Consumers to benefit from greater competition in 4G space

				KUALA LUMPUR: Competition among wireless Internet service providers in Malaysia is set to intensify, especially with the entry of YTL Communications Sdn Bhd and its offering of YES 4G Internet services, but consumers will benefit from greater product offerings and lower prices. YTL Communications, a subsidiary of YTL Power International Bhd, launched its YES 4G mobile Internet service with voice last Friday. The 4G technology, which is three to four times the speed of 3G, will further spur innovation in the internet space especially among wireless Internet service providers according to Edzard Overbeek, the Asia Pacific and Japan president of Cisco Systems Inc, the technology provider to YTL’s YES. “For already established content and Internet service providers (like Astro and TM), competition will definitely intensify in this space and there will be some pressure for those companies. But these are very solid organisations as well and the way they will respond is that they will find new services,” Overbeek tells The Edge Financial Daily. “They will find new ways to attract new customers and they will find new ways to outcompete some of the entrants that are entering the game. But in the bigger picture, this will bring the industry to a higher level because as competition intensifies, people will get more creative,” he added. Anne Abraham, Cisco System Sdn Bhd Malaysia managing director, said, the entry of new players would see healthy competition and extend the reach of extra content and Internet offerings across the nation. This would have taken a longer time if the country only depended on one operator. Overbeek said that with 4G, consumers would be able to access rich media like high-definition (HD) content without wired Internet connections, where rising demand is seen today. The predecessor to 4G technology, 3G is also able to provide video feeds but not in HD quality because of the latter’s smaller bandwidth. 4G technology via WiMAX is able to provide theoretical bandwidth speeds of up to 100Mbps. “Applications are moving from traditional static ones to full HD feeds. And that is what’s happening where the Generation Y in Malaysia say they are very comfortable using video. “If that population gets into both business and now into this new 4G environment, I would say you would want to provide solutions for this new upcoming Generation Y. Sometimes companies only focus on what happens today, but you need to be prepared for what eventually comes tomorrow,” Overbeek said. “If they are in their minds attached to all these social media, they are very used to video and all that then you better step up to that because the attractiveness of you as a company will start to decrease if you don’t have those features,” he added. Overbeek said that despite the increasing mobility of data consumers today, wired and wireless connectivity to the Internet would continue to coexist. “We don’t think that mobile will be the sole access technology, but fibre will also be an access technology as well. Until today, when governments build cities they are still putting fibre beneath the ground. “Fibre has an ‘unlimited’ bandwidth and it depends how much light you put in it. Both of them are absolutely vital in this industry,” he explained. Currently, the only other company offering mobile Internet connectivity with 4G WiMAX is Bursa Malaysia-listed Green Packet Bhd, which started out as a small outfit and subsequently grew. Green Packet, which is still loss-making, said it expects to be profitable by 1QFY2011 ending Dec 31. The company last week announced that its net loss shrank by more than half to RM13.7 million against RM31.8 million in the previous corresponding period. Revenues improved to RM100.9 million from RM63 million in 3QFY2009. Basic loss per share was at 2.1 sen from a loss of eight sen per share. The company which had said that it “welcomes” competition from newcomer YTL Power into the industry, stressed that it offers a differentiated product offering from YTL. This would still enable it to compete healthily in the expanded industry, it added. Green Packet has also focused its product expansion overseas in emerging markets to counter rising competition at home. However, technology analysts said they do not discount steep competition in future, which will eventually lead to a decline in profitability for WiMAX. Analysts said that the entry of “heavyweight” YTL would heat up the competition which would be good for consumers. They will eventually benefit in terms of lower prices and enhanced product offerings. Written by Daniel Khoo    Monday, 22 November 2010 14:34