and a questionnaire, will offer recommendations for Malaysian telecommunications industry as well as Government. All matters discussed will remain confidential.

I would be very grateful if you would be kind enough to spare an hour of your time to meet with me to discuss the topic and some specific propositions and that I am investigating.

In the meantime, should you require any further information or have any queries, please feel free to contact me on +6012 232 0823. I look forward to hearing from you soon. Yours Respectfully Amita Krishna.

361

APPENDIX 2: Interview Guide

Code #

Date

Name of Firm

Contact Name

Position

Contact Details

Section Key Points Some Questions

A Introduction Overview, Ethics and Confidentiality

B Introduction and

objectives

Determining why Malaysian telecommunications firms venture

into overseas markets

The influence of the dynamic marketplace on their competitive

strategies

How they internationalise

The challenges they face in international markets

What are the key factors that need to be addressed for successful

international market penetration

Governments Role

C Experience, prior

knowledge and

perspectives on

the research topic

Views and perspectives on the internationalisation of Malaysian


D 4 Questions

pertaining to the 4

research

propositions

Outlined below

1 The Dynamic

Market

Landscape

What are your views on the current state of the global market and

emerging trends?

How do you believe these influence the Malaysian market

Do you consider it necessary for Malaysian Telcos to venture

abroad? If so, what are the push/pull factors for them to do so?

How important is international market selection?

What strategies do Malaysian Telco firms employ for


2 Strategy What are your views on the strategies adopted by Malaysian

Telcos that seek to enter international markets.

Do these strategies take into consideration, product, operations

and marketing strategies? If so, please describe.

How important is it have strong leadership and a Global Mindset

What benefits do you believe can be gleaned benefit from

establishing network relationships .

How important is a. Trust b. Commitment c. Learning?

The role of knowledge and how easy is it to transfer?

3 Challenges How adequate are the structures, resources to address the

challenges that Malaysian Telcos face in international ventures?

How are Malaysian Telco firms financing their international

ventures?

How would you describe the leadership

How important is trust in building network relationships

How innovative are Malaysian telco firms products and services?

How important is psychic distance to Malaysian telco firms

venturing overseas?

362

4 Government What sort of incentives are available for the sector in both

domestic and international markets?

What is your view on the regulatory authority and how effective

are regulatory policies?

What’s your view on Host Governments

What more could be done to improve regulation?

E Additional

information and

issues

Would you like to share any other comments or issues that you feel

are pertinent to the successful international market penetration of

Malaysian Telco Firms?

363

APPENDIX 3: Web Survey Invitation to Participate

Email Invitation to Participate in Web Survey: Dear Ms.Krishna,

My name is Amita Krishna and I am conducting research as part of my Doctor of

Business Administration (DBA) degree at Southern Cross University. I am

investigating the strategic issues that impact the successful international market

penetration of Malaysian telecommunications firms.

Accordingly, I would be very grateful if you would be kind enough to participate in a

Questionnaire survey on this subject. Participants include individuals from Malaysian

telecommunications firms and organisations in related industries, Government

Agencies, Academics and industry experts.

My research aims to assess how the emerging trends in the global telecommunications

sector influence strategies of the Malaysian telecommunications players and identify

the challenges faced by Malaysian telco firms as they internationalise. The global

economic landscape has intensified competitive pressures and with changing

consumer demands and emerging technology advances, Malaysian

telecommunications firms are required to strategise for growth and sustainability.

They are also rethinking their business models to secure new sources of revenues

whilst managing customer demands. This includes the need to venture into overseas

markets.

The findings of this research, including knowledge collated from this questionnaire,

will offer recommendations for Malaysian telecommunications to be better equipped to

successfully compete in the global economy.

The survey should take no more than 20 minutes of your time and consists of 16 core

questions which are presented as statements relating the the issues in this research.

Your input will be anonymous and confidential. This research has been approved by

the Human Research Ethics Committee at Southern Cross University. The approval

number is ECN-10-122.

I would appreciate your response within Two (2) Weeks of this invitation. The survey

will be closed on 18 July 2011.

Should you require any further information or have any queries, please feel free to

contact me directly at [email protected].

Please click the link below to begin the survey.

http://www.zoomerang.com/Survey/WEB22CNP7BQQMF/

I would like to thank you in advance for your time and participation.

Kindest Regards

Amita.

mailto:[email protected]

http://www.zoomerang.com/Survey/WEB22CNP7BQQMF/

364

APPENDIX 4: Web Survey Information Sheet

"Addressing the Strategic Issues that Impact the Successful International

Market Penetration of the Telecommunications Sector: A Malaysian

Perspective"

INFORMATION SHEET FOR THE QUESTIONNAIRE FOR THIS DOCTORAL

RESEARCH THESIS

How to answer the questionnaire:

The Questionnaire consists of 16 core questions which are presented as statements

relating to issues in this research. Please read each statement carefully and rate how

strongly you agree or disagree with each of the statements by placing a tick in the

appropriate box. The rating scale ranges from 'Strongly Disagree' to 'Strongly Agree'.

You will require no more than 20 minutes to complete all of the questions.

Please note that participation is purely voluntary and no financial remuneration or

incentive will be offered for taking part in this research.

My Responsibilities (As the Researcher)

To ensure the confidentiality of the information provided, your name and other

identifying information will not be attached to data collected. Your name and contact

details will only be used when sending the Questionnaire to you.

The research findings may be submitted for presentation at industry conferences or

publication in academic and industry journals. No personal data will be used and any

information collated will only be presented and reported as overall data.

In the final research report, the participating organisations will be referred to as cases

with numbers. The results of the research will be made available to interested parties

in a final thesis format through Southern Cross University's library. I would also be

pleased to share the findings of the research with you directly if you would be kind

enough to send me an email with the subject header "DBA Research Findings".

Your Responsibilities (As a Participant)

In the event that you feel uncomfortable participating in this research, you are free to

withdraw your consent and discontinue participation at any time without explanation.

IMPORTANT: Please note that by completing and returning the survey, you will have

been deemed to have given your consent to participate.

Enquiries:

The form is yours to keep for future reference. Please feel free to contact us should

you require any additional information or have any queries:

Researcher: Supervisor:

Amita Krishna Professor Dr. A. Selvanathan

email: [email protected] email: [email protected]

365

Contact No. +603 7949 1607 (Southern Cross University, Malaysian Office)

This research has been approved by the Human Research Ethics Committee at

Southern Cross University. The approval number is ECN-10-122.

If you have concerns about the ethical aspects of this research or the researchers,

please write to the following: Email: [email protected]

All information is confidential and will be handled as soon as possible.

366

APPENDIX 5: Web Survey