Adi Kusma is president of Biznet Networks, Indonesia

Adi Kusma is president of Biznet Networks, one the leading telecoms providers in Indonesia. He is appearing on Day One of the Broadband ip&TV Asia 2012 conference, taking place on the 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia. Telecoms.com speaks to him about the major developments and challenges in the region.

What is the core technology your network is currently based on and what are the development plans for the future?

We’re using Metro Ethernet and GE-PON for our business market and HFC network for consumer market. We think picking the best technology for each market segment is important.

What major developments have there been for the broadband industry in your region over the past year?

The major development in Indonesia is mobile broadband, due to a lack of fixed-line cable infrastructure.

Speed is often touted as a priority, but some view the major challenge to be coverage and network capacity. What is your view?

The main issue is area coverage, but the main obstacle is the service price. To deliver an affordable broadband service for the market is really the challenge.

Is FTTH really necessary for businesses and consumers and what are the stumbling blocks to rolling it out?

FTTH is suitable for businesses, but for consumers FTTH investment might be too expensive. The main problem of rolling out is the permit issue on the area.

To what extent can fixed wireless connections help in the roll out of broadband connectivity?

Fixed wireless connections are also suitable for business markets, where users don’t move much. For the consumer market, mobile wireless connections are a huge opportunity, especially with LTE technology.

Will the dominance of mobile connectivity limit the growth opportunities for fixed line connections?

I think each technology has its own benefit and function, fixed line is suitable for high bandwidth, business and consumer market, while mobile wireless is suitable for low bandwidth with mobility. Each technology will complement each other depending on the usage.

What is your stance on bandwidth caps, line throttling and traffic management?

I think to ensure better network performance for all users, all of those must be implemented. Sometimes when users see unlimited packages, they would like to abuse the network to use as much as possible, and it causes problems for other users too.

What are the trends in terms of data traffic and how is it affecting your network expansion plans?

Video is the main use of bandwidth for now. People have changed the way they see entertainment moving from traditional broadcast content to interactive video on demand content over internet. The total bandwidth uses more than doubles every year.

What are the biggest challenges you expect to be facing over the next 12 months?

Our main challenges are obtaining permits to deploy a new network and the creation of advanced mobile broadband technology that has very large bandwidth.

Why is your attendance at this event so important for you and your company and what aspects are you looking forward to most?

We’re looking to see new technologies and case studies and see where the market is going in the near future.

The Broadband ip&TV Asia 2012 conference is taking place on the 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia. Go to the website now to register your interest.

Praveen Rajan, Head of Internet & Services, DiGi Telecommunications, Malaysia

Praveen Rajan, Head of Internet & Services, DiGi Telecommunications, Malaysia is speaking as part of the Emerging Market Experience Exchange the day before the Broadband ip&TV Asia 2012 conference, 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia. Telecoms.com catches up with him to see what the major concerns and issues are for this local operator.

What major developments have there been for the broadband industry in your region over the past year?

The region is noted for aggressive competition, especially from new 3G players and WiMAX operators. We have pioneered selling 3G broadband as a complementary service to fixed broadband services. The market is also beginning to see voice plans with bundled data quotas. For us a major development will be the introduction of LTE. Smartphone usage is rising fast, and there is more demand for wider 3G coverage. We currently offer HSPA and EDGE nationwide and will be moving towards LTE in the near future.

Speed is often touted as a priority, but some view the major challenge to be coverage and network capacity. What is your view?

Speed is secondary to consistency of the network. Coverage, capacity and consistency are key pillars to a great user experience. Most customers, especially on smartphones, do not realise the speeds they are getting, and it is difficult to tell the difference at a certain threshold. For example, moving from 3Mbps to 7Mbps may not show real improvements in web and email usage.

Is FTTH really necessary for businesses and consumers and what are the stumbling blocks to rolling it out?

Personally, I believe that FTTH will continue to be relevant as a primary broadband service in key market centres. Operators that choose to do this need to be fully aware of the cost dynamics and expectations from customers. However, we are focused on the wireless business and not FTTH.

To what extent can fixed wireless connections help in the roll out of broadband connectivity?

Fixed wireless is seen as a primary way of getting connected for most households in Malaysia. The technology is able to manage throughput and capacity better than conventional wireless. Mobile broadband will continue to be relevant with the rise of new devices such as smartphones and tablets. There will be some parts of Malaysia that may rely on wireless broadband using USB modems as a primary way to get connected to the internet.

What is your stance on bandwidth caps, line throttling and traffic management?

Caps, quotas, throttling and traffic management are crucial today to ensure data profitability. These should be communicated up front to customers, and we should move away from communicating “unlimited” plans.

What are the biggest challenges you expect to face over the next 12 months?

The biggest challenges will be balancing value propositions between 3G and LTE, and meeting customer expectations on speed and performance.

Why is your attendance at this event so important for you and your company and what aspect are you looking forward to most?

Data is a big focus for most operators so we are looking to learn from other operators through case studies of product and network rollouts.

The Broadband ip&TV Asia 2012 conference is taking place on the 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia. Go to the website now to register your interest.

Ali Tabassi, chief operating officer for YTL Communications, Malaysia

Ali Tabassi, chief operating officer for YTL Communications, which operates a mobile broadband in Malaysia under the brand name of Yes, believes his company’s service offerings stand up to the brand promise. While in many developed markets mobile broadband coverage often suffers from poor coverage and lacklustre speeds, in Malaysia, Yes will let you stream YouTube videos or conduct video calls whether you’re in downtown Kuala Lumpar or in the mountains near the border of Thailand.

It’s something that Tabassi is looking forward to explaining more about at the Broadband ip&TV Asia conference, taking place on the 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia.

“Our initial plan when we launched our service in November of 2010 was to cover 65 per cent of the population and to have coverage throughout the peninsula of Malaysia, from day one. We were able to achieve that. We’re the only wireless operator that has the entire highway connected to mobile broadband, so users can connect to the internet, download movies watch YouTube and make calls.”

Tabassi claims that in optimal areas customers can enjoy speeds of up to 15Mbps peak, but says that most will see a consistent 4-6Mbps on the downlink and 1-2Mbps on the uplink. While the speeds on offer from don’t hit the peak speeds of the LTE networks in the US Yes prides itself on offering a consistent fast experience that is significantly faster than the current 3G network in the region.

Yes offer a combined package that offers voice, SMS and data together. “We built our philosophy based on innovation, based on being honest, innovative and bold, and delivering a true mobile broadband to our customers, with a voice application on that. So our vision is to be Malaysia’s fastest mobile internet with voice.

For users with a Yes Buzz Cloud phone, voice calls can be made over the WiMAX network on the same data plan. Tabassi says the voice feature is what differentiates Yes from all other WiMAX operators in the world and that for the operator voice is just another application on the network. Yes also contrasts with conventional carriers that have strict rules regarding tethering. It not only permits but encourages users to connect multiple devices to their account, with each device identified by a user ID and password rather than through a SIM card.

“We are the first operator in the world that has offered a converged service of voice and data. Voice is still very important – it’s something that everyone is used to. And they want to have the capability to have whatever devices they have available to them. We focus on delivering the ability for our customers to have multiple devices on same account. Each customer is given a user ID and password but also their own unique PIN number that is fully accessible throughout the world.  You can make or receive a call from anyone throughout the world and SMS, all at very affordable prices.”

Yes currently offers four devices, a USB dongle, a ‘Huddle’ mifi hotspot device that lets five devices connect, a home gateway device for fixed wireless that permits 20 devices to connect, and a ‘cloud’ phone with a integrated WiMAX connection.

“Our whole service offering is based on innovative ways of not utilising a SIM card for devices,” explains Tabassi. “We use a username and password for the authentication of our customers and their devices on our network. The customers can use one account with multiple devices on there, unlike other existing wireless operators that every device has its own SIM card, and a different package for that SIM card to be used. So we went with one affordable package that a customer can choose to use it for data, for voice, for SMS or any combination of those.”

Could it compete with fixed line services in the country? Tabassi doesn’t think so for now. “I don’t believe it will completely replace wireline. Wireline has an existing capital and there is a lot invested already in the ground. There will be more use of wireless to bridge the digital divide, and reach faster and at a lower cost than trying to dig the ground and lay our fibre. Most fibre connections will come down the road when there is a business need for it.”  Tabassi thinks that Yes’s coverage, will enable it to bring 4G speeds to areas outside of the reach of the main urban areas.

In a worldwide scale it is LTE, rather than Yes’s WiMAX, seems to have the momentum behind it. Will LTE play a role in the future of YTL’s network? “We have heard a lot of announcement and hype around other technologies”, say Tabassi, “but realistically when you look to see the amount of commercial roll-out we are not seeing it that broadly.” The focus though is on the customers, and there’s certainly no ideological issues preventing YTL from introducing LTE. “We are a wireless mobile broadband operator and not aligned to any one technology. We are in the business of offering the best service to our customers, at the most affordable rates. If other technologies become available that provide us with the same eco-system, economics and affordability [as WiMAX] that we can pass onto our customers we will definitely look into that and offer that service.”

An indicator of a future path to LTE for YTL Communications could be the fact that the Malaysian government is granting it 2.6GHz spectrum in 2013. Tabassi is praiseworthy of the Malaysian government approach to making spectrum available and not charging huge sums up front, which in turns benefits consumers through lower prices. “Today we operate on 2.3GHz spectrum and thanks to the government of Malaysia and their vision of expanding mobile broadband they have agreed to offering more spectrum, so we will get more at the 2.6GHz range, starting next year. The government knows that it is better to pass the savings onto the consumer by not necessarily putting a huge prices (on spectrum). So we applaud the government of Malaysia for not charging up front for the license of the spectrum but enabling the operator to expand the footprint so the customers can benefit.”

The challenge ahead for YTL Communications then will be how to continue to expand and reach new customers. “There are always challenges in building base stations in different areas,” Tabssi says. “We need to make sure we have the right mix, and continue to deliver the service that the customers demand. Ultimately, it will be what value added services we can offer to our customers. Not just about hype.”

The Broadband ip&TV Asia conference is taking place on the 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia. Go to the website now to register your interest.

Attendees at last week’s WiMAX Forum Global Congress in Amsterdam were treated to a procession of operators committed to WiMAX, but attendance was significantly down from last year, and behind the scenes vendors fretted about rollouts being delayed due to everything from a lack of spectrum—for example in India and Brazil—to a lack of funding due to the financial crisis and economic downturn. For vendors, this means it could be 2010 before they see significant revenues from selling WiMAX equipment. That is several years later than many vendors expected, which is likely to lead more players to withdraw from the segment.

On a more positive note, operators such as Packet One Networks (p1) in Malaysia are gaining significant momentum. P1, which has 30MHz of 2.3GHz spectrum, launched services in August 2008 and now has 350 base stations installed in Malaysia’s five largest cities, covering 25% of the country’s population. The operator says it had 35,000 subscribers at the end of 1Q09, will pass 100,000 by August, and aims to have more than 200,000 subs by year-end. The operator says that in 1Q09 it took 30% of fixed broadband net additions in Malaysia, despite having a population coverage of only 25% compared to near 100% for the incumbent fixed broadband operator.

Yota, which claims a nationwide footprint of 2.5GHz spectrum in Russia, launched commercial services in Moscow on June 1, following the launch of free trial services in Moscow and St. Petersburg in November 2008. Yota’s WiMAX devices include USB modems, notebooks with embedded WiMAX, and an HTC smartphone supporting both WiMAX and GSM. Yota’s tariffs include a $30 per month plan offering unlimited usage, speeds up to 10Mbps and unlimited downloads from Yota’s online music service. Yota says that since its trial launch in November it has sold 75,000 WiMAX devices, 15,000 of those the HTC mobile device, and expects 70-80% of trial users to convert to paying customers. During the trial at the end of May it had 75,000 customers and is adding an average of 40,000 per month. The operator plans to have full coverage in Moscow, St. Petersburg and three other cities by end-2009, for a total population coverage of 26 million via 1600 base stations.

Comstar, the largest fixed broadband operator in Moscow, says it soft-launched WiMAX services in Moscow in May with 170 base stations running in the 2.5GHz band. The operator is focused on portable devices including USB modems and notebooks, and says the network supports peak downlink speeds up to 12Mbps and typical speeds of 2-7Mbps. Its tariffs start at $9 per month for 1GB and increase to $16 per month for 2GB and $22 per month for 5GB. Comstar says it has invested $20 million in the service so far, but does not detail subscriber numbers.

US-based Cleawire launched Mobile WiMAX services in Portland, Oregon in January 2009 and in Atlanta in May, and says it is on track to have services in 80 US markets with 120 million people by end-2010. Time Warner Cable, an investor in Clearwire, says it will be an MVNO on the Clear WiMAX network and will launch services in at least one of its existing markets by the end of 2009. The operator’s significant cable markets are New York, Los Angeles, North and South Carolina, Texas and Hawaii. Clearwire plans to launch services in Dallas Ft. Worth, Honolulu and Charlotte in 2009, along with other major markets including Chicago, Philadelphia, Baltimore and Charlotte. The operator, which says it has more than 18,000 base station sites in deployment, plans to launch services in 2010 in New York City, Washington DC, Houston, Boston and the San Francisco Bay area.

Meanwhile Japan’s UQ Communications says it launched trial services in February and is on track to launch commercial services in July. The trial service runs on 600 base stations running in the 2.5GHz band, and provides peak downstream speeds of 10-15Mbps. UQ says it plans to have 4,000 base stations deployed by end-March 2010, when it expects to have some 300,000 subscribers. The operator plans to have 90% population coverage by March 2012 via 38,000 base stations, some 19,000 of which will be indoor solutions including femtocells. UQ has the only WiMAX license in Japan and must provide open access to MVNO operators. The operator says it has had discussions with 50 potential MVNO partners. One confirmed MVNO partner is mobile operator KDDI, the lead investor in UQ.

WiMAX Vision speaks to CC Puan, CEO of Green Packet Malaysia, and MD of the Green Packet Group, about the firm’s WiMAX interests as both supplier and operator.

How did Green Packet start?
I co-founded Green Packet, headquartered in Silicon Valley, in late 1999. We started off as a software and solutions developer to enable the convergence of multiple networks through seamless integration. We help operators solve network problems and increase ARPU, mainly in the mobile broadband space.

Why did you set up operations in Malaysia?
After the dotcom crash, we couldn’t get any more funding. But looking at the solutions we had been developing, we still felt we had huge potential. And the Malaysian government had been doing many things to promote multimedia and technology development [through the Malaysian Multimedia Super Corridor project] and to attract foreign companies to set up their base in Malaysia. So I decided to scale down the US operations, focus on the Asia-Pac market, and move the HQ to Malaysia. Our first major operator contract to sell our solutions to was China Telecom. We then took the company [Green Packet Berhad] public in May 2005.

Why did you branch out into the operator side by acquiring a 2.3GH WiMAX licence in Malaysia and setting up Packet One (P1)?
While we were doing a lot of business in Asia, the Malaysian government was keen that we help them with their goal to reach 50 percent of the population with broadband by 2010. There is a high pent-up demand for broadband in Malaysia, so we thought why not? It has a PC penetration close to 30 percent [in a population of around 28 million] but around two million of those PCs are connected with dial-up rates of 56Kbps. There is a lot of low-hanging fruit for fixed broadband. So we went to the financial markets and raised nearly $100m as part of our bid and, in March 2007, we were awarded one of the 2.3GHz WiMAX licences.

What are the WiMAX rollout plans for P1?
The first phase is to have 1,800 base stations using 600 sites – three base stations per site – to support coverage of 25 percent of the population. We started commercial launch in August 2008 using Alcatel-Lucent equipment but now we are starting on the second phase, with equipment from ZTE, to cover 40 percent of the population, which requires 3,000 base stations and 1,000 sites. We anticipate finishing that by the end of H1 2010. By the end of this year, we are confident we will have 2,100 base stations as compared with about 1,000 base stations now. If you look at the network and subscriber growth for P1, we are moving at a fairly remarkable rate.

What about P1 subscriber numbers?
We had 10,000 subscribers at the end of last year. At the end of 1Q 2009, the net subscriber additions were more than double compared with the last four months of 2008. We see that growth trend continuing and we expect to have 250,000 subscribers by the end of this year.

Is there any conflict of interest between being an operator and an equipment supplier in the same market?
The group strategy is to spin-off the service provider. We have a plan to IPO P1 within the next three years. To have an interest in an operator may have a worse impact in a country where we are a [direct] competitor to our customers. That’s why, in the longer term, we plan to spin-off P1. At the moment, we don’t see much impact on the solutions business [by owning P1]. We do sell solutions, however, to 3G operators in Malaysia.

What do you sell to the mobile operators?
The main product is our connection manger platform, which is used to achieve fixed mobile convergence and seamless integration across multiple networks. The 3G operators, after they upgraded to HSPA networks, have been selling a lot of data cards. But their networks are getting quickly overloaded, so they are in a bit of a dilemma. What we do is provide a connection manger that can offload traffic from 3G onto cheaper wifi networks where it is available. The seamless connectivity is a unique aspect of our solution. We’ve also built a lot of widget-based applications into the connection manager, which is getting a lot interest from both the 3G and WiMAX operators.

How have you helped P1?
At the time P1 got its licence at 2.3GHz, there were very few devices available. So, to ensure P1 success, we also invested in a big team based in Taiwan to help us develop all the devices – USBs, data cards and CPE. We also have WiMAX devices for the 2.5GHz and 3.5GHz frequency bands.

What about WiMAX CPE costs? How far can they be driven down?
The first thing to say is that WiMAX is an open platform based on open standards. But as we are still in the early days of the technology, there are still long IOT [processes] to go through. But the maturity of the WiMAX ecosystem is unprecedented in that it is happening so fast. The 802.16e standard was not ratified until late 2005 but the price of the CPE has gone from between $250 to $300 in 2007 to under $100 today across each of the WiMAX standardised bands. And the price of the USB dongle today is cheaper than a HSPA modem. The maturity of the WiMAX ecosystem in terms of device prices and variety is really remarkable. And one of the advantages of the open standard is that it doesn’t have the IPR and royalty issues related to CDMA and the future LTE. I think it’s possible to get simple WiMAX CPE [no voice or wifi] below $70 by the end of this year.

What is the cost difference between an HSPA and USB dongle today?
There are royalty payments on HSPA, which range from a few US dollars to tens of US dollars depending on the volume, which has to be added to the cost of the chipset. But WiMAX chipsets are now under $20 [with no royalty payments], so it probably costs about $15 to $20 more for a 3G chipset. There are more than 20 WiMAX chipset companies compared with CDMA, which is mainly a Qualcomm play.

How many WiMAX CPE units are you shipping?
We’re probably looking at between 700,000 to 800,000 units this year [including dongles], which is about 7-8 percent of the total market share. Apart from Malaysia, which we estimate at around 250,000 [with P1] this year, we already have global reseller CPE partnerships with Alcatel-Lucent and Huawei.

How do you see the WiMAX device market developing?
I think it will be in four stages. The first stage is fixed-line services and CPE, followed in the second stage by nomadic services with USBs and embedded devices. The third stage is mobile handsets, and the fourth stage is embedded CE devices and M2M applications.

Why have you set up a WiMAX operator consultancy business?
We want not only to be a WiMAX operator in Malaysia but also a regional player, so we have set up another arm called P1 International. It is designed to help aspiring WiMAX operators have a quicker time-to-market by leverage our experience.

NFC comes to Malaysia

Malaysian mobile operator Maxis launched what it claims to be the world’s first commercial mobile payment system based on NFC (Near Field Communications) technology on Thursday.

Maxis FastTap is an integrated mobile payment service established under a partnership with Nokia, Visa, Maybank and Touch ‘n Go.

Available on the Nokia 6212 classic device, the NFC system allows users to purchase goods and services at more than 1,800 Visa payWave merchant locations as well as pay for toll, transit, parking and theme park charges at over 3,000 Touch ‘n Go points nationwide by waving their device over a reader at the point of sale.

The quick payment system is geared up for small item purchases up to a maximum of RM150 (Eur31) per transaction, as well as for ticketing and transportation payments.

Packet One outlines ZTE deal

Malaysian WiMAX operator Packet One Networks (P1) has fleshed out the terms of its agreement with ZTE, which it alluded to last week.

On the Thursday signing of the $28m deal with the Chinese supplier, P1 said it would use ZTE kit for phase two of its rollout plan this year.

“Currently, the company is well on track to provide WiMAX coverage to 35 percent of the population in the peninsular by end of this year,” said P1′s chief executive officer Michael Lai at the signing ceremony.

ZTE is to supply WiMAX network planning and design, equipment supply, engineering services and WiMAX network optimisation, which will be used in parallel with Alcatel-Lucent WiMAX kit for phase one of P1′s network.

Phase two of P1′s network rollout is focused on the East Coast and Penang. By the end of this year, P1 expects to have established 700 new sites.

P1 says it is expecting to spend RM1bn in capex to support its network and product rollout over the next five years.

Packet One looks to ZTE

P1′s first WiMAX deal was with Alcatel-Lucent. In January 2008 the operator announced it had picked the Paris-headquartered supplier to provide an ‘end-to-end WiMAX wireless broadband solution’, a deal valued at RM320m (approximately $71m at the time).

Alcatel-Lucent recently announced, however, that it would be focusing all its ’4G’ mobility efforts on LTE, preferring to use WiMAX for fixed and nomadic applications only. This may have been a factor in P1′s decision to go with ZTE, which appears fully committed to mobile WiMAX.

At the Mobile World Congress 2009 event in Barcelona, a ZTE spokesperson told WiMAX Vision that the Chinese firm was already talking to some of Alcatel-Lucent’s WiMAX customers.

P1 acquired its WiMAX licence in March 2007, giving it a 30MHz chunk of spectrum across Peninsular Malaysia in the 2.3GHz frequency band.

In an e-mail exchange with WiMAX Vision earlier this year, Michael Lai, P1 CEO, said: “Our target is to cover 25 per cent of Malaysia by 2009, 40 percent by 2010 and 60 percent by 2012. This is in line with the Malaysian government’s national broadband plan to provide broadband access to 50 percent of Malaysian households by 2010.”

Since its licence award, P1 has been building up a number of strategic partnerships to add extra clout to its WiMAX presence. These partnerships include Oracle Systems (billing and revenue management) and EMC Corporation (IT infrastructure). It has also signed agreements with Fiberail (the owner of a nationwide fiber-optic network in Malaysia), and AIMS Asia (an internet transit provider). Fiberail gives P1 a quicker route to market through access to its high-speed network for backhaul and core transmission, while AIMS gives P1 voice and data interconnect capability with local and international service providers.

Redtone, using base stations and CPE equipment from Motorola, has launched the first commercial WiMAX service in East Malaysia. The first phase of the WiMAX network covers the Kota Kinabalu business district.   

Redtone’s WiMAX licence – a 25MHz slice of spectrum in the 2.3GHz frequency band – will allow the company to extend coverage across Sabah and Sarawak, the two main cities in East Malaysia.

“We are impressed by Motorola’s ability to provide advanced features like MIMO-B in a live system,” said Redtone Group CEO, Zainal Amanshah, in a prepared statement that outlined some of the reasons why the company selected Motorola. “These features will ensure a smooth network upgrade when we need to increase system capacity in the future.”

Redtone’s announcement comes hot on the heels of the unveiling of the first commercial WiMAX network in Peninsular Malaysia by P1.

Green Packet, which owns P1, also announced this week that it would invest up to RM1bn ($300m) in WiMAX structure over the next four to five years. To date, Green Packet has invested around RM300m (just under $100m) in its WiMAX operations.

Packet One (P1), a 2.3GHz mobile WiMAX licence holder in Peninsular Malaysia, has become the first operator in the country to launch commercial WiMAX services.

The initial promotional offer is RM99 ($30) per month for customers signing up to a 12-month contract for a 1.2Mbps service. A 2.4Mbps service is available at RM299 ($89) per month for a one-year contract. P1′s WiMAX tariffs are pitched just below the combined price of an equivalent-speed ADSL service and PSTN connection offered by Telekom Malaysia.

Green Packet, which owns Packet One, has invested around RM300m (just under $100m) in its WiMAX operations to date. 

According to analysts at local investment firm Aseambankers, P1 will need at least 350,000 subscribers paying an average of about RM92 ($27.5) over the course of five years before it can break even. P1 is aiming to acquire 100,000 subscribers over the next 12 months.

The Malaysian Communications and Multimedia Commission (MCMC), the country’s regulator, has stipulated that all four 2.3GHz WiMAX licence holders – the other three are Redtone (for East Malaysia), Bizsurf and Asiaspace (both serving Peninsular Malaysia) – should have 25 percent population coverage of their respective WiMAX licence areas by the end of 2008. P1 has said it will meet that target and subsequently increase its population coverage to 35 percent and 46 percent in 2009 and 2010 respectively to meet MCMC requirements.

At first glance, Malaysia looks a promising place for WiMAX to make an impact. Broadband penetration is low (around five percent at the end of 2007) and GDP per capita is reasonably high at around $6,500.

One potential drawback, however, is that the regulator has awarded WiMAX licences in the 2.3GHz frequency band, which does not enjoy the same level of vendor support as 2.5GHz and 3.5GHz. Lack of economies of scale, of course, pushes up prices.

Although WiBro in Korea uses 2.3GHz and is supported by local vendors such as Samsung, the system is based on 8.75MHz channels. WiMAX operators in Malaysia use 5MHz and 10MHz channels, which means they can’t turn to the Korean vendors to supply kit.  

According to a recent report in ’3G Wireless Broadband’, a newsletter published by Informa Telecoms & Media, MCMC has not ruled out issuing WiMAX licences in the 2.5GHz frequency band. Spectrum at 2.5Ghz was originally handed over to several triallists for pre-WiMAX technology in 2003, but not much progress has been made. If WiMAX licence awards did happen at 2.5GHz, it would clearly put the 2.3GHz business case under more strain.

Earlier this year, Intel invested RM50m ($15m) in Green Packet with a view to speeding up WiMAX development in Malaysia.