Celcom-DiGi Sign MoU for Advanced Network Collaboration

Celcom and DiGi today signed a Memorandum of Understanding (“MoU”) that will allow both operators to share their network resources, namely operations and maintenance, transmission and site sharing, and radio access network.

I would like to thank Celcom for inviting me to the event.

Full press release after the jump- My opinion at the bottom of this post.

Celcom Axiata Berhad [formerly known as Celcom (Malaysia) Berhad] (“Celcom”) and DiGi Telecommunications Sdn Bhd (“DiGi”) today announced plans to explore long-term network and infrastructure collaboration in Malaysia.

The Memorandum of Understanding (“MoU”) signed between Celcom, DiGi, and their respective major shareholders Axiata Group Berhad (“Axiata”) and Telenor Asia Pte Ltd (“Telenor”) will focus on three collaborative areas, namely operations and maintenance, transmission and site sharing, and radio access network.

The proposed active sharing model is geared towards generating significant operational and cost efficiencies for both operators by removing duplication of base station sites, addressing escalating rental fees, reducing utility bills and transmission costs, optimising deployment of base stations per area, and redeploying equipment between redundant and new sites.

The MoU is among the first such collaboration in the world with a wide and comprehensive scope. This is the first time two major network operators in Malaysia are considering extensive collaboration of network resources. A definitive agreement is expected to be reached before the end of 2010 once both parties have agreed on the long-term economic and operational viability of this collaboration.

This agreement also closely reflects an earlier accord for the sharing of network resources in Bangladesh between Axiata and Telenor Asia, through their respective operating companies Axiata (Bangladesh) Limited and Grameenphone Ltd. It signals the commitment of Axiata Group and Telenor Group to explore initiatives regarding network resources collaboration in Asia that could bring long-term significance in cost savings and environmental benefits.

The MoU was signed in the presence of the Malaysian Communications and Multimedia Commission Chairman Tan Sri Khalid Ramli. Signing on behalf of their respective companies were Dato’ Sri Shazalli Ramly, CEO of Celcom; Henrik Clausen, CEO of DiGi; Dato’ Sri Jamaludin Ibrahim, Managing Director/President and Group CEO of Axiata; and Sigve Brekke, Executive Vice President of Telenor Group and Head of Telenor Region Asia.

On the MoU, Mr. Clausen explained, “Maturing mobile markets like Malaysia can benefit from extensive network sharing as a key strategy to drive cost and operational efficiency. These efficiencies will in turn allow us to explore new and innovative ways to provide wider coverage at better costs for our customers, especially in facilitating the strong demand for data services nationwide. This is the main driver behind this collaboration, and we see clear advantages in moving forward together on a long-term, sustainable business model.”

“With higher internet penetration, networks are becoming more data-centric than voice-centric, driving an increased capacity requirement in all points of the network infrastructure. In the long run, it is more practical to explore other alternatives to address this shift in trend. This collaboration is a new milestone not only for Celcom and DiGi, it is also a brand new chapter for the local industry and the country, positioning Malaysia as a pioneer in network infrastructure sharing. Ultimately, we look forward to improved quality of service and increased shareholder value, benefiting both the consumers and service providers” said Dato’ Sri Shazalli.

My Opinion

Sharing the network would allow better mobile coverage which is good for consumers, but not necessary better experience for data users. As we all know and most market analysis have predicted this- data consumption will overtake voice in the coming years.

At this point of time, Celcom has more subscribers than DiGi, especially when it comes to data/broadband users. Sharing of network capacity would only slow down DiGi’s network and this is bad experience for DiGi customers.

I personally think that this agreement benefit the operators more than the customers. Both operators can soon reduce their network cost when it comes to network upgrading or expansion.

The impact of this agreement- DiGi customers get better coverage and slower data/broadband speed. While Celcom customers get faster broadband speed. Also since Celcom is known for network problems(few times last year), this MoU also means that if Celcom’s network has problem, high chances that DiGi’s network would also face the same problem.

I seriously think only certain part of the network should be shared(especially rural areas since the goal is to provide mobile coverage) other than that, this agreement shouldn’t apply to their network in the cities as network resources are readily available and the operators just need to invest more to provide better experience to customers.

An agreement is expected to be signed by the end of this year.

Related topics on MalaysianWireless:

Czq Chai

(if i'm a DG user)
does it mean i can use 3G services but receiving Celcom 3G network???
http://profiles.yahoo.com/u/3EOBOOTJFDXRCWR2U2ZUFDFQ6E David C

But kugan. DIGI is ppl choice due to cosisntency data even thou limited coverage.
But Celcom = best Coverage but inconsistency. even sometimes reach 4 days without connection (sabah-Tawau-Semporna-Even in KK Town)

I guess there wanted to get rid of Maxis ? just my guess.
Coz i more concern on technical rather than business itself.
Guest

david c,

digi's consistency because they offer lower/average speed compare to other operators that offer MAX speed (thus lowering the stability / consistency)

that is why digi keeping a low profile in promoting their MAX high-speed broadband itself. they only offer max 700kbps likely average speed. and they never offer/promise anything higher than that.

in short, if operator offer as high speed broadband as possible, consistency/stability may be lower. digi in turn offer the other way round of the equation: offer lower but slightly guarantee performance.

2 types of users out there: want the fastest (short duration of usage but inconsistent) and want the stable (more duration of usage but enjoyable)
Levinx

Guys, I am not sure but I think Kugan (blog owner) is wrong and misleading in his opinion. The MOU clearly stated that its work in 3 areas, Sharing of Base station in terms of tower, power, monitoring, genset and all other enviromentals.

It never mention Sharing of Network Access.. Its like co-location. DiGi can piggy back on Celcom nationwide base station site to co-located their own transmission equipments but use celcom facility in terms of power, aircond, cabin. Celcom can piggy back on DiGi for their indoor coverage in several comemrcial building. IT'S NOT NETWORK SHARING, NOT ROAMING. No telco in this world do TOTAL ROAMING, if TOTAL ROAMING, better merge lah to one company.

I guess Kugan has misunderstanding the term here.
Jen

I think this was an intelligent move. Never thought this could happen.
Guest

http://biz.thestar.com.my/news/story.asp?file=/…
http://profiles.yahoo.com/u/RG5F6I2R6RO525J5SBBXEL2Z54 Kar SiongC

this is my email to MCMC on 27th May 2010. i dont know does my email that lead to this action taken by two telco. . . but over all i am happy and feel this is a good move. i believe it a sharing of the tower our of the town where by Digi is a bit lacking of …

Hello to any one concern,

i am a postpaid Dgi user using Smart Plan 68 with unlimited 3G Data plan. i certainly need to be online 24/7 at all time

i am force to choose my phone to 3G mode ONLY due to Digi is lacking or rather weak in 3G signal, and most of the time i will drop to EDGE when 3G signal are weak.

recently i board Putra LRT ( now know as Kelana Jaya Line). from Wangsa Maju to Masjid Jamek. my phone is on 3G or UMTS mode only. to my surprise, when get into Tunnel at Ampang Park, KLCC, Kg Baru, Dang Wangi, and also Masjid Jamek is NO 3G signal for DiGi and Maxis user. only EDGE provided for DiGi and Maxis user.

Question arise why 3G signal only for CELCOM and not others provider?

i been follow up with u all info and news. in the aspiration to get 50 % penetration rate by end of 2010, i bet u all at MCMC and CFM to be more liberalism, also start to put much more pressure to local PBT …MPSJ, DBKL, MPKB, or what ever PBT and push all state Gov to cover more place.

in another case and issue …

i was in KTM train Antarabandar from KL Sentral to Patai Timur. surprise again. DiGi is apparently weak signal or NO Signal at all. i dont aspect 3G in the middle of jungle in Johor, Pahang, Kelantan. but at least EDGE or even GPRS will do.

i know Gov have time frame for Telco tower that time 1 , time 2 and time 3 which ending this Dec 2010. and Gov have also FORCE Telco to share tower. but time and time again i am waiting for Digi to have more place coverage and SAD.

i had email to both Digi and Maxis to highlight my problem not less then 10 times from 2006 to 2010.

or else let Digi have access to Domestic Roaming to log into Celcom or Maxis network when Digi is hard to build a tower at said location.

location of Road national route No 8 between Kuala Lipis to Gua Musang. Digi dont have signal or else got signal but no Data. here is the GPS location list
1)N 04' 31.780' E101'59.498'
2) N 04' 41.819' E 102 0.254' ( near Pusat Perhentian Merapoh)
3) N 04' 41.829 E 102' 0.221'
4) N04' 47.182 E 101' 59.519

sorry for the long list of wording and complaint. which i log multiple complaint to Telco and no respond or improvement from 2003 till now. as i though this is the last resort i email in to MCMC and CFM, cause i strongly believe only u all there can solve my problem.

i hope MCMC can provide more access to DiGi and let Digi Growth in term of Coverage. base on the UNFAIR for Digi user where by Maxis and Celcom caan have coverage. i also do hope MCMC can approve Domestic Roaming to Digi user, i do know that specific req is not easy to implement in days, but at least TRY. or else FORCE all Telco to share all those Tower not only share tower in the City or large shopping mall in KL.

Kampung folk in and around less Resident site might be consider by Telco. but it is a MAJOR ROAD connection from KL to Kelantan going through Bentong, Raub, Kuala Lipis, Gua Musang, Kuala Krai, and end at Kota Bharu. it MUST be force by u all guys from MCMC to let all. i repeat ALL TOWER to be share, in my opinion Cell phone coverage in the country must be an EQUAL RIGHT to all user regardless of which Telco they use.

sorry again for the long word. i hope this email is read by all party involve. pls CC, BCC to all party including all telco and celco also all relevant Gov agency and local gov.

Thank for reading and helping hand.
http://profiles.yahoo.com/u/WZYV5MZNAAC2HPKYVNK7HDRQPU Anil

I agree with Levinx, this collaboration does not include domestic roaming. It’s only sharing of infrastructure to reduce cost. Meaning to say that Celcom and DiGi will co-locate their sites or maybe reduce the rental charges if they are renting from each other. This in the long run will reduce their overheads. Such collaboration is good because it helps the operators to expand their network faster. As for Kar SiongC complain, you need to note that DiGi has just recently started rolling out their 3G network. Please give them some time to expand their coverage to be as good as Maxis or Celcom. No doubt Celcom has really good coverage but they need to work on their broadband speed. Users nowadays prefer a stable and fast broadband network speed compared to network coverage.
Vincent9300

Yeah, Anil. It's very common for co-location on data and now move to network co-locate for these 2 telcos. It's not combination/merging of 2 networks or sharing of network access… Kugan comment is totally misleading. I am sure DiGi will not permit access of it data network by Celcom users and vice verse. UMobile roaming on Celcom network is already not included data… So the sharing of network access won't happen…. I hope the editor will find out more on technical terms before comment like Tom & Jerry.
http://malaysianwireless.com/ Kugan

The MoU includes “transmission and site sharing, and radio access network”. Guys, I never mention network sharing or roaming, I only talked about capacity.

Let me clarify, DiGi and Celcom may share the same base station and still maintain a DIFFERENT Network, but this agreement allows them to SHARE BACKHAUL(in other word capacity) to reduce cost.

Most problem in a mobile network today is related to backhaul when it comes to network congestion. A base station can't cope with so many subscribers at one time, especially data users. This is a weakness of the wireless technology itself. And DiGi and Celcom is planning to share this “backhaul” to reduce cost, that's why I said this bad for consumers.

@Vincent9300
Thanks, but I'm trying not be too technical on this blog so that everyone can read and understand the post. Correct me if I'm wrong, U Mobile roaming agreement with Celcom is scheduled to expire within a month, and their new roaming agreement with DiGi includes data.So it is possible for your statement- “DiGi will not permit access of it data network”.

Appreciate your comment..:)

@Levinx
Please read through the post again, not a single word on roaming. When it comes to network sharing, it can be any part of the network, in my case, I was referring to capacity or the technical term “backhaul”. The MoU- “transmission and site sharing, and radio access network” could allow the sharing of backhaul by both operators to reduce cost. Sharing of backhaul is like sharing the bandwidth while at this point of time we consumers need more bandwidth.

@Kar SiongC

Have you email aduan@skmm.gov.my ?
http://malaysianwireless.com/ Kugan

Also take a look at TheStar article- http://biz.thestar.com.my/news/story.asp?file=/… . Look for the word “provides more capacity”…
Vincent9300

Mr Kugan,

I guess you need to rephrase your comments.

Your phrase 1 -> “Sharing the network would allow better mobile coverage which is good for consumers, but not necessary better experience for data users……”

In your term, this SHARING OF NETWORK = BETTER MOBILE COVERAGE, means roaming.

in fact and actual case, SHARING OF INFRASTRUCTURE/BACKHAUL ETC = not necessary BETTER MOBILE COVERAGE!!!

Your phase 2 -> “At this point of time, Celcom has more subscribers than DiGi, especially when it comes to data/broadband users. Sharing of network capacity would only slow down DiGi’s network and this is bad experience for DiGi customers.”

in your term, this is SHARING OF BACKHAUL,
But for my understanding, a customer won't buy uncommitted backhaul bandwidth from Celcom, but rather commited bandwidth like 2Mb, 4Mb etc… So, its like just sharing the physical line but whereby logical circuit still commited bit rate (CBR). Thus where is the pool sharing?

The saving is DiGi needless to purchase own backhaul equipment, which is like microwave, multiplexer, ATM etc…but rather rent from wholesales Axiata/Celcom.

Your phrase 3 -> “The impact of this agreement- DiGi customers get better coverage and slower data/broadband speed. While Celcom customers get faster broadband speed.”

In your term, this only will happen when roaming.
In actual, when 2 different air interface (2 networks), one has nothing to do with each other on network access. This is like 1 equipments, 2 networks… no interference. So where got impact?

I wish i am not wrong but this is the fact of ICT.
http://malaysianwireless.com/ Kugan

Better mobile coverage by sharing the network could also mean that DiGi making use of Celcom's base station to provide cellular coverage, not necessary roaming.

Also read the article by TheStar InTech:

Celcom Axiata chief executive officer Datuk Seri Shazalli Ramly said with higher Internet penetration, networks are becoming more data-centric than voice-centric and this is driving up capacity requirements.

“This agreement will not only benefit Celcom and DiGi by removing duplication of base station sites but also consumers by improving the quality of service provided by both companies,” he said.

Echoing Shazalli's sentiments, DiGi chief executive officer Henrik Clausen said the reality is that the demand for mobile data services is increasing rapidly and it can only be met by pooling resources together.

http://techcentral.my/news/story.aspx?file=/201…

Note, this is a MoU and my comment is just an opnion, the agreement is finalised.
http://profiles.yahoo.com/u/RG5F6I2R6RO525J5SBBXEL2Z54 Kar SiongC

Yes Kugan. i email to aduan@skmm.gov.my and also to CFM.

i dont aspect this large move made by this two telco. all i mean is for better coverage for Digi user.

well this “Sharing” hopefully is shaere of Tower Structure … and not sharing the BACK HAUL.

Yes i agree with Blog owner view … sharing of the “Capacity” will eventually hurt Digi Data user.

i hope Digi dont pinch down back Celcom and “Bluff” off by Celcom to share the Capacity with Celcom.

Digi have a well maintain and stable network now now and weak coverage for now, if we compair one to one with Celcom. Celcom have low speed broadband but large coverage.

Finger Cross … we all Pray … Digi u are the smarter choice. and THIS TIME also must Choose to SMART … don bully by Celcom …. :)

well i hope this blog is readed by Both Telco if possible … :)
guest0101

anything can be shared (technically)……lets wait and see. i don't think both celcos know (or confirm) what they going to share as yet…in my opinion, signing MoU just to kick start the sharing initiatives
Gileiole

Sharing the network is not somethinh new. It has been the practice in most part of the world. The impact of the MOU as shared by you is very misleading. All this while I thought I can get some good understanding of the cellular system from you but no more now.
Vincent9300

Gileiole, I agree with u,

“Better mobile coverage by sharing the network could also mean that DiGi making use of Celcom's base station to provide cellular coverage, not necessary roaming.”

Again, Kugan has misunderstood that base station transceiver can be shared..thats the most NON sharable piece. Reason is DiGi and Celcom both has 1800 spectrum. One equipment not to transmit 2 1800 bands for 2 different providers…

It's not Mobile communication technology, my fren Kugan. It is only happen on IP/INTERNET for VLAN….no VLAN kind of thing on GSM or 3G yet, brother…
Gileiole

Vincent, you are right! You can have RAN sharing but not the transceivers.
Kugan buddy…you have to really understand the cellular technology before posting something STUPID.
Guest02

So in other words = Sharing Telco Tower la. Where ever Celcom hav. Digi can placed their Equipment too. Fuiyo.

Not sharing their network (Router,Switches & Important Data/Routing)
Vincent9300

thanks Kugan for allowing to publish the comments… we learn from each other right?
http://malaysianwireless.com/ Kugan

As I said earlier, this is an MoU, nothing is confirmed. At this point, everyone have their opinion, so do u. Nothing to hide.
http://malaysianwireless.com/ Kugan

My statement did not mention anything about transceiver. I said base station and there are so many things on a base station right?
http://malaysianwireless.com/ Kugan

I'm closing the comment section. You may comment and share your opinions once the MoU is finalised.

Jun201010

Kugan

23