Long moribund, Malaysia’s fixed-line sector has been jumpstarted by the introduction of a nationwide high-speed broadband (HSBB) network, which has boosted Telekom Malaysia’s (TM) bottom line and promoted greater competition. TM’s flagship fibre-to-the-home (FTTH) project could offer millions of users broadband access while opening the door to internet protocol television (IPTV) and other converged services.

Until 2010 the only fixed-line broadband service widely available in Malaysia was TM’s Streamyx ADSL service, which was launched in 2001. The service enjoyed reasonably steady growth throughout the decade, hitting 1m users in 2008; it stood at 1.68m users by the end of 2011. However, service interruptions and speeds of less than 1 Mbps for the most expensive plan failed to satisfy users, many of whom switched at the first opportunity to the WiMAX networks, P1 and Yes 4G, or to wireless broadband plans offered by GSM providers.

NATIONAL PLAN: Meanwhile, the government’s national broadband plan called for a two-pronged approach to nationwide broadband. This comprised a basic service of providing broadband across the country and a HSBB network that targeted dense, “high economic impact” areas. With the delivery model specified as fibre-to-the-home, which requires intensive investments by the company, the government designated incumbent TM as the sole last-mile provider. The agreement announced in September 2008 specified that TM would roll out service to 1.3m households by end-2012. TM will invest RM8.9bn ($2.9bn), while the government is kicking in RM2.4bn ($774m).

Crucially, as part of the public-private bargain, TM is required to offer open access to its last-mile connections with “reasonable terms” for any competitors. There has been debate over how much discretion TM will have in deciding these terms, with CEO Zam Isa declaring that TM would provide access only to operators who offer value. Still, the entrance of players including Maxis, ASTRO, P1, and TIME shows that competitors view the sector as being worthy of investment.

TM launched its Unifi service – a triple-play offering combining HSBB, IPTV, and telephony – in March 2010.

The company announced on August 31, 2012 that it had reached 420,000 subscriptions from a total of 1.26m premises connected, which helped drive revenue up by 9.7%, nearly double what was anticipated.

The 33% take-up rate outpaced several national broadband networks in the region. Singapore’s Next Generation network has connected nearly 1m houses, but only has 130,000 subscribers, according to a report from Informa Telecoms & Media (ITM).

RACKING UP THE COMPETITION: Given the strong showing by TM, competitors are seeking to distinguish their own fibre offerings in order to secure a share of the burgeoning market. In April 2011, for example, the country’s satellite pay-TV leader Astro teamed up with Time.com (TIME) to offer triple-play services – IPTV, broadband and telephony. The B.yond IPTV product especially targets condo dwellers who cannot access Astro’s normal satellite service.

Meanwhile, traditional mobile players Maxis, Celcom, and P1 are angling for a slice of the pie. Maxis Home FTTH launched in March 2011, with the GSM giant also promoting its mobile service by offering an RM50 ($16.13)/month discount to existing subscribers.

Maxis has also entered the triple-play fray, exploring and lining up content deals, and preparing to launch digital lifestyle services to every screen. Finally, FTTH packages from P1 and Celcom both arrived in 2012, offering comparable pricing, although neither provider is expected to deliver IPTV services.

A May 2012 report from CIMB Bank revealed that TM’s Unifi represented 95% of the market in 2011 – a share the company will most likely maintain, at least for now, thanks to recent growth. While the FTTH and IPTV offerings from Astro, Maxis or P1 will give customers a converged and ubiquitous broadband experience, they are unlikely to take much market share away from TM. Indeed, the introduction of FTTH could make TM a significant player in the internet segment once again.