Posted on by Kit

Is Telekom Malaysia trying to kill REDtone?

The Second Finance Minister, Datuk Nor Mohd Yakcop gave a most unsatisfactory reply in Parliament yesterday to the mountain of questions by MPs, mostly from Pakatan Rakyat, about the award of the RM11.3 billion High Speed Broadband (HSBB) monopoly to Telekom Malaysia, together with a RM2.4 billion subsidy with taxpayers’ money.

I stood up during thd 2009 Budget debate on the Finance Ministry to ask whether the government is prepared to review its award of the HSBB project to Telekom Malaysia or to allow the building of another HSBB network as there is an offer by another company to do so without a single sen of subsidy in order to promote broadband liberalization and enhance competition.

To this question and those by other MPs on the rationale of awarding the HSBB to Telekom which will encourage Telekom monopoly and discourage broadband liberalisation, Nor Mohd gave an ambivalent reply saying that the government was prepared to review the HSBB project if necessary – which means nothing at all.

Either the government is reviewing the HSBB project awarded to Telekom towards calling for a proper tender to be called or it is not reviewing at all!

The arguments for and against the RM11.3 billion HSBB award to Telekom Malaysia and the government subsidy of RM2.4 billion had been canvassed in Parliament during the winding-up by the Energy, Water and Communications Minister Dato Shaziman bin Abu Mansor in the 2009 Budget policy debate on November 3, 2008.

All the questions and issues which I had posed on Nov. 3 remain unanswered, whether by Shaziman at the time or by Nor Mohd yesterday, despite the latter’s promise to have “a review if necessary” but no commitment of any review!

Finally, we were back to square one when Nor Mohd said he would revert back to the Energy, Water and Communications Minister on the issue!

I maintain what I said on Nov. 3 and yesterday in Parliament – that Telekom Malaysia must bear the greatest responsibility for Malaysia’s failure to become a broadband power, left far behind in the past decade by other countries when Malaysia had started on an equal broadband footing with them.

South Korea has now a broadband penetration rate of 93 per cent and Hong Kong at 30 per cent, as compared to Malaysia’s 17 per cent which includes Malaysia’s most extraordinary “low broadband speed”!

I had said on Nov. 3 that Telekom Malaysia had acted as an absolute bully in refusing to open up the last mile copper to allow other industry players to buy the “last mile” at a fair price and thus promote a full liberalisation of the telco industry.

This monopoly has not only allowed Telekom Malaysia to have a stranglehold on the other industry players, it has been most costly to the country in terms of lost GDP in tens of billion of ringgit in the past decade, business competitiveness as well as more efficient public service delivery.

I had even asked whether it was true that Telekom Malaysia was trying to “kill” REDtone because the latter was too aggressive.

View the Minister’s reply and exchange at the video here of the parliamentary debate of Nov. 3, 2008.

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34 Replies to “Is Telekom Malaysia trying to kill REDtone?”

  2. as usual, all these schemes based on either monopolistic or at best duopoly system have one single objective: to enslave all Malaysians into supporting organizations seemingly under gomen control or those of the cronies’. You name just name it. In this case you find, the single reason is cut off competition so that there is no comparison, and without comparison you wouldn’t be any wiser.
    They forget without fair competition, every process in the country will cost more than our neighbours’. Then how would you compete when Petronas has exhausted its supplies? No more subsidies! Every step, the gomen takes can only lead us to Zimbabwe! They don’t really care that in the more age, either you have substance to compete or you haven’t got it.
    You can’t hope that others will stand still for you to catch up or to surpass [remember the song, Dreaming…] If you expect to do it in two years, others may do it in 6mths just because they use WHATEVER RESOURCES THEY HAVE IN AVAILABILITY!
    No one in the whole wide world owe us anything, either we make use of the talents the CREATOR has given or you drop down the ladder of competition.

  4. I have said this before:

    I don’t trust this Mohd. Nor.
    He is not very clever, no, not even clever at all.
    He is also not a caring person.
    He does not love Malaysia or Malaysians enough to bother whether we swim or sink.

    Something is not right when UMNO politicians keep screwing Malaysia and Malaysians.

  5. Kit,

    The 30% broadband penetration rate given for Hong Kong is WRONG.

    As of Q1 2007, 52.72% of US households had a broadband connection while Australia was at 51.93%. South Korea still leads the pack at 89.38%, with Hong Kong at 87.14%, Monaco at 82.92%, Iceland at 75.76%, Singapore at 75.53%, the Netherlands at 73.27%, Denmark at 72.99%, Macau at 72.27%, Isral at 72.07%, and Norway came in at 71.35% household broadband penetration.

    http://www.dailywireless.org/2007/08/22/broadband-penetration-grows/

  6. IF opposition MP like Mr Kit and DSAI cannot get the minister to give an answer or provide a good explaination, how are we normal rakyat supposed to do? US got to select the president they want, we can only choose party, we have no right to choose the leader we want, is this democratic?

  7. I don’t know about them killing any organisation, but their practices may be contraceptive. It would be so easy to equip the majority of households in Malaysia with super-high-speed broadband. You nearly had it when TM and the MCMC destroyed FibreComm, and then bought the pieces.

    What I want to know is – where are the installations like FibreComm, or was one public hijacking enough to dissuade anybody else attempting something similar? Malaysia has railway tracks – where’s the fibre network that’s so easy to lay between population centres along railway lines? Malaysia has highways – where’s the fibre network that’s so easy to lay between population centres along highway service ducts? Malaysia has tropical rainwater ducts – where’s the last mile installation that would be so easy along storm drains or street lighting?

    Nobody that owns a railway or a highway wants to sell Internet Access – but they could turn a healthy profit from selling access to long-distance bulk communications to companies who could then compete to offer local access and services, perhaps even renting high speed access to people’s homes from local councils’ infrastructure. Even the local Internet cafes and game zones could get involved in connecting residences to high speed Internet if there was resellable bulk communications available to them.

    Where are all these businesses that could bring Malaysia’s communications into the 21st Century? I suspect they’re selling teh tarik and curry puffs like everyone else, because some lines of business are safe.

  11. Pingback: Lim Boo Chang’s Blog » Blog Archive » TELEKOM MALAYSIA v. REDTONE

  12. Monopoly GLCs like Telekom and Tenaga Nasional have reported huge losses this year as compared with the private sectors like Maxis, Digi and IPP companies. Why ? Simple answer : ???

    Maxis and Digi have been managed by excellent management employees and strong leadership of majority multiracial composition in their labour force. Similar IPP giants in electricity generations comprised majority of multiracial labor force.

    Dont believe me ! Try to walk into TNB an Telekom outlets, you will be suprised that both GLCs are over staff, less efficient, poor customer services, less effective and poor delivery channels. Futhermore, the debts owed to both GLCs by the majority customers comprised of the majority who always think that they have their rights not to pay up and delayed payments to the GLCs where the government owned major GLCs.

    So what you expect for both monopoly GLCs to subsidize the majority with “Tidak Apa Attitude”and “Tak Payah Bayar” – pasal “Hak-hak Ketuanan Mah”. What happen to the big bully, Kassim Amat pun happy pakai Free telephone, Free electricity and Free internet – tak payah bayar end each month pasal he is anak ketuanan mah ?

    End of the day, both CGLs need bail out from the minority major taxpayers who contributed the majority shares $$$ to IRD. Similar you have seen the failed banks are bailed out by EPF and taxpayers during financial crisis in 1997. Will this happen to TNB and Telekom in this coming world financial turmoil ?

    Yes, Redtone is a public listed company and aggressively promoting FREE WIFI for the IT savvy users similar like HK, Singapore, USA, Europe and Japan are given FREE WIFI for their rakyat. Why Malaysians must pay a hefty RM88 for internet service and force to pay RM25 for unused fixed line ? Why Malaysians must pay high electricity bill to TNB when the petrol prices have fallen from USD140 per barrel to USD58 per barrel now?

    Who are the real damn public/ rakyat money SUCKERs today ?

  13. Telekom still the best company to deploy HSBB since they have the best infrastructure and expertise in the industry .The only problem is their procurement and roll out plan . TM’ s need to be transparent with their procurement policy especially to benefit the sme company .
    TM do not have to rely on everything foreign they have the best practice and methodology way back when they executed the big roll out copper plan in the ’80 ( 3 million lines )

    Look at WIMAX the previous minister awarded to 5 companies ( Telekom not one of them ) till today no success story they are struggling they failed to deliver their promises. by right MMC should pull back their licences.

    REDtone is a sick baby defeated by their technology selection they are too lethargic with technology not innovative and creative
    there is no need for Telekom kill them they will die on natural death.

    The big blunder for Md Nor was when he break up Telekom into 2 separate companies fixed and cellular separately . both companies performance getting worse.

  14. A non-malay even though he is more capable and more qualified but cannot:

    Be – the prime minister of the country
    Be – the deputy prime minister of the country
    Be – the head of any branch of the armed forces in the country
    Be – the head of department in a ministry
    Be – the head of state of the states with no rulers
    Be – the head prefect of a national school
    Be – the IGP of the country
    Be – the nominated as the best of the best in the school
    Be – the secretary-general or deputy secretary-general of a ministry

    What is worse is that the PM goes around telling people, repeating a crazy lie, by saying that – “We do not practice racial discrimination in our country”.

    Did the MCA and MIC leaders agree to this in 1957?

    Did the people in Sabah and Sarawak also agree to this in 1963?

    I think malays will keep on to give rubbish answer!

  15. Basically, a free market encourages competition, and competitor has to innovate to survive.. In this case, then only the taxpayers will enjoy the benefits.. since the costs will be lowered and services improved.. If Malaysia still want monopoly in such a important industry.. we are telling ourselves Technology do not need innovation..

    The award to TM is cannibalising those WiMax companies like Green Packet and REDTone.. What the Government can do is to control itself from intervening because a free market works best for itself.. what the government needs to do is just constantly regulate any illegalities from those companies..

    Anyway, it is an indication that UMNO is not willing to change.. Long live conservative UMNO.. you will rule the world one day..

  16. YB. Maybe you should have asked will the gov. willing to consider to allow the building of another HSBB network by Redstone without a single sen of subsidy from the gov. if the company is prepared to pay a matching commission to him (the minister) ?

  17. Unc Kit penetration of 17% is about just right with estimated total population of 25Mil that equated to about 4.25Mil. With 2Mil in KL, 1Mil in Penang and the rest in other \major\ M’sian cities. That’s about right. If more penetration it only mean more readers of RPK, DSAI, Jeff Ooi, other PR bloggers and of course not forgetting this famous Blog. Umno had never had an intention to allow internet to expand at lighting speed like Australia or SKorea to capture wider usage/coverage. It’s another form of media gag. M’sia will never be a free market so as long Umno is still the political master with two feet firmly planted in the corporate world. Najib’s announcement of the new 30% bumi requirement is just another smokescreen. Other bureaucracy is in place to curb any follow through. Keep pushing forward. PR is not far from success…..worst come to worst it is just four years away.

  18. The answer is very very very simple.

    They employed all non-productive personel with very very very high pay. Just take for example : TimeCom, managers and executives are more than the low ranking staff.

    If you look at the account, it will generate a gross profit; and it will not generate a net profit but net loss.

    Just to spoon feed those non-productive managers and executive.

    My friend work there, he is a manager but he is also report to a manager and his subordinate is also a manager. Everybody is manager.

  19. Perhaps Malaysia can learn from Singapore on this matter. Separate the ownership of the HSBB infrastrucure/assets and HSBB service providers. This will allow more competitions among HSBB service providers and ultimately consumers will benefit from this.

    http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_282849.html
    Home > Breaking News > Singapore > Story
    Sep 26, 2008

    OpenNet wins broadband bid

    The consortium comprises Axia NetMedia, Singapore Telecommunications, Singapore Press Holdings, and SP Telecommunications.

    By Chua Hian Hou

    The consortium, OpenNet, will operate an islandwide network offering every home and office Internet speeds of up to 1Gbps completed by 2010. — ST PHOTO: NG SOR LUAN

    A CONSORTIUM comprising Canada’s Axia NetMedia, SingTel, Singapore Press Holdings and SP Telecommunications, has won a hotly-contested bid to build Singapore’s next-generation high-speed broadband network.

    The consortium, OpenNet, will design and build an islandwide network offering 95 per cent of homes and offices Internet speeds of up to 1Gbps by June 2012.

    At speeds 10 times faster than what is available today, the network will make it possible to roll out new services that require ultra-high-speeds like virtual-reality 3D games or high-definition video-conferencing services.

    Users in large households can also enjoy a smoother Internet access with the enlarged pipe.

    OpenNet’s win over rival consortium Infinity, comprising StarHub, MobileOne and the Qatar Investment Authority, was announced on Friday by Minister for Information, Communications and the Arts Dr Lee Boon Yang.

    ‘For Singapore to remain competitive in the globalised and digital economy, we need to make careful and timely investments in our key economic infrastructure, including our infocomm infrastructure,? said Dr Lee.

    Singapore’s government will fund as much as S$750 million for the OpenNet group to build the fiber-optic network.

    OpenNet will offer wholesale prices of $15 a month for home users and $50 a month for commercial users, said a statement from the consortium.

    During the construction and commissioning phase, OpenNet estimates its costs to be about S$1 billion. The group expects to spend S$1 billion to S$2 billion over the 25-year licence period for access to infrastructure.

    OpenNet forecasts its shareholder investment requirements to be in the range of S$120 million to S$160 million, which will be required during the construction and commissioning phase.

    Mr Art Price, Chairman and CEO, Axia NetMedia, said, ‘OpenNet’s approach is future proof with no compromises from either the technology or business structure perspectives.’

    Mr Allen Lew, SingTel’s CEO Singapore, said ‘The compelling proposal is a result of the strengths of each consortium partner, such as SingTel’s extensive high-quality network of ducts, technical expertise and our considerable experience in deploying fibre in Singapore.’

    Added Mr Alan Chan, CEO of SPH, ‘OpenNet’s proposal will help realise Singapore’s vision of being a next generation city. The network paves the way for an advanced broadband infrastructure, supporting seamless connectivity which will boost Singapore?s competitiveness and attractiveness as a global business and infocomm hub.’

    SingTel and Axia each own 30 per cent of the venture, while Singapore Press has a 25 per cent stake and Singapore Power 15 per cent. Singapore Press, the city’s largest newspaper publisher, owns shares of MobileOne Ltd. and StarHub, which submitted the rival bid.

    Ten companies including Alcatel-Lucent, BT Group Plc, Nokia Siemens Networks and NTT West were short-listed to bid for the so-called Next Generation National Broadband Network.

    There were 4.2 million high-speed Internet subscribers at the end of Jul, according to the regulator.

    Singapore requires separate companies to build and operate the infrastructure. Singapore will pay as much as S$250 million to the company chosen to operate the network.

    Singapore has introduced an Intelligent Nation 2015 program to help triple technology-related exports to S$60 billion and create 80,000 jobs. The city also started offering free wireless Internet access for three years starting in Dec 2006.

    http://www.ida.gov.sg/News%20and%20Events/20080926174755.aspx?getPagetype=20
    Singapore’s Next Generation National Broadband Network To Be Nationwide by 2012

    Singapore, 26 September 2008 | For Immediate Release

    Government Selects OpenNet’s Proposal To Build Passive Infrastructure

    By 2012, homes and offices nationwide will be connected to Singapore’s ultra high-speed and pervasive Next Generation National Broadband Network (Next Gen NBN). In two years’ time, 60 per cent of homes and offices can already expect to have access to this new, pervasive, all-fibre network.

    At a media conference this afternoon, Minister for Information, Communications and the Arts (MICA), Dr Lee Boon Yang, said, “I am pleased to announce that the Government has decided to select the proposal from OpenNet Consortium to design, build and operate the passive infrastructure for the Next Gen NBN.”

    OpenNet’s proposal offers attractive wholesale prices that can stimulate a vibrant and competitive retail market. Users can look forward to innovative services from as early as 2010. OpenNet will be making use of existing ducts and other underlying infrastructure, thereby minimising disruption to the public and enabling the network to reach homes and buildings nationwide by 2012.

    OpenNet is led by Axia NetMedia Corporation with Singapore Telecommunications Ltd, Singapore Press Holdings Ltd and SP Telecommunications Pte Ltd as the other members of the consortium. The NetCo Request-for-Proposal (RFP) was launched on 11 December 2007 and closed on 5 May 2008 with proposals from two consortia, namely Infinity and OpenNet.

    OpenNet’s Proposal

    As the selected NetCo, OpenNet will design, build and operate the passive infrastructure of the Next Gen NBN that will be capable of delivering speeds of up to 1 Gbps and beyond. The Government will provide a grant of up to S$750 million to the NetCo to support the network rollout.

    OpenNet will offer attractive wholesale prices of S$15 per month per residential fibre connection and S$50 per month per non-residential fibre connection, to the Operating Companies or OpCos. Such wholesale prices are expected to bring about competitive retail prices in the ultra-high speed broadband market.

    To encourage premise owners to connect their homes and businesses to the network, OpenNet is required to waive installation charges for home and building owners when the network first reaches their premises.
    Under a Universal Service Obligation, which will take effect from 2013, OpenNet will also fulfil all subsequent requests to install fibre termination points in homes, offices and buildings.

    In its proposal, OpenNet will deploy and own all the fibre optic cables and offer wholesale dark fibre services to downstream operators on a non-discriminatory basis as set out in the RFP. OpenNet will make use of relevant existing underlying passive infrastructure assets, such as ducts, manholes and exchanges, belonging to its partner, SingTel, to facilitate the deployment of its fibre network. As part of OpenNet’s proposal, SingTel has committed to transfer these underlying assets to a neutral party within 24 months of the NetCo’s Contractual and Financial Close, or CFC in short. The CFC will take place within seven months of today’s award. The neutral party, called the Asset Company or AssetCo, will be an independent and separately managed company. It will be owned by a registered business trust or will be structured in a similar manner to be approved by IDA.

    SingTel, as a member of OpenNet, has also committed to reduce its stake in this AssetCo within five years of the CFC and seek the relevant shareholders’ and regulatory approvals, where required. As part of the successful close of the RFP, SingTel is also required to submit to IDA for approval, a detailed implementation plan on the formation of the AssetCo and subsequent partial divestment of its relevant underlying assets.

    Dr Lee mentioned at the December 2007 launch of the NetCo RFP that the Government views Effective Open Access through a structural and/or operational separation as key to the achievement of a vibrant and competitive next generation broadband market. The RFP has achieved this outcome for the Next Gen NBN. Nevertheless, Government will continue to consider the need for legislation to entrench Effective Open Access in this market over the long term.

    At today’s media briefing, Dr Lee also said: “Today, we have arrived at a significant milestone for Singapore. The Next Gen NBN propels Singapore to the forefront of broadband development internationally. Soon, Singaporeans will be able to enjoy a richer broadband experience with more choices and at affordable prices. Businesses, large and small, will find it cheaper and easier to access ultra high-speed broadband, and be able to use infocomm more extensively to boost productivity and competitiveness. The Next Gen NBN will be a strategic enabler that will transform the way we work, live, learn and play.

    To sum up, Singaporeans can look forward to the ABC of Next Gen NBN: Attractive prices for ultra-high-speed broadband; Benefits from innovative services, Coverage nationwide with minimal disruption during fast roll-out.”

    Next Steps

    With the selection of the NetCo, OpenNet is expected to work closely with the Infocomm Development Authority of Singapore to provide the necessary network information for Next Gen NBN Operating Company (OpCo) RFP bidders to finalise their bid submissions, which are expected to be due on 14 November 2008.

    ——————————————————————————–
    ISSUED BY CORPORATE & MARKETING COMMUNICATION DIVISION
    INFOCOMM DEVELOPMENT AUTHORITY OF SINGAPORE
    ——————————————————————————–

    Related Resources:

    Annex – Glossary of Terms
    http://www.ida.gov.sg/doc/News%20and%20Events/News_and_Events_Level2/20080926174755/MR26Sep08Glossary.pdf

    Briefing Slides
    http://www.ida.gov.sg/doc/News%20and%20Events/News_and_Events_Level2/20080926174755/NetCo26Sep08.pdf

    Related Link:

    Opening Remarks By Dr Lee Boon Yang, Minister For Information, Communications & The Arts, At The Media Briefing For The Award Of Next Generation National Broadband Network Netco Request-For-Proposal
    http://www.ida.gov.sg/News%20and%20Events/20080926175858.aspx

    About Infocomm Development Authority of Singapore

    The Infocomm Development Authority of Singapore (IDA) is committed to growing Singapore into a dynamic global infocomm hub. IDA uses an integrated approach to developing infocommunications in Singapore. This involves nurturing a competitive telecoms market as well as a conducive business environment with programmes and schemes for both local and international companies. For more news and information, visit http://www.ida.gov.sg.

  20. I think there’s no time to waste, DAP should set up a committee specifically to urge young Malaysians to register as voters and vote in the coming general election. You gotta make it a priority and it have to start now or else it will be too late.

  22. This is the failure of the goons of the ruling suckers. Wanted to have everything and monopolize everything but not able to delivery anything. These goons just not cut out to compete in anything at all but merely hide behind politics to get things done. Well they are infamous with that.

  24. chengho: TM is the best? that’s the first ever nice comment about them that I’ve heard in my life! They are ‘the best’ because they have no real competition. Trapped in a monopoly, even the worst service provider would be deemed ‘the best’ because there are no other service providers to compare them with!

    And getting a maximum of 300kbps when you’re paying more than a hundred ringgit for a 2Mbps connection is a rip-off. That goes to Maxis’ and Celcom’s HSDPA as well. 3.6Mbps? More like 500kbps. But everything comes with a clause; best effort basis lah, ya? Pathetic.

  26. What a monopoly and suffering losses?
    Someone here said myanmar could one day surpass us in ICT.
    I would not be surprised.
    Burmese are one enterprising lot.
    Indonesians come here and work as house maids, construction workers and factory workers.
    Burmese come here and operate little shops, restaurants and other small businesses in the heart of KL (not small towns). And often they are brave enough to take on the whole shop lot and not just half a shoplot. And Burmese could speak english. This last point would in fact put them in a postion of advantage compared to local malays who could hardly utter a complete sentence in english.

  27. Hi cintanegara,
    A complete waste of time.Majority of non-Malays does not support UMNO as they just represent a particular community not entire Malaysian.
    Is there a difference between UMNO and DAP?
    DAP has a few Malay members, does UMNO have any non-Malay members?

  30. Cintanegara.. You never reply what people said about TM.. what you are saying is all about race and religion.. can you talk something about what’s happening in our country and what’s best for us in the future?

    A monopoly in the ICT industry is never never good.. lets face it..

  31. Oppositions are questioning….why award to Telikom only….and UMNO guy….talk of the important reasons why such a broadband need to be set up….saying we are far behind…..developing countries around us.
    It is waste of time to listen to this….as UMNO must have as many multi billion projects..with companies own by them….directly or indirectly…to keep milking our money away for their agendas..consisting of party interest….personal..and spread out to few friends.
    UMNO party is corrupted to the core..so said their respected old guard…Tengku Ahamad Rithauddeen….strangely confirmed by Mahathir…saying it started 30 years ago…blaming everyone corrupted…..except himself!!
    They say….if a person suffers from syphilis disease…the signs are…getting crazy…and talking nonsense.
    Be prepared for the unexpected!!

  32. I am not hinting M is suffering from syphilis…impossible.
    I am saying…watch out to those crazy nuts in parliaments….blaring out…like a choo choo train…to quickly sit down…as body is itchy.

  34. HSBB is designed not for TM to monopolize broadband (BB) business. TM role is more on providing BB infrastructure, lease the infrastructure on wholesale basis to any company wanted to provide BB services. If customers need BB service from Maxis on the HSBB for example, it is TM obligation to install a new CPE in customer premise and let them connect to Maxis.

    All the while, anyone can be ISP. If you think last mile access fees is not competitive then try invest your own last mile network then you know it is not easy to “serve people needs”.. or be a little more creative by deploying wireless local loop in unlicensed band, a wireless LAN with properly configured channel will do the job.

    The BB business opening up to competition, at least in the wireless segment. TM does not own a wimax license, nor a 3G license but never heard TM shouting it is unfair/uncompetitive. After a year, there is no comprehensive wimax roll out yet, with P1 only covering limited area of Klang Valley at horrible fees structure – like RM230/month for 2.3Mbps best effort!

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