According to GlobalData, a data and analytics company, revenue for the sector is expected to see a compound annual growth rate (CAGR) of 2.8% to US$6.5 billion (RM30.7 billion) in 2027 from an estimated US$5.6 billion (RM26.5 billion) in 2022.

Most of the gains will be driven by the mobile data segment, GlobalData added.

However, revenue from the mobile voice service is expected to see a decline at 1.7% CAGR over the forecast period.

GlobalData attributed the slowdown to a decline in the average revenue per user (ARPU) of voice service.

On the other hand, revenue from the mobile data service is expected to rise at a CAGR of 4.9% over the next five years.

This, GlobalData said, would be driven by a higher ARPU as the adoption of 5G picks up.

“The average monthly data usage will rise from 16.1GB in 2022 to 40.8GB in 2027, driven by a growing consumption of mobile video and social media content over smartphones,” Hrushikesh Mahananda, telecom research analyst at GlobalData, said.

“Based on subscriptions, 4G will remain the leading mobile technology in Malaysia until 2026 before 5G surpasses it and goes on to account for a 47% share of total mobile subscriptions in 2027,” Mahananda said.

He said this would be driven by the expansion of 5G network initiatives by the government and mobile operators.

Digital Nasional Bhd (DNB), a special purpose vehicle owned by the ministry of finance, has been given the task of driving the 5G infrastructure in Malaysia.

Four MNOs — Telekom Malaysia, Digi Telecommunications, YTL Telecommunications and Axiata-Celcom — have signed on for a combined 65% stake in DNB.

The remaining two — Maxis Communications and U Mobile Sdn Bhd — have held out on taking a stake but have signed on to subscribe to the 5G service.