Commentary Local

Harlow? Harlow? Can you hear me?

mobile

TheMole
Written by TheMole

Feb 22, 2017

By Dave Avran

THE news going around is that Telekom Malaysia Berhad (TM) Group CEO Tan Sri Zamzamzairani Mohd Isa will not be renewing his contract which is due to expire next month. The current Chief Financial Officer (CFO) Datuk Bazlan Osman, 52, is the hot favorite for the top job.

Interestingly, Bazlan started as an accountant with the Sime Darby Group before joining Celcom as VP of corporate finance before becoming the CFO. He was instrumental in Celcom’s RM3.5 bil restructuring and integration with Celcom Mobile Sdn Bhd, so it will be interesting to see what he does with TM, assuming he clinches the job.

TM looks determined to make a comeback to Malaysia’s highly competitive mobile telecommunications market. To this end it has bought a 72.9% stake in Webe Digital Sdn Bhd (previously known as Packet One Network (M) Sdn Bhd or P1).

Dave is one of Malaysia’s pioneer bloggers and founder of MARAH, an active online crime watch movement.

At this point you would be right in asking why P1 changed its name to Webe after spending millions on an aggressive advertising campaign to turn their brand into a household name. I still remember their provocative “Dah Potong?” campaign tagline.

In essence, P1 provided Worldwide Interoperability for Microwave Access (WIMAX) a wireless communication standard marketed to households, while Webe focuses on offering postpaid mobile services with unlimited use of data, free calls and sms with no binding contract targeted at TM’s Unifi broadband customers.

On paper, it’s quite a clever strategy. TM has a firm grip on its millions of customers who use its broadband internet services in their homes and offices. The problem is when they step out of their brick and mortar structures; TM loses out the mobility part to the other operators.

This is where Webe comes in to neatly plug the missing mobile services piece with an attractively packaged and priced deal for that much coveted convergence.

The question on everyone’s mind now is can Webe garner a significant market share in an already highly saturated sector of the local communications industry? The take-up of unlimited usage plans are normally slow as Malaysian consumers are cynical and wary about the term “unlimited”.

Many have gone through previous “unlimited usage” packages and say that unlimited usage currently makes sense for Webe as its network is underutilized. As traffic and network congestion increases, especially at night, they question if Webe will then impose quotas and cap data usage at various levels. Keep in mind that broadband capacity is fixed.

To be fair, Webe’s RM79 monthly plans are attractively priced and lower than Maxis’ and Digi’s average revenue per user (ARPU). Maxis’ ARPU for 2016 was RM102 while Digi’s Q4 2016 ARPU was RM81.

Both these telcos may experience a possible loss of customers to Webe in the near future. Celcom’s ARPU for Jan – Sept 2016 was RM77, pretty close to Webe’s offering. Interestingly, Webe has an agreement with Celcom Axiata for a domestic roaming partnership.

It will be interesting indeed to see if this latest version of the unlimited usage strategy works on Malaysians.

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TheMole

TheMole