Budget 2014: Broadband phase 2 set to take off

by **Cals** Sat 26 Oct 2013, 20:53

Published: Saturday October 26, 2013 MYT 12:00:00 AM
Updated: Saturday October 26, 2013 MYT 11:52:54 AM
Budget 2014: Broadband phase 2 set to take off
[You must be registered and logged in to see this image.]
A TOTAL of RM3.4bil will be allocated for the next phase of the country’s high-speed broadband (HSBB).
Of this, RM1.8bil will be spent on expanding coverage in mainly urban areas to benefit 2.8 million households nationwide. The Internet speed will be increased to 10 megabits per second (Mbps).
Another RM1.6bil will be spent on expanding HSBB to suburban areas, with the Internet access speed increasing to between four and 10 Mbps, which will benefit two million consumers.
Telekom Malaysia Bhd (TM) currently owns and manages the existing HSBB network, which it started to construct in 2008 in an RM11.3bil public-private partnership agreement with the Government.
Budget 2014, however, did not disclose which party would fund this HSBB expansion, which is being termed as HSBB2.
However, sources have indicated that TM may be forking out the bulk of these investments, with the Government bearing a smaller portion.
TM declined to provide details on the funding plans for HSBB2 and said discussions on the project details were still ongoing.
Group chief executive officer Tan Sri Zamzamzairani Mohd Isa applauded the Government’s decision to expand the HSBB project to its second phase.
He said TM was committed to continue expanding the broadband reach holistically across urban, sub-urban and rural areas and enhancing broadband user experience.
“For broadband for the general population, especially in under-served areas, we would continue to strengthen our fixed-line services while exploring other alternative technologies,” he said.
The establishment of the submarine cable network to serve the bandwidth capacity requirements of Internet users in Sabah and Sarawak is much welcomed in anticipation of increasing future capacity requirements and ever-growing data needs.
“A tremendous growth of data is expected over the next few years in tandem with an increasingly dynamic and high-growth business environment in Malaysia, tied with the exponential rise in Internet usage,” Zamzamzairani said.
Analysts said TM could leverage on its balance sheet to make the investment. As at June 30, TM had a total of RM3.44bil in cash and cash equivalents and a free cashflow of RM1.03bil.
An analyst said TM’s broadband service UniFi was gaining more traction, with its numbers continuing to look good. In the second quarter, the UniFi customer base was up 50.3% year-on-year (y-o-y) to 577,000, while TM’s overall broadband customer base grew by 7.1% y-o-y to 2.15 million.
Meanwhile, 1,000 telecommunication transmission towers will be built over the next three years to increase Internet coverage in rural areas, with an investment of RM1.5bil.
To increase Internet access in Sabah and Sarawak, new underwater cables will be laid within three years at a cost of RM850mil.
These investments will utilise the Universal Services Provision Fund, which is under the purview of the Malaysian Communications and Multimedia Commission.