APG boost for broadband, prices likely to fall with higher capacity

by **Cals** Thu 03 Oct 2013, 15:41

Published: Thursday October 3, 2013 MYT 12:00:00 AM
Updated: Thursday October 3, 2013 MYT 11:54:21 AM
APG boost for broadband, prices likely to fall with higher capacity
BY B. K. SIDHU
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Afzal (left) briefing Ahmad Shabery (2nd from left) on the project.
KUANTAN: The building-up of additional submarine cable capacity to carry Internet and broadband wholesale transit traffic globally by two Malaysian telecommunication companies will give the country adequate transit traffic.
It will also allow Malaysia to compete with Singapore to become a major transit hub.
Several multinationals and Malaysian telecoms carriers are currently using Singapore as a gateway for transit traffic to Japan and the US, despite investments by bothTime dotCom Bhd (TdC) and Telekom Malaysia Bhd (TM) to reduce the need for players to route traffic via Singapore.
TdC’s latest venture with Facebook and several global players into the Asia Pacific Gateway (APG) submarine cable network will give the company a lot more capacity that it can sell to multinationals and carriers.
TdC is investing US$60mil (RM192mil) via unit Global Transit in the APG. It is a 10,400km international fibre optic cable system that will link Malaysia to South Korea and Japan. The cable system is scheduled to be ready in the third quarter of 2014 in an agreement that was signed in 2011.
On its investment in the APG, TdC chief executive officer Afzal Abdul Rahim said “the payback period is between seven and 10 years”.
Afzal was speaking to reporters after visiting the cable-laying ship in Kuantan yesterday. Also present was Communications and Multimedia Minister Datuk SeriAhmad Shabery Cheek.
Global Transit is a regional Internet and bandwidth provider. It holds a 10% stake in Unity Cable System, which has a submarine cable network from Japan to the US.Google is also an investor in Unity Cable System.
Afzal said the company was in talks with several local and global players to sell transit capacity on the APG. With the APG, TdC can tap the market right up to Indo-China.
On transit traffic, Afzal said the additional capacity would help ”flatten the pricing curve”.
“It levels the playing field between Malaysia and Singapore with the APG,” he said. For a long time, players have complained that they were paying a lot more to route traffic out of Singapore, and there were few alternative routes out of Malaysia, although TM and TdC have been building capacity for a long time.
Although price is a factor, resilience and quality is key for multinationals, and this is what the Malaysian players believe they can provide with the additional capacity.
He also added that through their investment in the APG to add capacity, the Government did not have to fork out the seed capital of RM600mil it had earlier planned under the Economic Transformation Programme (ETP) to increase global transit capacity.
Under the ETP, Rangkaian Serantau Sdn Bhd is a consortium comprising 24 telcos set up with the aim of lowering the wholesale cost of international and domestic bandwidth capacity to reduce the price of broadband and improve the service quality of Internet access to end-customers.