Business

Thursday May 27, 2010

Asiaspace: High TM charges prompt network re-engineering

By B.K. SIDHU
bksidhu@thestar.com.my


PETALING JAYA: Asiaspace Sdn Bhd says Telekom Malaysia Bhd’s (TM) backhaul charges are expensive and as such it is forced to build its own microwave facilities. It expects the shift will cause some instability in its services.

“We are replacing all our metro-E link or backhaul with microwave link, which is much more cheaper and serves the same purpose, so why should we pay more to TM?” Asiaspace chairman Datuk Abdul Ghani Abdullah said.

“The re-engineering of our network will cause service interruptions for our users but we have informed them,’’ he said.

The company will not charge users of its Amax service from May 1 till the completion of the network re-engineering. It is spending RM20mil for the backhaul facilities and the vendor is Huawei. It has so far spent RM90mil for its network build-up.

Ghani had in March written to the Information, Communications and Culture Minister to complain about TM’s backhaul rates.

In the letter, he said: “It was inevitable for new players to use TM’s facilities. Here is where the problem is. If TM wants to kill the new players for fear that the newcomers are a threat to TM’s business, TM will impose exorbitant charges. TM is also a wholesaler and retailer.’’

In April, he wrote to the Government, urging it to be forceful in ensuring that the incumbent reduced the cost of backhaul charges to facilitate growth of broadband in the country.

And on May 20, the industry regulator reminded players that access needs to be provided on reasonable terms and they should work towards concluding access agreements and not delay them any further.

Almost all operators in the country have some form of access agreement with the incumbent player, given its vast network.

Asiaspace is not a big player compared with many others but it is one of four players with the prized WiMAX spectrum. It only has 2,000 users and coverage is to limited areas in the Klang Valley. However, Ghani said, 15,000 users had registered with the company pending the coverage expansion to indoor areas.

But why is Asiaspace complaining now when it had earlier agreed to partner TM for backhaul facilities?

“We really did not have a choice when we were negotiating as they are an incumbent and no other player has that kind of network.

“It is something about the way TM’s wholesale department sells the backhaul facilities. Even if we are using half the facilities, we still have to pay full,’’ Ghani said.

TM, in response to queries from StarBiz, said it had “entered into a commercial arrangement with Asiaspace to provide backhaul services (wholesale ethernet). As in all commercial arrangements with other service providers, the price was negotiated and agreed by both parties.

“The backhaul capacity to Asiaspace was provisioned based on their retail service take-up forecast and were arranged on modular basis.

“As the backhaul service provider, TM fulfilled its obligation as set out in the agreement. Unfortunately, Asiaspace failed to honour its obligation on payment to TM. It is unfair to accuse TM of charging high rates when the price has been agreed upon by Asiaspace through proper negotiation process.’’

Asked why Asiaspace had not paid TM, Ghani said: “We were so frustrated with the charges but we will be paying TM for what we have agreed upon.’’

He also denied the company was in trouble.

“We are just re-engineering our network so that our customers will be assured of better quality of services. It is also not true that we have only three people in our office; in fact we have 42 people.

“Yes, we had to let go of some staff with our network configuration programme as we are slowing down but that does not mean we are out of business,’’ Ghani said.


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