Broadband Internet Access in Malaysia

The following is my personal opinion and has nothing whatsoever to do with my employer. Now that I got that universal disclaimer out of the way ... the gloves come off.

Now that TM has launched the UniFi, HSBB service, it would seem that the path to competitive broadband it finally here. Well, it's one small step, fortunately in the right direction, generally, but, ultimately we are just beginning a very long journey with land-mines all along they way.

For a start, UniFi is currently only available in affluent areas, TTDI, Bangsar, Subang Jaya, Shah Alam and is targeted at the heavy Streamyx user. The roll-out plan will continue to slightly less affluent areas, eventually, but at the end of it all, in 2018, those outside the Klang Valley and South Johor will yell, "What about us ?!". How about the people in the rural areas, where the optical fibre doesn't reach. The optical backbones are needed for everyone else to provide their service, yes, even the wireless guys need these backbones to backhaul the traffic. Arguably you don't have to use fibre, point to point SDH wireless can deliver 622 Mbps or more. The problem is the service providers will never put infrastructure into areas with low perceived demand. This is where intervention and funding is needed. And where is that wholesaler when you need one?

Secondly, UniFi costs about RM44 per 1 Mbps. Contrast TM Direct over Metro-E at about RM14,000 per 1 Mbps and server hosting bandwidth at RM450 per 1 Mbps. What's wrong with this picture ?
Surely Internet bandwidth is the same right ? Ok, so maybe some bandwidth may be slightly different, their packets *may* get a motorcade with outriders to rush them through the congested local pipes to the border router at which point they join the rest of the rabble fighting for limited International bandwidth. Is that worth paying 300X more, just to get a latency of 380ms instead of 400ms - well, NO. It is worth paying 300X more so when your Internet link is down the friendly helpdesk will call you and say "sorry, your, Internet is down right now and we are working to get it back up as soon as possible, have a nice day", instead of you having to call them ? Your call.

Little wonder almost all Malaysian content is hosted overseas. I know some Malaysian Internet radio and TV streams are hosted in the US only to be streamed back into Malaysia. Would you got to Singapore to buy Malaysian products ? Well only if they were cheaper in Singapore... right ?

And, no, this isn't an attack on TM, they have an uphill battle to just survive, having Axiata stripped from them, TM is now almost entirely a domestic player ... yeah, if that sounds as scary to you as it does to me, then you understand the implications. Take SingTel for example, they made about SG$15 billion in group revenues (March 09, including their overseas investments) of that SG$5.5 Bil is *domestic* revenue in a tiny (in geographic size) market. Almost SG$10 billion came from international operations. Singtel can afford to be magnanimous in their domestic market and they are taking a wholesalers role now. TM no longer has international operation, hmm ... whats wrong with this picture ?

As for Axiata, they no longer have a solid home base to fall back on ... I'm talking about TM's domestic and international infrastructure - yes, submarine cables, the pipelines that carry the lifeblood of the Internet. As the world increasingly and inevitably heads to a ubiquitous Internet, Axiata will be stretched to meet the demands of broadband mobile Internet due to not having their own "sunken" investments.

I think the TM Axiata split may have condemned both companies to a slow and lingering death over the next 10 years or so. A split of TM into separate wholesale and retail players would have been ideal, allowing all the retail players to have a level playing field in the wholesale market. There is some hope in this area though, in the form of Time.com. Good things are happening there, finally under competent leadership and management. I just hope they are allowed to do what they need to do.

What about Maxis and Digi ? Heck they don't have any submarine cables to speak of, so how are they getting their big pipes to the Internet ? Hmm, interesting question don't you think ? Hello, your ARPU is dropping, mobile broadband is whats needed to boost that ARPU but you need some BIG pipes to the Internet, not to mention your mobile voice capacity planners need to be re-educated. Celcom, what's the big idea putting your mobile broadband customers behind a NAT ? Private IP addressees! Heard of IPv6 ? Time to bite the bullet before it gets too big. Yeah yeah, no ROI to upgrade all that junk to support IPv6 yadda yadda.

What about the WIMAX players ? Hmm, only P1 is operational in any significant way, good for you P1 ... just make sure your capacity planners know what they are doing. Bumping up against the laws of physics is not pretty when it comes to wireless Internet ... there's only so many packets that can be jammed into that tiny spectrum at the same time before it all goes balls up, yes ? Perhaps targeting the densely packed disgruntled Streamyx bittorrent addicts wasn't such as great idea after all, no? Did your capacity planners think of what happens in the tiny bit of spectrum when 10,20,30 bittorrent clients all chattering endlessly 24x7 with hundreds of IP connections per client ? Add the YouTube addicts to that. Someone came up with the term Femto-Cell for a good reason. Then what happens to deployment cost when your WIMAX cells need to be as close together as WiFi cells to cover the same area ? oops

What happened to the rest ? I recall YTL Communications boss at the "Launch of Malaysia's First Fouth Generation Network" say something like "we will launch nationwide in 6 months, because launching in isolated areas doesn't make sense". Hmm, 6 months are almost up, hope to see the launch end of next month.

Lets talk about submarine cables now. Unfortunately since pretty much half the Internet is in North America and the other half in Europe, to get at both halves, we in Malaysia need to invest in big pipes under water for big money. TM stands alone in their investments here. I hear someone yell, "Monopoly" .. well, yes, in the past. Which is why the only private cable landing in Malaysia is FLAG, which landed in 1996 ! Nothing else private has landed since. Singapore on the other hand, has been allowing all comers to land, to the point they may even have a "too many cables in the water and not enough coastline" problem. Singapore has about 28 Tera bits/sec worth of submarine cable capacity, much much more than is needed domestically ... hmm, I wonder if there are customers up north who might want some big pipes ?

In Malaysia, for the domestic players, they could have made investments from 2008 onwards, when submarine cable landing stations became open for licensing to everyone else. A little too late? Maybe. We will see in the next 2-3 years if any new cables land in any new submarine cable stations but thats a lot of CAPEX, hard to justify to their respective boards - "Gimme half a billion US$ to put a cable under water". I wonder if the oversupply down south can get me a good price instead ?

I can't talk about the submerged part of this iceberg so I'll end here.

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Comment by Tan Tze Meng on April 2, 2010 at 9:46am
I have half a mind to do a capacity plan for the celco's to figure out how much bandwidth they need to have given their mobile broadband user base. What I don't have is how much do they actually have.
Comment by Tan Tze Meng on April 2, 2010 at 9:39am
Hahahah thats a good one

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MALAYSIA STATISTICS - Q4 2009

Population - 28610000
Households - 6220000
Direct Exhange Lines per 100 households - 43.6
Broadband per 100 households - 34.2
Cellular phone per 100 inhabitants - 106.1
ADSL Subscribers - 1513500
SDSL Subscribers - 10200
Satellite Subscribers - 5300
Wireless Subscribers - Mobile - 927800
Wireless Subscribers - Others 1- 57100

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