The age of HSBB- the return of the Jedi Knights

I have written articles on our recent HSBB. As you will remember on the 24^th of March 2010, Telekoms Malaysia launched its HSBB. On hand to deliver the birth of HSBB were the Prime Minister, the Minister Rais Yatim of course and the bosses of TM.

TM will offer its triple play services, combining telephone, TV and internet services. It will charge consumers anything from RM 149 to RM 240 per month. That's a lot of money and can only be justified when a number of things go along with the price. Such things like service, content and quality of the programs. I mentioned some of these services which TM will offer- on paper.

I am looking at this whole business as a turf war between the government and ASTRO. I have termed this move as the empire strikes back. But the empire may not be looking out for the welfare of its people. It may in fact be looking out for the interests of a select group of stakeholders. We can also expect ASTRO to do its own creative re-engineering.

Imagine this. Suddenly ASTRO is taken private. What happens next? Well, behind closed doors, stakeholders may change. Equity changes hands. Then, in 5 years time ASTRO is taken public again but this time with new stakeholders. UMNO's interests, interests of wealthy UMNO puteras and the likes. MIC Puteras. MCA mandarins and so on. A new ASTRO will be born, having the required tools to mount a new challenge to new players. Maybe assume new character and identity. It's owned by Mohd Ananda. It will be hailed as a new smart partnership under the aegis of 1 Malaysia. Maybe its all just a move to secure a contract for exclusivity.

But I am also thinking, the whole exercise of offering HSBB is just another excuse, solemnised by the PM for certain people and groups to make tons of money. So what do we do? We write and we question the powers that be.

For example, we want to know why this penchant for contracts of exclusivity. TM offers us HSBB for how long? Will it be the exclusive provider for HSBB for the next 20 years? Will the government agree in excluding any other telcos from offering triple play services? 

I have only recently become aware that ASTRO has an exclusive license for Satellite Broadcasting here in this country until 2017. They have been awarded this license in 1996 and till 2017 there should not be any new Satellite Broadcaster in Malaysia. MiTV came up sometime in 2005 and died almost a year later. Vincent Tan is still holding the spectrum license and also the 3G license (U Mobile) and is hunting for prospective buyer so he can make quick bucks. Now TM is out here with hope to beat ASTRO.

This trend towards increasing concentration of economic powers, otherwise known as monopolies are in contrast to the PM's economic vision of competition and creativity and innovation. It's actually a consolidation of the old economic practices hatched since 1970 that have not succeeded in addressing the main economic issues of wealth distribution and economic growth.

We now know that out of the RM 54 billion in equities allocated to selected BUMiputeras only RM 2 billion remain. That means, the majority of the Melayus who received shares and equities were not interested in owning permanent assets. They were after windfall money so that can own brabuses, Lamborghini and Ferraris and made it to Malaysia Tattler's List of social luminaries. 

Thus the act of placing wealth creating asset under the control of a monopolistic behemoth, which is similar to the economic practices  of NEP era, isn't going to improve the distributive agenda of our economic policies. We are only going to see an economy promoting meritocracy, creativity and productivity if we consciously work towards promoting competition. Hence the first step is to distance ourselves from this practice of creating monopolies and giving economic exclusiveness.

Then there were also the standard menu of privatisation which actually turned out to be piratisation. I call it authorised looting. So while the empire may strike back, Sakmongkol AK47 is joined by a battalion of Jedi knights...who will write to inform the public.

Consider the following. When the govt privatized some of its functions, it privatized two fundamental growth drivers: electricity and telecommunications. Let's look at the sore points on these piratisation projects.

In the case of electricity, we are stuck because apparently the Perkasa patron didn't bother to ask about the key terms of the IPP agreements that had cornered TNB. No one in his right mind would on the one hand wax eloquent about national patriotism but on the other hand uncharacteristically overlook a ruinous term that requires the state to buy electricity even when it doesn't need the surplus ...which is why every household, school, office and factory today is paying for power which it didn't use. In some enterprises, the excess electricity bill equals additional incomes for staff. In one case, an entire family toasted from using candles because it couldn't afford to pay the electricity bill.

What for privatization of power (sic) you can see parallels in APs for the automotive industry and concessions for road tolls.

Likewise, in the case of telecommunications, the social and strategic objectives of privatization seem to have been conveniently overlooked. Social because we are still a low-income and small population economy compared to those we aspire to. Strategic because, like electricity, telecommunications is a key high-income growth driver, what more an investment attractor, what more the only tool for the future of this 21st century which, in a word, is - convergence. In fact, high-speed broadband of telecoms has become the focus of all the major economies.

So if we are to compete to climb another rung in global rankings, at the least we must have cheap, easy and wide access to high-speed broadband. And by wide, one can envision rural folks being able to enjoy channel entertainment from the world, not the versions that have been sanitised until their IQ drops to the official level.

The rakyat ask, if you want us to change our mindset, give us an affordable tool as a first step. As we on the screen and get an avalanche of sights and insights, we will then be motivated to proceed to the next step - to learn the languages used in the content of the web - and that will expand our mental horizons so that we can do more real money-earning things - and that will contribute to reducing your treasury deficit while helping us become higher income earners and so, free us from the pathetic zealots who are constantly trying to send us back to their stone age. Now, how?

Now, how are we going to do all that if such broadband access is officially bundled under one provider which is a public-listed company which thus means its first loyalty is to its shareholders who are unlikely to be concerned about national strategic and social objectives because they only want their ROIs multiplied? Especially at this critical juncture when 1Malaysia is trying to soar with high-income 1Enterprises? Or soon face economic extinction in a middle-income 1Trap?