WIMAX license awards : MCMC doing it right

Leaving the sunset industry...

It all started in year 2005, around the fifth month of the year when StarBiz publishes an article highlighting dilemma(s) faced by Malaysian second or third tier players who were indulging heavily into the business of VOIP.

During those times, many foresighted that the busienss of VOIP was already at its peak and the right thing to do is to look for new business advenues.

Broadband was the answer for them, given the fact that during those times, broadband was still very new to many Malaysian with market penetration of less than 3%. But rolling out broadband solution is yet again not without-frills because the big guys own the infrastructures and if they have to rely on leasing these infrastructures, experiences from running VOIP businesses taught them one thing; it is always better to be independent. So, they got to find a way to do without having dependencies on others and since the air is free; WIMAX seemed to be the winning-horse.

However, WIMAX was pretty much in its infancy. The biggest problem was there is no hardware (at least mobile devices) which is able to receive the signal of WIMAX. WIFI was already pretty common but not WIMAX. So, everybody was left playing the guessing game.

Intel came to rescue...

Then a few months later (March 2006), Intel lived up to the challenges of its new branding called "Leap Ahead" and announced ventures into creating WIMAX chipset. All technology fund managers were pretty excited about that development.

Scandals, rumours and politics ...

The biggest break came on July 2006 when government of Malaysia via its telecommunication commissioner MCMC suddenly shocked the news by cancelling the calling for the tender of 2.3GHz spectrum.

Reason is cited as the tender requirements do not compliant with the ICT blueprint endorsed by goverment, suggested by MCMC known as the MyICMS 886 strategy.

And then consecutively, the following events unfolded from Malaysian news:



Latest News ...

The latest being the rumours where winners had already been chosen, who will be Green Packet and YTL-e. The news considered them as frontrunners. However, some declared it as fact-inconsistency because these people are not so much of a "real" telco players. They are not even second or third tier players but more of a technology providers.

Nevertheless, both had previously joint-ventured with other parties to become eligible. YTL-e with Bizsurf and Green Packet with MIB Comm.

MCMC making the right decision ...

The decision to choose Green Packet and YTP-e other than the likes of telco heavy-weights like Maxis, Celcom, TM, DiGi, MiTV and etc is perhaps, borrowing the logics from this article; is that big telcos particularly those whose major advenues come from servicing clients for telephony communication, will probably keep the obtained licenses in dormant-mode in the near future because the likelihood of cellular phones having support for WIMAX will not be something of the distant future.

In other words, these so-called big players, will not live up to the expectation of WIMAX potentials envisions by the MyICMS 886 strategy.

To argue this further, let me try the followings.


    1. Too much to be pampered.
    Telcos like TM, Maxis, Celcom and even DiGi has their telephony businesses and also they have 3G at their disposals (except for DiGi). So, they have plenty of things to meddle with.

    2. Conflict protection.
    WIMAX solutions, if available will divert many telecommunications into the Internet funnel. Thus, this will revolutionalize the way people communication to a great extend. As such, many business communications would be diverted from current practice of phone-to-phone (via telcos) to peer-to-peer (via software like SKYPE and etc).

    No business will try to outdate itself, this is proven by recent dispute of TM marginalizing second and third tier players by counter-striking cheaper VOIP solutions targeting the market eaten up by the former (second and third tier players). During the period of 2004 and 2005, Second and third tier players had worked very hard and now they feel betrayed and thus calling it dirty play and demanded MCMC to take immediate action.

    TM says that it is their rights.

    In fact, this is what they should do to protect what they deem as "their belongings" blinded by the need to curb monopoly.

    However, this is what we think that Green Packets and YTL-e are the rightful winners compared to the heavy-weights. But in actual fact, they know the game better than you and me. In fact, they really wanted the licenses and Maxis has been working hard on it.


The Cloud's Strategy ...

Reason why heavy-weights have to try to be part of it is because of one simple principle; either you are in or out of the game. The fact that WIMAX and telephony are inter-related. We borrow the intelligence from The Cloud (the biggest WIFI operators in EUROPE by partnering with SKYPE and operating many hotspots).

The Cloud's strategy is to capture as much customers (making calls through Internet via hotspots than through cellular networks) and try to brainwash their loyalty to Vodafone and Orange. Thus, if The Cloud's sales is going up, then Vodafone and Orange's sales will be going down.

As The Cloud's CEO George Polk puts it, "If they don't embrace these things, they'll lose the game."

Precisely, Polk thinks that it is possible to get Vodafone and Orange to pay him commission to channel back some customers to their (latter) networks or they(latter) can pay up-front booking fees to have certain traffics reserved for them. So all these are like figures and costing game, where product managers have to crack their heads to recalcute profitability all the time; over and over again (just like being in love).

Finally, we shall wait for actual announcement which is expected to be happening at the end of the month.

Comments

Joshua Yip said…
Very well researched topic and keep up to the good work. I wish the mainstream media like theStar will have more professional opinion like this.
Brandon Teoh said…
Thank you.

Just humble opinion.

I think mainstream media are bounded by obligations over obligations.
Unknown said…
i"v gotten so much information from this. This post was very well written. I hope P1 will be able to conquer all barriers ahead of them and put Malaysia's broadband standards up there along with other developed nations.