Cashing in on P1

It has been nearly a year since the TM acquisition of P1 fell through, and now TM is actually bleeding money – net profit was down 38.8% as of Q1, this year!

When Telekom Malaysia forked out RM560 million and acquired majority stake in pioneer WiMAX player, Packet One, it made sense to every one in the industry, because now the incumbent fixed line telco can extend their services to the wireless realm, and ultimately save on building expensive fixed infrastructure.

Why isn’t TM turning in a profit yet, when there are still so many underserved areas, not to mention businesses that are hungry for quality broadband services? Telekom Malaysia’s SME business packages are actually popular among small to medium businesses who want quick and easy Internet set up. There is no lack of demand in that segment.

With TM now being able to use P1’s 2.3GHz and 2.6GHz spectrum allocations, they can now offer wireless broadband to complement their own fixed services. In fact, before acquisition, P1 was making a tidy sum from IP-PABX services, using their wireless broadband technology to deliver them to businesses that wanted quick set up.

Granted, hiccups are expected especially since two fundamentally different technologies and infrastructure (and work cultures) are being merged so that it may appear as one whole to the user. But might TM’s use of P1’s precious spectrum also be the cause for TM losses?

Even before P1 was acquired, the wireless player had always stayed away from business offerings preferring to stick to offering consumer services to the masses. Consumer services also do not come with the hassle of service-level agreements (SLAs) and enterprise-level support. In summary, consumer services are much easier to offer.

If this is going to be case also, post- acquisition, I hope TM would reconsider, because they must surely know, businesses like mine are willing to pay a premium for reliable services and ongoing support.

Can you hear the kaching-ching yet, TM?

IT BYTES BACK! says: P1 always has really cute ads about how they are whipping the competition.  How about applying that same diligence, creativity and confidence to the business segment as well, hey?

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