Wednesday February 23, 2011
By B.K. SIDHU
bksidhu@thestar.com.my
KUALA LUMPUR: Telekom Malaysia Bhd (TM) and Celcom Axiata Bhd may potentially be entering into a 10-year collaboration that allows TM to get back into the cellular business it once sold off but now needs mobility solutions to bridge the gap in its current product offering.
For Celcom, the collaboration allows it access to a high-speed broadband (HSBB) network. Its foray into the fibre business gives it exposure to millions of homes and offices to push rich multimedia services such as IPTV and video on demand and stay in competition with rival Maxis Bhd which aspires to become an integrated player.
The partnership may be a game changer in the way Celcom and TM operate in the future. Each will have a platform that they need to push multimedia, fixed and mobile solutions to users.
“We will not become a full-blown cellular player as our focus is our fixed-line business. (But we will opt for the) mobile virtual network operator (MVNO) model as it allows us to get into the cellular business that we can monetise on,'' TM group CEO Datuk Seri Zamzamzairani Mohd Isa said.
TM in a statement said it would opt for the MVNO model to offer its own brand of mobile voice and data services to complement its existing fixed-line portfolio.
Zamzamzairani said they (TM and Celcom) could either offer services jointly or individually.
This TM/Celcom partnership also means Maxis may have more competitors on hand than it had hoped for. Hopefully, the consumer will be the big winners in terms of choices. And with more players competition should drive rates down and, perhaps, improve the quality of services and offerings.
Yesterday, both Celcom and TM inked a memorandum of understanding (MoU) to cooperate on several areas and gave themselves two months to hammer out a definitive collaborative agreement.
Celcom was once upon a time a unit of TM but, after the demerger, it was hived off to Axiata Group.
Asked if it was a mistake to demerge with Celcom years ago since it now needed to also offer cellular services to its users, Zamzamzairani said “it was a shareholder issue and not management.''
This MoU signing came just over a month after Maxis inked a deal to use TM's HSBB for a 10-year period. The sharing of resources will save the country millions in infrastructure build-up but both Celcom and TM could not give any estimates of how much they would save in infrastructure sharing.
“It is in the best interest of the telecoms industry, especially the service providers, to progress towards network infrastructure sharing to minimise capital expenditure. It does not make sense for the industry to duplicate infrastructure,'' Information, Communications and Culture Deputy Minister Datuk Joseph Salang said after witnessing the signing ceremony yesterday.
Under the MoU, Celcom and TM will explore possible collaboration in the areas of HSBB be it access or transmission, wholesale Internet access, digital subscriber line access (end-mile copper network), fiber network system via wholesale long-term lease or MVNO services.
“In this day and age of multiple screens, be it phones, tablets or TVs, consumers are now being entertained and are interacting with each other in a multitude of ways,” Celcom CEO Datuk Seri Shazalli Ramly said. “The old paradigm of fixed versus mobile access is becoming increasingly irrelevant due to consumer behaviour, the lines are blurring (and we need to provide content via multiple access and devices, thus the need to collaborate).''
IDC Malaysia associate market analyst John Cheah believes TM will be able to regain a foothold in the lucrative mobile market with a tie-up with Celcom.
“However, taking into account that there are already numerous mobile operators and MVNOs, TM would need to identify a niche market or provide competitive rates,” he said. “TM could leverage on its existing broadband brands and provide a mobile data plan to complement its fixed-line counterparts.''
As for Celcom, he said: “It would be able to develop new fixed-line products. It would help control capital expenditure for Celcom in terms of long-term investments and maintenance of its next generation backhaul networks.''
http://biz.thestar.com.my/news/story.asp?file=/2011/2/23/business/8118522&sec=business
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