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Will TM's UniFi service be a success?

Finally, it's here.After more than two years since the announcement of its plans, incumbent telecom operator, Telekom Malaysia, has finally made good its promise to bring high-speed broadband (HSBB) to the masses.

Finally, it's here.

After more than two years since the announcement of its plans, incumbent telecom operator, Telekom Malaysia, has finally made good its promise to bring high-speed broadband (HSBB) to the masses.

Launched amid an elaborate fanfare of fireworks and music, with a giant stage and an igloo as the backdrop by Prime Minister Najib Tun Razak last week, TM's 11.3 billion ringgit (US$3.8 billion) HSBB project has been touted as a key enabler that is expected to change Malaysia from a medium-income to a high-income country. "Definitely, HSBB broadband will make Malaysia a 21st century nation," he was quoted by national news wire, Bernama, during the launch.

Dubbed UniFi, TM's service is an amalgamation of "Uni" that signifies togetherness and camaraderie, and "Fi," which symbolizes fiber optics, according to company officials.

Although not the first service provider to launch a high-speed broadband offering--that honor belonging to Time dotcom, which stole the thunder from TM last month when it introduced its Time Broadband in limited areas last month--TM's launch offers more in terms of value and bundled offerings.

At a media briefing last week, TM revealed that UniFi is available in three packages for consumers and three for enterprises. Subscribers can choose from a 5 megabit per second (Mbps), 10Mpbs or 20 Mbps package for 149 ringgit (US$44.7), 199 ringgit (US$59.7), and 249 ringgit(US$74.7) per month, respectively.

A fair usage policy (FUP), which limits the amount of total downloads to 60GB, 90GB and 120GB per month for the three packages, will also be enforced. If subscribers breach these limits, the speeds will be throttled down to 10 percent of the speed of the package subscribed to.

Besides raw download speeds, home subscribers will also receive free calls to TM fixed lines nationwide, 22 IPTV channels over an 8Mbps dedicated channel, and video-on-demand (VoD) titles, which TM said will be updated every month.

Packages for enterprises begin at 199 ringgit (US$59.7), 599 ringgit (US$179.7) and 899 ringgit (US$269.7) per month for the same speeds respectively, minus the IPTV offering, but enterprises will not be subjected to the FUP.

TM is going all out to sign up subscribers and to do that, it will be waiving the installation and activation charges and giving away a broadband router, an IPTV set-top box and an optical network unit that connects fiber to the home.

These freebies are supposedly worth more than 1,000 ringgit (US$333), according to TM. The only catch is that subscribers must sign up for the package for a period of 24 months.

Speculation has been rife for months as to how much TM will charge for their HSBB packages. Now that the pricing is out, there are mixed reactions as to what's being offered.

Blogs, forums and Twitter have been chattering about the pricing and how the packages are still too expensive for an average Joe. Some say that it's affordable but only if the service is up to par, not like what consumers experience with TM's ADSL service streamyx, which is notorious for its poor service. Others outright say UniFi is not worth it.

Bundling all the hardware for connectivity is a good place to start, as I believe consumers are now used to the idea of buying a bundled package that is tied to a contract rather than to the hardware itself.

But, it's with trepidation that I note several points that could possibly turn off turn potential customers away.

Firstly, the 22 IPTV channels currently offered are not perceived to be premium channels, which are available over at TM's IPTV rival, satellite provider Astro. At a press briefing, Zamzamzairani Isa, group CEO of TM, explained that TM's HSBB offering is not merely about TV channels but rather about a totally new entertainment experience that is delivered over a new medium.

"You can't really compare the two," he declared.

Citing that other mediums cannot present the same interactivity as HSBB can, Zam noted that HSBB is able to provide services such as VoD, multiplayer gaming, high-speed Internet access and free voice calls.

While these channels are a good place to start, potential customers will inevitably compare them with what Astro has to offer, as it is the market leader in the paid content segment.

Many have noted that the content offered is simply not sweet enough for consumers to bite on, and I concur with that. TM will have to up the ante and improve its selection of content providers in order to lure customers over to its UniFi service.

Another letdown was the lack of high-definition (HD) content, something that was expected from TM's IPTV service. To date, TM has only two high-def channels, which again are not considered premium. Astro, on the other hand, has begun offering five HD premium channels under its Astro Byond package.

Also, not much has been said about the VoD option that TM is offering. Its brochure merely states that subscribers can watch "Hollywood premier series, latest movies and kids' favorites". Until it can provide a more comprehensive listing of the VoD movies it will offer, I believe people will remain skeptical about signing up.

Arguably, the sorest point is the FUP.

TM's Zam described FUP as a necessary evil and defended its usage as a "standard industry practice", a tool used to distribute equitable bandwidth among its users and to hedge against those who would hog the bandwidth downloading heavy content, such as movies and music.

Notwithstanding legality issues, I do believe, there are consumers out there who plainly want large bandwidth for their own purposes, not necessarily so that they can download music or movies. I'm inclined to think that TM could have provided more concessions for the FUP it wants to enforce or better still, to do away with the FUP altogether.

To round up the challenges, TM has its work cut out for it has to ensure that the service and installation teams are able to professionally install the equipment, its customer call centre will be able to attend to customer enquiries and answer all questions regarding UniFi, and address problems to do with network rollout and ongoing service challenges.

Seeking to hedge against any fallout that might hit TM, Zam was quick to tell journalists last week that TM expects a fair amount of teething problems to take place as UniFi is based on new technology.

While these teething problems may be inevitable, I do think the jury's still out on how TM's UniFi service will appeal to the public.

But, one thing is clear: the public, especially those who reside in areas where UniFi is currently unavailable, will be watching closely how TM will adjust and rejig its strategy, packages and rollout schedule.

Because for a national project of this size, financed in part by 2.4 billion ringgit (US$800 million) of taxpayers' money, will demand it does so.