Malaysia held up as NBN king

Shadow Communications Minister Malcolm Turnbull used Malaysia as an example of how Australia should be treating broadband in a speech yesterday, after Informa Telecoms and Media (T&M) released statistics showing that Malaysia's roll-out is trumping others in the region.

Turnbull used his speech at the Broadband World Forum in Malaysia to examine Malaysia's policy, which has its government paying 30 per cent of the fibre roll-out. It is being headed by the incumbent telco player Telekom Malaysia, and will reach 20 per cent of Malaysian homes.

Turnbull pointed to the fact that despite Telekom's government support, other broadband players could still compete by entering the market, and that the country would be served by a variety of technologies, including DSL and wireless.

Informa T&M this week said its figures showed that the Malaysian network is "comfortably outpacing" other national broadband networks being deployed in the region, including Australia's.

According to Informa T&M, the joint venture between Telekom Malaysia and the government had 310,000 subscribers by the end of April and had passed over 1.2 million premises in the country. The expectation is that it will be finished on time and within cost, which is spawning interest in extending the network's reach.

In comparison, Informa T&M said Singapore has 130,000 subscribers, while Australia has 7000 and New Zealand only has 500.

"There is no doubt that Malaysia's decision to stick with the incumbent Telekom Malaysia, in deploying its next-generation broadband networks, is definitely bearing fruit at the moment," said Tony Brown, senior analyst at Informa T&Media.

"The other NBN markets in the region have deployed more complex NBN models, with new and independent entities created to build and operate their NBN networks — and that has taken a lot of time and created some significant teething problems, especially in Australia."

Turnbull agreed with Informa T&M's sentiment in his speech, bemoaning what he considers the staunching of competition by using cherry-picking laws, which prevent competitors from rolling out their own networks unless they are ready to wholesale a layer-two bitstream service. He is convinced that the prices will have to rise substantially in order for the government to recoup its investment; he also drew attention to the time it has taken the NBN Co to roll out to the premises it has.

The signing of the deal that will enable NBN Co to use Telstra's ducts, and the transfer of Telstra customers onto the NBN when the copper is decommissioned, took much longer than expected, delaying the roll-out. However, a three-year plan has recently been released, which will see the NBN roll-out speed ramped up.

"On current forecasts, the NBN is scheduled to be completed by December 2020, although we know the project is well behind schedule. By the end of next month, the NBN was forecast to have passed 152,000 houses with its fibre, but as of the end of March, only 18,200 premises had been passed with fibre. It doesn't compare well to Malaysia's HSBB roll-out, which was initiated around the same time as the NBN and is on track to have 1.3 million premises in its footprint by the end of the year," he said.

He urged people to consider the NBN debate — not as a technical debate, but rather in terms of outcome; what the country needs to do to provide super fast broadband.

In a technological-purist sense, the answer would be fibre; in an economic sense, he believes the technology would have to vary, as in Malaysia.

The Coalition has promised to do a cost-benefit analysis of the NBN when it gets into office, to see what parts of the project makes sense to continue with, but ideally the party would like to roll back the Telstra and Optus agreements and the cherry-picking laws, so that it can encourage broadband competition. It would also subsidise broadband in regional areas, instead of having a cross subsidy as with the NBN, and encourage a technology agnostic roll-out of fast broadband.

"We will meet those targets with a gradual approach, based on a mix of technologies. Whether it's fibre to the home, fibre to the cabinet, next generation mobile solutions, or, of course, upgraded cable; they all have their part to play. We need a complementary combination of solutions, introduced incrementally, and tailored to local needs," he said in Malaysia.

Yet, critics have said in the past that the basket case that the Australian telco industry has developed into, in the years after Telstra became private, can only be remedied with an NBN, enabling equal access to any provider, and, further, some say that fibre is future-proofing Australia.

Informa T&M's Brown did say that the Malaysian government's decision to not create an independent wholesale network access operator, as Australia has, could be negative in the long term.