Business

Thursday October 22, 2009

TM not a broadband monopoly


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 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 RM1.3bil capex for its fixed services and in 2008, RM1.448bil for its business as usual capex. For the first half of this year, the capex spent thus far stood at RM520mil. Therefore, the issue of reducing price due to sunken cost is not true.

Datuk Zamzamzairani Mohd Isa

Group chief executive officer

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