A broadband call to arms

Meanwhile, the United Nations’ “Trade and Development 2006 Information Economy Report” mentions how broadband “… is absolutely necessary for countries, because without broadband, it is difficult to have e-business”.

 

In Malaysia, we are very much in the “building broadband into a strategic advantage” stage. The national target, as outlined by the National Broadband Plan unveiled in August 2006, is to increase broadband penetration to 75% of Malaysian households by end-2010. However, in September 2007, the Cabinet Committee on Broadband revised this to 50% by 2010. The Economic Planning Unit forecasts this will result in a tangible contribution of 1% to the national GDP, creating 135,000 new jobs in the process.

  

To put things into perspective, out of the 200 or so nations in the world, less than 20 have achieved 50% penetration rate, and many are looking to achieve it in the next 5 to 10 years, including Malaysia.

US President Barack Obama sees broadband as a strategic advantage for the US. In his “Blueprint for Change” economic recovery document, he says: “America should lead the world in broadband penetration and Internet access … because that’s how we’ll strengthen America’s competitiveness in the world.”

 

Malaysia still has some way to go as we strive to more than double our household broadband penetration in the coming 20 months or so. Our current fixed broadband penetration stands at 21% at end-2008. But with a multitude of wired and wireless access technology now available around the country, including DSL, WiMax, 3G and the upcoming next generation fibre optic-based high-speed broadband (HSBB), it would appear that half the national household is still a realistic, even if extremely challenging target.

 

When I say realistic, I mean in so far as every player involved equally pitches in. Let me clarify: in many leading broadband countries such as South Korea, Canada, and the Scandinavian nations, the “killer app” has been local content and commerce. Interestingly, while service affordability is certainly influential, it isn’t the deal breaker it is sometimes made out to be. Having local content readily available for our end-users will drive broadband take-up substantially and is where our efforts should be focused on.

 

Telekom Malaysia (TM) has been a broadband player since 2001 when we introduced the Streamyx DSL service, and since then, we have been consistently driving down the cost and ramping up the service and quality of experience. In the past eight years, we have also upgraded and expanded our Streamyx offering to cover nearly the entire country.

 

It was a very exciting moment for me personally when the announcement was made in September 2008 of the public private partnership (PPP) between the government and TM to roll out the HSBB network and related services. The HSBB project has a larger nation-building remit: to enhance the country’s economic and global competitiveness by making 10Mbps to 1Gbps HSBB technology accessible and compelling to Malaysians, both for end-users and service providers.

 

In the PPP agreement, TM is investing RM8.9 billion over 10 years to finance the HSBB network infrastructure. One can draw parallels with the previous copper infrastructure, which TM had also spent a tremendously large amount over the years in building up, maintaining and improving; if not for these investments independent of market demand, there would be many households located outside commercially viable zones which would not be connected now.

 

On our part, TM promises to openly engage with the industry with regard to HSBB. And in saying that, we feel the myth of TM being a “broadband monopoly” should also be finally put to rest.

 

Broadband deployment in Malaysia is carried out by both wired and wireless operators. Many operators were given licences by the government to operate both wired and wireless segments, yet the fact remains that many have made the business decision to operate only in the wireless sector. This has left TM as the largest fixed-line broadband operator by default — something that we feel should not be held against TM.

 

We earnestly hope that all HSBB wholesale access seekers, who are free to come into the HSBB network, will add value for the end-user. The “multi-lane super-highway” HSBB network is being set up to drive value for the end-user — not to be resold at a higher price in smaller packages.

There are many potential high bandwidth next-generation applications that can be made available via HSBB, which would make the broadband experience much more engaging for consumers and profitable for service providers. This is what we should be striving towards.

 

On our part, we will honour the PPP agreement to guarantee fair and equitable access to all licensed and qualified access seekers. I therefore implore my industry contemporaries to join TM in bridging the broadband gap. In adding to our 1.5 million broadband subscribers, we are aiming to do our fair share, but TM cannot do it alone. I believe the 21% penetration rate for broadband in 2008 leaves plenty of room for all operators, wired and wireless, to grow our respective businesses in the coming two years.

 

Datuk Zamzamzairani Mohd Isa is group CEO, Telekom Malaysia Bhd