RM1.3b spent on TM’s high-speed broadband so far

KUALA LUMPUR: Telekom Malaysia Bhd (TM) has so far spent RM1.3bil of the RM11.3bil allocated for the high-speed broadband (HSBB) project it hopes to launch by next March.

“Most of that was spent to develop the core network and to secure international capacity to prepare for HSBB,” group chief executive officer Datuk Zam Isa told StarBiz in an interview.

The next stage will be rolling out fibre optics for the last mile at targeted geographical locations, which are high density areas within the Federal Territory and Selangor.

Industry sources said Chinese firms, Huawei Technologies and ZTE Corp, have been chosen as technology partners in the HSBB roll-out, with Alcatel playing a smaller role. (see also page 5)

Zam did not confirm this but added that TM would make due announcements on the work packages involved in the project. “Suffice to say, any major player in this industry can be involved (in the deployment of HSBB),” he said.

Of the total HSBB investment, the Government will contribute RM2.4bil, which will take the form of disbursement, on a one-to-one matching basis.

In other words, the Government will give RM1 to TM for every RM1 that it invests in HSBB, up to a maximum of RM2.4bil.

“So far, we have claimed RM665mil back (from the Government); it works on a progressive basis. We have to roll out first then we claim back,” Zam said.

Of the 95 exchanges nationwide to be covered by the initial rollout, to date physical work has been completed at four exchanges and in progress at 44 exchanges.

Zam said the telecommunications group wanted to “frontload” the investment so that it would be supply-driven, rather than demand-driven.

“To do this, we need the infrastructure (to be developed) early, and this is where the Government is co-investing with us, so that the supply will be there when the customer needs it,” he said.

Zam said that by the end of 2012, about 1.3 million premises would have access to HSBB services, in accordance with the completion of the first phase of the project agreed with the Government.

TM currently has close to 1.4 million broadband customers.

“We have commitments with the Government so we will roll out on time,” he said.

He played down talk that the WiMAX operators were eating into TM’s current market share for broadband, which it offers under the Streamyx brandname, using its existing copper networks.

TM is experiencing a smaller growth in net additions for its broadband service, while WiMAX operator Packet One Networks (M) Sdn Bhd has been enjoying high subscription rates.

“There is some churn taking place, no doubt. That is only natural when competition comes into the market,” Zam said.

“Whenever you have competitors, we know customers will have a choice. So TM has to strive to remain relevant in the marketplace.

“Still, there is a big difference between wireless and fixed line technology. In wireless technology, there are limitations to coverage, especially as more users start coming on board.”

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