HAVING been involved in, and observed, the Internet industry for over 30 years, I would like to share some views on the current discussions about the National Fiberisation and Connectivity Plan initiated by the Malaysian Communications and Multimedia Commission (MCMC).
We used to be a leading country in the development of Internet services in the region before the Communications and Multimedia Act 1998 (CMA 1998) was implemented. In fact, this Act was supposed to enhance industry competition and improve services.
No doubt we have a lot more players (licence holders) now, but while competition in provision of mobile services is well and good, the same cannot be said for fixed line services. There is something not quite right here. Today, our broadband services are lagging far behind those of the countries which we used to be ahead of.
In my view, the key issue is the fibre optic infrastructure. Providing fibre optic infrastructure (with trenches and ducts) is a very expensive undertaking which only big players with the necessary resources can take on. This makes small players dependent on them, leaving them at their mercy. So, while we now have close to 200 players with licences that allow them to provide the fibre optic infrastructure (among other facilities), only a few can afford to take the challenge. The playing field is far from level.
Imaging that we have three telcos laying fibre optic cables along a road, with each spending RM100,000 per km. Total spending would be RM300,000 per km for the same number of customers along the same road. Hence, the customers would have to pay three times more for the same service.
If we extend the argument for the whole country instead of just one road, at the end of the day, our broadband services would not be competitive.
Basic fibre infrastructure should be shared and operated by an independent entity. In fact, infrastructure that requires right-of-way (meaning digging roads and land) should be operated by a single party. This is the case with water supply, electricity supply and sewerage facilities. We should not have two water pipes, two electrical power cables or two sewerage ducts into our houses just for the sake of competition. With a single operator, it would be much easier to deal with local authorities (who issue permits), cheaper to maintain roads and less inconveniences to road users.
In a trench, there would be more than one duct, and each duct could have a single or multiple cables (depending on the size). Each cable would have tens or hundreds of fibre strands (which look like human hair).
One pair of fibre strands is already sufficient to transmit broadband data in hundreds of Gbps or tens of Tbps. One Gbps (giga bits per second) is 1,000 mega bit per second and one Tbps (tera bits per second) is 1,000 Gbps. If a user takes 10 Mbps, one Tbps can support more than 100,000 users. However, in reality, more fibre strands are required at certain places, depending on service topology.
But with a single trench and a few ducts, it should be sufficient to serve hundreds of service providers and million of users for the whole country. The basic infrastructure must therefore be shared.
To be fair to all service providers (retailers), this infrastructure should be operated by a third party that is not competing against any of them. To be trusted, it has to be controlled by the government and heavily regulated. To reduce the cost, it should be operated on a not-for-profit or cost-plus basis. In the long run, it should be self-sustainable.
MCMC is collecting from service providers more than RM1bil per year under the Universal Service Provision (USP) scheme. This is sufficient to build the shared fibre optic infrastructure for the whole country. It may take 10 to 15 years to be fully completed, but I believe 80% can be done within five years or less.
This has to be done if we want to transform the country. We have to change from the “business as usual” approach.
DR MOHAMED AWANG LAH
Former CEO of Jaring
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