The Age of HSBB- part 1

It is the age of broadband

What is the medium of transmission? Fiber optics? Then TM will work closely with the fiber optic manufacturers and suppliers. One deputy minister who has a monopoly status in supplying fiber optics will become a zillionaire high incomer. People in TM will have a network of friendly suppliers whom they have registered earlier. When you have inside knowledge, ALL the future businesses can be anticipated.

This is the secret of becoming a high incomer. Hence when TM announces on 24^th March, it will start offering triple play services- THAT sets tongue wagging.

It's worrying. The PM wants to start this country on a path to high income by conferring near monopoly status to TM. Telekom Malaysia announces its providing HSBB by charging rates that are unreasonably high. We have the right to ask- can the same facilities and service with the same capacity be provided at cheaper rates? If we can, then, something is not right with the charges TM is making.

Then we want to ask, what is actually being offered to us at that price? We don't want this HSBB project to be another excuse for some people to underwrite their retirement plans. Yes, we have heard senior government officers maneuvering the timing of projects worth hundreds of millions to coincide with their retirement. Even ministers overseeing particular ministries are reticent in corralling such senior government officers. Let's ask Rais Yatim for instance.

Who's not to say, the same shadowy agenda doesn't exist inside TM?

Who do we compare to? We compare the same services provided for by Singapore whose people have higher per capita cash incomes than our people. The logic is this. If higher income people can enjoy cheaper rates, it is reasonable to expect much more sensibility from a poorer country- it should be charging much less because our per capita income is lower.

TM is a behemoth. It surprises us that TM's offer to wire up the whole county with superfast internet service is the only offer. Sometime ago, when the Pahang government wanted to join in the fray to provide the country with the same service, it is said TM hired someone to extol its virtues while casting aspersions to the abilities of others. If that is true, TM wasn't playing fair. It wanted this business to be wholly theirs.

If the PM is serious in talking about innovation and creativity and all that, he must be mindful of any attempts to monopolize any market segment. Begin by dismantling any vestiges of monopoly. For instance, let there be more players offering the same service as TM and see how they compete. Let there be more than one ASTRO. Because satellite TV providers can also muster the market for triple play services.

Let there be more electricity provider direct to the people instead of selling power to TNB and reselling it. Let's see whether TNB can compete and those wanting IPPs can compete by offering better and cheaper services. Let there be more than one water supplier.

Let's have more broadband competitors. Why TM only? Please issue more cable TV operator licenses. So they can offer competition. We are not just going to sit around and accept what the CEO of TM says- this and that. Right now, he is sitting on cash piling machine.

More broadband competitors. That's the idea behind creative disruption expounded by Schumpeter. Create as many entrepreneurs as possible because they are the pivots on which everything turns as Schumpeter says. Now, the emergence of TM as the sole entrepreneur can hardly be said to be symbolic of disruptive creation.

But we shall discuss these philosophical issues at another time. There is an interesting book on Schumpeter- Prophet of Innovation by Thomas McGraw in the market to whet the appetite of the serious researcher.

For the moment let's ask what exactly does TM offer us now? Triple play? A triple-play network is one in which voice; video and data are all provided in a single access subscription. The most common applications are Telephony, community antenna television (CATV) and high-speed Internet service. The transmission medium may be fiber optic , conventional cable ("copper") or satellite.

Issue more licenses to downstream businesses. Fiber optics?- not Mukhriz alone please. Satellite? Not Ananda alone. Is TM going to use conventional cable? Issue licenses for suppliers then or appoint a dealer supplier network.