Slide1: Ministry of Energy, Water and Communications Malaysia 11-13 October 2004 UNCC, Bangkok National Broadband Plan – Connecting Communities : Widening Private Access


Slide2: Outline Introduction Definition Features Current Scenario National Broadband Plan Rationale Strategies Target Recommendations Government Intervention Policy and Regulatory Incentives Others


Slide3: Introduction - Definition Definition of Broadband Different understanding of broadband in different countries Global understanding is “Transmission capacity and speed to allow interactive high-quality full-motion video, data and voice applications simultaneously via one pipe”. Malaysia define broadband speed as speeds above 1256 kbps Currently, bandwidth provided by TMNet (Streamyx) is 384 kbps for households and 512 kbps – 2 Mbps for corporate users Other players include TIME, NasionCom, AtlasOne


Slide4: Introduction - Features Speed Speeds will change according to demands ITU – 2 Mbps Korea, Japan – 10 Mbps is the norm Malaysia – currently, 384 kbps is the norm Features of Broadband


Slide5: Introduction - Features Technologies Fixed/cable – ADSL, FTTH, HFC and PLC Satellite-VSAT and DTH Wireless - LMDS, MMDS, etc. Note: ADSL – Asymmetric Digital Subscriber Line FTTH – Fibre To The Home HFC – Hybrid Fibre Coaxial PLC – Power Line Communications VSAT – Very Small Aperture Terminal DTH – Direct to the Home LMDS - Local Multipoint Distribution System MMDS - Multipoint Multi-channel Distribution System Features of Broadband


Slide6: Introduction - Features Features of Broadband Communications technology that can provide support for always-on and fast-access Applications - Advanced computer applications, Video-on-Demand (VOD), Video Conferencing (VC), Computer Aided Design (CAD), e-Government, e-learning, telehealth, etc.


Slide7: Introduction – Current Scenario Broadband country comparison based on cost per 100 kbps Price per 100 Kbps of data per month US$, April 2003 Malaysia : US$7.61 Source: ITU Research Malaysia : US$5.21 From 1 Nov 2003 Prior to 1 Nov 2003


Slide8: Prerequisite for broadband access PC ownership - 4.2 M (16.7 %) Internet penetration - 2.9 M (11.4 %) Source : MCMC, Dec 2003 Need to accelerate both PC ownership and Internet access to widen broadband penetration Introduction – Current Scenario


Slide9: Introduction – Current Scenario PC per 100 population, 2003 Malaysia in comparison with other countries Source : ITU@2004


Slide10: Introduction – Current Scenario Internet Users per 100 population, 2003 Malaysia in comparison with other countries Source : ITU@2004 Ratio for Internet Subscriber to Users is 1 : 3


Slide11: Introduction – Current Scenario Broadband subscribers per 100 population, 2003 Malaysia in comparison with other countries Source : ITU 2003 / Analysys 125,000 subscribers


Slide12: Current Broadband Supply Situation In Malaysia Service Providers Service providers No. of broadband subscribers* TMNet 140,386 TimeNet 1,124 MaxisNet 633 Jaring 189 Total 142,332 Availability Of Infrastructure - Abundant availability of domestic backbone capacity as compared to last mile broadband infrastructure Introduction – Current Scenario * As at March 2004


Slide13: Kuching Labuan Kota Kinabalu Batu WMU KLR B.T Razak Sg.Petani Penang Pasir Mas Seberang Jaya Cherating Taiping Tasik Temerloh Rasah Kelang P.Dickson Segamat Mersing Kluang Teruntum Skudai Miri Melaka Muar Johore Bharu Tampin KLJ Bintulu MALAYSIA DOMESTIC OPTICAL FIBRE SUBMARINE CABLE SYSTEM Tumpat K.Lipis Gemas Existing backbone infrastructure for broadband Introduction – Current Scenario Telekom Malaysia: 5,454.8 km Maxis: 1,381.0 km Fiberail: 1.414.0 km Celcom: 609.7 km Digi: 113.2km Time Telekom: 2,965.0 km Others: 30,000km Estimated Total : 70,000 km Excess capacity : 50%


Slide14: Broadband household penetration rate in Malaysia still below 10% over the next 5 years Strategies needed to boost up penetration rate Korea Hong Kong Taiwan Singapore Malaysia Penetration Rate 90% 80% 70% 60% 50% 40% 30% 20% 10% 2002 2003 2004 2005 2006 2007 2008 0.4 0.8 1.8 3.5 4.8 5.9 6.8 Projected Broadband Household Penetration Rate In Selected Asian Countries (without Government intervention) Introduction – Current Scenario Source: IDC 2003 Broadband speed defined as 128kbps


Slide15: Introduction - Rationale Rationale for broadband In the context of the development of a knowledge-based society and economy Pre-requisite for high-speed info-communications access New benchmark on national infrastructure and country competitiveness Expansion of Multimedia Super Corridor (MSC) nationwide Rollout of e-government and other flagship applications Potential for bridging the digital divide hence the knowledge divide


Slide16: A critical mass equivalent to a penetration rate of 5% equivalent to 1.3 million connections to attract industry players to roll out infrastructure at the last mile level. Source: Citicorp 2000 National Broadband Plan – Strategy 1) To Create a Critical Mass


Slide17: ADSL, WiFi, ISDN And VSAT Internet Community Centres Total HealthNet Hospitals and clinics (5,000) MyREN Universities & Research Institutions SchoolNet Schools (10,000) EG*Net ++ Government Departments Federal (219) State (346) 22,000 POW District (142) Network Community ADSL- Asymmetrical Digital Subscriber Line WiFi - Wireless Fidelity ISDN - Integrated Switched Digital Network VSAT- Very Small Aperture Terminal Drivers for broadband rollout, (public+private+home) target 1.3 mil connections by 2006. All communities should be connected to broadband 2) Government Intervention - Connecting Communities National Broadband Plan - Strategy 2,000 132,000 10,000 7,000 27,000 84,000 Connections* (2006) * 1 connection equivalent to home user connection at 384 kbps. Assumption 2 Mbps per site. LibraryNet Libraries (900) 2,000


Slide18: Total Others Leased Line & ADSL Transportation Leased Line & ADSL Distributive Trade Leased line & ADSL Manufacturing (MNCs and SMEs) Network Examples Community ADSL- Asymmetrical Digital Subscriber Line WiFi - Wireless Fidelity ISDN - Integrated Switched Digital Network VSAT- Very Small Aperture Terminal Leveraging on Government intervention, (public+private+home) target 1.3 mil connections by 2006 2) Private Sector National Broadband Plan - Strategy 150,000 22,400 15,000 30,000 45,100 Connections* 2006 * 1 connection equivalent to home user connection at 384 kbps Leased Line 37,500 Banking and Finance ADSL, WiFi, ISDN And VSAT


Slide19: Total Projected Demand For Broadband Connection 2004-2008 Major Usage Community Private Sector Projected Demand (‘000) 2004 Home Users 2005 2006 2007 2008 25 358 248 150 73 229 2,298 1,589 994 554 Source : Analysys And Estimates By KTAK 28 214 172 132 66 Cumulative 282 2,870 2,009 1,276 693 (public + private + home) target 1.3 mil connections by 2006.


Slide20: To create a critical mass National Broadband Plan - Recommendations A critical mass equivalent to a penetration rate of 5% equivalent to 1.3 million connections to attract industry players to roll out infrastructure at the last mile level.


Slide21: Connecting Communities - To connect identified communities with broadband infrastructure to reach critical mass 5% by 2006 to reach target 10% by 2008 2. Government Intervention National Broadband Plan - Recommendations Internet Community Centres Hospitals and clinics Universities & Research Institutions Schools Government Departments (Federal, State, District) Community


Slide22: Promote Competition and Infrastructure Sharing To intensify competition at the last mile through Opening up of licensing for the last mile Separation of wholesale and retail businesses Outsourcing of installation Mandate Unbundling and Co-location - Interconnection Tariffs must be approved by Government - Commission to resolve the disputes between telecommunications providers. National Broadband Plan - Recommendations 3. Policy and Regulatory Framework (1)


Slide23: Mandate Broadband Under USP Programme To mandate broadband access for USP programmes Promote Facilitative Role Of Local Authorities Need to play a facilitative role to speed up approvals for infrastructure development within their districts National Broadband Plan - Recommendations 3. Policy and Regulatory Framework (2)


Slide24: Tax Rebates & Government Computer Loan Greater tax rebates for purchase of new computers (currently tax rebate of RM400, proposed 40% rebate) Government computer loan periods can be reduced to three years from the current 5 year period 15% tax rebate for broadband equipment Affordable PCs Introduce affordable PC at prices lower than RM 1000 (US$300) This is to encourage PC ownership which is a pre-requisite for creating broadband demand. Note: Phase 1 (15.3.04 – 30.4.04) 11,255 units sold. Phase 2 will be commenced soon. Soft loans to ISPs to rollout infrastructure Easy access to affordable financing (eg. Bank Pembangunan & Infrastruktur) 4. Incentives (1) Provide incentives for private sector take up National Broadband Plan - Recommendations


Slide25: Incentives (2) Extend existing tax relief schemes given to MNCs that operate shared-services centres to other sectors eg. transportation, tourism, hotels, restaurants, wholesale, retail sectors etc. for investment in broadband expenditure. Currently MNCs that operate shared services in the MSC area enjoy a 20% tax relief (i.e. 20% of taxable income) Similar benefits should also be extended to SMEs in the above sectors which are highly automated, and have requirements for higher bandwidths These sectors also contribute significantly to the economy National Broadband Plan - Recommendations


Slide26: Others Designate MEWC as focal point: To plan and monitor development of broadband in the country. This includes aggregation of demand for broadband. To nurture and promote local-content development to stimulate broadband usage To align broadband plan with flagship rollout programmes National Broadband Plan - Recommendations


Slide27: Thank You