Broadband Subscribers Set to Double by 2006

Malaysia's largest Internet service provider (ISP), Telekom Malaysia Bhd (TM), is likely to double its broadband user base by mid-2006. According to Abdul Wahid Omar, CEO of TM, the company had secured 340,000 broadband users by June 2005 - and the number is growing by 30,000 new users per month. At that growth rate, it is expected that Malaysia will have 700,000 broadband users by the middle of 2006.

Until recently, broadband penetration in the country was stymied by high cost and lack of availability. Last year, Malaysia's broadband penetration stood at less than 1% of the population - well behind other Asian countries and regions such as Singapore, Taiwan, Korea and Japan, which have double-digit penetration rates. However, TM's promotion of its broadband ADSL solution, Streamyx, at competitive monthly flat-rates for unlimited usage, and with a free modem, has been a success. Wahid said TM will increase the number of ports to one million by the end of the year to widen the availability of its Streamyx service.

TM also aims to raise content revenue from its Internet unit TM Net Sdn Bhd significantly from the current 5%. "We have to increase our content revenue and that means we have to come up with exciting content to drive the take-up rate," he said.

Wahid indicated that TM is looking at offering broadband TV on its Internet protocol (IP) platform as a means to raise revenue, although it has yet to commit to a date. The company began conducting trials in Subang Jaya, just outside Kuala Lumpur, last year but some technical issues remain unresolved.

Apart from its broadband users, TM has over 1.56 million dial-up subscribers, as well as a small number of mobile broadband users via its cellular arm, Celcom (M) Bhd. It is also the dominant fixed-line telco in Malaysia with over four million users.

Wireless Broadband Era
Meanwhile, TM's main Internet rival Mimos Bhd has entered the wireless broadband fray with a Wideband Code Division Multiple Access (WCDMA)-based technology from SOMA Networks Inc. Mimos' ISP unit Jaring, which has over 700,000 mostly dial-up users, hopes to sign on 500,000 broadband subscribers by 2008 when the new service is fully deployed. The new service will provide voice and broadband access to users and is expected to loosen TM's stranglehold on the "golden last-mile" in Malaysia.

Bertrand Bidaud, vice president of Asia Pacific at Gartner Inc, said it is clear that broadband growth has accelerated in Malaysia but penetration remains low. "If the government wants more broadband usage, it should fund or tender it directly through some Universal Service fund," he said.

Bidaud said wireless broadband may be a viable niche solution for the country once prices drop and before WiMAX 'e' takes off by the end of the decade.

by Julian Matthews

(August 2005 Issue, Nikkei Electronics Asia)