Global Economics

Malaysia: A Broadband Slowpoke?


Some are angered by the quality of broadband services, saying it will undermine the government's bid to make the country a global ICT hub

Some industry observers have lashed out at the quality of broadband services in the country, which they say will undermine the government's bid to transform Malaysia into a global ICT hub.

Teneo Technologies CEO Jeffri Shahul Hamid told ZDNet Asia that broadband service providers still have a lot of room for improvement. The reliability and general broadband speed of broadband services in Malaysia are still "below average" compared to other developing countries, Jeffri said, in an e-mail interview.

A Web site services provider, Teneo Technologies' business is directed impacted by the quality of broadband services, he said. "If the broadband service is not satisfactory, our business will be affected tremendously," he noted. "In our case, there is only a single services provider and we haven't got the option to subscribe to secondary or backup lines."

Jeffri's sentiments affirm the findings of a recent survey, also bemoaning the state of the country's broadband services.

Conducted by economic think-tank Executives Working Together (TEC) Asia and the Malaysian Institute of Economic Research (MIER), the study revealed that CEOs in the country were generally unhappy with the state of Malaysia's broadband services. Over 170 CEOs were polled in the First-quarter 2007 TEC-MIER CEO confidence index survey.

Some 70 percent of respondents indicated that broadband Internet access was slow, noting that broadband service providers seemed unable to deliver on the promised access speeds.

In addition, 64 percent of the CEOs said service providers in the country were inefficient, while 56 percent complained about inadequate broadband coverage and 38 percent lamented the costly service.

Raymond Chee, managing director of Emerge Systems said poor broadband services would adversely affect the adoption level of business-to-consumer (B2C) and business-to-business (B2B) e-commerce. Emerge Systems is one of Malaysia's largest corporate hosting service providers.

In an e-mail interview, Chee noted that the high cost of bandwidth and "lackadaisical attitude" of the country's main broadband service providers caused Malaysia to lag behind other countries in the region, such as Korea and Singapore. This must be urgently addressed, he added, given the government's ambition to transform Malaysia into an international IT hub.

Chee believes it is only through open competition that Malaysia can improve on its broadband provisions within the shortest period of time.

"The 'sleeping giant' service providers will have to face competition from smaller aggressive local broadband service providers, or foreign players with huge budgets, if Malaysia wants to improve its broadband services," he said.

David Wong, group CEO of SnT Global, agreed: "The majority of areas in Malaysia are still covered by only one ISP (Internet service provider). And not much effort is put in by the ISP [to improve its broadband services]." SnT Global is a business process outsourcing (BPO) services provider.

"If your company is involved in e-commerce, you can invest in the best infrastructure available," Wong said, in an e-mail interview. "But your potential customers might not be able to do business with you because the broadband service at their premises is down."

To ensure there is competition in the market, he suggested that the Malaysian government should open up the "last mile" to other service providers.

"When an industry is monopolized, there's no competition to drive the incumbent telco to achieve excellence," he said. He noted that competition through the emergence of WiMax service providers, for example, would help energize the industry.

"All the ISPs are eyeing the WiMax wireless spectrum for fast deployment of broadband services," Wong said, adding that he was hopeful WiMax services will be rolled out by year-end at an affordable pricing.

Alternative broadband access services such as WiMax and BPL (Broadband over Power Line), have been touted as possible solutions for breaking the monopoly most incumbent telecommunications providers have over last-mile access.

In March this year, Malaysia's telecommunications industry regulator snubbed the country's top telcos such as TM, Maxis and DiGi, when it instead awarded 2.3GHz WiMax licenses to four lower-tier telcos. The licensees have until year-end to roll out their WiMax services to 25 per cent of Malaysia's population in their respective designated areas.

Each licensee is expected to invest between 250 million ringgit (US$72.5 million) and 300 million ringgit (US$87 million) during the first three years of its WiMax deployment.

Provided by ZDNet Asia—Where Technology Means Business

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