MALAYSIA - The slow uptake of broadband services has led the Malaysian government to revise its earlier optimistic penetration targets, prompting industry observers to call for market reform. The government had previously set a target of 75 percent adoption rate by 2010, but only 11.7 percent of Malaysia's 5.5 million households currently have broadband access, up from 7 percent in 2005. This disappointing state of affairs recently prompted a Cabinet Committee chaired by Deputy Prime Minister Najib Tun Razak to revise the target down to 50 percent by 2010. However, the Association of the Computer and Multimedia Industry of Malaysia (Pikom) said the government should instead use an internationally recognized benchmark in establishing the broadband penetration target. It is proposing the government sets a goal to achieve at least 3.0 broadband subscribers per 100 inhabitants by 2010. Compared to comparable economies, Malaysia lags behind its peers in terms of broadband subscribers per 100 inhabitants. To improve the quality of broadband services, Pikom said telcos in Malaysia should follow the lead of countries such as South Korea and Japan, in upgrading to fiber networks. Pikom is also concerned over repercussions of the Malaysia's costly, yet poor-quality broadband services. The Association has proposed that the cost of broadband usage for consumers be reduced immediately to create a critical mass of broadband users.

Much of the brickbats concerning broadband services have been directed at Telekom Malaysia (TM), which has 94 percent of Malaysia's broadband subscriber market or a base of more than 1 million subscribers. Industry observers say some of the problems may stem from TM's dominant market position, and the apparent protection the telco enjoys as a government-linked company, especially on issues such as the unbundling of last-mile access. Pikom argued that the current "oligopolistic, monopolistic situation for telecommunication backbone and broadband services will doom us all". In a discussion with government officials last April, Pikom urged the Malaysian government to open up the telecommunication and fiber-optic pipelines owned by government-linked telcos and make the network accessible to all technology providers. This, it said, will reduce the cost of broadband services for consumers. Hafriz Hezry, an investment analyst with TA Securities Holdings, said the introduction of WiMax could resolve, to some extent, the problem of the last-mile access which TM seeks to protect. Full article ZDNet Asia