IPTV - Astro TV conducting trials with Time dotCom; Mobile Telcos Price War?

Astro TV conducting IPTV trials with Time dotCom

By B.K. SIDHU
bksidhu@thestar.com.my

PETALING JAYA: With Telekom Malaysia Bhd (TM) venturing into the broadcasting business with its IPTV (internet protocol TV) offering, Astro TV is not about to let any of its market share slip by without a fight.

It is learnt that Astro TV is conducting trials for its IPTV offering in Mont Kiara by riding on Time dotCom Bhd’s (TDC) fibre optic fast-speed network.

Astro TV needs an IPTV platform and if it were to wait till sister company Maxis Communications Bhd completes its network build-up, that may well give TM an edge in some places.

Hence, the trials with TDC which began at the end of July involving about 100 users.

Sources said this was a technical trial for the Astro b.yond to determine if the network was able to carry enough video content at fast speed. TDC is providing the GPON infrastructure for the trials.

A GPON access network not only enables telcos to build and support video services, but provides the ability to scale the network to deliver any bandwidth-hungry services such as HDTV (high definition TV) and VOD (video on demand), an IP-based broadband video service.

Astro needs a minimum of 15-20 megabits per second (Mbps) for content delivery and TDC’s network can provide up to 100Mbps. Sources said trial users were able to watch all of Astro’s programmes in HD and 3D quality.

The trials make TDC a potential contender for access to Astro besides Maxis. However, since TDC only focuses on multi-dwellings such as condominiums and apartments blocks, its reach may be limited. TDC finds it too costly to focus on fibre to the home as done by TM.

TM is bundling IPTV with its high-speed broadband service known as Unifi. But content will remain the differentiating factor in the IPTV business. For now, Astro has rights to loads of content but don’t underestimate TM as it is tying to link up with a lot of content providers to make its IPTV proposition appealing.

Maxis, on the other hand, is working overtime to get a fast-speed Internet network up. It has appointed Huawei as the exclusive supplier for the next generation network. Maxis said the job would also include the building and managing of a full-service Fibre To The X network using GPON technologies.

Maxis has also conducted trails for IPTV involving 50-odd users during the recent World Cup.
Whether Astro will need more than one player to deliver its IPTV content is unclear but Maxis certainly is building a fibre optic network in its quest to become a quad player and it will have to rely on content from Astro.

ASTRO :  [Stock Watch]  [News]
TM :  [Stock Watch]  [News]
TIMECOM : [Stock Watch] [News] 

Analysts don't expect lower prices for mobile phone services

By LEONG HUNG YEE
hungyee@thestar.com.my

Price war unlikely but telcos are expected to compete on device offerings, say analysts

PETALING JAYA: While cellular companies may have posted rosy profits during the latest reporting season, analysts say the second half will not be an easy period for them.

Analysts do not expect an all-out price war between telcos but they do see competition heating up on device offerings such as smartphones.

“Both DiGi.Com Bhd and Maxis Bhd will be offering Apple Inc’s iPhone 4 soon. Pricing details have yet to be revealed but consumers will always opt for the best bargain,” an analyst said, adding that the average revenue per user (ARPU) and earnings before interest, tax, depreciation and amortisation (EBITDA) margin for telcos would remain under pressure.

DiGi had earlier cautioned that its EBITDA margin for 2010 might be pressured due to higher level of handset subsidies.

“Both DiGi.Com Bhd and Maxis Bhd will be offering Apple Inc’s iPhone 4 soon. Pricing details have yet to be revealed but consumers will always opt for the best bargain,” an analyst said. Pic shows Apple iPhone 4 on display at the registration desk at the headquarters of KT in Seoul on Monday. Apple’s newest smartphone will be officially released to Korean consumers on Friday. — Reuters

 

AmResearch Sdn Bhd said that despite a recent reduction in interconnection fees to 5 sen from 8 sen previously, the competitive landscape between telcos remained status quo. “There is yet to be a full-fledged price war,” it said.

The research house said ARPU continued to decline on a blended basis and reckoned that ARPU was almost reaching saturation point.

Within the postpaid segment, AmResearch said ARPU increased 2% to 4% in all three companies in line with the growth recorded in usage minutes.

“Voice is taking a backseat to non-voice, parallel to other developed countries. This trend should persist to a saturated level, where voice usage would hit its floor – as observed in the fixed line segment – within the next two to three years,” it said.

AmResearch said all three mobile companies were recording significant growth in broadband usage, with Celcom Axiata Bhd leading with more than 50% market share followed by Maxis (35%) and DiGi (15%).

The research house said the telecommunications sector was still undervalued, with enterprise value to earnings before interest, tax, depreciation and amortisation (EV/EBITDA) ranging between 5.42 times and 8.11 times. It said regional peers were valued at an EV/EBITDA of at least 9 times.

An analyst said the possible slowdown in the second half could lead to a cut in consumer spending.
However, the analyst said he was still confident about the industry’s outlook given the number of new mobile devices being introduced into the market.

He expects non-voice revenues from wireless broadband and data value-added services, including mobile Internet, messaging and content services, to drive growth for telcos moving forward.

The analyst said his top pick was Axiata Group Bhd as it “has a good regional story with presence in 10 countries and good-performing assets in Indonesia, Sri Lanka and Bangladesh.”

Brain drain, education,racism

Brain drain gains momentum

ZIYING'S BRUSH

Malaysia’s brain drain is not limited to adults as increasing numbers of children are also leaving the country.

RECENT reports on the two school heads accused of racist slurs bring to mind a question that an expatriate, newly arrived in Malaysia, posed to me. “Why,” she asked, “do Malaysian parents send their children away?”

I was momentarily stumped. And then I realised she was right. So many people send their children overseas when they reach a certain age, sometimes right after primary school, or more often, after third year secondary school. Their kids are in Singapore, Australia, Britain – anywhere but here at home, and the situation has become so normal it didn’t strike me as strange.

It is said that some half a million Malaysians have left the country to work or live abroad and the papers these days are full of reports on the great Malaysian brain drain. Much has been written on the whys and wherefores, with much hand-wringing over how to get these brains back.

Preparing for change: Sweeping reforms are being implemented in schools across China to meet the needs of the next stage of the country’s development.

 

All the while, under the radar, children whose families can afford it continue to leave. After finishing secondary school overseas, they attend university. Chances are, unlike a decade or two ago, many won’t come back. It seems young brains, too, are draining away.

Malaysia likes to promote itself as a centre of educational excellence. So why is this happening, and is there a reality gap somewhere?

The two school principals’ racist remarks just seem the tip of the iceberg.

Racism is at the root of these ridiculous comments but I would venture a guess that ignorance also plays a role. After all, I was told by friends that history textbooks have been revised to exclude much of world and important segments of local history. I hope this is not true but from what I have seen at the National Museum (Muzium Negara), I find that perfectly believable. If a national repository can ignore the seminal role played by one-third of the country’s population – i.e. the Chinese and Indian minority ethnic groups – then this really comes as no surprise.

Given this one-sided view of national history, should anyone be surprised that a school head allegedly called certain ethnic groups “passengers”? Clearly, that also reflects the shortcomings in their own education and poor training as well as the quality of some Malaysian schools. Being educators, they should know better but with the shrill racist and religious rhetoric of certain extremist political factions, it should not surprise anyone if there are more who think that way.

Grooming leaders: Hawaii’s Punahou School has excellent facilities and teachers, and a curriculum that fosters creativity. It is the alma mater of President Obama and well-known business leaders .

 

Recently there have been debates on whether the two crucial subjects of Maths and Science should be taught in English or Bahasa Malaysia. Looking around Asia, it is obvious that developed nations like Japan and South Korea do not teach in English and neither do rapidly developing countries like China. Yet they have surpassed Malaysia in so many ways. Rather than the language of instruction, it is ultimately the quality of the syllabus, the materials, the teachers and the teaching that make a difference.

Given the situation, it is no wonder that parents are sending their children overseas at an early age or even emigrating with them. Away, the children can have an opportunity to develop their full potential in a meritocratic system that rewards ability and results without the suffocating burden of political and ethnic strictures.

Outside Malaysia’s borders is a competitive, knowledge-driven world where there are no protective mantles and only the fit will survive. One need not look far to see what is happening. In economic powerhouse China, for example, competition is part and parcel of the national fabric.

Meritocracy has been practised since the first imperial (civil service) examinations over 2,000 years ago, and is still practised through assessments like the annual gaokao university entrance exam. And the education system is currently being fine-tuned by a series of sweeping reforms to meet the country’s future needs.

As for attracting Malaysians back from overseas, I shall never forget what a potential employer in a listed Malaysian company told me when I applied for a job after several years working with a multinational in the Asian region. He glanced at my resume and said: “In Malaysia, it is not what you know, but who you know that counts.” Later, at the Human Resources department, I discovered for the very first time my overseas education and American university degrees were a negative as “things are different in Malaysia”.

Meanwhile, young and not-so-young human capital are continuing to leave Malaysia, the country is unable to produce enough engineers, managers and other professionals to make a difference and FDI has fallen through the bottom. What is needed now is the courage to step out of the comfort zone and make the changes that are so long overdue – or brain gain will just remain wishful thinking.

This column will take a break until early November. Ziying can be reached at ziyingster@gmail.com.

Racism Malaysia NAH!!! ... 

thestaronline 

Housing troubles are resurfacing

I'll regret saying it but housing troubles are resurfacing

Over the years the housing market has been one of my favourite subjects – and one that has provided rich pickings for my critics. It is time to face their ire again.

By Roger Bootle
Published: 8:19PM BST 05 Sep 2010
47 Comments

Wishful thinking? Mortgage approvals have been low all year.

 

Last week's Nationwide house price figures showed a second successive monthly fall, this time of 0.9pc. What's more, this data followed other signs of weakness. Mortgage approvals for house purchase have been low all year, while the RICS new buyer enquiries balance has been negative for the past two months. Could the market be on the turn?

Lower house prices would make a lot of economic sense. In the UK, as in the US, a surge in house prices was right at the centre of the wider economic boom which ultimately ended in the financial crisis. 

Since then, most asset markets have undergone a major adjustment. In the US, even though the housing market never got as overvalued as ours did, house prices fell by 32pc. In the UK commercial property prices fell by about 45pc. Equities fell by about 50pc, and still stand 20pc below their peak. The pound fell by about 25pc. Although average UK house prices initially fell by 20pc, they then recovered and currently stand only about 10pc below their highs. So the UK housing market sticks out like a sore thumb.

 

Moreover, as a multiple of earnings, average house prices are, at 5.2, way above the long-term average of 3.7. Admittedly, this indicator has been flashing red for ages. And measures of so-called affordability – the ratio of mortgage payments to take-home pay – show no sign of undue strain. Mind you, if housing is not affordable when official interest rates are at virtually zero then when will it be? My view is that official interest rates will stay at this level for ages. But at some point they will go up to something like 5pc, probably taking mortgage rates to about 7pc. At current prices, how affordable would housing be then? In any case, many potential buyers find that even if they can afford the mortgage payments they cannot save enough to meet the now larger deposit requirements.

Nevertheless, movements in house prices need a catalyst. There are a few candidates. Mortgage availability is getting tighter as lenders wake up to the risks, face closer regulation and anticipate the imminent expiry of the Bank of England's special liquidity scheme.

Meanwhile, the pressure on personal finances is set to intensify as the rate of increase of average earnings edges down, higher taxes reduce disposable income and job losses in the public sector both reduce total personal incomes and erode confidence about job security. At the top of the market in London, support from foreign buying in the wake of sterling's collapse has softened as sterling has recovered. The higher rate of income tax and continued doubts about the outlook for the City point in the same direction.

That said, there are no certainties. The housing market has seen false dusks before. This could be another one. Because of low interest rates, it is possible the market will hold these levels and that housing is eventually returned to reasonable value by the continual upward march of salaries, rents and the general price level. But I doubt it. The issue is whether the market falls sooner or later.

So bring on the ire. (You know who you are!) Doubtless I shall soon be told that there is no such thing as "the" housing market but rather umpteen micro markets, or that I have forgotten about supply and demand. (A pretty bruising criticism to an economist.) Or that I have ignored the fact that we are a small island, that we don't build enough houses and that Aunt Mabel is set to remain in her three bedroomed semi, despite having a gammy leg etc.

Let me say that the average level of house prices is determined by the balance of supply and demand. But the supply is the stock of houses, and that stock does not change much from year to year. So movements in prices from one year to the next are principally caused by shifts in demand. And demand does not mean the airy aspiration to live somewhere nice, or the "need" for housing, neither of which has any economic content. Rather, it means the willingness and ability to pay the going price.

Ability is affected by income, interest rates and the availability of credit. Willingness is affected by many things but one of them is what people think will happen to prices in future. Like other asset markets, therefore, housing is subject to a substantial speculative influence. If prices are expected to fall then much "demand" which was present when prices were expected to rise will evaporate. I suspect that both the ability and the willingness are about to fall.

roger.bootle@capitaleconomics.com
Roger Bootle is managing
director of Capital Economics
and economic adviser to Deloitte