P1 to offer fibre-powered broadband in 1Q12

Green Packet Bhd’s wireless broadband arm, Packet One Networks (M) Sdn Bhd (P1), will begin offering fibre optic cable-powered high-speed broadband (HSBB) and possibly IPTV services by 1Q12, having sealed a 10-year wholesale agreement with Telekom Malaysia Bhd (TM).

“Along with [the] launch early next year, we [will] also look at providing IPTV and Video on Demand (VoD),” P1 CEO Michael Lai said at the signing ceremony between P1 and TM yesterday.

The agreement gives P1 access to some 1.3 million homes connected to TM’s HSBB network, alongside leading mobile phone operators Maxis Bhd and Celcom Axiata Bhd, which had earlier signed similar wholesale agreements with TM. These services will compete with TM’s own HSBB triple-play (broadband-home voice-IPTV) offering UniFi which has 142,000 customers as at mid-August, 30% of whom are active users of the IPTV service.

P1 currently offers wireless broadband services using its WiMAX network. Lai, who declined to reveal the value of the agreement, said P1 would need very little capital expenditure for the new service as it rides on TM’s infrastructure.

“There will be some allocation for operational expenditure, [which] we will reveal in the future [when it is ascertained],” he said.

The collaboration with P1 is TM’s third agreement with a local telco since it signed the public-private partnership agreement (PPP) with the government in 2008.

Zamzamzairani: The partnership will bring enormous benefits to all end users.

Under the agreement, TM is to allow any MCMC-licensed service provider access to the HSBB network that is estimated to cost RM11.3 billion over 10 years for a fee.

TM group CEO Datuk Seri Zamzamzairani Mohd Isa said the collaboration with P1 is yet another step forward for the HSBB rollout plan. “The partnership will bring enormous benefits to all end users, as it is in the consumers’ best interest to have a range of options to choose from,” Zamzamzairani said.

In a recent report, OSK Research said wholesale agreements are a boon for TM, given that it allows faster monetisation of the HSBB network as opposed to banking only on retail offerings to recoup investments.

“While contribution from TM’s wholesale business remains small (at 9%), we expect this to pick up from 4QFY11 on recent launch of Maxis’ fibre-to-the-home (FTTH) service and similar launches by P1 and Celcom Axiata in the near future,” OSK said.

The HSBB network will allow P1 to migrate its bandwidth-hungry users to the new fibreoptic services, instead of losing them to competitors. OSK Research has a “buy” call for TM with fair value of RM4.19.

Separately, Zamzamzairani said TM’s foreign shareholding levels have increased to 18% currently, significantly above a one time low of less than 10%. The increase is a reflection of foreign investor “confidence in the group’s performance and the take-up of the UniFi broadband service”, he said, adding that the take-up of UniFi had this week passed the 170,000 customers mark.

TM added two sen to RM4.22 while Green Packet rose one sen to 65 sen yesterday.


Written by Max Koh, theedgemalaysia.com