Here’s a very short list on what to look out for in the local telecom industry this year:

Aggressive 3G services

I know that everyone has been saying that it is a year for 3G since it was launched like back in 2005(Celcom in May, Maxis in July and U Mobile in March, 2008). The reality is, 3G has a goal when it was introduced and I don’t see that goal being achieved in Malaysia, yet.

3G was created to to offer high speed broadband services on the mobile phone. But till now, I don’t see many people out there who are using 3G services and applications on their 3G phone. The only thing that the mobile operators could pride them self on 3G is the wireless broadband services that they are offering, an alternative broadband service to your fixed broadband service.

I am not going to talk about this further, but I hope to see more 3G service for mobile phones this year, such as services that make use of video call, maps/navigation services on phone, enhanced location based services, better online mobile payment, shopping services, music streaming, social networking and thousands of other services when you look at i-mode.

I know that most of these services are available, but I hope to see it coming from our very own telcos and more than 500 content developers in Malaysia out there.

World Economy: Impact on the Local Telecom Industry

I predict that the current world economy situation will have no impact on our local telecom industry. I don’t see any reason why people will not SMS or talk less on their phone. That being said, however, people might not change phone as frequent as they did during the previous years.

In general, they should be no impact on our local mobile operators unless they have any business relationship with US-based companies.

WiMAX Heats Up

I have high hopes on P1 to drive the WiMAX and broadband adoption in Malaysia. You will see more WiMAX coverage areas as P1 expands their wireless coverage. On top of this, P1 will be launching their USB modem(MIMO supported) by Q3 this year(about June) and their new fixed WiMAX modem with VoIP support, replacing the current DS 300 model.

P1 does not seem to only focus on providing broadband service but also on content as well. Expect to see more content and services from Ruumz, an online social networking site created by Green Packet, the parent company of P1.

As for the other WiMAX players, personally, I don’t expect and don’t see much development from them although I must say that I do have a little hope for Asia Space since they are working on Digital Media Broadcasting (DMB) services. It is really interesting to see them trialling the service but I doubt that they could take it further since it involves a lot of investment while they are trying hard to expand their WiMAX coverage.

Asia Space DMB Receiver

It will also be great to see YTL e-Solutions to meet their own deadline this year but personally, I doubt it.

IPTV Services

Well, it is true that IPTV has nothing to do with mobile telecom. The reason I am talking about this is because it could drive the adoption of broadband services in this country. I like what Malaysian based-Syqic has to offer and their partnership with Hypp.TV. I believe that that they are working on a mobile IPTV application. Although they don’t have high hopes on it, I hope to see them launching it with a mobile operator later this year.

Other local technology companies working on IPTV services includes MOL, TM , TIME, REDtone, WorldIP.TV and more.

Hope on MVNOs

I have not seen any serious impact from the current MVNOs players yet. When I last spoke to Jason Lo, the CEO of Tune Talk, he said that Tune Talk will be launching the services later this year. I am still trying to get more details about Celcom’s investment on Tune Talk.

Another MVNO player appears to have some new developments too. Sumitomo Corporation of Japan has invested RM30 million in Merchantrade Asia Sdn Bhd. And why would a Japanese company do so, especially during the recession period?

As of January 2009, Merchantrade appears to have over 94,000 active subscribers and this is something positive. Hope to hear more about them this year.

Don’t know whether if you still remember Happy, looks like Happy makes you sad afterall.

HSBB to Become Reality

As scheduled, TM should be rolling out the High Speed Broadband (HSBB) for wholesale on second quarter and for retail in the fourth quarter this year.

Speed should be starting from 10Mbps to 100 Mbps for residential customers and up to 1Gbps for businesses for high economic impact areas delivered via fibre optic infrastructure.

More Choices on Mobile Broadband

There has been many talks about 3G/LTE technology competing with WiMAX. I predict there will be more competition in the mobile broadband market once P1 launches their USB Modem. At the moment, only Asia Space offers a WiMAX USB modem, but it has limited coverage areas.

If the signs are right, I see that Celcom Broadband will be focusing more on their 3G broadband offering this year while Maxis Broadband could be coming up with more content and services. Competition between the 3G players will also heat up with DiGi 3G coming into the picture, however, DiGi needs to be aggressive in expanding their 3G coverage this year.

I don’t have any predictions for U Mobile as for now. I believe there will be not much impact from U Mobile on the local mobile industry this year, unless if they are able to offer more broadband packages, expand their 3G coverage areas and also launch their much awaited DVB-H services.

NetBook is the Killer Mobile Device

I expect to see more Netbook offerings this year to complement the mobile broadband services. The attractive offerings should be coming from the mobile operators and also the WiMAX operators. If things goes as plan, there should be WiMAX-powered notebook/netbook devices sometime this year.

The Dell Inspiron Mini 9 with Maxis Broadband is a good bundle but I hope to see something more attractive with complete wireless broadband service(Maxis Broadband is included for the first 6 months only). Also expect to see some attractive netbook offerings from Celcom within the next few weeks.

P/s: If you think I have missed something, kindly post a comment.

P1 is currently conducting user trials. If I am not wrong, the trial period is 14 days which after that the user can continue to subscribe the P1 WiMAX, of course, with a monthly fee. But I am not sure about the fee.

There are no charge to try it out for 14 days but you must be under the P1 WiMAX coverage. The flyer above was for the Setapak residents only and looks like today is the last day for registration. Trials in other areas are also available, call 1300-800-888 for more info.

P1 is expected to launch their WiMAX service very soon once they are satisfied with the feedback gathered from the trials.

Stay tuned folks!!

Visit http://wirelesstalk.my/ and start discussing a topic/issue now.

The future of wireless broadband technology is seen between WiMAX and LTE, the fact is, Aidaas has its very little own technology that could challenge any wireless broadband technology currently available in the market.

Aidaas is a broadband technology by Allied Digital Infonet Berhad (ADIB) and based in Malaysia. I will talk about Aidaas soon once the WCIT 2008 is over. For now, visit http://aidaas.com.my/

The service will use aircraft carrying communications equipment hovering at stratospheric levels (i.e. 20km from the ground) to blanket large areas with broadband access.

QucomHaps chief executive officer Billy Harkin said HAPS is also capable of providing 3G (third generation) and GSM (Global System for Mobile communications) connections, as well as digital broadcasts and WiMAX (Worldwide Interoperability for Microwave Access) wireless Net access.

“HAPS is not meant to replace existing telecommunications infrastructures, but to complement these systems by extending and enhancing their coverage and reach,” he explained.

QucomHaps signed a contract with a Russian agency in November to purchase 48 units of M55 aircraft, of which 13 will be used in Malaysia.

The company is also investing RM12mil to bring an M55 aircraft to Malaysia to carry out a technical demonstration in March.-The Star

What is HAPS?

HAPS technology is relatively an outstanding concept, proposing the use of piloted M-55GN high altitude aircraft flying in a circular corridor at an altitude of approximately 20 km to provide wireless access over extended areas. HAPS are best integrated with terrestrial wireless technologies and interconnected through radio links. HAPS latency is minimal and bandwidth are allocated to a number of transmission technologies on the same platform (e.g., TV & Radio broadcast and backhaul, mobile telephony, VoIP, monitoring). The technology optimises on the usage of efficient frequency spectrum and reuse of frequencies and bandwidth on demand. HAPS provide additional and alternative capacity to service providers, broadcasters and telecommunication operators.

Fundamentally, HAPS perform efficiently on task that currently handled by satellites, aircraft or terrestrial systems that include communication and non-telecommunication applications:

• Telecommunication
• Location services including air and maritime traffic control
• Point-to-point, point-to-multipoint and broadcasting services
• Surveillance of persons, goods, and areas Monitoring
• Reconnaissance and intelligence
• Data collection and remote sensing
• Mapping
• Weather

More info: http://www.qucomhaps.com/

A a memorandum of understanding (MoU) was signed between DBKL,MCMC and Green Packet(Packet 1). The phase 1 of the project will cost RM60 million where RM50 million will come from Green Packet and the rest by MCMC and DBKL.

The project is called the “KL Wireless Metropolitan project“.

It is similar to what Singapore has been offering to its citizens since last year. Although this new WiFi service will be using WiMAX as its backbone, wouldn’t that be too late to offer full WiFi coverage now?

By mid next year, WiMAX will be offered by 3 telcos in Peninsular and 1 in East Malaysia. Plus, WiMAX hardwares(routers, PC Cards) and notebooks with WiMAX capability will be offered very-very soon.

The KL Wireless Metropolitan project has three phases, where 90% of the Klang Valley population will be covered with WiFi by 2010.

The wireless broadband service will offer speed up to 512Kbps and will be free for 2 years.

I hope this initiative does not end up like here.

STARBIZ: No new spectrum – does that hinder DiGi’s growth?

Morten Lundal: We have significantly less spectrum than Celcom (M) Bhd or Maxis Communications Bhd. We are somewhat at a disadvantage because of that. If we could get more spectrum, we are clearly a player that would use this national resource efficiently.

STARBIZ: Given an option, which one would DiGi choose: the 3G spectrum or WiMax spectrum?

Morten Lundal:WiMax or 3G are similar as they both can offer broadband access to the Internet, but 3G offers a few additional things for a mobile operator. If we were to only compete for broadband, we would be indifferent.

But as a mobile operator, we would prefer 3G as we can also produce voice even more efficiently with it in the future. But DiGi is still very competitive without any of the two.

STARBIZ: What efforts are in place to get more spectrum?

Morten Lundal:There is a review being done now by MCMC (Malaysian Communica-tions and Multimedia Commission) for a spectrum re-allocation.

It is to make sure that valuable spectrum is being used and not left idle. DiGi is using all its spectrum efficiently, which is good both for consumers and the country.

STARBIZ: Has DiGi asked for more spectrum from MCMC?

Morten Lundal:We famously applied for 3G and WiMax without much success. When it comes to our future positioning, we will pose our views to MCMC in December.

STARBIZ: How much of spectrum or what type would be ideal?

Morten Lundal:We would like spectrum to produce voice as we are growing, and more spectrum will allow us to plan our network more efficiently.

We would like to have broadband spectrum, so that we could use DiGi’s competitive strength in driving more broadband penetration in Malaysia.

Given the way we made headway in the mobile sector, DiGi’s entry in broadband market will drive competition and expansion, which I think consumers would applaud and the Government would appreciate, since broadband growth is seen as important by all.

STARBIZ: When would the existing spectrum hit its limits?

Morten Lundal:We do not have ceiling as such. The only thing that happens when you have spectrum exhaustion is that we would have to add more cost and more sites than our competitors.

STARBIZ: Would DiGi work with another operator to get more spectrum?

Morten Lundal:We should rather ask MCMC. It is the regulator’s task to reallocate spectrum so that it is more efficiently used.

STARBIZ: What are the trends in consumer spending in the mobile sector?

Morten Lundal:When it comes to trends, we are part of an over-hyped industry.

Today, people love to be able to call anyone wherever they are or whenever they want, and SMS. That is a proven factor globally, but many advanced services like video calls are globally a flop as it is very difficult to change people’s behaviour.

Some services are proven successful in some segments in some countries but not at a global level.

Looking two years ahead, my take is nothing much would actually change – at least nothing that would affect our revenue composition significantly.

Voice telephony and SMS will remain strong. But over a five-year period, we may see non-SMS data growing, but not in a very significant way.

STARBIZ: Where can DiGi tap new growth?

Morten Lundal:As the fixed network dries out over the next decade, this transition will drive growth in the mobile sector.

Lower prices in the mobile sector will drive up confidence for people to call and usage patterns will be up, and that means growth.

Higher salaries will also increase mobile spending and these are growth areas that we can tap into.

Besides that, the barriers for consumers to reach out to DiGi are fast disappearing in terms of closing coverage gap, and the brand attraction is at least at par with other players.

With mobile number portability (MNP), the major barrier to choose DiGi would be removed. So there is room for growth in the mobile industry even though some say it would hit stagnation, but our challenge is to remain competitive.

STARBIZ: Where would the next fight be in the industry?

Morten Lundal:Pricing would be a factor in the competition. If you observe the mature markets, pricing is still very important for positioning in market share. We also have new players coming in and that will also add to the price focus.

STARBIZ: Currently, voice tariffs are in the 10 to 15 sen per minute range among operators. How low can it go in a competitive landscape?

Morten Lundal:At current prices, Malaysia’s voice call rates are very competitive, given the wide coverage, high quality and rapid innovation.

STARBIZ: Would mobile TV be the next killer application to drive mobile revenues?

Morten Lundal:The industry has a tendency of proclaiming what has not been proven yet to work to be the next big thing. Mobile TV has not been proven yet to not work but some still believe that will be big.

However, at least until now, mobile TV launched in any country has seen a very low consumer demand, so it would be pure speculation to say that mobile TV would be the next big thing to drive revenues.

It is one of those illusions the telecom industry tend to surround themselves with.

STARBIZ: Do you reckon DiGi would gain hugely from MNP?

Morten Lundal:I believe there would be a positive impact on DiGi. People chose their cellular numbers years ago, and with MNP they can have a chance to choose the operator they prefer and keep their numbers.

There are a lot of people who would love to change to DiGi but love their numbers even more. Now, with MNP, they can take their beloved numbers and join us.

Operators would be on their toes with MNP because customers would be able to move freely and even leave freely if the service is bad.

Hence, customer service would have to improve for customer retention. MNP is great for consumers.

STARBIZ: How important is customer retention to DiGi?

Morten Lundal:It is very important. We don’t like to tie our customers in with long contracts. We rather intend to give the best customer experience so that customers would trust us, and for that reason stay with us.

STARBIZ: What customer experience would DiGi offer to its 6.1 million mobile users in an MNP environment?

Morten Lundal:The functional attributes: the network is always on, you will always have access to services you want and you will be surprised by innovation now and then. It is important both that the basic always works and that the latest is always there.

The customer’s positive experience with the company’s service is important as well. It is not just about choosing the product but a preference for the company offering the product as well.

By having these attributes, we would be competitive in an MNP environment.

STARBIZ: DiGi topped the rankings in higher value creation among telcos in Asia-Pacific last year. How did you manage that?

Morten Lundal:Our focus was to compete in Malaysia and shareholders determined our value.

STARBIZ:Would there be a corporate exercise to split your shares to make your shares more accessible to the public?

Morten Lundal:No, we think the price per share is still affordable. (DiGi shares closed 30 sen higher to RM25 at Friday’s close).

STARBIZ: Would there be a cash call?

Morten Lundal:We have readily available funds to support our capital expenditure of between RM600mil and RM700mil this year, and RM700mil to RM900mil next year.

The funds are required to support growth and change to more modern and up-to-date platforms.

STARBIZ: Telekom Malaysia Bhd’s cellular unit, possibly Celcom, would make its debut on Bursa Malaysia mid next year. How would DiGi stack up against that unit?

Morten Lundal:Celcom itself is pretty comparable in size, but the holding company has ownership of foreign national assets whereas DiGi’s strength lies in that it is fully focused on the Malaysian market.

STARBIZ: Maxis Communications Bhd wants to be a regional player. Does DiGi have any such ambitions?

Morten Lundal:No, we are focusing on making great customer experience on efficient platforms in the Malaysian market.

P.s: Telco Talk Malaysia wants to meet the DiGi Chief Executive Officer in person. Will that happen?

Related Article:

• DiGi to maintain rapid pace of growth
• Brokerages see double-digit growth for Digi in FY08