Govt and TM likely to seal broadband deal on Aug 14

AFTER over a month's delay, the much awaited signing of the RM11.3bil high-speed broadband (HSBB) agreement between the Government and Telekom Malaysia Bhd (TM) is scheduled on August 14.

Sources said the planning for the signing was well underway and “it is highly unlikely that there will be further delays”.

TM and the Government were originally slated to seal the deal on July 1 but the signing was put on hold, as the Government then had not sorted out where the funding for its portion in HSBB will come from.

“The funding part is resolved now and the Government will fork out RM2.4bil for its part in the project,’’ said a source familiar with the HSBB infrastructure network project.

He did not disclose whether the funding would come from the Ninth Malaysia Plan allocation.

Instead of the Finance Ministry, the Ministry of Energy, Communications & Multimedia (MECC) is expected to sign on behalf of the Government.

Earlier, it was said that the Government, via Finance Ministry, would be involved in the project.

According to the source, this was just a technicality and the Finance Ministry had asked that the MECC to sign on its behalf.

This is also the first time the Government is co-investing in a project where it wants returns, but “details on the quantum of returns is not clearly specified”.

The idea for the HSBB was to boost broadband penetration in the country.

The investment for a nationwide reach of broadband would cost about RM15.2bil, of which the Government had earlier planned to co-invest RM4.5bil last September.

However, the Government decided to scale down the project this year and only work on Zone 1, which covers major cities and towns.

The cost for Zone 1 will be RM11.3bil, and TM was picked as the player to implement the project.

TM is forking out RM8.9bil while the Government about RM2.4bil, thus the need for the signing agreement so that the project can be implemented.

TM had said that it would start to roll out the project six months after the signing of the contract.

However, there are various unresolved issues that needed to be addressed so that the industry could benefit from the project and not TM alone.

So far, players still does not know how much access will be provided to them and at what rates.

The concern is that the lack of transparency would allow TM to muscle its way in the negotiations for network infrastructure usage as has been done in the past.

Whatever the Government or TM does, one must bear in mind that if TM overcharges the industry players, the consumers will then suffer in terms of higher usage charges for broadband services.