Asian Broadband CEOs: Invest in Us!
Dato' Zam Isa, group CEO at fixed line operator Telekom Malaysia Berhad made the case for the region, saying it will be tough for the telecom sectors in many regions around the world to recover totally from the current economic slump, but that "there is much more opportunity for Asia to reach the industry's former heights than Europe or the U.S."
This optimistic vision for Asia/Pacific is based on massive subscriber growth opportunities that still exist for fixed and mobile broadband, and for mobile connectivity in general.
Isa states noted that, for the first time, TM's fixed data revenues exceeded those from fixed voice during the first quarter of 2009, demonstrating the growing trends of both data service demand and fixed-to-mobile substitution. To capitalize on the demand for broadband, TM is rolling out a national high-speed fixed access network.
The FTTx network is costing a total of MYR11.3 billion ($3.2 billion), of which TM is funding MYR8.9 billion ($2.5 billion), with the government stumping up the remaining MYR2.4 billion ($680 million). That funding has caused some consternation among TM's mobile rivals, which view the external funding as state aid.
Having completed the build-out of its new IP core, TM plans to pass 1.3 million domestic and business premises by 2012 with a mix of fiber-to-the-home rollout and fiber-to-the-curb with VDSL2 deployed over existing copper plant. Check out our LRTV interview below for more details.
Isa stressed that the project is is a commercial venture by TM, and not a government contract, stating that the government's involvement is designed to expedite the project and provide more coverage more quickly than if just driven by market forces.
Tackling the same market from the wireless side, Michael Lai, CEO of Malaysian greenfield WiMax operator PacketOne (P1), agrees with the potential of IP and broadband, but believes its future is mobile.
"The next industry mega trend is mobile broadband. It's a population-based business and Asia/Pacific, with half the world's population and broadband penetration of less than three percent on average, is where it's at," he said.
He further suggests that, as the market is in the duldrums currently, there's no time like the present to invest, but fires a shot across the bows to anyone looking to make a quick buck stating, "The telco play is a long term bet; a ten year play."
P1 actually secured its funding two years ago, so it is not facing difficulties in raising cash to support its operations. However, it is operating in a market with penetration closing in on 100 percent and where mobile data competition is fierce. All three cellular operators have deployed HSDPA, and the third-ranked operator, DiGi, has already taken this to 14.4Mbit/s.
Lai is not the least intimidated and believes that the all IP structure of WiMax gives P1 a strong advantage in mobile broadband.
He tells Light Reading Asia: "The average usage on my network is 7.4 Gbytes per month, and that would crash any 3G network in the world today."
He does however concede that to deliver high-quality services over WiMax, as all IP network requires effective configuration and management as best effort is not good enough.
Lai sees WiMax services developing in three distinct stages. The first requirement is just to deliver broadband and to connect people to the world, acting as a DSL alternative where DSL is not available or too expensive. The second is to make broadband portable, and the third is full mobility. It will be like this all across Asia/Pacific, and Lai expects that it will be a relatively compressed timeline, with WiMax embedded consumer electronics appearing within two years.
Very much like WiMax creator Intel, Lai sees the success of WiMax developing around the embedding of WiMax chips into consumer electronics and the availability of Mobile Internet Devices (MIDs). He recognizes that HSPA has the jump on device development so far, but again points to its lack of end-to-end IP as its ultimate downfall in fulfilling these segments.
When it comes to LTE, which is all IP, Lai suggests that there will be little difference and ultimately the two technologies could converge.
The technologists of 3GPP will again state that although they are both OFDM technologies, LTE and WiMax are very different and combining them is impossible. They will be equally unhappy with his tongue-in-cheek suggestion that LTE stands for "late to evolve," as by most evaluations LTE will have gone from standards development to commercial deployment faster than any other technology, should launches go ahead in 2010 as currently planned.
Whatever the long-term mobile broadband technology path is, fixed and mobile deployments in Malaysia are growing unabated and there is potential for a technology battle. However, perhaps the best indication of how fixed and mobile will feature in the Malaysian market was given when Isa offered to sell Lai backhaul capacity, an offer Lai subtly sidestepped.
— Catherine Haslam, Asia Editor, Light Reading