Broadband fees unlikely to fall just yet

Broadband fees unlikely to fall just yet

From left: P1 chief marketing officer Kenny Wong, P1 chief operating officer M. Idham Nawawi & P1 CEO Michael Lai displaying its products

IT WILL be a crowded market for Internet service providers this year but consumers shouldn´t expect prices to fall.

Although competition will be tougher, Packet One Networks (Malaysia) Sdn Bhd (P1) believes the broadband market is big enough for all currently.

"I don´t think there´s a need for a price war. The market is still quite open, relatively untapped, and plenty of opportunities out there," chief executive officer Michael Lai said in a media briefing in Petaling Jaya yesterday.

Today, P1 has more than 100,000 subscribers, which is the highest among Malaysian peers using WiMAX technology like YTL Group, Redtone International and Asiaspace.

However, P1 is also competing with bigger rivals like Telekom Malaysia Bhd, mobile operators Maxis Bhd, Celcom Axiata Bhd and DiGi.Com Bhd.

With YTL slated to officially launch its wireless broadband services by the end of this year, and more aggressive broadband push by giants TM and other mobile operators, P1 expects margins to come under pressure this year.

"We see challenges in margins, but at the end of the day, whether or not your margin can be maintained is dependent on two things, revenue and cost. So, the key thing for us now is to increase our sales, and manage our cost properly," said Lai.

Still, P1 remains positive on the industry and its prospects. "This year, we aim to at least double our last year´s subscriber base," he said.

The company has invested some RM400 million to roll out its wireless network since its launch in August 2008 and it will spend another RM200 million this year.

It plans to go to East Malaysia in the second half of the year.

P1 is planning to introduce more devices to the market this year, including the much-anticipated netbook that uses WiMAX, developed by P1 and its partners.

He did not disclose the prices and specifications of the netbook, but promised that prices will be "attractive" for customers.

Green Packet plans tie-up with Indonesian telcos

Green Packet Bhd (0082), a mobile broadband provider, plans to partner mobile operators in Indonesia to roll out its wireless high-speed Internet access service in the region. 

The company, which offers broadband services to homes and offices using the WiMAX (Worldwide Interoperability for Microwave Access) 
  technology, has a licence to operate in Malaysia and Singapore.

But it wants to grow and have more licences to operate the WiMAX in South Asia, which includes India, Pakistan and Bangladesh, its group managing director Puan Chan Cheong said.

Puan wants Green Packet to be a key player in the broadband business in South Asia.

"We are actively seeking WiMAX licences. The three key markets that are attractive for WiMAX's success are Indonesia, Vietnam and Thailand and that's where we will focus on for the next three years," Puan told Business Times.
However, Indonesia has issued licences to several telecom companies (telcos) late last year.

"We will partner the operators to offer our broadband service across the country. We are actively engaging with them right now. In fact, some of them are using our consulting services so there would be easier dealings with them," Puan said.

For Vietnam and Thailand, Puan said both governments are expected to issue the WiMAX licences within the next 12 to 18 months.

"We hope to have a chance to participate. The governments have not announced the details but we will most likely bid for the licence with the locals there," Puan said.

Puan also expects the company to have more cash in hand as its business grows. "Right now, we have RM200 million cash. We are looking at a private placement this year to raise some RM150 million. Moving forward, there will be more cash flow from our operations," he said.

Green Packet is optimistic that its broadband business will grow as it enlarges its customer base.

It also expects more money from its software and WiMAX devices, including the supply of WiMAX modems, internationally