"We will continue to study the business potential of each of our networks and we see a tremendous value in the 800Mhz spectrum, both in terms of present technology as well as the migration to third generation technology.''
Lucent, Motorola shortlisted for Telekom project
Source: WorldSources Online
Publication date: 2001-01-26
Jennifer Jacobs
TWO US firms have been shortlisted by Telekom Malaysia Bhd as possible equipment suppliers for the plan to convert the use of Mobikom's frequency from cellular to fixed wireless telephony.
Lucent and Motorola are now said to be in the running for the project that will use Mobikom's 800M megahertz frequency as a new platform-or the code divisional multiple access or CDMA platform-for fixed wireless services.
Sources told Business Times that Telekom Malaysia's tender committee has recommended these two equipment suppliers and the matter is now in the hands of the Ministry of Finance.
The contract, if awarded, could be worth between RM300 million and RM1 billion.
Telekom Malaysia is currently in the process of rationalizing its cellular telephone business and plans to migrate the subscribers of Mobikom to its flagship TM Touch. The company owns both the mobile phone services.
Should the migration be realized, the 800Mhz frequency will be vacant, hence the possibility of using it for a fixed wireless service. The service, in a nutshell, will see fixed line telephone served by radio waves rather than cables.
Its chairman Datuk Mohd Radzi Mansor had said last year that the company was evaluating the cost of moving Mobikom's 800 service to the CDMA platform for fixed wireless services. CDMA is a US technology that runs on the 800Mhz frequency.
''We do have the frequency for it and the Mobikom license is still valid,'' Mohd Radzi said.
Telekom Malaysia had indicated as early as June last year that it was looking to migrate all its cellular subscribers to TM Touch.
As Telekom Malaysia has traditionally provided fixed wireless services in rural and suburban areas, the contract may have an impact on a contract it had earlier awarded to KUB Bhd to provide Wireless Local Loop (WILL) equipment.
KUB Telekomunikasi, in partnership with Q-Telecell, won a RM318 million two-year contract from Telekom Malaysia last year to supply the equipment for urban, suburban and rural fixed wireless service, after a protracted tender process lasting three years.
Rural telecommunications is a major issue now especially with the move towards knowledge-based economy. The digital divide becomes even more profound when urban centers such as the Klang Valley have access to state-of-the-art communication services while some in the rural areas are still not able to make a simple telephone call.
In 1994, Telekom Malaysia, ahead of the opening up of the fixed market to competition, started to look at using cellular technology to provide fixed services in rural areas, as a possible solution.
It implemented radio in local loop services, a technical spin-off from cellular systems that ran on its Atur 450 frequency. The service involved setting up a radio-based station in the areas it wanted to serve, instead of kilometers of cables.
The basic idea was good as it cut down rollout costs and reduced payback periods for investments in rural telecommunications. But as a first generation technology, it encountered many problems in implementation.
The wireless local loop technology it is currently employing is a refinement of this technology, and CDMA is an even more sophisticated version.
Mohd Radzi had told Business Times that cost would be a major consideration in deciding on whether to use CDMA to provide fixed wireless services.
Sources within the company added that if Telekom Malaysia decides not to go ahead with the project, it could still utilize Mobikom's RM500 million network for the purpose and wait a few years before going directly into a third generation mobile system or 3G, rather than investing in second generation system now and then upgrading to a 3G system.
Telekom Malaysia's cellular division has been a strain on its resources for the past few years now.
In 1999, when it announced a 47 per cent drop in its pre-tax profit to RM884.2 million from RM1.67 billion the year before, the company said it suffered its heaviest losses in its cellular division.
Its then-chief executive Datuk Wira Mohd Said Mohd Ali did say, however, that the company had made a bad debt provision of RM86 million for Mobikom alone.
When asked if Telekom Malaysia might be better off closing Mobikom down since it had incurred nothing but losses since the group had acquired the entire stake in the company in 1998, Mohd Said replied: ``We have plans to revamp Mobikom, including upgrading its technology. We will continue to study the business potential of each of our networks and we see a tremendous value in the 800Mhz spectrum, both in terms of present technology as well as the migration to third generation technology.''
Copyright 2001 BUSINESS TIMES all rights reserved as distributed by WorldSources, Inc.
Publication date: 2001-01-26
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