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World Wide Wait for Net access?
On the domestic front, no one disputes that TMnet and Jaring's access rates for dial-up subscribers are among the lowest in the region. See chart below.
Corporate users, however, balk at the high cost of leased lines. Annual access fees for the dedicated lines cost from RM32,000 (US$8,421) for a 128 Kbps line to RM128,000 (US$33,684) for a 2 Mbps line. An additional 50 percent fee on the quoted rate is imposed for unlimited commercial use.
Many have turned to US-based networks for such services instead. Mark Chang, founder of online recruitment service Jobstreet and the Malaysia Online directory service, said cost and inconsistent technical support from local ISPs make US-based networks more attractive.
His solution for improving the ISP market is to add more competitors. "It is similar to the handphone business which saw better service and ease in congestion only after there were more competitors in the market," he said.
Though announced a year ago, none of the licensed ISPs has taken the plunge yet. Industry analysts say the roll-out delays could be attributed to risks associated with the ISP business and payback time is known to be slow.
The telcos involved--Binariang Bhd, Celcom (M) Sdn Bhd, Mutiara Telecommunications Sdn Bhd, PrismaNet (M) Sdn Bhd and Time Telecommunications Sdn Bhd--also took a beating last year from the recession which stalled their expansion plans for a variety of fiber-optic, fixed-line and cellular services.
TMnet's Abdul Majid, however, is against more players and feels the number of ISPs should be proportionate to Malaysia's 22 million population. "Three ISPs would be ideal," he said.
Malaysia's struggling ISPs have also been blamed for the slow e-commerce take-off in the country.
Chang says the issue is more of buying habits and logistics rather than about technical lackings and security fears.
"The US buying public is used to using credit cards for phone orders, mail orders and TV sales. The logistics infrastructure to move product easily and cost-effectively is also there. It is easier for them to take it to the next level which is e-commerce. In Malaysia, we don't have that history," he pointed out.
Chang adds that the free fall of the economy and huge debts racked up by companies last year may have also stifled involvement in new and risky online ventures.
Another factor likely to impact the growth of the ISPs is the march of foreign portal players entering Asian markets. With their branding and marketing clout, wide experience and better content offerings, foreign players are likely to trample on local players still feeling their way around.
"Foreign players have a bigger 'war chest' and this will have an impact on local players. We must ensure that local players get access to lower infrastructure and software costs, and more venture capital funding," said Chang.
Abdul Majid suggests local players should instead aim to form strategic alliances with their foreign counterparts, so as to gain a foothold and precious technical knowhow in a limited market.
Pivotal to the two ISPs development and survival is the Multimedia Super Corridor, which is drawing a wide variety of IT companies involved in Internet-related ventures. The question is whether Malaysia is ready for mission-critical service requirements that discerning corporate customers demand. Or will it fumble as it has in the past?
Intel's Barrett says the market will grow to a billion computers linked to the Net in a few years time. That's a market Malaysia cannot afford to ignore. Local ISPs claim they are ready to face the incoming e-commerce tide. Only time will tell whether they will capitalize on that wave or be all at sea all over again.
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