M'sia on cusp of 'true' high-speed broadband

Content players welcome boost to services market, but Net service providers express concerns over lack of details regarding wholesale access pricing and service terms.
Written by Lee Min Keong, Contributor

KUALA LUMPUR--While content providers welcome the latest development of Telekom Malaysia's (TM) high-speed broadband network, industry players have expressed unhappiness over the lack of pricing details for wholesale connection service.

After a significant delay, the country's leading telco TM says it is on track to roll out its FTTH (fiber-to-the-home) high-speed broadband service later this year.

Malaysia's broadband speeds have been notoriously slow and services costly, compared to countries such as Singapore, Korea and Japan. The 11.3 billion ringgit (US$3.2 billion) nationwide high-speed broadband (HSBB) project, led by TM, has been deemed in some government quarters to be the panacea for Malaysia's broadband ills.

The project spans 10 years and involves adding high-speed fiber to the core network, laying fiber from the curb to homes in selected areas and increasing the number of passages for international connectivity. Service providers will be able to subscribe to bandwidth per link of between 20Mbps and 1Gbps transmission speeds.

The HSBB's project program director Ahmad Azhar Yahya said, in a March media briefing, the project was progressing "according to schedule". TM was slated to roll out its HSBB wholesale transmission offerings to service providers in the second quarter, while its retail services were targeted for launch in the fourth quarter.

Last month, TM inked its first wholesale contract with Internet services provider (ISP), Wi-Net Technology, in a deal worth 250 million ringgit (US$71 million) over five years. Wi-Net currently has operations in the northern states of Penang and Kedah, and plans to expand its services nationwide by leveraging TM's network.

Content over e-commerce boost
Content providers are also counting on the nationwide network to boost the country's online services market.

Local Web hosting services provider, Emerge Systems, is gearing up its content-related projects to leverage the higher broadband speeds promised by the HSBB.

"We will be participating indirectly [by] supporting [the network] with content-related and application-related offerings that can benefit from the HSBB initiative," Raymond Chee, managing director of Emerge, said in an interview with ZDNet Asia.

He noted that Malaysia's bandwidth cost is currently one of the highest in the world, after factoring in the country's per capita income. "In Singapore, a 100Mbps broadband service would cost just S$89. In Malaysia, for 88 ringgit you only get 1Mbps," Chee said. "We are probably 10 years behind the U.S., five years behind Australia and Singapore, in terms of broadband services."

"However, I'm excited about the HSBB project. I believe our sales will increase when HSBB rolls out as people will finally be able to enjoy true high-speed broadband, and this will help boost e-commerce and the content industry," he said. "With nationwide high-speed broadband coverage, users will be able to fully enjoy free Internet phone calls, video-conferencing, Internet-based high-definition TV, and so on."

Discontent over pricing
However, not all of the country's estimated 20 ISPs have warmed to the HSBB infrastructure. TM currently holds a near-monopoly in Malaysia's Internet services market, largely because it owns almost all last-mile connections across the country.

Most operators have to rely on TM's core network to offer services, and some industry players are disgruntled that the carrier's wholesale access rates are less than equitable, especially when TM is also their competitor in the retail sector. Some 1.3 million users subscribe to TM's Streamyx broadband service, offered by its retail arm, TM Retail.

In a report by The Edge Financial Daily last week, industry sources and service providers highlighted the lack of disclosure on pricing and terms of service for the HSBB. They said it was hard to gauge the competitiveness of TM's offerings, even after the Wi-Net deal was signed.

TM rebutted, noting that it was simply observing global wholesale telecommunications practice by keeping its HSBB wholesale pricing scheme on a "need-to-know basis, due to competitive sensitivity".

TM Group CEO Zamzamzairani Mohd Isa said in a statement that the company had briefed all 20 licensed operators involved or keen to develop their own networks. Zamzamzairani reiterated that TM guarantees all service providers on the HSBB network "open and equal access at competitive pricing", according to the public-private partnership (PPP) agreement sealed with the government.

Lee Min Keong is a freelance IT writer based in Malaysia.

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