Telekom M'sia cuts digital leased line costs

Telekom Malaysia Bhd has announced it has effective May 1, reduced rates for its domestic and international digital leased line services.

KUALA LUMPUR--Telekom Malaysia Bhd has announced it has effective May 1, reduced rates for its domestic and international digital leased line services.

According to the telco, the new rates will be offered to both existing and new customers. The new rates are expected to provide users of domestic and international leased lines with cost savings of up to 50 percent, depending on the location of the line and the line speed.

Digital leased lines offer a dedicated multipoint and point-to-point network for end-to-end connectivity with speeds of between 64Kbps to 2Mbps. Currently, Telekom's main customers utilising digital leased lines are government departments, banking and finance (for ATM services), multi-national corporations (MNCs) and petroleum companies.

Adnan Rofiee, Telekom senior vice president for major business and government, told the media that the new rates would enable Telekom's customers enjoy better data communications, reduced costs and improved efficiency. At the same time, the more attractive pricing would promote Malaysia as a regional hub, attract more foreign investors by providing a better infrastructure within the MSC and stimulate further economic growth in the country.

Telekom telCo chief operating officer Dr Idris Ibrahim emphasised that the introduction of the new rates was not a response to what, he termed, were offers by other people. In a veiled reference to the recent announcements of reduced digital leased line prices by Time dotCom, Ibrahim countered the suggestion that Telekom was introducing new rates in an effort to beat the competition.

"It is not that we are reacting to an offering by other people--we have our own cost analysis and the new rates are offered on a business viability basis ... Whatever the response of our competitiors is, ours is a competitive rate," he said.

On the business side, Ibrahim admitted that Telekom expected to see "very slight" reduction in their margin of profits but the telco fully expected to recover the shortfall through greater subscription. He declined however to indicate specifically how much revenue the company aimed to generate from increased subscriptions.

He said Telekom expected to net an additional 3,000 subscriptions with the introduction of the new rates. There are currently 63,000 existing subscribers to Telekom's analog and digital leased lines, contributing some RM1.1 billion in revenue to the telco's coffers.

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