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Sakmongkol ak 47

Monday 29 March 2010

The age of HSBB- the return of the Jedi Knights

I have written articles on our recent HSBB. As you will remember on the 24th 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?


Jamali,  29 March 2010 at 17:53  


Don't remind us about the IPP dealings with TNB.

I can't bear the sight of YTL cornering TNB and I just wonder whether Mahathir feels guilty about this issue.

Now that old man is talking about moral with PERKASA.

Mahathir allowed us all being screwed up by YTL OR is he having interest in it?

May be Ani Aroff can be called at a forum, Dato.


Anonymous,  29 March 2010 at 20:17  

dato dearest
you are just repeating what many SENSIBLE Malaysians having been saying all this while.You think nobody knows about the cerita kedai kopi TNB? ever wondered why Tan Sri Ani was disgusted?Maybe Umno to Umno talk might make a difference.Umno only listens to Umno right?
Nevermind if it is such,as long as a positive change takes shape for the benefit of all and sundry.

Donplaypuks® 29 March 2010 at 21:20  

Ever since Harry PaP, a megalomaniac and control freak came up with the concept, we too have joined the lemmings and plunked for M'sia Inc.

The reality is the mandate for Govts and that of private enterprise is as divergent as cricket and american football where the yanks can't stand an honourable draw and MUST have thier playoffs to determine the sole winner.

It is not the business of Govt to be in business. Private enterprise owes its loyalties to its owners and shareholders; Govt has social, welfare, cultural, educational, economic strategies and other issues to consider.

Other than managing directly infrastructure businesses like Tenaga, Water, Highways etc., they should divest out of Khazanah, Equinas, Mavcap, GLC's etc.

Lopsided PCI issues can be better addressed by Govt concentrating in creating the right atmosphere and (forcibly enforcing as in S'pore) ground rules for businesses to thrive and by emphasizing meritocracy. Our Govt seems to have learnt nothing from the massive failures of the 1969 created NEP.

We are all of 1 race, the Human race

Anonymous,  30 March 2010 at 00:21  

Size matters not.

Look at me. Judge me by my size, do you? Hmm?

And well you should not. For my ally is the Force, and a powerful ally it is.

Life creates it, makes it grow.

Its energy surrounds us and binds us. Luminous beings are we, not this crude matter.

- Yoda -

Anonymous,  30 March 2010 at 00:32  

Oh no!

Please let it be no more rhetoric


... Or else just give me that AK47

I'm gonna shoot myself or strike me down with that Jedi Light Saber.

God Help us All

Yeah - funny isn't it, Pekasam smells stinks simply its mantra:
UMNO cant uphold the malays anymore
hence Pekasam has to protect its right in the name of melayu!?

Who gave Pekasam or IA the warrant or talk on behalf of all majority Malays in the very 1st place?

Rowdy-Hill Billy wannabe

-Ikan Tongkol-

kuldeep 30 March 2010 at 05:05  

Morning Dato..

Ur up early or late sleeping?

Lets hope NEM will a revelation worthy of its acronym...cos soon PM will do Part 1.

Anonymous,  30 March 2010 at 05:52  

The People’s Parliament

Dear Mahathir
March 29, 2010
Sorry to be writing to you so soon after the last, but I read on Malaysianinsider that at the racist Perkasa congress over the weekend, you had called for a review of something or the other so as to be able to reply to allegations that the Malays have stolen the country’s wealth and denied the rights of non-Malays, and felt that I could not let you get away with these mischievous, dishonest observations without responding to the same.

You see, I do not think anyone has said that the Malays have stolen the country’s wealth or denied the rights of the non-Malays.

What many have said, myself included, is that you and your privileged cronies, inside and outside of government, have robbed the people of this nation, Malays included.

And, inspired no doubt by you, many in the civil service also got in on the action.

I’m going to keep this short, so I’ll just cite one instance. I’ll leave commentators to add to the list, if they care to.

One evening in the early 90’s, when Putrajaya and KLIA was being conceived by your government, I got a call from a friend who excitedly asked me to meet him to look at a ‘cannot go wrong’, ’sure make money’ investment opportunity.

I met him at a pub in PJ.

He opened up maps of Sepang and Dengkil, said he had connections with people who had connections in the highest offices of government, identified the areas on the maps that were being earmarked for the construction of Putrajaya and KLIA and the housing and commercial areas that would sprout up thereabouts, and then said that the owners of these property were unaware of these intended developments. If we bought now, the price would be dirt cheap.

When sold later, or if acquired for purposes of the intended development, the returns, either from the re-sale or government acquisition, would be considerably higher.

Big profits to be made.

At the loss of those who had held those properties for a long time, some passed down from generation to generation.

And who were unaware of the intended development.

These were Malays.

Who were screwing them?

Ariff Sabri 30 March 2010 at 05:55  


you are freaking up many people, keeping watch? gd morning... no, not sleeping late. up early.

Anonymous,  30 March 2010 at 08:19  

wakaka... same old never ending story... IPP backed by MAhathir... anyway, in near future it was right, so we need more IPP player, to produce murah punya tenaga.. by the way, natural resource not in our hand... ada siapa2 yang boleh produce electric using solar on cheaper price... hmm kena make sure it for long term.. jangan kaput tengah jalan dah la... hmm tima kacih daun kladi walla.. baru senang paham...


Anonymous,  30 March 2010 at 09:24  

After reading your 3 articles on HSBB, it appears that TM is made as an easy target while other telcos such as Maxis, Digi and others are made look like an angle.

The matter of fact points that have not been addressed in the article is that other telcos are allowed to roam free to make as much money as possible without any such obligation to national aspirations and social obligations similar to TM.

Allow me to give few examples mostly in series of questions to drive the perspective

Example 1. Would you think given an opportunity, TM would willingly sponsor Malaysia soccer league which is not generating much publicity and interest even among Malaysians? Likely no. Have any of these other operators sponsor something bear resemblance to what TM is doing? I certainly have not seen any.

Example 2. Imagine, in a very remote area a person requested for telephone service through their assembly man. Which company would this assembly man call to provide the service for his constituency? Can TM refuse the service? Likely not especially when politicians are involved. Can other operators refuse even if requested by politicians? Certainly so especially if it is not commercially viable.

Well, now these operators are going to such remote places because of the MCMC USP fund, which ultimately help their revenue and indirectly finance their network expansion.

Example 3. Are these other operators required to fulfilled top positions with Malaysians and equitable proportion reflecting society in Malaysia? Well we know, several of these companies are having non Malaysian as CEOs and some other strategic positions are also filled with non Malaysians. Doesn’t make us wonder aren't many Malaysians qualified for these senior positions or have the government question them about this? Imagine if TM CEO decides to hire several foreigners to senior management positions. Dare us to image what would happen to him/her.

Example 4. TM is required to ensure certain percentage of contracts goes to bumiputra contractors and suppliers. Similar question should be asked whether similar practice been done by other operators. By the way, under "fair business practice" adopted by these companies what percentage of contract value actually been awarded to local, foreign and bumiputra contractors and suppliers? Isn't the government interested to find out the details?

These questions are raised because while TM is constantly taken under the microscope, these other operators manage to operate outside the radar and in the process raking huge profit year after year perhaps at the expense of TM. While government have very strong influence over TM, the government seems to be powerless over these other operators at least to ensure national aspirations are followed and supported.

Perhaps there are some truth in this Malay proverb “Kera dihutan disusukan anak dirumah mati kelaparan”.

Anonymous,  30 March 2010 at 14:30  

Anon30 March 2010 09:24,

I’m wondering whether u’ve given those extracted questions more thought. Or is it either too complicated for u to see the forest from the tree from yr prospective, or u’r just acting dumb!

Example 1 – sport sponsorship is not charity. U want financial support, make sure u can at least prove yr worth by promoting the brand. See Petronas’s involvement in Mercedes Formula One team? CIMB sponsoring Dato Nicol in Squash Championships? Do u think TM’s involvement in La Tour de Langkawi is not political motivated, rather than commercial? And if u still insist on the Malaysia soccer league, then this is again a pure political play, where the commercial exposure is limited! Sport sponsorship based on political arm-twisting will always ended up like Magnum wasted millions in pumping Sauber-Red Bull F1 team, with Alex Yong in towed! BTW using yr analogy, there r other more worthy sponsorships like the beer companies supports for the Chinese Vernacular Educational funds, which give more commercial exposure + positive educational return than the Malaysia soccer league. Is this blind to u?

Example 2 – U’ve answered yrself with this MCMC USP fund. In fact the penetration of mobile in rural areas r much appreciated than TM’s fixed-line services. So u r indeed talking craps! If u r going to mentioned those truly remote areas, like those within the S’wak inlands, then not even TM will bring any lines (fixed or mobile) to those areas, political arm-twisting or not!

Example 3 – Do u know that most of the people doing all the real works within TM’s HSBB contracts r either foreigners/non-malay M’sians? What’s the use of having malay top executives & yet they know nuts about telecommunication tech/infras/marketing! This might sound racist but unfortunately it’s the truth. Why such situations exist? Blame them on cronies, poor/non-existent business exposure, & a generally lack of hand-on due to pseudo-mentality of ‘ketuanan’. I’m the boss. I can always delegate & hire so why get my hands dirty. & most of all I want my kins sitting in high-paid, aircon executive positions, zilch knowledge notwithstanding! So without training under a proper marketing gurus, how to gain exposure in cut-throat business planning in telecommunication. Without proper tech training, how to work around the technical bottlenecks when one can’t distinguished between IAP & IXP. So now u know why TM is going to pay RM20M for McKenzie & Co for strategic planning for HSBB, as if we don’t have home-grown expertise!

Example 4 – this is exactly the down fall of the umnomalays! Always look for hand-out, always look for quota for survival. Hello, how about some competition to bootstrap u up to the next business level? If u r good y r good, period. And profit-orientated commercial entities will recognize u & get u to do the job.

TM is constantly taken under the microscope, simply because it’s a GLC using money from ALL M’sians. It’s NOT yr heirloom, neither it’s yr in-born right.

T’au ke?

Anonymous,  30 March 2010 at 16:04  

Dear Dato'

"Four of every five adults believe access to the Internet is a fundamental right, and more than half believe it should never be regulated, according to a new survey"....BBC

The TM's package is way to pricey and the really performance is yet to be tested. The bad experiences with Streamyx and Celcom Broadband have taught me to be skeptical about TM's offerings.

When MSC was launched in 1996, we were ahead of Singapore in term of internet access within Cyberjaya. Now our Internet access is even worst than Romania, an Eastern Europe country.

Anonymous,  30 March 2010 at 17:41  

The Ringgit stops here, er, over there,

Hmmm, no it's your fault, oh look ... it's just TM fault OK.

All we have to do is remember "1Malaysia"

Yes TM dont be anggur masam and simply shove it in Our Ar*e - RM149too much lah however I would like to point out this are simply political motivated lah apa lagi

-Ikan Tongkol-

Ree,  30 March 2010 at 20:03  

Hi Datuk Sak

Havent posted in your blog for a while.

I just finished reading the NEAC's New Economic Model document. 200 plus pages and no mention of Bumiputera equity participation! A good start.

Anonymous,  31 March 2010 at 03:16  

Saudara Yang Mulia.....

i would appreciate it if you could explain to me in lay-man term of NEM. From what i read, there were 200 pages of this NEM. Is this a model or a policy? In what category does it fit; MACRO or MICRO. Or maybe the main stream media who carried it could not ascertain therein laid the model. OR are we having the second MR Kacang for a PM.
Gosh What is going around and is this country fields of productive Kacang. Thank you.

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