Thursday, February 2, 2023

Competition healthy for broadband industry

TWO spectra were issued in less than a year. DiGi.Com Bhd was not a recipient although it has helped revolutionise the cellular industry in Malaysia.

Rates for voice calls have dropped drastically over the years and now we pay a pittance for SMS. There are plenty of choices in terms of packages for the consumer, and that would not have been possible if DiGi did not strike out in a market controlled by giants.

Competition benefits the consumer, but the cellular companies are also making a lot more money now.

DiGi failed to get a WiMax (Worldwide Interoperability for Microwave Access) licence, but so did Jaring, Maxis Communications Bhd and even Telekom Malaysia Bhd that put in three different bids for the spectrum.

“But why not DiGi?” many are wondering. It failed the second time around, first for the 3G spectrum and now WiMax. Those evaluating the bids know the reason best. Could it be because DiGi did not meet the conditions set, or that it is majority foreign-owned, or that Telenor has not sold down its stake to 49%?

Or is there a game plan to cajole DiGi to team up with Time dotCom Bhd to create a second cellular/broadband company to give TM Net Sdn Bhd a run for its money?

The reasons are not known, but foreign-owned companies should be allowed to grow, not stifled, if Malaysia wants to continue to attract foreign direct investments.

Teaming up with Time dotCom is a good idea, as Time certainly needs a strong partner and DiGi has the capabilities to drive change at Time.

But more importantly, the emergence of a strong player would shake up the broadband industry, which is also the reason why four WiMax spectrum winners were announced recently.

With competition, rates will fall and service quality will improve. Competition is necessary if Malaysia is to have a wider broadband penetration.

Malaysia has only 13 years before it is expected to become a developed nation. Its broadband service, when benchmarked against world standards now, is atrociously poor.

Users are fighting a constant battle to get higher speeds and uninterrupted access, and getting one gigabit is rare.

But do the four players have the financial muscle or willpower to make a difference in the broadband arena? Can they take on TM Net?

In terms of shareholders, it is pretty impressive. For one, YTL Corp (BizSurf (M) Sdn Bhd) has the track record in delivery. It is even willing to build a bullet train to Singapore, which speaks volumes of what it can do. So it would be worth watching.

Green Packet Bhd is an up-and-coming company, in tune with technology, but let’s see how it performs from a consumer’s perspective.

REDTone will concentrate on Sabah and Sarawak. Asiaspace Sdn Bhd has the track record in building telecommunication towers, but this is a consumer service. We shall have to wait for the delivery.

With the WiMax spectrum out, the Government is essentially opening up the last mile connectivity. The winners are likely to opt for wireless connectivity to bridge the gap, but is that the best move?

Jaring has not been hugely successful with its wireless broadband offering and Time failed with its Webbit. WiMax itself has yet to be vastly successful, given issues regarding the standard. But these four new winners appear to be very ambitious for they believe they know better how to reach out to the marketplace.

It would be good if they can make a difference to the broadband scene. Monopoly has not benefited Malaysians, so injecting more competition into the broadband sector would be good for consumers.

But Malaysia has seen the consolidation of the cellular sector from a seven-player environment to a three-player one. There were three broadband failures in the past, so is there any room left for failures?

The onus lies on the regulator to ensure the delivery schedules are met and the spectra put to use. Otherwise, give the spectra to others that can deliver. In any case, it is time the regulator takes a tough stance if Malaysia is to have a higher broadband penetration rate.

As for DiGi, try again when the 2.5GHz spectrum tender is out next year. -TheStar

Kugan is the co-founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy

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