KUALA LUMPUR: Malaysian consumers pay considerably more for high-speed broadband access than those in other countries, the World Bank said.
According to the bank’s latest edition of the Malaysia Economic Monitor, the high cost of fixed broadband internet services is partly driven by limited competition.
“While Malaysia has made significant progress in terms of facilitating affordable access to mobile internet services, the cost of access to high-speed broadband services is relatively high compared to other countries,” it said.
In terms of price per Mbps, Malaysia ranked 74 out of 167 countries for fixed broadband services and 64 out of 118 for fibre broadband services. This placed it behind regional peers such as Vietnam and countries at a similar level of economic development such as Mexico and Turkey.
The World Bank said the limited competition, with Telekom Malaysia Bhd (TM) having a significantly larger market share than the leading firms in other countries, contributed to the higher fixed broadband prices in three ways.
“First, while TM is the major incumbent of cable landing stations in Malaysia, rather than allowing for co-location of its stations with other operators, it instead provides point-of-access connection outside the stations and charges a higher fee, which translates to a higher cost of broadband rollout.
“Second, given TM’s extensive broadband networks, it has been awarded exclusive memorandums of understanding with the government to deploy the high-speed broadband (HSBB) and sub-urban broadband (SUBB) plans, without contest.
“This eventually eliminates the possibility of attracting private investment by the network rollout operations.
“Third, Malaysia also pays a higher IP (internet protocol) transit prices than is the case in other countries, and this is subsequently passed on to retail consumers of broadband services,” it said.
The World Bank’s assessment was prepared before TM announced new broadband plans under its Uni brand in support of the national broadband agenda.
TM on Tuesday said it would offer an affordable entry level unifi @ 30Mbps for poor folks costing under RM100. This is more than 40 per cent below the existing 30Mbps package.
There would also be a re-launch of “unlimited” unifi mobile postpaid plan.
Meanwhile, the World Bank said Malaysia performed relatively poorly in terms of the quality of its broadband services.
“In February 2018, Malaysia’s average download speed was ranked 63rd out of 130 countries, with an average download speed of 22.56 Mbps. This is significantly lower than regional comparators such as Singapore, which ranked in top place (161.53 Mbps) and Republic of Korea, which came in third (129.64 Mbps).
“Countries at similar levels of economic development as Malaysia also have significantly faster download speeds. For example, Hungary has an average download speed of 90.94 Mbps, while Thailand has an average speed of 41.35 Mbps,” it said.
Instead, World Bank said Malaysia should look beyond doubling its internet speed and aspire to achieve gigabit-level of connectivity, similar to advanced economies.
In the global context, it said Malaysia’s plans to develop its HSBB and SUBB are unlikely to make Malaysia significantly more competitive, given that many advanced economies are already planning for gigabit networks.
“Republic of Korea, for example, has already implemented the Giga-Internet Pilot project, with plans to commercialise 10 Gbps broadband services by 2020, while Sweden aims to provide broadband access at a minimum speed of one Gbps by 2025,” it said.