Unifi now has 74% coverage with 2,900 towers- Public Investment Bank

Analyst believes the Telekom Malaysia Bhd’s (TM) mobile business would require time to grow and generate positive returns.

Public Investment Bank said telecommunication company’s potential threat from a new player is remote, at least in the medium term for its fixed-line broadband business.

Public Invest said the idea of creating an alternative broadband provider in Malaysia is nothing new, noting that previously, Time dotCom was taunted to be the second broadband player but failed to take off successfully.

“Time dotCom is now a niche provider serving selected population in the urban area.”

It said consumers could benefit if Broadnet become a relevant competitor to TM, which would drive down prices and increase speed.

“Based on our sensitivity analysis, a RM10 reduction in TM’s broadband average revenue per user would result in a 3.5 per cent decline in its bottomline.”

It said Broadnet would build fixed broadband network infrastructure alongside TM’s existing High-speed Broadband (HSBB).

“We don’t see a compelling business case for it unless it is able to provide last-mile connection and secure sufficient funding.”

The research firm said the project could receive funding from the government with the possibility of soft loan extension from foreign party, subject to private-public partnership.

On the Unifi Mobile, it noted that the service has reached population coverage of 74 per cent with a total of 2,900 towers.

“It is also expected tower to increase to 5,000 towers in order to provide full coverage.”

However, it said Unifi Mobile is not expected to deliver any positive earnings stream in the near future as the first 1m cards were given out for free in order to secure new customer base for the new product.