Recently, Maxis made an unexpected move to reduce pricing of its fibre broadband plans, beating TM.
According to CIMB Equities Research:
“With the new plans, Maxis has moved ahead of the finalisation of new access agreements with TM, which are still in the final stages of negotiations. Maxis says it will offer higher speed plans in the coming months, once it secures access from TM.
CIMB Research said as per its earlier expectations, Maxis did not undercut TM’s price on the Home 100Mbps plan.
However, the 30Mbps plan was priced lower than its expectations of c.RM100+. Based on the Mandatory Standard on Access Pricing (MSAP) and a contention ratio of 30:1, “we estimate the monthly wholesale cost would have been RM88.50. Maxis appears to have foregone subs acquisition cost and any profit margin”.
It said Maxis’s 30Mbps plan is available to all, which may force TM to eventually extend its RM79/month 30Mbps offer beyond the B40 households (RM4,500 monthly income and below).
This could pose further downtrading risk for its more price-sensitive unifi (and applicable Streamyx) households, although we believe most subs will choose to upgrade speeds to at least 100Mbps (i.e. RM129/month).
At the moment, Maxis fibre plans are cheaper than TM’s Unifi. Ironically, TM owns the HSBB fibre network that Maxis is using to offer its fibre services.
Note: TM claims it is Malaysia’s Convergence Champion although I am not sure what does that really mean and if it brings any value to consumers.
Initiated and signed in September 2008, the RM11.3 billion national HSBB (High-Speed Broadband) project is a Public-Private partnership agreement between TM and the Malaysia Government to develop next generation HSBB infrastructure and services. TM invested RM8.9 billion and the government invested RM2.4 billion on an incurred claims basis based on project milestones reached by TM.
High Speed Broadband Project Phase 2 (HSBB 2) has a cost RM1.8 billion whereby the Government will be investing RM500 million and the remaining RM1.3 billion will be invested by TM. The total cost of the Sub-Urban Broadband Project (SUBB) investment is RM1.6 billion with the Government investing RM600 million and TM investing RM1.0 billion.
TM is substantially owned by the Malaysia Government: Khazanal Nasional (26.21%), EPF (17.28%), ASB (11.86%).
I am thankful that TM is wiring up the nation, a job which the other ISPs may not be able to do it (man power + funding). However I believe we have been paying too much for fixed broadband service over the past 17 years, much higher than our neighbour countries.
Just like water and electricity, basic broadband pricing should be regulated as well. I believe every Malaysian should be able to subscribe to a 10Mbps service at a price determined by the Government, example RM50/month. Hopefully the new Communications and Multimedia Minister Gobind Singh Deo could do it right for Malaysians.