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Sakmongkol ak 47

Friday 26 March 2010

The road to high income economy-2


I will let Walla tell us about the road to a high income economy. Walla tackles the question that I have asked in my latest article; how to increase the cash income of individuals. The typical individual in Malaysia is likely be one who takes home on average RM 3,000 per month. How do you increase his cash income?
By asking him to be entrepreneurial. In Malaysia this translates at the most simple level as asking him to work hard, not to accept handouts, not to depend on others and not to have this mindset that others owe it to us to help us out. We must also get out of this mental rut that the good life is a matter of right to us. Rights are acquired. They are something you fought and struggled for and qualify for. You acquire ownership and title to a TOL land by working it and 'having worked' it qualifies you to acquire a right. Hence a right is something you qualify for and not acquire by being someone, some race etc.
A: 'I read that 74 percent of Malaysians draw no more than rm3,000 per month. You reckon we must be somewhere inside a low-end quartile of per capita incomes relative to cost of living compared to many other upcoming economies?'

B: 'You mean net zero at beginning of the month so that each household is actually floating on credit to get to the next payday? Probably so. Especially when each has to commit so much to essential high-ticket items like homes and cars. And the tightness is not going to soften as they grow older because they will have children and old folks to take care with education and medical costs rising. Not unless and until they can earn more to save up now. That's save up to survive, not save up to spend to spur the economy, mind you.'

A: 'But how? The ecosystem is not pro-innovation. Hard to get loans and grants for ideas. Hard to find good designers. Hard to find professional fabricators, people who can take your plan and micro-machine what you want, or integrate applications to deliver a seamless service. And probably a whole layer of sly bureaucracy along each step. It's quite demotivating, especially when all of one's waking hours are already spent slogging for sleepy companies in moribund industries.'

B: 'We need to spark idea-labs, Sofea. With communications technology, it gets easier to tap the new social computing wavefront and get diverse and borderless resources to collaborate. That's one way to spark innovation. Maybe the MSC people can run with it and the Mida etc people can set up a single welcoming mat to attract some of the brains in the US and Europe who have been untethered by their financial crisis to e-venture here. That's a shift from luring capital and equipment to luring talent and brains. In any case, they don't have to be physically here. But they will be essential not just for their know-how but also for their know-where. They know where the markets are that we need to target. Ours is too small for any big-wave high-income activity. We can sell that we are lower cost and presumably still smart people.'

A: 'But they can get more from India, China, Russia, the East Europeans, Philippines, even Vietnam. Why us?'

B: 'Ah, for that you must ask the Ibrahims and Nordins of this country. They talk big, loud and fast so they must have brains and answers for everything. And I mean everything, all the way from bumi to langit.'

A: 'Sir, I don't think they have done a single productive thing in their entire lives.'

B: 'Except make investors shake their heads and walk away? Hmm. Who outside UMNO still doesn't know that?'

A: 'Your way of posing two statements as one twisted question makes me dizzy, Tun.'

B: 'Only to make you pliable to what I am going to say now, Sofea, which is this - our road to a high income economy is paved with the corpses of shattered excesses.'


Anonymous,  26 March 2010 at 09:19  

Najib: NEM More Entrepreneurial, Innovative And Focused On Quality

Some other Key Ideas in the speech ;
>The government's role is to serve as a facilitator,
>less reliance on subsidies to support economic activities, he said.
>low skills and low technology manufacturing will be a thing of the past and the industry mind-set has to change to focus on advanced manufacturing, he stressed.
>small and medium industries (SMIs) to do more investment on research and technology as well as human capital.

Looks good indeed and very2 reasonable.Its about being innovative,efficient and competitive..

And TM leads the way by charging the highest rates for HSBB ;the model for High Income Economy and competitiveness.

The outstanding innovation of "triple play" with IPTV,voice and data is ground breaking whilst at the same time wallet busting for the consumers; who wants the less innovative single play of fast internet.

The change in mindset is a necessary requirement if we are to progress.

The high HSBB rates will create a pool of healthier Malaysians who has to forgo lots of Big Macs and Nasi Lemak in order to enjoy the wonders of "triple play".

The HSBB rates are completely free floats with no element of subsidy in keeping with the Govt NEM philosophy.The RM 2.4 bil given to TM is a brilliant example of facilitation and the rakyat in general WILL NOT be allowed to benefit thru lower charges as that will be construed as a "subsidy" element.

The HSBB with IPTV and voice will bring a vast change in lifestyles to the CEO and senior mgmt of TM.

Syabas all round.

Unknown 26 March 2010 at 09:21  


OK Since 74% of the population earns LESS than RM3000, and DS Najib says that we are stuck in the MIDDLE INCOME TRAP, pray tell me WHAT is the MIDDLE INCOME? Is it more than RM3,000? If so it will only be part of the remaining 26%. Which part? 10%? 15%?

OK, now the Government's "Economic Policy" is to lift us out of the Middle Income Trap. That would be helping only part of the 26% of the population.

Hopefully Lifting part of the 26% of the population will help to drag the under 3,000 income earners into Middle Income.

It all Sounds Good but we hope it won't be a case of the Rich or "Near" rich gets richer whilst the poor remains the same or gets worse.

Ariff Sabri 26 March 2010 at 09:25  

anon 09:19

pls contact me on my e mail. i am interested to find out more about this juicy TM deal and hope to write more about it- with yr help.
the only thing innovative about this broad band is the price.

Anonymous,  26 March 2010 at 10:44  

Dato SAK47

The claim of triple play by TM is rubbish!!! It is only high income for TM and monopolictic.It is not even innovative.

Two years ago I had the privilege to advise a private corporation to try to raise funds for them to expand their same "triple play", that is IPTV from any channel internationally, free voice over internet phone and unlimited data download at speed in excess of up to 2 gigs at less than half the price that TM is going to charge for its so called tri[ple play. The infrastructure for other private sector players to take on TM already exists but the govt refuses to acknowledges it and gives TM monopoly rights! Some korean Private Equity funds were seriuosly considering the proposal but due to bureacratic hindrances they gave up!

TM is taking the Malaysian consumers for a ride as it has been doing for years on its minimum line charges even after it became a corporatised body.

Anonymous,  26 March 2010 at 11:38  

Salam Dato Sak,

Not too dwell and even digress too much on the main topic - but i'm curious

1.Local Banks: I remember clearly that last three / four years BNM announce that they will change, implemented the whole cheque format issuance & clearance what happen to this? I still experiencing delay and lack of further initiative from the said banks.
What happen to those assurance that when a consumer banks in the said cheque locally (within Klang-Valley) It is said that would be cleared within 24hours?
and to change the format of
so-called banking layman terms standardised cheque size and all that jazz lah.
What Happen to that?

3. Word on the streets and recent announcement BNM is finally awarding up to seven(7) licences to both conventional & Islamic Banks?

Is all the above said directly will boost the economy per se - which eventually leads to a
high income economy?

Coming back on your piece, I doubt so everyone especially with those sole breadwinner is enjoying the said analysis of RM3,000 I've seen friends earning RM800.00 and with average 4children with the help of the wife and some other work godwilling they can still survived.
Albeit it is not RM3,000 we're looking for, it is more the quality and a very fair playing level of Survival in Kuala Lumpur the Heart of Malaysia.

and to say rasuah is not akin to UMNO/ PKR,DAP, PAS is totally bollocks.

-Ikan Tongkol-

Anonymous,  26 March 2010 at 12:25  

The research house said in its earlier scenario analysis for the HSBB, it assumed RM150 ARPU. But with HSBB packages priced at RM149-RM249, HSBB ARPU may surpass its assumption of RM150. While these plans come with fair usage limits of 60GB-120GB, they offer free voice calls to TM fixed lines and cheap 10 sen/minute tariff to mobile numbers.

“In our earlier scenario analysis, we concluded that TM’s commitment to pay 20 sen/share dividend is sustainable. The potential upside to ARPU assumption further supports our view,” it said.


Anonymous,  26 March 2010 at 15:27  

promo TM HSBB nampak... hehehe... no comment on this matter.. still too early to dream with you.. malam masih muda... Najib still finding the correct word to promote his MEB... hmm baru nak kenalkan muka2 admin dia jerr..


Anonymous,  26 March 2010 at 15:30  

so we are not getting pure FTTH...still using copper for last bit?
And in many places..existing infra of manholes n conduits already in place?
Thus CAPEX shld be lower then the 12 bil or so...and TM shld be able to charge lower rates..
Anyway..IPTV is content play with lots of potential VAS and that shld be the money spinner (but have to work harder of cos)...TM prefers the "take it or leave it" approach of charging high.Good strategy cos of their monopoly.But is it in the interest of the country?

>>excerpt from TM's annual report
In greenfield (new development) areas, FTTH will be
the pre-dominant technology used for both residential and commercial
properties, whereas, brownfield (existing development) areas will be served by
FTTH, ETTH, VDSL2 and ADSL2+ technologies depending on the types of
properties and services to be deployed.
* Fibre-to-the-Home (FTTH) – the physical delivery of fibre optic cables directly to homes &
businesses replacing the existing copper lines
** Ethernet-to-the-Home (ETTH) – a generalised fibre solution evolving from a circuit switched
model to an entirely packet switched model using Ethernet as opposed to Asynchronous
Transfer Mode (ATM)
*** Very High Speed Digital Subscriber Line 2 (VDSL2) – an access technology using existing
copper lines which is the newest and most advanced standard of DSL broadband wireline
**** Asymmetric Digital Subscriber Line 2+ (ADSL2+) – an access technology using existing
copper lines that is able to extend the capability of basic ADSL by doubling the number of
downstream bits

----END -----

PM wants the country to be innovative and competitive but obviously TM have better ideas.Tony Fernandez are u there?

Anonymous,  26 March 2010 at 15:41

The infrastructure will be rolled out over 10 years with the federal government investing RM2.4 billion and TM RM8.9 billion to provide high-speed broadband access to over 1.3 million premises by 2012.

Deploying a fiber-to-the-curb (FTTC) infrastructure, and using VDSL technology to provide a broadband service over a copper line to each customer's premises, would be much cheaper, costing a total £5.1 billion ($9 billion), according to the BSG report, which can be found here.
(APPROXIMATELY RM 1000 per household)

1.3 million households @ RM 1000/Hsehols = RM 1.3 Bil

Wonder how much TM hv spent on the 4 Areas to date?Why worry..RM 20m is small money

Telekom Malaysia Berhad (TM) is mulling to give a RM20 million project to McKinsey & Co to ensure its RM11 billion high-speed broadband (HSBB) is on time to meet the 50 per cent broadband penetration target this year.

Anonymous,  26 March 2010 at 16:25  

As a percentage of income most things are expensive in this bolehland. Just compare with our nearest neighbour, Spore.

With same average starting salary for a graduate of RM2,500/mth here and S$2,500/mth in Spore. For 5mbps broadband Sporean pay less than 2% of their salary while we pay 6%, 3 times more. The same goes for host of other things like mobile phone, satellite tv, cars, electronics goods, food even apartments and condos.

Dollar for dollar i.e on purchasing power parity, most things are cheaper in Spore. Even 95 Ron petrol is sold at S$1.70/liter in Spore compare to ours at RM1.80. But when the govt make a comparison, they will convert the S$1.70 to RM4.10/liter making it expensive. You see as a percentage of income, Spore cost of living for its citizens is cheaper than Malaysia.

Anonymous,  26 March 2010 at 17:17  

Excerpts from M'sia Insider

"To date, TM has a “premises passed” achievement of 143,000, with a target completion of 150,000 premises passed by year-end.
Thus far, TM’s capital expenditure spent from fourth quarter of 2008 till Oct 30, 2009 was RM1.4 billion covering last mile access, Internet Protocol core deployment and capacity expansion for international links.

TM had received government reimbursement for this, which is in line with the stated commitments under the PPP Agreement."

TM CAPEX works put to RM 10,000 per consumer>>this is equivalent to UK projection for full FTTH deployment.
TM's config is more of FTTC with VDSL over copper which is markedly cheaper.

Govt shld have carried out an OPEN BID for HSBB Infra..then there won't be any questions on CAPEX.This HSBB programme is so essential and will play a major role for NEM.But if saddled with HIGH COST and bad technology...the country will have almost irreversible damage.
Right now after the IGLOO launch..consumers are still stunned by the world class pricing by TM.And the lack of proper thinking is reflected in removal of CAP after public outtweet.

I cry for the brains and leadership that PM Najib has to rely on to "turnaround" M'sia.

dua sen,  26 March 2010 at 19:51  

Anon 16.25 you're spot on. We are suffering from imported inflation.

My prediction is if TM don't change the pricing plan, then they will have shortfall of their revenue projection because the take up rate will be low.

Unless their actual market segment is the affluent 5% of population.

P/S TM just bracktracked on usage quota. Bunch of amateurs!

Anonymous,  26 March 2010 at 22:17  

RM3000 ?!! WOW.... I would say the ave income of my kampong folks is somewhere between RM400 - RM700 per month ! And that with wang ehsan thrown in 2-3 times a year.

No joke man..

Anonymous,  26 March 2010 at 22:24  

Is this the NEM...the High Income Model that our esteemed PM is pushing for?

The basic principle is..if you can't afford HSBB there are other cheaper options..512K etc.Or you can go to Warnet..HSBB is designed for the High Income Guys..the elites.

If you can't afford the premium charges by TM you must not complain.Instead you should strive to improve yourself and be in a position to EARN more money and eventually be able to afford HSBB.

Thats the High Income crutches,no assistance..its your own struggle.If you fail you have no one to blame.Its not god given or PM given right for anyone to expect HSBB .Its only for the High Income Guys.Serve u right for being trapped in the middle income.

And if S'pore,USA,UK etc is charging cheaper rates for faster HSBB its cos of competition.They have to compete cos got no monopoly like TM.This "no monopoly model" is very2 bad cos it will defeat the High Income Economy.

If TM don't make 30% profits then their shares will go down.We must all together suffer and sacrifice to make sure TM's profits is increased.Then they can pay their bosses higher salaries,gives more dividends etc...this will promote the High Income New Economic Model.

We shld be proud to see their market cap increase and their CEO buying huge bungalows,cars and everything.We should not envy their success cos its their duty in order for all of us Malaysians to achieve the High Income Economy.If everyone is as poor as us,then how can HIM be achieved?

So..pls do not complain about HSBB rates.Go and get a 512k streamyx.

Anonymous,  26 March 2010 at 22:33  

Mr Din turtle...

No problem..we will just put the TM CEO in your kampung and the GDP/capita for ur kampung will usd 50000 per capita minimum.And if we put some of the TM suppliers in your state...I guess ur state have achieved 2020 target NOW.

Mr Din...congrats..u hv achieved the High Income Economic Model.Well Done.

Anonymous,  27 March 2010 at 00:48  


Is the picture posted on your article really "Walla"?

I thought Walla is a guy.


kuldeep 27 March 2010 at 09:08  

“It is all bundled together, there is (no a la carte),” TM group chief executive officer Datuk Zamzamzairani Mohd Isa said.
Zamzamzairani said: “It is not about subsidy, there is just too much suspicion. It is all about us moving to a lifestyle offering and this is all about triple play.”

Arrogant indeed.

Is this the spirit of NEM?

I am the boss man,I run the only HSBB service in town so you have to listen to me and agree to whatever I decide is good for you.

Dato Z..
Your IPTV channels is not compelling Dato Z..why don't you be more innovative,work a bit harder and get more channels.There are thousands of Channels available...even Spanish ones that can be over dubbed.But IPTV is content play..myb Dato Z is not the right man.Once ur IPTV offering is really attractive people will want it on their own accord.No need for sledgehammering your customers to submission.

Its not ethical to use your monopoly over HSBB to push through your profit agenda.You try forcing all Celcom subscribers to have a land can't right ? cos Maxis and Digi is there to protect consumers.

I don't believe Dato Z monopolistic mindset is reflective of the spirit of innovation and competitiveness that PM needs to realise his NEM.

PM needs better people running the BIGCOs...not number crunchers who are too distant from operational realities and relies on crutches to make things happen.

walla 27 March 2010 at 11:09  

Patience is a virtue.

walla 27 March 2010 at 11:15

Anonymous,  27 March 2010 at 11:28  

The greatest show on earth is going on now at the PWTC.
See how they are shooting shadows with blanks.
Please write something on this event.

Anonymous,  27 March 2010 at 11:48  

wakaka... idris... walla she-male lorr... dont be fool, he can she forgo...


Wenger J. Khairy 27 March 2010 at 13:36  

Anon 16:25 gives the answer. to become high income, raise the value of the ringgit. ok the question now is how to raise the value of the ringgit.

cut out this stupid corruption, reign in the government deficit.

innovation and easy credit is ok, but really the strong ringgit policy is the single policy that will change this.

that Dato' should be able to comment as he is quite expert on these matters.

Anonymous,  27 March 2010 at 13:55  


Allow me to quote this newspiece from Malaysiakini -

"Seterusnya, Ibrahim berkata Perkasa akan merentas kampung, desa serta bukit-bukau dan menjalar sehingga ke akar umbi.

Mereka juga berikrar akan mencari 'pengkhianat untuk dinyahkan' kerana mengkhianati perjuangan bangsa dan negara"

What do you think of this? The last sentence the mencari pengkhianat thing.

Think of this situation:

A lecturer in a local uni critically discusses Perkasa's ideas. In the end the lecturer concludes that Perkasa's ideas do not make economic sense.

Would the lecturer be branded as 'pengkhianat bangsa' if she is a Malay.

Would it be wise to kind of not criticise Perkasa for now...?

So Perkasa will go everywhere, even to Universities... and with the tone of voice I think it might wiser to shut up... at least for a while...

What is your opinion Datuk... ?

Yours truly

Anonymous,  27 March 2010 at 14:24  

This TM's HSBB is an amateur gizmo, run by short-sighted, air-con based paper-pushing nincompoops!

Dateline Jun 2000, TM International Gateway’s international bandwidth ranges from E1 (2Mbps) to STM1 (155Mbps) as follow;

Linked to USA
1 x 155 Mbps (Teleglobe),
1 x 45 Mbps (MCI),
1 x 45 Mbps (MCI Satellite),
1 x 45 Mbps (AT&T) ,
1 x 45 Mbps (ABONE),
2 x 2 Mbps + 1 x 512 kbps (MCI)

1 x 1984 kbps (KDD),1 x 1024 kbps (IDC) + 1 x 1024 kbps (Japan Telecom) links Japan
1 x 1984 kbps (Telstra, Australia),
2 x 1984 kbps (SingTel, Singapore),
1 x 512 kbps (IndoSat, Indonesia),
1 x 1984 kbps (Kornet, Korea),
1 x 1984 kbps (Dacom, Korea),
1 x 1984 kbps (CHTI, Taiwan),
1 x 512 kbps (CAT, Thailand),
1 x 1984 kbps (CWHKT, Hong Kong),
1 x 1984 kbps (Etisalat, UAE)
1 x 100 Mbps to Jaring (within M’sia)

EastGate has redundant one-hop connection to the internet cloud (ie USA source):

1 x 155Mbps (Teleglobe) and 1 x 45Mbps via Japan (Abone)

Of all these links only the 155 Mbps (STM1) are contributing significant bandwidth to satisfy the Joe M’sians’ internet quests, as most popular transit point for Internet traffic is in USA.

These international gateways are all housed within the 3 point-of-landings (Penang, Kuantan & Mersing), housing the Number of Network access points (NAPs) or Internet exchange points (IXPs). Current infras will NOT be any better dateline 2009 as the same people are still sitting there, talking bulls!

Properly play out - triple play services – a combination of Internet access, telephony, TV and video – are expected to offer considerable sales potential in the consumer segment. Triple Play has plenty of appeal for customers: they only need to pay for one access service and can place phone calls affordability over the Internet, surf the Web, watch TV, and access videos, games and music for their home entertainment platforms over the network. Triple Play is seen as a means of increasing the average revenue per user (ARPU), attracting new customers, and offsetting shrinking margins in former cash-cow segments, like call charges and DSL access, with revenue streams from value-added services.



Anonymous,  27 March 2010 at 14:25  

cont 2/2

To support Triple Play services, the broadband infrastructure needs to be expanded. TV and video streams require much higher bit rates than, say, Internet access and VoIP applications. Because an individual video stream today needs a transmission rate of between 1 Mbps and 4 Mbps (and this will increase with the advent of tomorrow’s new high-definition TV formats), vendors need infrastructures capable of supporting rates of between 5 Mbps and 25 Mbps. Furthermore, high Quality of Service is crucial to Triple Play services because no one, for example, would be willing to put up with a jerky motion on TV.

The TM’s HSBB is at best a miniature Intranet setup with localized Ethernet bandwidths (100Mbps, 1Gbps) within M’sia. The amount of money quoted for HSBB is HIGHLY inflated due to leakage, poor future foresight notwithstanding! There is ZILCH provision for international Internet requirement. The moment when you start to go international, you get back to the best-effort speed crap, due to the bottleneck syndrome.

Think of a Ferrari running on our kampong road – nice expensive car, whose suspension been ‘tortured’ by the uneven surface & throttling at below designed speed because the road is not tarred!

First catch - many of the existing sunset copper infras within M’sia’s towns are good enough for this triple play applications, ie DSL copper lines & cable TV lines for the First Mile (EFM) using proper interface equipment (TM’s VDSL2 for some HSBB connection). Unfortunately, this Cu infra is old tech, more so NOT much juice to squeeze. Optical Ethernet to home is high tech(?), thus can cost in more for leakage! Comprendi?

Second catch - all is good iff all these bandwidth-hunger video applications can be housed within M’sia. This creates a local boom for content providers with the right connections.

But - what if the users want to watch these video from outside M’sia? Youthtube? Music/movie vedeos? TV series uploaded to the internet? Ouch, ouch2x, with the current international gateway bandwidth there will be bottleneck at the Network access points. But that will be some time down the line, iff the package pricing is high enough to delay reaching the break-point of current international gateway capacities.

Maybe catch thrice – create an equivalent of IPP for international internet gateway providers – mamak-style.

So izznt it the clear case of POOR planning, coupled with potential money-renting motives? Running before knowing how to walk?

The numbers of STMs linking S’pore to the rest of the world is more than 3x that of M’sia. On top of that, S’pore is working hard as a regional IXP, linking Asia with Europe & USA, thus reducing internet traffic to demanded connecting points. S’pore can provide decent package cost for high speed internet connectivity now even without investing as much compared with TM’s HSBB.

I rest my case.


Anonymous,  28 March 2010 at 06:32  

forget about serious economic talk just for a while.

Kita belajar kaifiat mengundi untuk pengundi Ulu Selangor;

1) masuk Dewan mengundi terus ambil pensil

2) pasang niat; sahaja saya mengundi BN kerana ROSMAH

3) pangkah

4) masukkan kertas undi dalam kotak undi

5) cium gambar ROSMAH

Barulah sah menjadi penyokong BN

Wenger J. Khairy 28 March 2010 at 10:22  

Anon 6:32 he he he he kelakar jugak.

Anonymous,  29 March 2010 at 16:02  

Tok Sak
As a Pahang man, I wonder what you think of this:

Tun Razak's unfinished agenda:

Race, money and power. When all the flowery words of rhetoric are stripped away, these three remain.

In Parliament tomorrow, they will still remain, shadowy themes behind Najib Tun Razak's economic agenda as he seeks to shape the Malaysian dream as his father did four decades ago.

Behind the grand economic theories and management-speak that are likely to litter his speech, though, will be very simple questions. How will Malaysia make money in future? What must we do to make money? How will we spend it? And who will get the money?

He has two choices.

He can look back and seek political comfort in inward-looking old ways based on brute force.

Or he can accept that Malaysian society and the world outside have moved on, that the comfortable old ways are no longer acceptable, that the days of easy money are over, that a national economy cannot be built on a get-rich-quick culture.

Anonymous,  14 April 2010 at 04:33  

Low Income Apartments in Maryland helped me out until I got my business start. I live there for years and finally grabbed a foothole.

Now I live in a high income penthouse :)

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