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Malaysia: Government and Telekom investing in broadband Print E-mail
Friday, 16 May 2008

Telekom Malaysia (TM) will invest US$ 2.7 billion and the government will contribute US$ 734 million over three years to build the first phase of the country’s High Speed Broadband (HSBB) project.

Minister of Energy, Water and Communications Datuk Shaziman Abu Mansor said the project is a public-private partnership (PPP) and would consist of three phases over ten years.

“The government has taken this PPP approach as it recognises that it requires large-scale infrastructure rollout involving last mile access, core and international network, and this may not be viable for a single or entirely private sector implementer,” Shaziman said.

He added that TM was the logical choice to upgrade the existing network for HSBB roll-out as it owns 95% of the country’s existing fixed line infrastructure. Malaysia’s broadband penetration rate is still considered low, at 18%.

“To ensure TM’s network openness, the regulatory framework will be developed on an open network concept to ensure that other industry players will have an opportunity to access the HSBB network at the application and network service levels,” he said.

According to Shaziman, the HSBB infrastructure, with speed of between 10 Mbps and 1 Gbps, would be developed at an estimated cost of US$ 4.65 billion over 10 years with the government putting in an initial investment of US$ 1.47 billion.

He said Malaysia’s gross domestic product (GDP) would be increased by 1%, or US$ 2.0 billion, if the country can achieve its aim of 50% broadband penetration by 2010. The 50% penetration rate is also expected to result in an additional 135,000 new jobs.

TM said the signing of the agreement between the government and the company for the HSBB project was expected before the end of June.

The HSBB project and the related project for the provision of “Broadband for the General Population” (BBGP), providing speeds up to 2Mbps, will be divided into three zones. The first zone, consisting of major economic areas such as Kuala Lumpur, Johor Bahru and Penang, will have both HSBB and BBGP, while the second zone will be covered by BBGP and wireless technologies such as 3G and WiMax. The third zone consists mainly of rural areas where network roll-out requires financing from the universal service provision fund.

Source: The Edge Financial Daily - WDR/Intelecon Regulatory News.