Tete-A-Tech

The Last Word on Malaysian broadband... uncut + final cut

Nov 4, 2009 13:10

My very first blog for CNET Asia was on February 5, 2007. And I wrote about broadband. I wrote about how lousy the broadband was. How expensive it was for the slow speeds. The only thing that it didn't have was expletives. Which circa 2009 nowadays is usually how I talk about the broadband in this country. Expletives, uttered in a resigned tone. For the last two years, I have written at least six or seven blogs about the hopeless state of broadband in this country. They're fabulous for my hits (which makes the CNET bosses happy), but I felt a constant sense of futility (and churning frustration) with each blog I wrote deriding the broadband quality in this country, deploring the monopolistic landscape of the industry, and railing against the incumbent provider, Streamyx.



The source of my frustration was simply the lack of effect it had. My PR friends talk about how they have to nowadays make an effort to court every bleeding blogger out there, no matter how insignificant they are. They talk about how the bloggers have this absurd potential power that cannot be ignored. Yeah, well try writing about broadband and Telekom Malaysia. Then no matter how big your soapbox is and how loud you shout in cyberspace, and no matter how many bloggers, influential and otherwise, heap steaming hot piles of poopy scorn and vituperative on Telekom Malaysia, it makes no difference. THEY DO NOT CARE.



How do I know this? Because no matter how insulting and borderline personal I got with my blog entries about broadband (and I have been called Voldemort by people who know me), I never ever managed to rouse the sleeping giant that is Telekom Malaysia. I wrote about how the HSBB (High Speed Broadband) project was a farce because it was being given to an ineffectual incumbent who had a lousy track record. I wrote about how the marketing of Broadband 4.0 was like something that had come out of a high school marketing class exercise. In all the last three years of writing venom about TM and Streamyx, and practically almost insulting their management and questioning their competence repeatedly, I HAVE NEVER EVER RECEIVED A SINGLE PHONE CALL FROM THE MANAGEMENT OF TM NET/TM.



Not the PR company. Not even the internal PR people.

Now, I'm not saying that I'm a blogger of tremendous prominence, or that I'm somehow this mover-shaker. But, in this age when managing blogs and their potential power of pervasive persuasion and thought influence is something PR companies are doing on a "err on the side of caution" basis, you would think...

...they would call.

Or maybe screw up my broadband. Or maybe make it better.

Or invite me to tea in Wonderland.



I write one little article about a poor experience with HP on recycling printer cartridges and HP's ringing me up for coffee and "engaging".



So this year, I resolved to NEVER write about broadband again. If the reading public wasn't tired of hearing me rant about it ad nauseum, I was tired of writing about the subject because it was becoming more and more depressing with each blog I wrote. It was becoming increasingly obvious that there was no political will, no corporate will, no corporate vision, no fricking ANY KIND OF WILL in play here whenever the subject of broadband was considered.

And here I am, sucked into it again.

The Australian Business Council outright declares this country to have a poor-quality Internet infrastructure and states that this is the reason companies are staying away from investing or setting up operations here in Malaysia. The Government acknowledges it. It goes--okay, you're right. Hands up. But is there any wholesale pillorying, burning of effigies and heads rolling going on to the incumbent? Nope. Not even the Prime Minister comes down hard on the incumbent, which is the sole party responsible for the rotten state of broadband in this country. No fines are levied on TM for being slow, inept, overcautious, lacking in vision, and too stupid to figure out how to actually make money from a broadband business except in the most brainless way possible. Instead, the WiMAX players, which in reality are actually trying to fill a gap that exists only because the incumbent is so ineffectual, get slapped for not increasing the penetration rates and failing to roll out their business fast enough.



Any panic on the side of the Government? Does the Ministry of Finance, Trade and the Prime Minister's Department come out with a statement to say that they will be taking action? Nope. Instead, the Ministry with the LEAST inclination to exercise its power and influence steps up and says "buck up, PLEASE".



Akamai releases a survey showing that Malaysia's Internet speeds lag behind China, India, and the Philippines. So, the excuse that big countries have trouble wiring up due to geographical locations is completely combusted by this survey, which includes two geographically diverse and huge countries, and one archipelago! Do we hear a response, a panic among the Government? Nope. Naturally, TM and Streamyx say nothing. After all, they're happy ripping off consumers to the tune of 60 bucks a month for a sub-par Internet service that calls itself broadband, but is a laughable excuse for broadband.



In what must be the singularly least visionary move of all, the Government then decides it will give a 500 ringgit tax break for broadband access to Malaysians as a move to encourage broadband use. Here's news for you, Mr PM. Malaysians who can afford broadband don't just want to pay less for it.

We want to pay less, and get more speed.

Instead of a tax break (which obviously is designed to create the illusion of a "goodie" from the Government), what should have been done was MANDATING the cost of broadband, as was done by Tun Mahathir years ago. Declare that 1MB of broadband shall henceforth be available for RM9.99, and no one is allowed to charge more without a reason. Then you'll see your broadband penetration rates SKYROCKET.

Then political parties get involved.



The MCA, which already has enough problems of its own, decides that it doesn't like P1's commercial for encouraging people to go wireless for Internet access. See also here and, most hilarious of all, a Letter of the Day in The Star actually defending the advertisement.



Clearly, our expectations of our politicians are so low that we resort to discussing even their vacuously vapid comments in Letters of the Day. Oh, and Senator Chew Mei Fun, thanks for telling everyone out there that single women can't take a joke, and can't stand to hear anything on the radio or TV that has any kind of remote phallic reference.And thanks for harping on the fact that the ad is so racy and saucy, rather than the fact that the broadband connection in this country is pathetic, and businesses are losing out because it's so terrible. (This is so gonna get you MY VOTE in the next election). And while you're at it, thanks for telling the whole world that your party is singularly irrelevant because you can't see the wood for the trees.

If you want to get on the case of P1, point out that their service DOES NOT WORK when it rains. Then again, in Malaysia, you can make money only from a service that DOES NOT WORK when it rains, when you are Astro. Which, come to think of it, is kind of a monopolistic thing, too.



Which brings me to my final point of today's all-over-the-place rant about broadband. This response appeared in The StarBiz section on October 22, 2009, as a letter to the editor. It is written by the group chief executive of Telekom Malaysia:

TELEKOM Malaysia Bhd (TM) would like to clarify the comments made in the article Challenge heats up for WiMAX published on Oct 15 in StarBiz. In the article, it was mentioned that TM has the virtual monopoly over copper-based Internet services and TM is able to keep reducing its prices as the bulk of its investments are sunken costs. Firstly, on the issue of TM being a monopoly--correction, TM is not a monopoly in the broadband sector. We have on many occasions communicated and explained this, but it is disappointing to note that such perception still exists. As you know, the other industry players are also licensed to deploy wired broadband, but yet their decision not to roll out was driven by commercial consideration. The wired network requires a big capital investment. This by default has left TM being the only one prepared to roll out a wired network. As such, TM cannot be labelled as having a monopoly.

Second, on the issue of TM being able to keep reducing its price due to sunken costs, we would like to highlight that TM continuously invests in upgrading and maintaining its infrastructure and network to provide better quality of service to fulfil the growing needs of its customers. In 2007 alone, TM spent RM1.3 bil capex for its fixed services, and in 2008, RM1.448 bil for its business as usual capex. For the first half of this year, the capex spent thus far stood at RM520 mil. Therefore, the issue of reducing price due to sunken cost is not true. Datuk Zamzamzairani Mohd IsaGroup chief executive officer

This is the statement of the Group CEO: "... correction, TM is not a monopoly in the broadband sector. We have on many occasions communicated and explained this but it is disappointing to note that such perception still exists. As you know, the other industry players are also licensed to deploy wired broadband, but yet their decision not to roll out was driven by commercial consideration." So, the Group CEO's argument is that TM is not a monopoly because there are other players/competition. Well, okay, let's examine this statement. First, does Telekom have competitors? Sure, it does. Its competitors would arguably be things like Astro and books. Things which people may choose to do instead of surfing the Internet. Oh, and there are those kuchi other 20 broadband providers, whom most of us have no idea who they are anyway.



But does that mean there is competition? A true competition occurs only when there are competitors that are in a position to compete. If I run the 100m against Usain Bolt, technically, it's a competition. There's another person. But given that I have no hope in hell of winning or even getting close to his time unless he loses a leg or both his big toes, am I really COMPETITION? Competitors do not mean that there is competition.



Then let's look at the definition of "monopoly". Here's what Wiki says:

"In economics, a monopoly (from Greek monos/µ???? (alone or single) + polein/p??e?? (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. Monopolies are thus characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.The verb "monopolize" refers to the process by which a firm gains persistently greater market share than what is expected under perfect competition. A monopoly must be distinguished from monopsony, in which there is only one buyer of a product or service; a monopoly may also have monopsony control of a sector of a market. Likewise, a monopoly should be distinguished from a cartel (a form of oligopoly), in which several providers act together to coordinate services, prices or sale of goods. Monopolies can form naturally or through vertical or horizontal mergers. A monopoly is said to be coercive when the monopoly firm actively prohibits competitors from entering the field. (Emphasis is mine)"

The existence of a monopoly is not economically defined solely by the presence of a single player. It is also defined by the lack of competition. If the Group CEO of Telekoms wonders why it is that the perception that TM is a monopoly still exists, it is because the Malaysian public is not stupid when it comes to economics, and we understand what a monopoly means and is.

WE ARE NOT IDIOTS.



It is however not surprising that the Group CEO of Telekoms does not obviously understand what a monopoly is. It's the oldest trick in the book, along with history being written by the victorious. If you control the definition, you can always make sure you don't fall in it. Do we really expect TM to come out and acknowledge that it's a bully boy who whips the competition with dirty tricks like withholding access or charging a fortune for access to its infrastructure, has the regulator's cajones in a WuXi Finger Hold and doesn't care what consumers think because if they don't like it, they can go ahead and try a service that doesn't work when it rains?

Just like no politician will admit to having underworld connections, no Malaysian GLC will confess that the only reason they are still in business and earning undeserved profits is because they have a Godfather behind them called the Malaysian Government. And just like banks that were "too big to fail", the Malaysian Government cannot bring itself to bankrupt its own child (the GLCs) in the name of making them better, making them more efficient and benefitting the rakyat.



This is ironic because the most significant reason South Korea and Japan are able to have the kind of breathless broadband penetration and astounding high speeds they have is because the Government CHOSE to force the incumbent to make broadband cheap and incur losses in order to roll out the service FAST.

Which ugly person admits they are ugly? Which dictator admits they are a dictator? No one. So, who with any sort of brains would crow that they are a MONOPOLY AND BE PROUD OF IT?

The Group CEO further goes on to state: "Second, on the issue of TM being able to keep reducing its price due to sunken costs, we would like to highlight that TM continuously invests in upgrading and maintaining its infrastructure and network to provide better quality of service to fulfil the growing needs of its customers." By this, I assume he is explaining/justifying why my broadband speed has stayed the same for the last three years, the cost of my broadband has stayed the same, and the quality of my broadband is SUCKIER than ever on bad days.

And the "continuing investment in upgrading and maintaining its infrastructure" is the reason why despite the need for 10MB speeds by certain businesses to actually function effectively, and the increased amount of content available in rich media that consumers want to access (also known as "growing need of customers"), we are still effectively stuck at 1MB, with the distant possible prospects, depending on geographical lottery, of 4MB in the future, at what price, no one knows.


If you've been reading all this so far, well, this is the penultimate paragraph, and where I get to my final point. Yes, there is one.

It's called a White Flag.

I officially give up.

As long as I'm writing this blog, I will not write about broadband ever again. I'm giving up the pleasure of throwing brickbats at TM. I surrender to the incompetence that exists.

I surrender to the cold hard reality that NOTHING WILL CHANGE. I surrender to the facts: TM has been, is and will always be a monopoly. The Government has no will to fix the problem. All the other players are just filling in a gap as best they can, under the worst possible conditions, and this will not change in the foreseeable future. I surrender to the inevitability of expensive slowband, for the next five years, and the foreseeable future.

Life is too short. And there are alternatives out there to sitting around and bitching about something that isn't going to change.

So, Telekom Malaysia, congratulations.

YOU WIN. I'm done with this.

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