TM could reduce broadband pricing up to 50%, but it doesn't want to

About two weeks ago, Telekom Malaysia Bhd (TM), the main Internet access provider, published a pricing structure for access on its website that seemed different from what the regulator had suggested earlier this year.

That made it obvious TM did not agree with the Malaysian Communications Multimedia Commission’s (MCMC) proposal on mandatory standard on access pricing (MSAP), leaving some industry players baffled as without the access pricing being reduced, it would be tough to push Internet access prices down. That may be history now since Gobind Singh Deo, the new Communications & Multimedia minister said this week that the MSAP by the MCMC will come into force.

He has promised a 25% cut in retail broadband prices by year end with the reduction in the access pricing.

“But he has to stand firm to make sure the players really bring down prices and don’t drag their feet,’’ says an industry observer.

Gobind on his first day in office said he wanted broadband “pricing to be halved and speed doubled’’ but has only managed to get 25% reduction for now with implementation by year end.

For the full 50% cut in prices, users may have to wait another year, said the observer.

“If access pricing is kept at a certain range, how can players bring down prices… there is little room to manoeuvre,’’ says another industry observer.

Having said that, he also cautioned that players may have only agreed to a 25% reduction to safeguard their income and may have given reasons “that it was tough to reduce further.’’

“In reality the MSAP allows for a 30%-60% reduction in pricing from current levels so there should be no reasons why the retail price of fast broadband cannot be reduced by 50%,’’ says a source.

To be fair, some drop in broadband pricing has been seen over the years but the pricing is still steep.

Broadband is still not seen as a necessity or a utility like water and electricity. Given the rise in digitalisation across the globe, every household should have access to the Internet and Gobind wants to make that happen.

TM is the biggest access provider of fast broadband and companies like Celcom Axiata Bhd, Digi.Com Bhd , Maxis Bhd , U Mobile and others the access seekers. All have access to the high speed broadband (HSBB) network. TM is also in the retail game with its “unifi’’ broadband services, competing with the likes of Time dotCom, Maxis, Celcom and Digi.

TM in a statement yesterday said it “has had several engagements in an ongoing dialogue with the Ministry and MCMC, to reiterate its support of the government’s aspiration regarding affordable broadband services at higher speed for the nation to increase its competitiveness; and on TM’s proposed initiatives to implement the same.”