x
Mobile

Telekom Malaysia Faces WiMax Challenge

Mobile broadband technologies, most notably WiMax, will provide the challenge to Telekom Malaysia Berhad 's dominance of the Malaysian Internet access services market, according to a report from Pyramid Research .

The report, "Communications Markets in Malaysia," predicts that broadband revenue will grow at a compound annual growth rate of 16.9 percent during the next five years, and that broadband penetration will rise from 6 percent in 2009 to just under 14 percent by 2014.

Telekom Malaysia (TM) will continue to dominate the market, but its position will be eroded, according to the report's author, Tae Hyung Kim.

The incumbent is building a national High Speed Broadband (HSBB) network to provide 100 Mbit/s to households and 1-Gbit/s access for businesses, and it will be required to open it up to other service providers. (See Asian Broadband CEOs: Invest in Us! and Telekom Malaysia CEO Talks FTTx, IPTV.)

However, Kim casts doubt on the ability of other operators to benefit from the fiber backbone, noting in the report: "The government guaranteed that all service operators will have equal access to this HSBB network, but we remain skeptical of the government’s ability to enforce open access given Competitive Local Exchange Carriers' (CLECs’) experience in Malaysia to date."

The report predicts that FTTx will take only 3 percent of the Internet access market by 2014, with Kim adding: "We are being conservative with our forecast for fiber connections under the assumption that initial tariffs will be high as TM seeks to avoid cannibalizing its DSL business."

The report therefore identifies WiMax as the biggest threat to TM's dominance and predicts the WiMax operators will be largely responsible for cutting TM's share of the Internet access market from 97 percent at present to 77 percent by 2014.

In terms of revenue, Pyramid predicts the Internet access market will be worth $1.2 billion in 2014 and further suggests that the number of WiMax access lines will rise dramatically to reach more than 770,000 in 2014, when it will account for about 11 percent of the total broadband access market.

The Malaysian Communications and Multimedia Commission (MCMC), which regulates the market, surprised observers in 2007 by issuing WiMax licenses to smaller, independent companies instead of the country's major telcos that also applied. This policy is providing TM with competition: The report cites Packet One's promotion, in which it provides free Acer Inc. netbooks to subscribers that sign up for 24 months, as an example of how the WiMax service providers are making inroads into TM's stranglehold on the Internet access market.

In a separate analyst column, Kim also suggests that the benefit of the HSBB for TM will lie with the incumbent's increased backhaul capability, which it can sell to mobile and WiMax service providers, as well as to digital pay TV service providers. Check out Kim's Pyramid Points column, Telekom Malaysia: Dumb Is Smart, for more details.

— Catherine Haslam, Asia Editor, Light Reading

olsen 12/5/2012 | 4:01:40 PM
re: Telekom Malaysia Faces WiMax Challenge

That seems very low. With approx. 6 million households in Malyasia, that would mean only 180.000 subscribers in 2014. And thats not counting the "x" DSL and business users.

HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE