Co-existing with TM


  • Business
  • Saturday, 21 Mar 2009

If you were asked to rate the current TM Streamyx service, how would you rate it on a scale of one to 10?

“I would give it a four because when it is bad it is terrible, but when it is good, it is just okay,’’ says a user who subscribes to the 1Mbps (megabits per second) package which costs RM88 a month.

Afzal Abdul Rahim accords it a generous score of 5.5. He is the chief executive officer of rival telco, TIME Dotcom Bhd (TDC).

“They (TM Net which offers TM Streamyx) have been improving the service over time. If TDC could be in a better position to provide wire-line services, there would be more competition and consumers will be in a better position,’’ says Afzal, the new man appointed to drive the change at TDC.

He expects TDC to compete head-on with TM Streamyx in the corporate sector as its retail offering is only in limited areas.

TDC may have a fibre-optic network spanning across Peninsular Malaysia but it lacks the last-mile connection to Malaysian homes. To wire up fibre to the homes (FTTH), it will cost TDC billions of ringgit, but it currently lacks the financial muscle to do so.

And while there are wireless options, one cannot expect the same level of connectivity or speed stability as that offered by fixed broadband networks.

With little or no competition, TM Net continues to lead in the fixed-line broadband marketplace. TM Net is also offering broadband via copper lines and there is a big difference in service quality between copper and fibre. Fibre lines hook up to the curb while copper is used to link up to homes.

“TM Streamyx is not available everywhere and the quality is varied when you have one portion in fibre and the other copper. There is also capacity problems. They have too many customers and lines are limited and that is why you get logging-in problems. Also, once you are connected, you can get bumped off at any time,’’ says an industry player.

Replacing the copper with fibre will make a significant difference in terms of delivery of services, which probably explains why TM only wants service providers that will add value to its network.

“You cannot have the same kind of speed with HSBB (high-speed broadband) as we are replacing the copper with fibre. The whole experience will be different provided the whole value chain is fibre,’’ says TM’s HSBB programme director Ahmad Azhar Yahya.

With the higher bandwidth, TM hopes to offer a myriad of services from IPTV (Internet protocol TV), video-on-demand, online games, e-health, multi-HDTV (high-definition TV), advance education and others.

Through TM Net, TM plays the role of network operator as well as network service provider, which is clearly an issue with other industry players who are calling for a separation between the two to ensure fair and equitable pricing for HSBB.

The industry players want to co-exist with TM when the HSBB is commercially available but it is also understandable that TM wants to protect its own turf.

Afterall, it is shelling out a massive RM8.9bil for the project and needs to recoup its investments and this it can achieve by playing the dual role of network operator and service provider.

Access terms for the HSBB were announced this week and the pricing is due out next month. But access is not open to all. Only value-added players will be able to ride on the HSBB in due time.

“If you are a player that just wants to provide normal broadband access, then what value are you adding? Why are you competing with us? If any player wants to deliver, they should be value adding, as that would make more sense,’’ says Ahmad.

In response, an observer remarks: “If this is not creating a monopoly, then what is?”

Ahmad retorts: “It is not true that we are creating a monopoly. Many fixed-line licences have been issued. If anyone is at a disadvantage, it should be us. Players have access to our network but do we have access to theirs? Players can provide mobility and bundled services but we can’t.’’

However, the key point, as articulated by a long-time industry observer, is that in this era monopolies are more often than not counter-productive in terms of service quality and pricing. In addition, the service quality of TM Net leaves much to be desired.

“We take complaints seriously these days and we know we have challenges with our Streamyx offering. To us, the customer is extremely important. Previously, we may not have been customer-centric but we are improving our customer service and we have various programmes in place for that,’’ Ahmad says.

The whopping price tag of RM11.3bil for the HSBB project has raised many eyebrows and is often criticised for being too high a price for merely 1.3 million lines.

But Ahmad disagrees: “Whatever we do not spend will be returned to the Government. Of the RM11.3bil, 40% will be invested in upgrading the core network to IP-based, 20% to improve international connectivity and 40% for FTTH.”

Under the HSBB roll-out plan, retail consumers in select areas in the Klang Valley will have access to the HSBB in the fourth quarter of 2009 and some parts of the network will be open for wholesale offering in second quarter this year.

TM will provide fibre to the home (FTTH) in select areas in the Klang Valley and other areas earmarked under the roll-out plan.

The first two areas to get FTTH are Taman Tun Dr Ismail and Subang Jaya in the Klang Valley. But don’t expect all the houses in Taman Tun Dr Ismail or Subang Jaya to have the connectivity.

“It has to be a step-by-step approach,’’ says TM vice-president of Group Strategy and Regulatory Dr Fadhlullah Suhaimi Abdul Malek.

Some houses will get it first and others, later. When there is enough demand to justify future investments, TM will identify the areas that will be wired with FTTH, which will largely be based on usage patterns and level of affordability. After all, there is no point ploughing in the capital to wire up an area which has limited takers.

But many say that it is an unlikely scenario as demand at the moment appears to have far outstripped supply in the country.

Related stories: Speeding up broadband Investing in next-generation networks From snail’s pace to lightning speed Better-priced packages on the cards

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