ABNxcess is officially Dead?

Hybrid fibre coaxial (HFC), Internet service provider, Asian Broadcasting Network (M) Sdn Bhd (ABNxcess), which has previously denied getting into financial doldrums, have been facing technical issues which has seen its transmission being temporary down, throughout the country, reported TheSunDaily in August last year.

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To date, it is unclear whether the network is still up and running but the company appears to have quietly shut down.

One of the user reported that the ABNxcess network was back up, running, but this was in May 2016- link.

There was also another user who said that he did not receive any bills from ABNxcess for nearly 8-9 months and have been using the service for free- link.

The ABNxcess website and Facebook are gone as well.

Right now, www.abnxcess.com shows that it is “suspended” however the website appears to be hosted on the same server with http://samuelcharles.my.

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abnxcess.com was supposed to expire on 13 September 2016 but it was renewed on the expiry day for another one year. Record shows that the domain is registered to Sreedhar Subramaniam using the company SNS Capital Sdn Bhd and email: sreedhar.my@gmail.com

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ABNxcess was 70%-owned by Tan Sri K.K. Eswaran through ABN Media Group. It has a five-year digital cable broadcast license which will expire in June 2018.

In 2012, ABN was given a financing facility of RM450mil loan from Bank Pembangunan Malaysia Bhd, a government bank held by Minister of Finance Inc. It also has a RM15 million loan with Maybank.

As of August 2015, filings with the Companies Commission of Malaysia show that ABNxcess has not submitted its financial results for the last two financial years. It incurred a widened net loss of RM30.72 million for the financial year ended June 30, 2013 against RM4.65 million a year before. [Link]

Based on the latest record I could find, the ABNXcess director was charged in the magistrate’s court in June 2016 with nine counts of late payment of its staff’s monthly tax deduction (MTD) to the Inland Revenue Board (IRB) in 2014.

The MTD, amounting to RM785,641.78, was for between June and December 2014, and August and November the same year.

However, the director, S. Sreedhar, 54, who was charged as employer, did not attend the hearing but was instead, represented by a company representative, R. Subashini. [Story]

My Opinion:

According to Tan Sri K.K. Eswaran in an interview dated mid-2013, ABN raised about RM500mil in funding for the first phase of its project and he said that this is sufficient to fund it for the next 7 years.

Unfortunately, those funding don’t seem enough and ABN wasn’t really operating about 3-years later.

The media (TV & Content) and the ISP industry are both challenging.

In the media industry, contents are not only expensive, competitors are locking contents down with exclusive broadcasting rights. Even new players like iflix have exclusive contents on their site which blocks companies like Astro from offering the same content. Astro also have exclusive contents. In my opinion, this is not healthy for the industry and the consumers.

As for the Internet industry, ABNxcess wanted to build its own Hybrid fibre coaxial (HFC) network and these cost a lot of money. It also partnered with Motorola to build the network, which is a good choice but not cheap. On top of that, bandwidth in Malaysia are expensive, which means peering with other network could be expensive too. Maxis & the other Telcos had plans to build their own nationwide fibre network a few years ago, to compete with TM’s HSBB, but they changed their mind (high likely due to cost & other challenges).

ABN has limited financial capabilities, I think the mistake it did was not picking between becoming a content player and being an ISP, it wanted both, at the same time.

You can’t deliver the content without the Internet network, but you can always offer the Internet service first without the content. That’s is why Malaysia’s ISP generally have dumb pipes because there aren’t many interesting contents that are hosted locally. About 70%-90% of our Internet traffic goes overseas.

Personally, I don’t see any affordable high-speed broadband service in the country and premium TV/Movie contents like Netflix are not cheap. ABNxcess was supposed to change this.

For the time being, it looks like the market will be dominated by ASTRO and Telekom Malaysia for now as there aren’t any worthy challengers yet.

It is sad to see ABNxcess go.

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