KUALA LUMPUR: Fees for mobile Internet broadband packages will drop an average 14% while basic fixed packages will be lowered by as much as 57%, said the Ministry of Communications and Multimedia Malaysia.
In a statement yesterday, Minister Datuk Seri Ahmad Shabery Cheek said mobile broadband packages will be offered at RM25 per month and consumers who sign up for these will have a monthly data cap of 1GB and at least 3G high-speed packet access for both prepaid and post-paid services. The reduction works out to about 14% less than current prices.
As for fixed services, Telekom Malaysia Bhd (TM) will soon be offering a basic broadband package at RM38 a month for 1Mbps of free data usage up to 1GB, which is 57% cheaper than the current RM88 for the basic package.
The new mobile basic broadband packages will be available almost immediately while the fixed package by TM is expected to be available from mid-June.
“The reduction in the price of basic broadband packages will be for both mobile and fixed services,” said Ahmad Shabery.
The minister also said that making broadband more affordable will allow the rakyat to get connected more easily. This is essential as Malaysia moves towards becoming a digital nation.
“The global average for capital intensity is almost 16%. Last year, the industry achieved just over 14% capital intensity, which is encouraging, and they (industry players) have been very positive about investing more to achieve or even surpass the global average in a few years’ time,” he said.
“With GST (goods and services tax) being implemented on communications services including prepaid reloads, the reductions for mobile and fixed at 14% and 57% respectively will more than compensate for the GST applicable to communications services,” said Ahmad Shabery.
Five telcos — TM (fundamental: 1; valuation: 1.1), DiGi.Com Bhd (fundamental: 1.55; valuation: 2.1), Maxis Bhd (fundamental: 1.15; valuation: 1.1), U Mobile Sdn Bhd and Time dotCom Bhd (fundamental: 2.4; valuation: 0.8) — also expressed their support in the same statement for the ministry’s initiative to drive wider broadband adoption via more affordable broadband packages.
“We already have the most comprehensive range of affordable packages for all customer segments nationwide and continue to look for opportunities to offer more value-added packages,” said TM chief executive officer (CEO) Tan Sri Zamzamzairani Mohd Isa.
Time CEO Afzal Abdul Rahim said the company will be offering a similar RM38 package for fixed broadband.
The CEO of Celcom Axiata Bhd Datuk Seri Shazalli Ramly said the company’s customers can look forward to new packages at reasonable prices in the coming weeks.
U Mobile CEO Wong Heang Tuck said the company recognises the need to help bridge the digital divide by providing greater connectivity and Internet access to the rakyat at affordable rates as it will benefit the nation in the long run.
“We recognise the need for the right entry level plans to accelerate adoption among Malaysians from all walks of life. DiGi therefore supports the Minister’s call for easier access to internet services,” said DiGi CEO Albern Murty.
Maxis CEO Morten Lundal said the company “recognises that broadband isn’t just accessed through PCs (personal computers) and post-paid smartphones, but also through prepaid solutions” and that it is “happy to support the ministry to make broadband products more affordable”.
The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.
This article first appeared in The Edge Financial Daily, on April 16, 2015.