UK-based Informa Telecoms & Media senior analyst Tony Brown tells StarBizWeek that TM's UniFi service, which got off to a relatively slow start in terms of subscriber growth, is really starting to pick up and growth prospects look good.
“Now that Maxis Bhd is selling HSBB services and Celcom Axiata Bhd is also likely to start doing so by year-end, we are going to see a big shift of subscribers moving away from DSL (Digital Subscriber Line) services towards the HSBB network,” he says.
The RM11.3bil HSBB project, signed in September 2008, is a public-private partnership agreement between TM and the Government to develop next-generation HSBB infrastructure and services for the nation.
TM is forking out RM8.9bil while the Government is co-investing RM2.4bil on an incurred claims basis based on project milestones reached by TM.
By end-2012 in accordance with the completion of the first phase of the national HSBB project roll-out as agreed with the Government about 1.3 million premises will have access to the HSBB services.
“Building up fixed broadband infrastructure typically involves large-scale investments over long-time horizons and the private sector benefits from more certain prospects in its attempts to finance and roll out such infrastructure.
The foresight to develop an ultra-fast broadband infrastructure is not only limited to Malaysia. Countries as diverse as Australia, Brazil, China and India have launched broadband initiatives respectively.
Elsewhere in the region, there are also a slew of activities happening with regard to HSBB. Some countries have already rolled out their HSBB while some are currently in the midst of developing the infrastructure.
“K-broadband”
Analysts say closing the broadband gap has become a priority for many governments.
South Korea has announced its plans to build a super broadband infrastructure with upload and download speeds of 1Gbps by 2013 through a fibre-optic cable. The project is reported to cost about US$24.5bil, and will largely be funded by the private sector.
The country, which prides itself as being one of the world's most wired countries, already has the best download speeds around the globe. “You will not fail to be impressed by the speed of the country's online connections,” says an analyst. The country is in fact in the process of developing an even faster broadband speed.
According to speedtest.net, South Korea's average download speed of 30.64Mbps currently ranks the first in the world. The results were obtained by analysing test data between March 30 and May 2. By comparison, Malaysia ranks 102 with an average download speed of 2.61Mbps.
Wired broadband, however, is just at the beginning in South Korea; the Korea Communications Commission (KCC) has plans to ramp up its wireless broadband to 10Mbps.
Indeed, it would be interesting to see how things shape up in South Korea once the fibre-optic infrastructure is rolled out.
“At the rate South Korea is going, it is quite possible that the nation will give us a glimpse of our own wired future,” he says. The Korean project, largely funded by the private sector, is key to growing the country's status as a middle-income nation after years of economic despair. Home-grown online gaming and entertainment have also boomed in South Korea as a result of its investment in broadband infrastructure.
Experience Down Under
Informa Telecoms & Media's Brown says the HSBB rollout in Malaysia is one of the most interesting “National Broadband Network” (NBN) type deployments thus far as it targets a very specific part of the nation; it only covers 20% of total homes with its 1.3 million homes passed target.
“However, this very specific targeting has enabled TM and the Government to bring the project in for just US$3.78bil which is way below what is being spent by the Australian government in its own NBN deployment,” he says.
The Australian government plans to invest as much as A$43bil over eight years to build a high-speed Internet network to connect 90% of the nation's homes and create jobs.
The Australian government has also created a new company, NBN Co Ltd, to build and operate the broadband network in urban, regional and rural areas. The government will own at least 51% of a company that will make initial investments of A$4.7bil to build and operate the network.
NBN Co says the capital expenditure for the project is estimated at A$35.9bil, of which the Australian government's contribution will be A$27.5bil in equity in the project.
The NBN will involve the laying of fibre-optic cabling to 93% of Australian homes, schools and businesses, providing broadband speeds of up to 100 Mbps, or up to 100 times faster than what many Australians are experiencing.
Construction for laying the fibre-optic backbone links in Australia has started and construction on the second release sites will begin in the first half of 2011.
Good start for Malaysia
Brown says the Australian NBN is in the early stages of rollout and the government still needs to complete its deal with Telstra before the network rollout can really move forward in a substantial fashion. Indeed, the Malaysian HSBB will very likely be completed even before NBN gets off the gate.
“Therefore, from a pricing and achievement perspective, it is reasonable to say that the HSBB network has gone pretty much as well as can be expected for such a big logistical project,” says Brown.
“There have been some technical issues and it has taken them (TM) a bit longer than they might have liked to start signing wholesale deals. But in comparison with Australia, there is no doubt that Malaysia's deployment has been more efficient,” he adds.
Brown says the key thing for the HSBB is that they are not trying to take on too large a project all at once. The decision to roll out to only 20% of the country in the first stage has kept the project to a “manageable size and prevented problems faced in Australia”.
The other market in the region deploying an NBN is, of course, Singapore where the entire country will have fibre-to-home access by early 2013.
“However, it is not really useful to make costing comparisons between Singapore and other regional markets given the small geographic size of the Singapore market which makes FTTH/B rollout there very cost-effective, and most certainly so compared to Malaysia or Australia,” says Brown.
Singapore model
The Singaporean government has been promoting the usage of broadband Internet access as part of its Intelligent Nation 2015 (iN2015) masterplan. Interestingly, Singapore like South Korea, also has impressive existing infrastructure and is one of the most wired countries.
Last year, Internet service providers in Singapore started rolling out the Next Generation Nationwide Broadband Network (NGNBN) service plans. The NGNBN supports high speeds of up to 1Gbps as it uses an optical-fibre network.
According to Infocomm Development Authority of Singapore (IDA), by 2012, homes and offices nationwide will be connected to Singapore's ultra high-speed and pervasive NGNBN. In two years, some 60% of homes and offices can have access to this new, pervasive, all-fibre network.
The Singapore government had in 2008 selected the proposal from OpenNet Consortium to design, build and operate the passive infrastructure for the NGNBN. The OpenNet consortium comprises Axia NetMedia Corp (30%), Singapore Telecommunications Ltd (30%), Singapore Press Holdings Ltd (25%) and SP Telecommunications Pte Ltd (15%).
The NGNBN will be capable of delivering speeds of up to 1Gbps and beyond. It was reported that OpenNet will invest S$1bil-S$2bil to design, build and maintain the network infrastructure, while the government will support its rollout with a funding of S$750mil.
OpenNet began the fibre rollout in 2009. The rollout is on schedule and is expected to achieve the target of 95% total coverage by mid-2012.
Based on estimates, there are over half a billion broadband subscribers worldwide (including all fixed access technologies) as at end last year. While Japan continues to lead the world in terms of the number of FTTx (fibre to the home or curb) subscribers; South Korea has the highest penetration in the world and is the first to reach over 50% penetration of households using FTTx.
According to international research firm Parks Associates, the demand for high-bandwidth applications will jump in the next few years as the number of households worldwide with broadband will reach close to 650 million by 2013. Asia-Pacific is the largest market, accounting for over 160 million subscribers, and is expected to have over 49% of the global market share by 2013. - By LEONG HUNG YEE, hungyee@thestar.com.my
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