INTERNET service provider Jaring will be merged with TMNet, a unit of Telekom Malaysia Bhd, to create a larger entity to provide wider and more efficient Internet services in the country, the Prime Minister said in his Budget 2004 speech.
TMNet is Asias largest Internet provider with about 1.5 million users while Jaring operated by Mimos Bhd has about 700,000 users. Some users have both TMNet and Jaring accounts.
Talk of a merger as a means to restructure Mimos and rationalise the operations of Jaring had been circulating the past two years. Jaring depends on service providers such as Telekom to provide the last-mile linkage to users.
Telekom chief executive Datuk Dr Md Khir Abdul Rahman told StarBiz yesterday that there must be a strong basis for such a move. This leads to the creation of a uniform service throughout the country and, certainly, there will not be disruptions in terms of interconnection as experienced now.
He said such a move tied in well with the reduction in Internet broadband charges for consumers and corporate and industrial users, and he anticipated a surge in the usage of Internet services as a result.
We have been promoting and pushing Internet usage to enable the quick and further promotion and adoption of ICT (information and communications technology) and e-commerce in the country. But we do not think the merger will create a monopoly situation as Internet charges would be coming down, Khir said.
Naim Yunus, a partner at DTA Ventures (a local venture capital company) felt it made no difference whether Jaring existed because it was already crippled by Telekom denying it access to its (Telekoms) last mile.
The future of Internet is in broadband, and the last mile to homes and offices is already monopolised by Telekom, hence Telekom virtually controls Internet broadband access. As such, I see no future for Jaring and the merger with TMNet is a saving grace for them.
However, rather than a merger, I would like to see the government taking a more effective approach, such as forcing Telekom to open the last mile to Jaring and others for true competition, Naim said.
But a source at another service provider welcomed the move to merge TMNet with Jaring.
The source felt that the market was huge and that only those operators able to provide good service would get sizeable market share. He sees a need for seven million Internet connections in the future.