Based on statistics made available by the Minister of Energy, Water and Communication as at 2006, broadband penetration rates for Malaysia is less than 3%, compared to more than 60% for South Koreans.
The BN Government’s National Broadband Plan target of 25% household penetration by 2006 and 50% by 2008, has clearly failed miserably.
In the larger national interest of achieving the above targets, and its importance towards building a generation of enterprising and innovative Malaysians, DAP proposes that the broadband market be liberalised to allow for foreign competition.
To promote the building of high quality and reliable broadband network, DAP proposes favourable tax treatment for telecommunication firms undertaking broadband investments:
* New broadband operators are allowed to deduct financing costs from their taxable income.
* Investors are exempted from paying taxes on interest income from bonds specifically ear-marked to finance these investments.
* Exemption from import duties for specific state of the art telecommunications equipment required for broadband infrastructures.
In addition, there should be direct grants to fund, valid for new connections signed up before 31st December 2008:
*The cost of installation of the broadband connection between the business premises and the appropriate exchange for the amount not exceeding RM100 per connection.
*First-time installation charges for connection to broadband services faced by all new residential subscribers for the amount not exceeding RM50 per connection per household.
*First-time installation charges not exceeding RM100 per connection and monthly charges not exceeding RM50 per month, for broadband services faced by registered charitable organizations and community centres.
The lack of competition in the broadband industry creates disincentives for businesses and consumers to adopt ICT. A monopoly telecommunication service provider would be induced to charge a higher price at all levels of service quality than in an otherwise competitive environment, thus slowing broadband adoption in the economy.
Hence, fiscal transfer schemes via favorable tax treatment on telecommunication companies and grants cannot serve as catalysts for ICT development by themselves. The National Broadband Policy needs to promote both facilities-based and intra-platform competition.
Facilities-based competition, or inter-platform competition, would bring about competition between providers of the same or similar services, but where the services are delivered via different or proprietary means or networks. For instance, a new cable TV network may compete with a BPL (broadband over power lines) to provide broadband services.
Intra-platform competition requires the incumbent telecommunication monopoly to share their physical network with other broadband ISPs, who may wish to access the facilities of the incumbent telecommunications provider. This will prevent duplication of network infrastructure as well as eliminate the natural barrier to competition in the industry.
While the current limited local loop unbundling (LLU) policy in place already permit such sharing of facilities, it is understood based on the feedback from the industry that the incumbent monopoly still possesses undue influence over LLU and hence retarding the liberalisation of the broadband sector.
Therefore, the industry regulator, Malaysian Communications and Multimedia Commission (MCMC) shall be given more enforcement powers to prevent anti-competitive and negative collusion behaviour by incumbent telecommunication companies. Heavier penalties shall be imposed, particularly for price and non-price anti-competitive behaviours such as delays in processing of applications, unreasonable terms and conditions as well as other forms of anti-competitive manipulations.
Stimulus for Local MSC Companies
To promote the growth of ICT industry in Malaysia, as well as the success of the Multimedia Super Corridor (MSC) which was initiated in 1996, all MSC status companies shall be immediately qualified to bid and tender for all Government-related ICT projects. In the past, only companies registered and approved by the Ministry of Finance are qualified to tender for these projects.
By allowing additional competition in the provision of services to the Government, the Government can expect additional savings in terms of cost of implementing ICT projects as well as an increase in quality of services provided. At the same time, it will serve as a timely boost to MSC-status companies, particularly local ones with the expanded market as the Government represents one of the largest consumers of ICT products and services in the country. The stronger domestic presence of the MSC-status companies shall result in improved ability and credibility for these companies to compete in overseas markets.
In addition, as the entire concept of ICT is based on its ability to transcend physical boundaries, particularly with the advent of broadband and mobile technologies, the geographical requirements for MSC-Status companies to be located at specific sites shall be phased out accordingly.
This requirement has been most heavily criticised by those employed in the industry, and the DAP is receptive to the voice of those affected by the current policies. Without geographical limitations, we expect Malaysian MSC-Status companies to continue to grow exponentially in terms of numbers and profitability, as their ability to service customers, attract global top talents as well as reduce operating cost will be enhanced substantially.
Increasing computer ownership
1. Household computer ownership in Malaysia continues to remain low at 21.9%. In order expedite the increase computer literacy as well as ownership, particularly among the lower income group who currently don’t pay any taxes, all Malaysians above the age of 21 shall be entitled to computer purchase vouchers based on their income levels. Those with income RM1,200 and below per month shall be entitled to RM200, while those with income above RM1,200 and below RM2,500 will be entitled to RM100. Assuming a 10% take-up rate by those who are eligible, this exercise will cost the Government approximately, RM300 million.
2. To encourage the use of internet technology in Malaysia, DAP proposes an allocation of RM250 million for a nationwide WiFi plan to create ease of connectivity to promote learning and innovation. The project will pilot in Klang Valley, Penang and Johor Bahru for 2008 and for all other secondary cities in Malaysia by 2010.
3. At the same time, the current RM3,000 tax relief policy for computers purchased every 3 years should l be abolished as it benefits wealthier Malaysians disproportionately, and does not benefit lower income groups who do not have to pay taxes.
(Speech 11 on 2008 Budget in Parliament on Monday, September 10, 2007)
I think the government should do away with imposing 5% tax on some of the telco company which over internet broadband services. What’s the point of encouraging Malaysians to use the internet if there’s 5% government tax imposed on them?
And WiMax service has been postponed again till next year wherer the initial launch suppose to be end of this year. What’s the hold up? With this kind of delay, I think for a fact that the service to customers in the future will be bad, just like TMnet Streamxy. And I think the fee should be lower than Streamxy if they what encourage people to use WiMax.
I would be very careful with what is being proposed on broadband. No doubt the monopoly situation is not great but the issues are very complex from lack of foresight in the first place to current real issues.
My own view is there is realitically only two way catch up to our ambitions which is either by a stroke of new luck with new technologies especially on wireless broadband of which there is some hope OR a massive subsidy scheme a keen to what ATT got just after the invention of the telephone. Nothing is a sure thing and likely NOT return on capital spend. If a subsidy scheme is to be had its got to be the intangible benefits of broadband and IT and not real returns e.g. the incredible benefit of free online news do for our democracy and free speech.
Broadband technologies change quickly and as soon as you invest in it, something better comes along. Certaintly the benefits of it to rural communities in Malaysia would be immensed if we can roll at least something out now but its not in dollar and cents for corporates…
what is the point of having high broadband penetration when :
a) a high number of Malaysians have literacy issues (cannot read, write or count)
b) an even higher number of Malaysians have computer-literacy issues (don’t know how to use the computer or just plain phobic of computers)
c) low quality phone network
d) an lower bandwidth for the main Internet trunk line connecting Msia with the rest of the world
Better to resolve these underlying fundamental issues first. Once we have these ready, the pool of Internet-ready client-base would be so big that no telcos can afford to ignore them and definitely provide better broadband service and coverage.
South Korea, Singapore and Japan have such high of broadband penetration plainly for 1 main reason: there’s a need for high speed good quality broadband service because the hi-tech service oriented industries and mature educated society.
Go to the rural area and ask the kampung folks what is broadband,”Tak tau lah”, will be their answer. Do you really think the goverment is going to open this form of communication to the rural area.When there is no control of opposition views being sent out.
90% of rural votes goes to BN because of the one sided news report that is being publish by our news paper.
WHy wud the scums increase penetration rate of Bband to rural areas and risk thier livelihood of corruption. Imagine these ppl hvng access to internet news via blogs such as YB Lim, Jeff Oooi, MT, Rockybru, etc. It would be suicidal for them.
So the charade will go on and on and ridiculous pentration rates will be churned out from time to time. AFterall, if our PM can simply churn out economical figures without knowing what it meant, so can his konco2.
Even I can say next year growth will be 5%. Any Dick can say that.
Give license to DIGI and you will see results soon with prices coming down fast just like they did with cellular phone charges. TM is the worst perpetrator of high pricing. Remember years ago when profits were declining; they went to the government to increase call charges.
This is so saddening. Anyone can say whatever he likes:
47.8% of the population in Malaysia are Internet users in Sep 2006 – says MCMC (http://www.internetworldstats.com/asia/my.htm)
Internet Penetration Rate is 14% in June 2006
Broadband Penetration Rate is 2.5% in June 2006
with
25% of the households connected by 2006
50% of the households connected by 2008
75% of the households connected by 2010
This plan approved by cabinet under Badawi in October 2004.
(http://www.bizit2006.uitm.edu.my/keynotes/Aug10/plenary5/ICT%20Infrastructure%20and%20Services-Rubaiah%20KTAK.pdf)
Broadband Penetration is 5% in December 2005, and should be 15% by 2010, says Lim Keng Yaik
(http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_4346c3c2-cb73c03a-df4bfc00-606b3909)
“In 2004 the number of subscribers was 2.9 million, in 2005 it increased to 3.5 million subscribers, and in 2006 the number of subscribers in Malaysia was close to five million, and should be 10 million by 2012”, says Telekom Malaysia (TM) Bhd General Manager of Strategic Development Division, Dr Fadhlullah Suhaimi Abdul Malek
(http://www.internetworldstats.com/asia/my.htm)
Malaysian Broadband Penetration is less than 1% in November 2005, and the government wants it to be 10% in 2008, knows the Asia Pacific Research Group.
(http://www.aprg.com/asp/pub_malaybband.asp)
7% of the households had Internet access in Malaysia in 2005, which has increased to 11.7% in September 2007.
Somehow this turns out to be 0.32 broadband access points per 100 inhabitants, being actually 0.32%. [To me, this is a calculation error by ZDNet Asia]
(http://www.zdnetasia.com/news/communications/0,39044192,62032069,00.htm)
In summary, under the current government, there seem to be liberties without bounds to issue statements of their liking.
This country is the world champion in setting up plans, as realistic or unrealistic as one can imagine. How about the following one:
There will be 5000 hotspots to free Internet access in 25 major cities, says Lim Keng Yaik.
(http://web20.telecomtv.com/pages/?newsid=41847&id=e9381817-0593-417a-8639-c4c53e2a2a10&view=news)
Sadly, in the end the delivery is missing:
Malaysia’s broadband services under fire
(http://www.zdnetasia.com/news/communications/0,39044192,62028004,00.htm)
Apart from areas that do not have broadband access, a lot of people does not apply for a broadband service. Lack of awareness is one of the main reasons, these people knows and has heard about the internet but did not know what’s the benefits, and what the internet can help them in their daily lifes. Computer literacy is but to browse the internet you don’t need to attend course, they probably don’t know it is that easy. I’m talking the awareness why the internet is worth the monthly payment. Many people, especially non city areas, would think if they can do away with paying extra for the internet, they would use the money for other necessities.
My streamyx bill is RM 88.00 per month. Tell me how many low wage earners can afford this sum?
In US, my daughter pay only USD 20.00 for a broadband connection which is far superior in speed.
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What’s the use of a national broadband if every Malaysian internet user is hacked by the government secret cyber spy force ? We might as well go right up to the Prime Minister in person and talk to him directly.
I think TMNet, via its allegiance to BN, is deliberately making
Internet services too expensive and too inaccessible for the
Malaysian masses. As alluded to by some writers here, it is largely to keep news, information, and opinion (the dissenting kind) out of the reach of the rural population who are largely responsible for keeping BN in power, accomplished alongside BN’s gerrymandering.
In keeping with its promise to the world of not censoring the Internet, the govt indirectly “censors” by devilishly placing obstacles on the Information Super Highway and slow traffic to a snail’s pace. TMnet conspires by deliberately not spending capital expenditure on hardware and software to expand speed and capacity. Forget the dream of low broadband subscription rates in Malaysia, let alone free WiFi access (ala San Fransico courtesy of Google), as long as TMNet is the sole provider. TMnet works in cahoots with the govt to restrict Internet access only to those who can afford it (the urban minority). Premeditated high subscription costs and pre-engineered inadequate IT infrastructure partly explain the low IT broadband penetration rate in our nation.
Ain’t BN smart in keeping this penetration rate low? No one can ever accuse it of censoring the Internet, even though it does exactly that by making information harder to come by or plain unavailable.
Furthermore, imagine the challenges faced by BN when it finds that it can no longer freely wield its weapons of mass oppression via laws such as ISA, the Printing Presses and Publications Act, the Universities and Colleges Act, etc. If the Internet is widely and
freely accessible, it becomes the Oppositions’ de facto weapon of mass dissemination. BN will not facilitate that. It’s suicidal. And, observe how BN is facing up this to this challenge today – it harasses and intimidates bloggers who write dissenting opinions.
Modern technology grows by leaps and bounds and is in a constant state of flux and evolution. To wait for the next best technology to arrive before jumping uninhibitedly onto the Internet bandwagon is to miss out on all the best opportunities available at any moment to improve and modernise a country’s economy and society.
Singapore, South Korea, Europe, US, and all countries that smartly embrace and utilise information technology are not sitting by idly waiting for the next state-of-the-art technology to help propel them forward. They implement comtemporary technology and
evolve along with the best tools and processes the IT world offers at any time.
Compared to these countries, Malaysia is at least one decade behind in harnessing the power of the Internet in enriching the nation’s social and economic life force. Even if we start utilising the best technology available today, we will still make only baby steps and stumble along. We cannot run if we haven’t learned how to walk first. Dismal as this may seem, it is still not to late to overhaul our IT infrastructure and our broadband access policy. However, if we stubbornly refuse to act, sadly, we will always be a follower instead of a leader, a copycat instead of an innovator, and we will be shunned instead of respected the world over.
Is the government really keen on increasing the penetration rate of broadband? Can they afford to let the public be well informed especially when their rural base gets to be more knowleagible? It will be suicidal and will spell a quicker demise to their grip on power.