1、1 The government will fund 30% of the proposedmultibillion project, which will be built by TelekomMalaysia Malaysias Deputy Prime Minister Najib Tun Razaklast week unveiled plans to embark on an ambitiousinitiative to roll out high-speed broadband servicesacross the country. The government official
2、alsorevealed that incumbent fixed-line carrier TelekomMalaysia (TM) has been awarded the megabroadband project. Targeted to cover 2.2 million premises, the projectis estimated to cost 15.2 billion ringgit (US 4.46billion) over 10 years, Najib was quoted to say in localnews reports. “We have asked th
3、e Finance Ministry to verify thefigure, which includes the cost of “last-mile“ fiber,core network and Iimprovements tol internationalconnectivity,“ Najib told local reporters. State-owned TM has been directed to start initialwork on the project, though deployment of the physicalinfrastructure is lik
4、ely to come only six months after thepartnership agreement 2has been signed. Thegovernment is targeting to ink the agreement as soonas possible, Najib said. The countrys deputy premier explained that theCabinet Committee on Broadband, which he heads,chose to partner TM because the telco already owns
5、an existing infrastructure. This, he said, would allowadditional investment to be done on a lower cost basisand at a faster speed. “We want the Inew high-speed broadbandiservice to be rolled out quickly and in a cost-efficientmanner, so that Malaysia would not be left behind interms of competitive e
6、dge,“ he added. “ Najib left open the possibility for other telcos to geta dip in the project, though he noted that the role ofthese industry players would only be determined later. STUDYING THE COST According to local reports, the government hadcommissioned consultant firm McKinsey & Co. toconduct
7、a feasibility study, which estimated that aninvestment of 15 billion ringgit (US4.4 billion) wouldbe required to ay fiber-opticines to every home inMalaysias major urban areas. To reach every home inthe 3country, this investment will need to increase to 53billion ringgit ( US15.55 billion 1. With th
8、e announcement last week, it appearsthe Malaysian government has opted for the less costlyoption. The slow rollout of broadband services in recentyears had forced the government 1o recently ower itshousehold broadband penetration target from 75percent to 50 percent by 2010. Curently, only 11.7 perce
9、nt or 643,500 ofMalaysias 5.5 million homes have broadband.However, these users have had to bear with poorservice quality and slow speeds because existingcopper telephone lines cannot support the increase insubscriber volume and bandwidth demands. According to a recent report by RHB Research,TM corn
10、ered 96 per cent of Malaysias broadbandmarket last year, though its Internet business only comprised some 5 percent of its overall revenues. Hafriz Hezry, an investment analyst with TASecurities, anticipates TMs deployment of high-speedbroadband services to homes is likely to be deliveredover a fibe
11、r-optic network. Currently, the bulk of TMsmuch -criticized broadband service Streamyx isdelivered to homes via the telcos copper-based 4last-miIe network. “Theoretically, FTTH fiber to the home 1technology has the capability to deliver access speedsof 100Mbps megabits per second), but initially, It
12、hink TM is targeting to provide speeds of up to10Mbps,“ said Hafriz said in an e-mail interview withZDNet Asia. Households with broadband accesscurrently get speeds of up to 1Mbps. “ Laying a fiber-optic network may account for thehigh cost estimates of the project, “Fiber optics is more costly than
13、 the existingcopper infrastructure, or even last -mile WiMaxsolutions,“ Hafriz said. “For example, WiMax licenseeholder Green Packet is !onlyl spending 500 millionringgit (US146.7 million) to roll out WiMax in majortowns in Peninsular Malaysia.“ However, the analyst pointed out that GreenPackets cap
14、ital expenditure (capex) only covers last-mile connectivity, data centers and related equipment.In comparison, he said that TMs fiber-optic networkmay include core network, infrastructure spending andinternational connectivity, resulting in a higherinvestment. According to Hafriz, TM should have the
15、 financialresources to undertake the project because it will berolled out over 10 5years. “The average capex is about1 billion ringgit (US293,4 million) a year andspending is typically heavier during the early years ofimplementation.“ he explained. “However, thegovernment will bear one third of the
16、total cost of the15.2 billion ringgit cost estimate.“ addition, TM would benefit from the tax incentivesfor capex related to last-mile broadband infrastructureannounced in last months 2008 budget, he noted. Hafriz also said TM could eventually partner otherplayers in the deployment of the high-speed
17、 broadbandproject, where a potential candidate is likely to beTime dotcom, which has an existing fiber optic-network. He added that it was possible TM would eventuallyopen up its last-mile infrastructure to other telcos. “Since the government will invest one third of the totalcapex, other players may be allowed to have accessto the network,“ he said, noting that the project isexpected to strengthen TMs vidual monopoly of thetelecommunication backbone and broadband servicesmarket.( Edited by YaoJuan)
