Telecommunication Issue #6

TM defends international tender decisions for HSBB project

Malaysian fixed line and broadband operator Telekom Malaysia (TM) has defended its decision to offer four tenders worth a total of approximately MYR10 billion (USD 2.82 billion) to international companies, according to local news source Business News. The operator was responding to a report issued by the Malay Chamber of Commerce (DPMM) which criticised its tender process for the high speed broadband (HSBB) project. TM claims its decision to award the tenders to international companies was only due to the fact that no domestic company could provide the necessary technology. TM also noted that the tender process had not been completed. DPMM president Syed Ali Attas however said that TM had given priority to foreign suppliers, and effectively blocked local companies.

Saudi Zain signs a million subs in first month

Zain Saudi Arabia, the cellular operator which launched the country’s third national mobile network in August, says it had signed almost a million subscribers by the end of September. ‘Things are moving much faster than expectations,’ company executive Marwan Al-Ahmadi told Reuters. Around 90% of Zain’s subscribers have signed to pre-paid packages. The firm says it expects to turn its first profit in its second full year of operation and it aims to have networks covering up to 95% of the population within two years, up from 55% currently. ‘Our ultimate aim is to get a third of the market,’ Al-Ahmadi said. ‘This is definitely not going to happen in the short term... I believe we should be able to achieve it in the range of five years.’

Wireline licensee looks to USD3bn rollout

The Saudi Arabian fixed line licensee Optical Communications Co, which is led by US telco Verizon Communications, is expecting to spend USD3 billion on deploying infrastructure. Verizon has taken a 15% stake in the venture, with other investors including Millicom International Cellular and a number of local partners. ‘For the moment, we have set a USD3 billion budget for the optical wire infrastructure alone,’ a company executive told Reuters. Optical Communications hopes to raise some of the cash it will need to launch its operations through an initial public offering next year, the executive added. A launch is scheduled for 2010.

XL secures USD214m loan from EKN

The Jakarta News reports that publicly listed mobile operator Excelcomindo Pratama (XL) has signed a deal with Swedish export credit guarantee agency EKN concerning a USD214 million loan for the purchase of equipment from Ericsson of Sweden. XL says the facility, which was arranged by ABN AMRO Bank Stockholm Branch and Standard Chartered Bank, is the first tranche of the total USD400 million facility provided by EKN. The funding will be used to fund part of the cellco’s CAPEX plans for 2008/09. The mobile operator has increased its capital expenditure target for 2008 from USD1 billion to USD1.25 billion, a significant portion of which will be used to upgrade its networks as subscriber numbers rise sharply. XL had 22.9 million mobile subscribers at the end of June 2008, up 124% year-on-year. Last month XL secured a USD140 million syndicated loan from four international banks – DBS Bank, Economic Development Canada, The Bank of Tokyo-Mitsubishi UJF and Chinatrust Commercial Bank – to help finance its ambitious rollout objectives.

Penang’s free internet projects move forward

Malaysian news source The Edge Daily is reporting that the free Wi-Fi internet project in Penang will proceed, despite opposition to the scheme expressing concerns about health implications. The project will see the entire state gain free access to internet services, and the project is due for completion within two years. Two operators have agreed to invest in the state, REDtone, which pledged MYR10 million (USD2.8 million) to the scheme, and Packet One Networks (P1), which said it would invest MYR20 million. The state government is still understood to be looking for additional partners in the project. Free Wi-Fi access is expected to launch in public areas around Komtar next week, courtesy of REDtone. P1 will meanwhile roll out WiMAX services, although this will be a paid-for service.