As revenues stop growing in a saturated market, mobile telecommunication providers or telcos will need to package their products innovatively, as well as, get new stream of income to sustain business.

IDC Market Research (M) Sdn Bhd Senior Research Manager for ASEAN Telecommunications, Alfie Amir said total mobile revenue began to decline in 2014 at one percent, year-on-year, from RM24.3 billion to RM23.9 billion.

"The revenue is expected to remain flat with compound annual growth rate of 0.2 percent in the next five years," he told Bernama.

He said Malaysia's mobile penetration has also reached 141 percent (total mobile users to population) in 2014 and was expected to stay at around 140 percent for the next few years.

With not much room to grow, Alfie said the only way to go among telcos was to capture subscribers from competitors.

Hence in 2015, the industry saw mobile operators, locked in close combat by rolling out competitive and affordable plans to capture a wider and larger consumer base.

Alfie said Digi has grown strongly in the last few years against the top two industry leaders, Maxis and Celcom, and has closed the gap in terms of market share.

"Digi has grown from a number three player in the market with almost 10 percent behind the two leaders, to almost at par with them in 2015," he said.

Despite the challenging landscape, Malaysia’s 'big three' mobile operators remained committed to investing in their networks and infrastructure which had caused margin pressure, said Alfie.

During the first nine months of 2015, telcos spent some RM1.95 billion on capital expenditure, a 14 percent increase versus the RM1.7 billion they spent collectively last year, said a report.

Celcom and Maxis continue to have the largest coverage, with Celcom providing the most reliable voice, SMS messaging, the fastest 3G and 4G LTE data network and an unbeatable 97 percent national coverage, it said.

Maxis, on the other hand, has the largest Long-Term Evolution (LTE) network in the country while Digi and U Mobile has also kept themselves competitive and have expanded their coverage from within the Klang Valley to areas like Penang, Perak and Malacca, said the report.

Meanwhile, on the fixed line segment, the market is still under-served with penetration of broadband still low and growth potential still huge for the next five years, said Alfie.

Telekom Malaysia Bhd (TM) remained the dominant player with largest network for the segment, he added.

TM's revenue for the first nine months in 2015 rose to RM8.54 billion from RM8.08 billion in the same period last year, with total capital expenditure at RM1.15 billion.

TM Group CEO Tan Sri Zamzamzairani Mohd Isa said the company's outlook for 2015 remained positive, with UniFi still enjoying the take up as the company proceeded with the expansion of the high-speed broadband coverage.

Recently, TM has signed the High-Speed Broadband 2 (HSBB) and Sub-Urban Broadband (SUBB) deals with the government which are initiatives to widen the country's broadband penetration.

It will provide world-class infrastructure for applications and content development in Malaysia with a speed of up to 100 Mbps for houses and businesses.

HSBB 2 will be rolled out over 10 years with the government investing RM500 million and TM RM1.3 billion, to provide high-speed broadband access to over 390,000 premises by 2017.

Moving forward, Alfie said for mobile telcos to retain their profitability they need to offer more competitive pricing, better packaging, improve customers experience and look into other value added services and attraction, to build customers loyalty as well as differentiator.

However, prices offered by telcos are already at very competitive level, hence the value-add services will be the differentiator factor, he said.

Telcos will also have to look into a new revenue stream and the trend showed that they are moving deeper into playing bigger role in information and technology (IT) with internet of things (IoT) and big data analytics (BDA) coming into the bigger picture, said Alfie.

"IoT is on the rise in Malaysia and telcos as connectivity providers are very much part of it and have a lot of opportunities to drive the ecosystem by partnering with other industries like healthcare provider or insurance provider for example," he said.

With BDA in use, telcos are expected to improve their customer experience, do predictive analysis, minimise network outage and optimise internal operation by reducing operational cost and increase efficiency.

The industry will also see telcos to start leveraging on big data and monetise it.

The analyst said the data segment would be another key area that the telcos would continue to focus on, in efforts to sustain their revenues and migrate their non data to data users.

The industry expects mobile data penetration in Malaysia to increase to 75 percent from the current level of around 60 percent of the total subscribers.