Broadnet raises concern in Telekom, Tenaga

The research house also raised its target price on Telekom Malaysia Bhd

KUALA LUMPUR: The aggressive moves by Broadnet Network Sdn Bhd, the company selected by the Government to undertake the Nationwide Fiberisation Plan (NFP), have raised concerns in government-linked companies, namely Telekom Malaysia Bhd and Tenaga Nasional Bhd.
According to sources, both the GLCs are seeking more information from the Government before they engage with Broadnet.

“For starters, Tenaga wants to know for sure if the Government has a golden share in Broadnet and if they are compelled to collaborate with the company,” said the sources.

As for Telekom, it was learnt that top officials of the dominant provider of high-speed broadband have sought meetings with the Ministry of Finance on the matter.

At the moment, Telekom’s mainstay is providing broadband connectivity. Towards this end, it has undertaken the High Speed Broadband (HSBB) project for several years and continued to roll out broadband connectivity.

“In some ways, Broadnet would be a competitor to Telekom. So it is only natural for the company to seek clarification as Telekom itself is indirectly owned by the Government through Khazanah Nasional Bhd,” said a source.

Broadnet’s objective is to provide high-speed Internet broadband connectivity to areas that are underserved and unserved currently.

The matter gained prominence early this month after the Communications and Multimedia Minister Datuk Seri Salleh Said Keruak gave his implicit support for the company to collaborate with Tenaga to pursue the NFP.

The little-known company packs a serious punch when it comes to the who’s who on its board.

A search with the Companies Commission of Malaysia revealed that Broadnet Network was previously known as Nasmudi Sdn Bhd, the same company that in 2003 made the audacious attempt to buy out the Employees Provident Fund’s minority stake in KFC Holdings (M) Bhd. That deal didn’t pan out and Nasmudi faded from the public eye.  

Nasmudi, now Broadnet Network, is currently 100%-owned by Datuk Mohd Ali Abd Samad. He is said to be the same person who was the former state secretary of Negri Sembilan.

Mohd Ali’s years in the civil service, and later in the corporate world - he was a former chairman of ECM Libra - won him some very strong allies.

The board of Broadnet includes Augustus Ralph Marshall, who was appointed in July. Marshall was previously the top executive at Astro and Maxis. 

Another well-known corporate figure on the board is Tan Sri Krishnan Tan Boon Seng, the former boss of IJM Corp Bhd. Krishnan joined the board in October.

However, the appointment of Tan Sri Ali Hamsa, chief secretary to the Government, to the board of Broadnet in November raised the profile of the company.

Another high-profile civil servant, Tan Sri Dr Sharifah Zarah Syed Ahmad, the secretary-general of the Ministry of Communications and Multimedia, was also appointed to the board that same month.

The minister, last week, was quoted as saying that the Nationwide Fiberisation Plan would, among other things, leverage Tenaga's extensive fibre trunk network.

He had said that the Government wanted more private sector entities to come into the broadband market and invest.

“We do not encourage monopolies or exclusive arrangements as this may slow down the deployment of broadband infrastructure,” Salleh was quoted as saying by Bernama.

The NFP, he said, was in line with Prime Minister Datuk Seri Najib Tun Razak’s announcement in this year’s Budget, which was to double broadband speeds at lower prices by 2019.

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