TM, TNB to undertake national broadband agenda

By NG MIN SHEN / Graphic By TMR

Two of the country’s largest utility companies Telekom Malaysia Bhd (TM) and Tenaga Nasional Bhd (TNB) have inked a proposed partnership to widen the country’s access to broadband connectivity and push the agenda for a digital Malaysia.

Both government-linked companies (GLCs) with a combined market capitalisation of RM159.4 billion would collaborate and capitalise on their strength in terms of reach, infrastructure and expertise.

TM already has over 2.35 million broadband subscribers as at end of August 2017 last year. TNB has an extensive fibre-optic network built for its system for supervisory control and data acquisition. TNB’s network is available in transmission lines and substations.

In December last year, TNB president and CEO Datuk Seri Azman Mohd had said that the second-largest company on Bursa Malaysia was in talks with parties over the use of its network as part of the National Fiberisation Plan (NFP) 2017-2019.

Insiders who know TNB’s operations said the power giant already has a very extensive fibre network and is only looking on how to connect to the last mile — to end-users.

TNB’s entry into the broadband network business could provide competition to other operators, especially in providing cost effective solutions and extensive coverage. TNB already has about 9.2 million customers in Peninsular Malaysia, Sabah and the Federal Territory of Labuan.

In a joint statement yesterday, TM and TNB said: “In particular, the synergies will enable the most efficient cost structure, and further accelerate the fibre broadband network reach.

“This is in line with the government’s aspirations to drive Malaysia’s digital economy, as envisioned under both the NFP, as well as the high-speed broadband projects,” the companies said.

The rollout under both TM and TNB is said to ensure the safety and security of the nation’s strategic and critical infrastructure. “The proposed network will also continue the existing open access participation of industry players to promote private sector competition in retail broadbands,” both companies said.

The memorandum of understanding was signed by TM MD and group CEO Datuk Seri Mohammed Shazalli Ramly and TNB’s Azman. The proposed collaboration, however, is subject to a definitive agreement to be signed between the parties upon finalisation of the commercial terms.

The NFP is an initiative aimed at expanding the availability and improving the affordability of broadband services, in line with the government’s announcement in Budget 2017 that it intends to double broadband speeds at lower prices by 2019.

Under the three-tier model to be established for the NFP, the first tier involves the use of TNB’s fibre-trunk network for wholesale backhaul services.

Last mile access will be offered by the second-tier wholesale service provider(s), while the third-tier providers will comprise existing telecommunication companies offering retail services to consumers and businesses.

The government in December last year appointed Broadnet Networks Sdn Bhd to undertake the NFP. It is not known how Broadnet Networks will fit into the TNB-TM proposed broadband alliance