KUALA LUMPUR (WiMAX Day). The Malaysian Institute of Economic Research (MIER) has released a report that indicates all is not well with the fixed broadband market in Malaysia, indicating an enormous market opportunity for WiMAX.

Amongst the issues noted in the report, titled the “Q1 2007 TEC-MIER CEO Confidence Index,” is that the majority of business executives in Malaysia are unsatisfied with broadband services provided by incumbent telcos.

The study said that broadband has become an important tool for business in Malaysia, and some seventy percent of the CEOs polled said that broadband plays an integral role in some part of their business operations.

However, the majority of CEOs “still felt that broadband service in [Malaysia] is slow due to inability of service providers to deliver access speed as promised, followed by inefficient service providers (64%), inadequate coverage (56%) and costly services (38%).”

Broadband penetration in Malaysia is significantly lower than in neighbouring countries of SE Asia. The Malaysian government has recognised this problem and stated that it intends to improve connectivity and turn Malaysia into an international hub for IT.

WiMAX the principal enabler
The impetus for allocating 2.3 GHz radio spectrum for WiMAX at auction in March this year was to ensure greater penetration of broadband in Malaysia.

Spectrum bidders responded quickly to government demands. YTLE e-Solutions Executive Chairman and Managing Director, Tan Sri (Dr) Francis Yeoh Sock Ping, told reporters after being awarded spectrum that his company would “strive to drive broadband penetration in Malaysia, thus helping to propel the future growth of the economy.”

The major telcos such as Maxis, Telekom Malaysia and DiGi, were excluded from participating in the auction. Energy, Water and Communications Minister Dr Lim Keng Yaik told reporters at the time that the incumbent telcos already owned 2.5 GHz spectrum but were not using it, so there was no reason to award more spectrum to them.

The government now expects that those companies awarded licenses in March will begin to roll-out WiMAX services to 25 percent of the targeted population by the end of 2007. The government also expects that 75 percent of the Malaysian population will have broadband access by 2010, and WiMAX is seen as the principal enabler.

While it remains to be seen if the ambitious roll-out targets will be met, current reports from Malaysia indicate that most of the new 2.3 GHz spectrum owners are well on their way to deploying infrastructure for their WiMAX networks.