Broadnet sends broadband market spinning
The entry of little known outfit called Broadnet Network into Malaysia’s broadband scene has sent shockwaves into the industry.
The affected are mainly two giant government linked companies or GLCs, namely Telekom Malaysia Bhd
(TM) and Tenaga Nasional Bhd (TNB), who incidentally have a combined market capitalisation that tops RM100bil.
Both are believed to be questioning Broadnet’s entry or at least coming to terms with what lies ahead.
To recall, Broadnet is the company selected by the Government to undertake the Nationwide Fiberisation Plan (NFP) and has some level of government support to work with TNB, which has an extensive power cable network ripe for fiberisation to provide broadband services.
Broadnet also has some big names on its board, including Tan Sri Ali Hamsa, chief secretary to the Government, which gives the impression that it also resembles a GLC. The government is also said to have a golden share in Broadnet although based on a company search, ownership lies with Datuk Mohd Ali Abd Samad, a former civil servant.
The question asked in this whole development is Broadnet’s track record to be afforded such a plum deal to spearhead the NFP. It’s a small outfit, owned by private hands at the moment and does not seem to have the financial clout based on records available.
On the flip side, the argument for the existence of a company such as Broadnet is the urgent need to hasten Malaysia’s fibrersation plan.
Many rural areas still do not have high speed broadband and even places that do have it are subject to high pricing levels at sometimes questionable quality. There are several players providing broadband services but pricing is still higher compared to other countries.
A new set up taking advantage of TNB’s extensive and long-reaching infrastructure, to deliver a cost effective fibre-based telecommunication network, should be good for the country.
TNB by itself should have commercialised this some time ago. It already has a fibre network on its transmission lines but that is being used for supervisory control and data acquisition purposes. The argument is that fibre is under utilised.
TNB cannot be held responsible for the under utilisation because provision of broadband is not its core business. Being the country’s main power utility, it has many other matters on its plate, including maintaining its massive power stations and building new ones as well as researching into and implementing say more renewable energy offerings.
Hence sometimes to hasten certain key projects, certain entrepreneurial parties need to get involved and get things moving.
And going by Communications and Multimedia Minister Datuk Seri Dr Salleh Said Keruak, the entry of the private sector for investments into building up the country’s fibre infrastructure is welcomed.
Going by some reports, the NFP will cost around RM10bil. Will Broadnet be raising that money for the project and if so, will it be provided some cushy terms from the government to aid that fund raising?
Ideally, Broadnet should be raising the capital expenditure on its own, churning out the detailed business plans on how lucrative this business can be, sans any cushy terms by the government. It should also strike commercially reasonable terms with the infrastructure owners such as TNB.
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