Business

Thursday April 2, 2009

RM700mil capex Celcom to upgrade infrastructure

By B.K. SIDHU


KUALA LUMPUR: Celcom (M) Bhd, a wholly-owned unit of Axiata Group Bhd (formerly TM International), will spend RM700mil in capital expenditure this year of which RM300mil will be for upgrading its wireless broadband infrastructure.

Celcom chief executive officer Datuk Seri Shazalli Ramly said there was a dire need to expand the infrastructure as demand was fast outstripping supply. To him, no one expected the growth to be so robust and it was partly due to the current economic climate and sites such as Friendster and Facebook that were attracting people to connect to the worldwide web.

“More people are staying at home and they turn to the Internet as their gateway to the outside world. The slowdown is seen as the growth catalyst for the wireless broadband sector,” he told StarBiz.

“The change in behaviour is driving the growth and, to us, it is about how fast we can bring in more capacity and connectivity to the user. Having said that we are cautious of (not over-selling) the capacity that we have.’’

Shazalli said demand was coming not just from the Klang Valley but also other states, including Terengganu, Perak, Kelantan and even Sarawak, besides the rural areas.

“The demand is beyond our expectations and the question we need to ask is how big is our pipe to cater to this demand that has a multiplier effect, so that is why we have to invest more,’’ he said.

Celcom is not alone in seeing a huge take-up for its wireless broadband services. Green Packet saw 2,000 new subscribers in the first month when it launched its RM48 per month package and DiGi.Com Bhd had an encouraging response to its newly-launched wireless 3G broadband service.

Celcom also prides itself to be the leader of the pack and Shazalli claimed it was because the company had the most wireless broadband subscribers in the country and provided the widest coverage in the country’s populated areas.

It had 228,000 wireless broadband subscribers as at end-2008, and its base had grown dramatically from a mere 66,000 at end-2007. Celcom launched its wireless broadband offering in 2007.

The total number of wireless subscribers in the country as per data obtained from the Malaysian Communications & Multimedia Commission website was 386,000 as at end-2008. Three months earlier it was 215,000.

Just for March, Celcom had a record of over 30,000 new subscribers, vice-president/head of business innovation division Kevin Henry said.

“We need to invest to cater to the future growth and our upgrading works will be completed by June/July where our core network will have the capacity to cater up to 10 Gigabytes of packet data,’’ Shazalli said.

But no wireless broadband network is without complaints from consumers who are facing inconsistency in speed, capacity and connectivity issues.

“There are pockets of complaints and we have done our investigations as to why consumers are complaining. What we have found is that 2% of our consumers are hogging 80% of our network capacity and that is why the others are having to contend with capacity and speed issues,” Shazalli said.

“These high users are either downloading movies or music all the time and there are others who use the connection for their businesses. Some even have multiple users. Rightly, they should be on the business package.’’

Other celcos were also facing the same problem, he said, adding that Celcom would not stop users from downloading but some other operators would deny this 2% users access, he said.

“We will just send them an SMS if they exceed their capacity limit and if they continue we will just throttle their speed. In so doing we are ensuring there is fair usage policy for everyone,’’ Shazalli said.

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