HSBT asked to give more details on broadband service

Friday August 22, 2008

HSBT asked to give more details on broadband service

PETALING JAYA: High Speed Broadband Technology Sdn Bhd (HSBT) had its say yesterday on its proposed privately funded RM18bil high-speed broadband (HSBB) project but was told to submit a detailed proposal to the Cabinet Committee on Broadband in a week.

Pahang Menteri Besar Datuk Seri Adnan Yaakob, who led a 10-member team to the meeting, made the presentation, which lasted about 20 minutes and elicited several questions.

Those in the know say HSBT presented a concept paper and the committee led by Deputy Prime Minister Datuk Seri Najib Tun Razak wants to look at its detailed proposal before making a decision.

Datuk Seri Adnan Yaakob

It is learnt that Energy, Water and Communication Minister Datuk Shaziman Abu Mansor, his senior ministry officials and Malaysian Communication and Multimedia Commission chairman Datuk Halim Shafie were among those present at the meeting.

Giving HSBT a chance to present its case means the Government is willing to listen to other parties with alternative proposals to wire up the country and the signing of the RM11.3bil HSBB project with Telekom Malaysia Bhd (TM) is on hold.

The HSBB project came about when the Government decided to increase broadband penetration in Malaysia.

The initial plan valued the project at RM15.2bil but it was later scaled down to RM11.3bil in a private sector/government initiative. TM was the “preferred partner’’ based on one proposal, sources said.

Of the project cost, the Government will fork out RM2.4bil and TM the balance RM8.9bil. A total of 1.3 million lines are to be rolled out under zone 1, covering the Klang Valley, Iskandar Malaysia and industrial areas nationwide.

The agreement signing was originally slated for July 1 but was delayed as the Government needed time to sort out its portion of the funding.

A new date was then fixed for Aug 14 but just days before that, it was called off again as the committee wanted to see HSBT’s proposal.

HSBT is a special purpose vehicle with a paid-up capital of RM1mil. It is jointly owned by Pahang government unit Pahang Technology Resources Sdn Bhd and privately-owned Bumiraya Resources Sdn Bhd. Adnan is chairman of Pahang Technology Resources.

HSBT wants to wire up 2.5 million premises over 10 years at a cost of RM18bil with private funds and plans to issue bonds to secure funding if given a chance.

HSBT’s technology partners are renowned Japanese, South Korean and Swedish vendors who are able to deploy a network that offers higher speed than what TM is proposing.

In a report, an analyst said the capital expenditure (capex) for HSBT was lower at RM7,200 per line compared with TM’s RM8,700. “If HSBT’s figures are reliable, it also raises the question why TM’s capex per line is substantially higher when TM already has an extensive fibre-optic trunk and back haul.’’ the analyst said.

Up to Tuesday, TM is said to be still lobbying to cement its hold on the HSBB project by meeting senior government officials.

Up to now, HSBT has made enough noise to be heard but it is unclear if the company stands a chance of overturning TM’s fate in the HSBB project.

Nonetheless, it would be interesting to see how the Government evaluates HSBB’s detailed proposal while taking cognisance that TM undeniably has the track record while HBST has the will to tap private funds for the project.