TM to save up to MYR1 billion on HSBB rollout?

2 Nov 2011

The High Speed Broadband (HSBB) project currently being undertaken by Malaysia’s fixed line incumbent Telekom Malaysia™ may cost the telco at least MYR1 billion (USD321.8 million) less than originally expected, the Star Online reports. The local news source cites unnamed sources as claiming that TM’s strict procurement policy has allowed it to reduce costs, with one source reportedly noting: ‘It is a form of savings as TM will not need to invest as much as it had earlier anticipated and that also means it does not have to borrow that much as well.’ While TM has declined to comment on the specifics of any potential savings related to the fibre network rollout, it was quoted as saying that the public-private partnership agreement provided for ‘cost-savings sharing with the Government and there was mutual incentive (by the Government and TM) to achieve efficiencies and this seems to have worked.’

As noted in TeleGeography’s GlobalComms Database, the contract for the fibre infrastructure deployment was officially awarded to TM in August 2008, and signed the following month, at which date, despite previous indications that the government would invest MYR5.4 billion in the project it was revealed that the state had lowered its contribution. Under the final terms of the agreement the Malaysian government will invest MYR2.4 billion over ten years in the project, with TM covering the remaining costs; the total cost of the project is expected to reach MYR11.31 billion. Following trials in December 2009, on 24 March 2010 TM officially inaugurated the HSBB network, and with services offered under the ‘UniFi’ banner, the initial product range comprised triple-play bundles which included fixed line voice, high speed internet at downlink rates of up to 20Mbps, and IPTV, and by mid-2011 more than 100,000 subscribers had signed up for UniFi services.

Malaysia, Telekom Malaysia