As Michael Lai leaves, what next for P1?: Page 2 of 2
By Edwin Yapp June 7, 2013
What next for P1?
Despite P1 claiming to have reached new heights with its total subscriber base surpassing 517,000 subscribers last year and a reported positive EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of RM7.1 million for the fourth quarter of 2012, the company still faces significant challenges to grow its top- and bottom-line figures, as well as subscriber numbers.
In March, the company shed close to 20% of its workforce or about 100 people, something the company claimed would help streamline its business operations and increase profitability.
On the technology front, P1 had been given the go-ahead to built a TD-LTE (Time Division Long Term Evolution) network on 2,600MHz, and it has reiterated its plans to do so.
But industry executives have warned that doing so would not be an easy task, although Puan himself declared that he’s the best person for taking his own company to the next level in an interview with The Edge.
Industry pundits Digital News Asia (DNA) spoke to noted three challenges for P1, going forward.
Firstly, WiMax players, including its rival YTL Communications, have for a long time trailed cellular broadband players in an already overly crowded mobile broadband landscape in Malaysia.
This makes it hard for them to grow their market share, especially when all they’re doing is providing access – which some refer to as being merely a ‘dump pipe’ player – to the network with no value-added service on top of their access services.
Secondly, whilst P1 has plans to upgrade to TD-LTE, doing so would not be as straightforward as merely building new base stations, as there are a host of challenges facing operators ranging from the design of the network, rollout plans, integration with existing customer provision and activation systems, and customer and technical complaints to tackle, to name a few.
As it is, P1 is already struggling with some of these issues and adding another technology to its network may end up exacerbating the problem.
Finally, although P1 has done relatively well since its inception to provide fixed-mobile broadband service to customers, the next wave of growth is going to be focused less on fixed-mobile broadband but more on smartphone and tablet growth.
After all, most analysts have predicted a huge growth in smartphones and tablets and this is where the potential for growth lies as mobile dongles aren't what's going to make Malaysia an LTE-enabled nation.
This further presents problems for P1 as the device ecosystem for WiMax and even TD-LTE is weak, and would continue to be so for at least the next year or two, especially given that TD-LTE in Malaysia is based on the less utilised 2,600MHz band.
One industry executive said, “Many of today’s smartphones and tablets certainly do not support WiMax and those that do (iPads, iPhones) support only FD-LTE (Frequency Division LTE) at 1,800MHz. Even if TD-LTE devices arrive, would they support the 2,600MHz band widely enough for P1 to have the scale to make money?”
(For an in depth look at the differences of TD and FD LTE, click here).
Other questions asked include: Will Puan (pic) be able to raise the bar for P1 and elevate it to new heights? Will other senior executives follow Lai’s move to leave the company? Or will P1 even find a suitor to buy it over, perhaps other interested WiMax or cellular players?
These are but some questions that the company must answer, sooner rather than later.