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M'sian WiMax operator pushes for 2010 rollout

YTL e-Solutions sets aside US$687 million over five years to build mobile broadband network, but won't be ready to launch services before July next year.
Written by Lee Min Keong, Contributor

MALAYSIA--Previously criticized for sitting on its WiMax license, local conglomerate YTL has roped in Samsung to implement its WiMax network across the country over the next five years. However, it will take at least 14 months before the high-speed mobile broadband service from YTL's subsidiary, YTL e-Solutions, is expected to be rolled out nationwide in July 2010.

YTL e-Solutions, one of the country's four 2.3GHz WiMax spectrum licensees, was perceived a laggard as it had missed an August 2008 deadline to deploy WiMax services commercially.

In fact, the slow progress among the licensees to offer such services in the country prompted then-Energy, Water and Communications Minister Shaziman Abu Mansor to to issue a warning last August, threatening to withdraw their licenses if they failed to deliver.

YTL e-Solutions said it expects to spend over 1 billion ringgit (US$279 million) over the next 12 months ahead of its July 2010 launch. "We expect to roll out fully in 14 months with user trials beginning in the next six to eight months," said Francis Yeoh, YTL e-Solutions' executive chairman and managing director, after a signing ceremony between its subsidiary, Y-Max Infra, and Samsung Electronics here Thursday.

Under the agreement, Samsung will implement a WiMax network that includes base stations, multimedia service offerings and a range of mobile Internet devices. YTL e-Solutions has identified 2,000 sites nationwide for the base stations.

"In terms of nationwide coverage, we're ahead of schedule," said Yeoh, adding that the company will invest a total of 2.5 billion ringgit (US$697 million) in the project over five years.

He said the network is designed to support 14 million customers and will cover about 70 percent of the population. However, he declined to say when YTL e-Solutions expects to break even or the timeline it is targeting to secure half of the 14 million customers the network was designed to support.

In June 2008, YTL e-Solutions signed an agreement with U.S.-based Clearwire (formerly known as XOHM) for the provision of technical expertise. It then partnered Cisco Services Malaysia in November 2008 to establish its WiMax core network in peninsular Malaysia.

The partnership with Samsung completes what YTL e-Solutions needs for an all-IP (Internet Protocol) converged mobile Internet network, said Yeoh, adding that the Korean IT vendor will supply network equipment as well as the world's first WiMax-enabled handsets.

In June 2006, Samsung launched the world's first commercial mobile WiMax services, called WiBro, in South Korea, which led to partnerships with 23 major WiMax operators in 19 countries, including Russia and Japan.

Asked about missing the deadlines set by the Malaysian government, Yeoh said: "We've explained [to the regulator, Malaysian Communications and Multimedia Commission (MCMC)] and asked them to give us more time."

The MCMC did not respond to ZDNet Asia's queries on whether any action will be taken against any of the WiMax licensees.

WiMax in Malaysia
In August last year, Packet One Networks (P1) became the first licensee to launch WiMax services in Malaysia. Asiaspace commercially launched its WiMax service on Aug. 30 last year, while Redtone International was the first to launch WiMax in East Malaysia.

P1 CEO Michael Lai said in an e-mail interview: "We plan to cover 30 percent of the country within the first half of 2009, 40 percent by 2010, and 60 percent by 2012. For East Malaysia, we aim to have a presence there by 2010."

"Currently, P1 [operates] the largest WiMax network in the country, and we're continuing to ramp up our efforts to ensure we stay ahead. We have definitely played our part in fulfilling the requirements of being a WiMax service license holder, and at the same time, are helping to meet the government's goal of bridging the digital divide," Lai said.

According to IDC, the cost of rolling out WiMax is significant and Malaysian players are moving ahead cautiously. In a recent media briefing here, the research firm said P1 looks set to continue its aggressive expansion this year, while the other three WiMax players seem to be taking a "wait-and-see" approach because of the capital investment needed.

Chua Fong Yang, IDC's associate market analyst, said it can cost from 100,000 ringgit (US$27,900) to 1 million ringgit (US$279,000) to set up a WiMax base station.

Lee Min Keong is a freelance writer based in Malaysia.

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