Telekom Malaysia Berhad (TM) and Tenaga Nasional Berhad (TNB) signed a Memorandum of Understanding (MoU) on Tuesday to jointly develop an implementation plan to deliver on the Government’s Nationwide Fiberisation Plan (NFP).
In an announcement to Bursa Malaysia, the companies said the collaboration will capitalise on the combined strength of both Government-Linked Companies (GLCs) in terms of reach, infrastructure and expertise. In particular, the synergies will enable the most efficient cost structure, and further accelerate the fibre broadband network reach.
Tenaga Nasional Berhad (TNB) is the largest electricity utility in Malaysia, delivering electricity to 9.2 million customers in Peninsular Malaysia, Sabah and Labuan. Telekom Malaysia (TM) operates the High Speed Broadband Network (HSBB) and offers the Unifi fibre service.
The MoU was signed by Dato’ Sri Mohammed Shazalli Ramly, Managing Director/ Group Chief Executive Officer of TM, and Datuk Seri Ir. Azman Mohd, President/ Chief Executive Officer of TNB.
The MoU is subject to a definitive agreement to be signed between the parties upon finalisation of the commercial terms.
Early last year, the Malaysian Government launched a Nationwide Fiberisation Plan (2017-2019) to connect about six million premises including an estimated two million premises in the rural areas.
As part of the Nationwide Fiberisation Plan, a 3-Tier model would be established, whereby the First Tier would involve utilising Tenaga Nasional Bhd’s fiber trunk network for wholesale backhaul services.
The Second Tier Wholesale Service Provider(s) would offer last mile access, while the Third Tier providers would comprise existing telecommunication companies offering retail services to consumers and businesses
However, in December 2017, it was reported that TNB appeared to have been cut off from the project as Communications and Multimedia Minister Datuk Seri Dr Salleh Said Keruak announced earlier that month that it would be awarded to Broadnet Networks Sdn Bhd. The relatively unknown company is said to be receiving a sizeable RM1.5 billion incentive from the government to help fund the last-mile fiberisation, The Edge Malaysia weekly reported.
Broadnet Networks was incorporated in 2002 as Nasmudi Sdn Bhd but had been relatively dormant until it was renamed in April 2017.
Subsequently, some civil servants were appointed to the board including Chief Secretary to the Government Tan Sri Ali Hamsa and secretary-general of the Ministry of Communications and Multimedia Tan Sri Sharifah Zarah Syed Ahmad.
At the time of the media report in December 2017, Broadnet’s sole shareholder is Datuk Mohd Ali Abdul Samad, who is also the director of the company.
TNB has said today it will be able to fund the project without government support, and is “willing to see through its realisation via strategic partnership with TM”.
Analysts are mixed towards the developments in the NFP project implementation, pointing out that Broadnet — which has high-profile civil servants onboard — has no track record in broadband development.
Meanwhile, the TNB-TM tie-up was also questioned as Broadnet has already been appointed by the government and currently holds both the National Facilities Provider and National Services Provider (NSP) licences, which allow it to bid for the infrastructure jobs.
The cost of the project is estimated to be RM10 billion, reported TheEdgeMarkets.