Fibre Broadband Providing Growth Momentum For IPTV

Telekom Malaysia (TM) said in March 2013 that the company has fulfilled its obligations under Malaysia's High Speed Broadband (HSBB) public-private partnership by rolling out the fibre broadband network to 1.3mn premises by end-2012. Malaysia's national fibre broadband project has so far seen impressive take-up , especially considering other countries in Asia Pacific are struggling to convince customers to make the switch. The next generation platform is also providing the growth foundation for IPTV services .

Impressive Adoption
UniFi Operational Results

TM announced in late February 2013 that the number of premises passed by its UniFi service, which is delivered over the HSBB network, reached 1.3 8 mn , up from 1.16mn at end-December 2011 and 760,000 at end-December 2010. The customer sign-up rate has steadily increased, reaching about 35% at end-December 2012 with 482,513 subscribers. By March 2013, TM said that the number of subscribers had grown to more than 517,000.

By comparison, other countries in the region have seen significantly lower customer response.

  • Singapore's Next Gen National Broadband Network was deployed to 95% of all residential and non-residential premises at end-June 2012, but a survey by OpenNet showed that about 20% of premises have made the switch to fibre technology. According to the Infocomm Development Authority, there were 284,800 fibre broadband subscribers at end-2012.

  • It is a similar scenario in Australia where the incumbent government is constantly criticised by the opposition party ( see our online service, January 14 2013, 'NBN Exceeds Target, Criticised Nonetheless' ). At end-2012, Australia's National Broadband Network passed 339,700 premises with 34,500 activated, representing a take-up rate of 10.2%. However, majority of the broadband services is delivered via satellite.

  • New Zealand's Ultra-Fast Broadband project had an adoption rate of 2.8% in early 2013 with 3,806 users out of 134,912 connecting to the fibre service.

While we are aware that the transition to fibre broadband takes time - developed countries face greater hindrance partially due to the current availability of quality non-fibre broadband services - Malaysia's strong progress has been impressive. The high take-up of fibre broadband in Malaysia has also translated to revenue growth for TM. TM reported operating revenue of MYR10bn in 2012, up from MYR9.2bn in 2011. The fixed-line incumbent also noted that its IPTV business, which is part of the UniFi triple-play package, generated MYR119mn in 2012, up by MYR79mn.

With the continued deployment and adoption of the HSBB, we expect the nascent Malaysian IPTV sector to gain further traction, particularly with the presence of strong competition. According to the Malaysian Communications and Multimedia Commission , there were 519,700 IPTV subscribers in the country at end-2012, up by 120.7% from 232,600 in end-2011. By comparison, the traditional pay-TV market grew by 11.8% over the same period to 3.4mn subscribers. IPTV services could also easily leverage on the growing mobile device user base to capture more audience , TM has announced that it is looking to widen its IPTV service distribution channel.

This article is tagged to:
Sector: Telecommunications
Geography: Malaysia, Australia, New Zealand, Singapore

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