Turnbull Lauds Malaysian NBN Model

Growing demand and operational efficiencies have resulting in accelerated adoption of Malaysia’s national broadband project, the High Speed Broadband (HSBB) network, that have reportedly put it well ahead of NBN projects in Australia, New Zealand and Singapore according to a new Informa survey. And Australian shadow communications minister Malcolm Turnbull has seized on the numbers, using a speech at an Informa event in Kuala Lumpur to draw a stark contrast between the uptake for the Malaysian network and its Australian equivalent.

Sani – Expecting up to 500,000 new customers by end 2012

 “In March 2011, we had 60,000 customers out of 710,000 ports,” said Telekom Malaysia chief strategy officer Dr.Farid Mohamad Sani. “At the time, the industry sentiment was quite negative since the take up rate was less than 10-percent. But the take up hasn’t [been] linear, and now we have 310,000 subscribers on about 1.1 million ports deployed. By the end of 2012, we are expecting between 400,000 to 500,000 customers on a run rate of about 25,000 new subscribers per month.”

 Sani had previously said that one of the reasons for the ramp up of subscribers is that there is no competition for fibre; he said that while 3G was able to challenge TM’s DSL service, it could not match the superior speeds of fibre. However, he also pointed out that the word ‘fibre’ is not really being used to market the service, branded “UniFi.”

Another driver for the ramp up is TM’s ability to increase the efficiency of its roll out. According to Dr Sani, when the network roll out began, it took a 6-person team to connect a single house per day.

“Today, we have improved that to two houses per day with a two-person team.” The performance of HSBB has put Malaysia well ahead of NBN projects in Singapore, Australia, and New Zealand, according to Informa. In Singapore, subscribers have reached 130,000 but delays in completing in-building wiring have prevented more users from signing up despite 90-percent of the buildings being covered by the backbone network. In Australia and New Zealand, subscribers numbered 7,000 and 500 respectively, according to the firm.

“There is no doubt that Malaysia’s decision to stick with the incumbent, Telekom Malaysia, in deploying its next-generation broadband networks is definitely bearing fruit at at the moment,” said Informa telecoms and media senior analyst Tony Brown. “The other NBN markets in the region have deployed more complex NBN models with new and independent entities created to build and operate their NBN networks – and that has taken a lot of time and created some significant teething problems, especially in Australia.

Turnbull jumps in

Australian shadow communications minister Malcolm Turnbull, delivering a speech to Broadband World Forum Asia in Kuala Lumpur last month, was quick to seize on the contrast with Australia’s own NBN. “By the end of next month, the NBN was forecast to have passed 152,000 houses with its fibre but as of the end of March, only 18,200 premises had been passed with fibre,” he said. “It doesn’t compare well to Malaysia’s HSBB rollout, which was initiated around the same time as the NBN and is on track to have 1.3 million premises in its footprint by the end of the year.”

Turnbull – Australia’s NBN roll out “doesn’t compare well” to Malaysia’s .

Turnbull also drew on a number of other comparisons between the Malaysian and Australian national broadband projects, including the fact that the Malaysian model would not seek to establish a monopoly service provider; was promoting a range of technology including FTTP, DSL and wireless where economically rational; and was built on a 30-percent public/70-percent private partnership between the government and Telekom Malaysia.

Challenges

Despite TM’s success so far, Dr Sani pointed to imminent challenges in the future for HSBB. For starters, the arrival of LTE in the next couple of years will offer a viable alternative to fibre.

At the same time, TM will face increased competition because its contract with the government for HSBB includes a provision to open up that infrastructure for third parties. “We have to do wholesale, so it will enable new players to come into the market,” he said.

Meanwhile, truly taking advantage of the fibre network with content will remain a challenge for TM,he added. “We are not media people. TV people are different. We have to figure out how to compete against broadcasters and their content, particularly for sports.”

The same sentiment is offered by Informa’s Brown: “With video set to play such a huge role in the broadband market and with so many operators now launching IPTV services – including both Telekom Malaysia and Maxis – content rights are becoming ever more critical.

“As things stand, an operator like Telekom Malaysia is going to find it hard to really break through asan IPTV player unless it either spends a huge amount of money on content or the government steps in – as the Singaporean regulator did a few years ago – and bans exclusive content deals between programmers and pay-TV operators.” – www.commsday.com