Malaysian Broadband Fees Among The Highest In The World
High-speed broadband access in Malaysia are considerably more expensive compared to other countries, said the World Bank.
The high cost of fixed broadband internet services is partly driven by limited competition, said the bank’s latest edition of the Malaysia Economic Monitor.
“While Malaysia has made significant progress in terms of facilitating affordable access to mobile internet services, the cost of access to high-speed broadband services is relatively high compared to other countries,” it said.
Malaysia ranked 74 out of 167 countries in terms of price per Mbps for fixed broadband services, and 64 out of 118 for fiber broadband services.
This puts the country behind regional peers such as Vietnam and countries, and at a similar level of economic development such as Mexico and Turkey.
The limited competition in the market, with Telekom Malaysia Bhd (TM) holding a significantly larger market share than the leading firms in other countries, has contributed to the higher fixed broadband prices in three ways, said the World Bank.
“First, while TM is the major incumbent of cable landing stations in Malaysia, rather than allowing for co-location of its stations with other operators, it instead provides point-of-access connection outside the stations and charges a higher fee, which translates to a higher cost of broadband rollout.
“Second, given TM’s extensive broadband networks, it has been awarded exclusive memorandums of understanding with the government to deploy the high-speed broadband (HSBB) and sub-urban broadband (SUBB) plans, without contest.
“This eventually eliminates the possibility of attracting private investment by the network rollout operations.
“Third, Malaysia also pays a higher IP (internet protocol) transit prices than is the case in other countries, and this is subsequently passed on to retail consumers of broadband services,” it said.
The statement by the World Bank was prepared prior to the new broadband plans launched by TM under its Uni brand in support of the national broadband agenda.
TM said it would offer an affordable entry level UniFi @ 30Mbps at below RM100 for the lower income group. This is more than 40% below the existing 30Mbps package.
There would also be a re-launch of “unlimited” UniFi mobile postpaid plan.
Despite its high cost, the World Bank said the quality of Malaysia’s broadband services is still relatively poor.
“In February 2018, Malaysia’s average download speed was ranked 63rd out of 130 countries, with an average download speed of 22.56 Mbps. This is significantly lower than regional comparators such as Singapore, which ranked in top place (161.53 Mbps) and Republic of Korea, which came in third (129.64 Mbps).
The bank said, countries at similar levels of economic development as Malaysia also have significantly faster download speeds. For example, Hungary has an average download speed of 90.94 Mbps, while Thailand has an average speed of 41.35 Mbps.
Malaysia should look beyond doubling its internet speed and aspire to achieve gigabit-level of connectivity, similar to advanced economies, said the World Bank.
The bank also said that Malaysia’s plan for HSBB and SUBB are unlikely to make the country significantly more competitive in the world because many advanced economies are already planning for gigabit networks.
“Republic of Korea, for example, has already implemented the Giga-Internet Pilot project, with plans to commercialise 10 Gbps broadband services by 2020, while Sweden aims to provide broadband access at a minimum speed of one Gbps by 2025,” it said.