ICT to contribute RM42b by end-2015

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.

More information security experts needed

KUALA LUMPUR: Although Internet banking cybercrimes are still at a manageable level, the country still needs to produce more information security experts, according to CyberSecurity Malaysia.

“I do not want to claim we have a lack of experts or that our experts are enough to solve problems but we need to collaborate to produce more experts,” said its chief executive officer Lt Col (Rtd) Husin Jazri.

He said with the number of Internet users rising and the trend moving into advanced levels, such as mobile banking, the country needs to be prepared in all areas, particularly with information security experts.

Currently, Malaysia has about 16 million Internet users, he told reporters after delivering the opening speech at the CyberSecurity RSA Seminar 2010 here.

On online banking, Husin said it was the users rather than financial institutions that were most affected by cybercrimes.

“I am not worried about the banks. They have a lot of money to secure their systems. They can have the world’s best consultants to look into their security systems,” he said.

“It’s the human part that gets affected, not the technological part. The users become the victims. When the users communicate with the banks, they are exposed to social engineering, online scams and other threats.”

According to Husin, online users should be aware that banks never do online maintenance as far as Internet banking is concerned for their customers.

“We need to educate users on this fact which can contribute towards curbing the problem (of social engineering),” he said.

From the total of 3,564 cases reported last year, 1,022 were fraud and forgery cases, which accounted for one-third of the reports, Husin said.

“We should share know-how and identify the necessary strategy to address threats such as the increasing risk of security breaches, identity theft, phishing and cyberterrorism,” he said. — Bernama

Can YTL keep promise to be cheapest mobile phone service and survive?

 

Raison D'etre - Risen Jayaseelan

AS expected, the mobile Internet service from YTL Communications Sdn Bhd, Yes, was launched last Friday with much fanfare. Some consumers are excited and rightly so.

YTL is promising the cheapest communication rates in the country with a simple integrated plan that combines voice, SMS and mobile data. There is also talk that YTL could offer Internet protocol TV soon.

YTL's Yes launch, however, is reminiscent of a couple of other launches of telecommunications-related services in the past by newcomers attempting to break into the scene.

Those following the telco or broadband scene will remember that in the last 10 years or so, there have been many players who have come into the wireless broadband scene.

Alas, despite their ambitious and sometimes colourful ad campaigns, many have not been able to sustain their businesses.

Here are some examples:

EB Capital Bhd launched its wireless broadband service in 2001, got listed in 2005 and went into major financial difficulties by 2008, when it was de-listed. At one point, had more than 1,500 corporate and retail customers for its wireless broadband service and had even done trials on WiMAX.

AtlasOne Sdn Bhd, started by a bunch of former Celcom employees around 2000. It was hailed as the new broadband player in town when it announced that it had garnered a significant amount of funding. At one point, it was said to have raised RM370mil partly from the Islamic Development Bank in Jeddah and partly from Bank Pembangunan Malaysia Bhd. But AtlasOne fizzled out and little has been reported about whether its funders had got their money back.

Time dotCom Bhd (TdC) in 2004 launched its wireless broadband service called Webbit in certain areas of Petaling Jaya. It is believed that TdC had not even managed to move beyond its pilot phase for various reasons, the bulk of them being technical in nature.

MiTV Corp Sdn Bhd, launched in 2005 as the country's second pay-TV operator, had expected to sign up 100,000 subscribers for the first year. It failed to gain a foothold in the pay-TV market and suspended its new subscription activities in late 2006, only to morph its business model into a cellphone service provider in the country

It changed its name to U Mobile Sdn Bhd, and operates the 018 prefix service and is now running trials on a wireless broadband service. Singapore's STT Communications Ltd and Multi-Purpose Holdings Bhd have bought stakes in U Mobile.

Green Packet Bhd, the most significant licensed WiMAX player in Malaysia (considering its widest coverage), has so far reported losses over the last few years due to its high capital expenditure in rolling out its network. It promises profitability, at least from an Ebitda (earnings before interest, tax, depreciation and amortisation) calculation, by next year.

No doubt, many players are driven to the industry by the attractive Ebitda margins achieved by the entrenched players, such DiGi.Com, Celcom and Maxis. But those starting afresh face major challenges and this is why many have failed.

First, you are up against some serious competition the incumbents are not about to give up a customer easily and these players have to some extent, sunken costs that put them in a better position to fight on price.

Then there are the huge costs involved in rolling services, on multiple fronts actually. Firstly, there is the network itself, which includes not only the equipment costs but also having pay real estate owners a rental for using their area to put up base stations and other equipment.

Then you have to continuously ensure your service is up and running and of a certain quality. It can cost a lot of money to deploy a sufficient number of technically competent staff.

Then there are the other fixed costs such as paying for billing systems, the call centres to handle customer queries and complaints and in some instances, having to pay what is called a device subsidy.

This is where players absorb some of the cost of devices sold that use their network so as to entice customers.
One of the world's leading WiMAX players, US-based Clearwire, is still reporting losses.

Still, perhaps a time will come when WiMAX players will achieve healthy Ebitda margins. And perhaps then they will enjoy the kind of investor interest that DiGi.Com and Maxis have today, due to their massive cash flows. Time will tell.

Deputy news editor Risen Jayaseelan says that despite the lack of visibility of profits of WiMAX players, the entry of new service providers can only mean good news to consumers, who should enjoy better rates for their telecommuncation needs.

7.5 juta pemilik akaun Facebook

 

Oleh SHAWKATH AZDE
shawkath.ashraf@kosmo.com.my

 

KUALA LUMPUR – Rakyat Malaysia merupakan antara pengguna aplikasi rangkaian sosial Facebook, Friendster dan Twitter yang tertinggi di dunia.

Menteri Penerangan, Komunikasi dan Kebudayaan Malaysia, Datuk Seri Dr. Rais Yatim berkata, dianggarkan terdapat 7.5 juta pemilik akaun Facebook di Malaysia kini.

“Ini adalah potensi rakyat yang harus digunakan oleh industri dalam bidang ini untuk memajukan negara khususnya menerusi kandungan mudah alih.

“Terdapat fakta yang menunjukkan bahawa kewujudan Facebook, Twitter, inovasi platform Android, aplikasi dalam talian dan mudah alih telah mengubah landskap komunikasi, pemikiran manusia dan melahirkan jutawan baru di Amerika Syarikat,” katanya.

Ikuti berita selanjutnya di KOSMO! hari ini.

What broadband is about

Lower prices for Internet services?

 

Lower prices for Internet services?

By LEONG HUNG YEE
hungyee@thestar.com.my

PETALING JAYA: Competition in the mobile and Internet business is expected to heat up with the entry of YTL Communications Sdn Bhd's Yes service, and some analysts believe that a price war may erupt.
There's a potential (for a price war).

With YTL coming into the market, the probability is higher, CLSA Securities Malaysia Sdn Bhd head of research Clare Chin said.

She said the new entrant would also raise competitiveness among telecommunications companies while broadband operators would be worried about their margins.

Expectations surrounding the launch of Yes sent shares in YTL Comms' parent company, YTL Power International Bhd, to their highest level in almost three years in early trade yesterday.

The counter ended eight sen, or 3.19%, to RM2.59 but off the intra-day high of RM2.64.

An analyst said the new entrant did not bring in competition automatically. He said telcos would up the ante against each other to woo customers in a saturated market and that was where the competition or price war would kick in.

In crowded markets where penetration (of voice) exceeds 100%, it can be difficult for an operator to distinguish itself from its competitors if it can only offer the same services.

To differentiate, it needs to be able to offer something new and different with better value proposition, the analyst said.

While competition is good for the consumer, it is not so for the local telcos which have spent the last few years battling each other in a price war, where consumers ultimately reaped the benefits in terms of low mobile call and SMS rates.

Every player's nightmare would be a price war, as margins would be pushed lower, hurting revenue, an analyst said.

YTL Comms' Yes 4G wireless broadband service would charge customers nine sen for a minute of call, one SMS or 3MB of data.

And that's before our rebates kick in, YTL Comms said in a teaser yesterday.

According to analysts, at nine sen a minute the service could be the cheapest in the market. However, they prefer to await confirmation from YTL on the price.

Sources said YTL would also be throwing in a rebate as high as 30% for its subscribers.

The more you use, the more rebate you'll get. For example, if you hit a threshold of 3GB, the price will drop and if you hit another threshold at 5GB, the price will continue to drop, the source said.

A simple calculation shows that nine sen per 3MB works out to about RM90 for 3GB, giving users roughly about 2,000 emails.

CLSA Securities' Chin did not discount consumers migrating to the latest network since cellular voice had already reached saturation.

She said consumers may want to choose a service provider that could offer them a better value proposition.
Investors are getting too excited, too early, Chin said, adding that today's event was just a launch and the hybrid TV would only be launched by end-2011.

Analysts said the triple play, which offers television, Internet and telephone in a single connection, would be the next wave that could change the traditional consumption pattern among Malaysian users of telecommunications services.

Apart from coming up with new products and services to steal customers from rivals, they would also have to entice their existing customers to spend more.

Yes is expected to cover up to 65% of the peninsula from day one. The other areas would be covered later.
The company has spent some RM2.5bil for the Yes 4G infrastructure.

The 4G network will be SIM-less with the 018 prefix.

In a report, OSK Research said that YTL Comms would need to capture at least 300,000 subscribers based on the assumption of average revenue per user of RM100 a month, given the steep initial investment outlay and operating expenditure.

Although the prices of WiMAX equipment and devices have fallen by over a third in the last two years, we believe YTL Comms would probably have to provide a steep upfront subsidy to lure subscribers given the stiff market competition as well as high mobile penetration rate, it said.

YTL Comms is also launching its flagship store at Lot 10 in Kuala Lumpur today after the official launch of the new service.