The wireless giant in Telekom Malaysia awakens: Page 2 of 2

Superior coverage
 
The wireless giant in Telekom Malaysia awakens: Page 2 of 2Having declared itself back in the game, TM is seemingly happy to take its time ramping up to becoming a full-blown wireless operator, as illustrated by it rolling out TMgo in what was essentially a small-scale launch.
 
A cursory look at the TMgo packages also suggests that they aren’t the most competitive in the market. Even if I were living in Kedah or Melaka, I would be able find a package at least 50% to 100% cheaper than what TM is offering, assuming the same specifications in data volume and hardware.
 
And don’t even bring in the issue of coverage, or rather the lack thereof.
 
No doubt over time, TM will roll out TMgo into the more developed parts of the country, such as Penang, the Klang Valley and perhaps Johor Baru. When that happens, the likelihood is that TM would make its services available at cheaper prices in a bid to compete.
 
TM does have one thing going for it though. Running its 4G service on an 850MHz spectrum gives it significant coverage advantage over the other LTE players, which are only able to offer their service at either 1,800MHz or 2,600MHz.
 
In general, an operator using the latter two frequencies may have to build three to four times as many cell towers to cover the equivalent geographical area that would otherwise be accomplished with one 850MHz cell site.
 
Put simply, TM would need to invest less because it would not need to build that many cell towers compared with what its competitors might have to do, given the same coverage area.
 
Neil Shah, research director at Counterpoint Research, noted that the 850MHz LTE (Band 5) is being used by SK Telecom and LG U+ in South Korea, and US Cellular in the United States.
 
Speaking to DNA via email, Shah said other operators are beginning to re-farm their existing 2G/ 3G networks operating in Band 5 in North and Latin America, India and other parts of Asia for LTE networks.
 
“The core strategy for employing 850MHz is to enable wider LTE coverage and this will be critical for LTE coverage beyond urban and suburban areas,” he said.

“More than 94% of the LTE devices by 2015 will support Band 5 LTE, so there shouldn’t be any issues from the device support point of view either," he added.
 
Ramping up fully

The wireless giant in Telekom Malaysia awakens: Page 2 of 2

So when can one expect TM to go all-out?

“I’d expect the trigger to happen a short while after the TM-P1 deal goes through,” said the industry executive. “When that happens, the 850MHz LTE portion could easily be used to provide coverage [due to its superior propagation properties] whilst P1’s 2,600MHz could be used to provide capacity at hotspots in urban centres.”
 
This strategy has been confirmed by another industry observer familiar with the matter.
 
Noting that TM has already commissioned a certain Chinese vendor and its subcontractors to roll out 200 850MHz LTE sites in the whole of Malaysia [including the ones in Kedah and Melaka] by year-end, the executive said TM is likely planning on using its existing CDMA cell sites to host these new 850MHz LTE sites.
 
“When the deal with P1 is completed and with the 850MHz LTE cell sites in place for coverage, TM can then roll out its 2,600MHz [courtesy of the takeover of P1] LTE sites where P1 has their existing WiMax [2,300MHz] cell sites for capacity purposes.
 
“Additionally, the cost of retaining existing P1 customers and converting them over to TM customers is cheaper than having to acquire subscribers from scratch,” the second executive explained. “With other advantages, such as the easily available fibre backhaul for P1 at a favourable lease price, TM is expected to come out a winner.”
 
That said, it’s my belief that TM still has its work cut out for it, as rolling out a wireless network isn’t as easy as it sounds. But with its financial muscle and its resolve to once again be a wireless giant, it would do well for the competition to be concerned.
 
The wireless giant in Telekom Malaysia awakens: Page 2 of 2Counterpoint Research's Shah (pic) however said he believes the other wireless players such as Celcom, Maxis and DiGi won’t be too worried about TM-P1 as they are quite ahead on the LTE front.
 
“From a spectrum point of view, TM might be on slightly more advantageous [ground] in terms of edging out on rural coverage, but Celcom, Maxis and  DiGi should be able to promise higher throughput and capacity on the network at the same time,” he said.
 
Shah also believes that better LTE data throughput should be one of the key differentiators for the leading operators, and that they should introduce different LTE device types in their portfolios and cleverly bundle them with varied LTE plans as an important strategic play.
 
Asked if he believed further industry consolidation would happen, Shah said the industry could well see more mergers [of LTE players] coming in Malaysia.
 
“It will be interesting to see how the long tail of mobile virtual network operators (MVNOs) and smaller operators compete with incumbents in LTE era.
 
“Ideally, operators would not like to indulge in a price war before they recoup a significant amount of their huge investments, though you never know as it takes just one player to disrupt the market and start a price war,” he added.
 
Related Stories:
 
TM throws its hat into the LTE ring with TMgo

So, what does LTE bring you, the user?

Telco Deep Dive: LTE’s elusive business model

A brief history of LTE

It’s spectrum rebalancing: MCMC on 2.6Ghz allocation

 
For more technology news and the latest updates, follow us on TwitterLinkedIn or Like us on Facebook

 
Keyword(s) :
 
Author Name :
 
Subscribe to SNAP
Download Digerati50 2020-2021 PDF

Digerati50 2020-2021

Get and download a digital copy of Digerati50 2020-2021