Friday, October 30, 2009

Telcos should work together to improve country's broadband penetration

I took this picture at the Pizza Hut junction near TTDI. You can see the competition is heating up in the broadband space in Malaysia. The current marketing campaign by broadband providers, notably from P1 seems to be attracting alot of attention. If you follow them on Twitter, you can see how they use the new media to make the connection with the customers. It's common sense (unfortunately uncommon for many) when a service provider shows leadership by embracing all these media channels that they transport in their network.

Competition is heating up. In the end, consumers obviously win. However, looking at the current marketing campaign, it's clear that they're churning the same set of customers. When Telco A attacks, Telco B naturally retaliates. How do we want to grow broadband penetration when Telcos are fighting for the same customer? I don't understand when one says that they uphold government's aspiration of increasing country's broadband penetration but at the same time asking customers to 'cut' relationship with the competing service provider??

Different technologies or comms media should be optimse to provide coverage according to demographic and geographic needs. Currently, we see these technologies competing in the same segment and geographic area. If resources are being used efficiently, i.e matching demand with the right supply, I really think we could increase both coverage and take up quickly. I'm not saying they shouldn't compete at all, but perhaps be given some set of priorities.

For this to happen, I reckon there must be some level of cooperation between players and of course, the regulator plays a major role. In the next generation network or an all IP industry, the economics works best when there's interworking between operators. The legacy circuit switch network economics was built upon a scarce resource transport technology. So telco shares capacity only at a premium. But in NGN, capacity comes in abundance. By working together, this capacity can be made even bigger. Competing on price only pushes the industry back to the commodity field. If we want to move up the value chain faster, interworking is key to optimise expertise and resources.

2 comments:

la.leche said...

It'd be great if they could work together but in a marketing p.o.v, not really plausible. Nice read, btw :)

abd. halim hadi said...

Nice posting. Fast but fun reading