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Telekom Malaysia, UMTS to Roll Out
3G Telekom Malaysia and UMTS Sdn Bhd, a subsidiary of Maxis
Communications Bhd, plan to spend an estimated RM8 billion (US$2.1
billion) over the next 15 years to introduce high speed mobile Internet
(3G) services in Malaysia.
Pilots will begin this month with
Telekom Malaysia testing out the service in the vicinity of the Multimedia
Super Corridor (MSC), while UMTS has scheduled trials in Kuala Lumpur city
center and selected suburbs early next year. Although the two operators
will compete head-on in the capital, they will share coverage across the
country to lower operating costs.
Both companies won the lucrative
bid for 3G spectrum blocks put up
for grabs by the Malaysian
Communications and Multimedia Commission (MCMC) last year, beating Celcom
(Malaysia) Bhd, Time dotCom Bhd subsidiary TimeSat Sdn Bhd and E-Touch Sdn
Bhd.
Malaysia opted for a "contest" in handing out the licenses
rather than a costly auction, reasoning that the latter may unduly burden
bidders, as seen with some 3G auctions in Europe.
According to
MCMC, limiting the number of operators will minimize unnecessary
duplication of large-scale infrastructure while maintaining competition at
the network facilities level. The two companies paid a fee of RM50 million
each for 2 x 15MHz block of 3G spectrum.
The failure of Wireless
Application Protocol (WAP) service and poor demand for General Packet
Radio Service (GPRS) also had the commission demand potential bidders
outline detailed business plans to the MCMC for approval before the
spectrum blocks were officially assigned.
"The assignment holders
must keep their promises and meet datelines set in the business plans,"
said Tan Sri Nuraizah Abdul Hamid, MCMC chairman, adding that the
commission will monitor the operators' progress.
Limiting
Operators
Analysts are cautious on the take up rate of 3G in a
nation with just over 8 million mobile phone users. Usage is expected to
reach 12 million by 2006. Maxis is the number one cellular carrier while
Telekom recently boosted its customer base to 40% through a merger with
another cellular provider.
According to Telekom chief executive
Datuk Dr Md Khir Abdul Rahman, the RM100 million 3G pilot at the MSC
coupled with impact of similar services implementation in other countries
will determine the commercial rollout rate at four targeted districts in
the central, northern, southern and eastern regions.
He said that
expenditure to build the network infrastructure would depend largely on
consumer uptake, although the company expects to spend less on equipment
as prices drop over time. "The service would cost between what
telecommunication companies can offer and what customers would like to
pay," he noted.
Maxis CEO Jamaludin Ibrahim concurred. "There are
many ways of sharing electronic and civil infrastructure," he said, adding
that the project will be financed by loans and internal
reserves.
Telekom and UMTS are optimistic of reaching 80% of the
population through its new range of services by 2010 and 2014
respectively.
by Anita Devasahayam
(July 2003 Issue,
Nikkei Electronics Asia)
Copyright (c)
1996-2003, Nikkei Business Publications Asia Ltd,
Nikkei Business
Publications, Inc. All Rights Reserved.
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