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Maxis says that fibre cost is high & “it is challenging to work with TM operationally”

Maxis Bhd, Malaysia’s largest mobile operator by revenue, believes there’s still hope in its loss-making and under-performing Home Services business and has no plans to give it up until all possible ideas to turn the business around has been tested.

The decline was partly due to the network cost it pays to Telekom Malaysia Bhd (TM), as Maxis rides on the latter’s high speed broadband backhaul infrastructure to offer its Home Services.

“I think the Home Services [business] is strategically well founded. It is obvious that broadband is a big market and everybody wants broadband wireless or fixed. It is also proven that if you have customers using many products, the churn rates are going to be lower, and that is fine.

“The problem is that the idea is ‘operationally challenged.’ It is challenging to work with TM operationally. I think [TM] has its own challenges ? but also, it is challenging to be its customer,” he said, adding that Maxis hasn’t prioritised the business enough internally.

“So, we could have done a better job,” said Morten Lundal, CEO of Maxis.

For now, Maxis is giving itself a few more months to solve issues. These include negotiating with both TM and Astro on the possibility to “change certain elements in the current business model.”

“We have given ourselves the task to solve those things ? we haven’t solved them yet, we don’t have clear information on what’s going to go forward. But we are working on it. We are giving ourselves a few more months, [and] in one to three months, these should be solved.

“Then we will have a clear path forward,” he said. “Divesting is one of the several options, but it is not our default option.”

Nevertheless, there are a few analysts who feel that Maxis should quit its Home Services business.

[Full Story]– The Malay Mail, written by Goh Thean Eu(DNA)

About Kugan

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