Could telcos be dead wrong in their advertising strategies? The annual MCMC Hand Phone Users Survey 2005 could provide some answers to this question.

Kashminder Singh

 

The MyICMS 886 blueprint, as it is called, is a concerted effort by the government to galvanise the nation and move it forward in sectors that are clearly going to be the engines of growth worldwide over the next few years.

The plan has correctly identified worldwide trends that will dominate the world and lays out just where Malaysia ought to be by 2010. It is aimed at keeping Malaysia ahead of fast growing economies like Vietnam.

The strategy is comprehensive in its coverage and dead right in the areas it focuses on. However questions abound as to whether the blueprint itself is specific enough to make a significant impact on the country’s growth. It does not envisage additional spending by the government; further rendering its success uncertain. The mobile industry is called upon to play an important role in the strategy. Unfortunately lots of questions are left hanging with some goals either not tallying up with other goals or clearly too hopeful.

Among the major goals that are sought for are five million 3G users by 2010, 2.8 million broadband subscribers by 2008, 75% of all mobile users to sign up for mobile TV by end 2008 and 1 million households to become “smart digital homes” by end 2010. All these goals will be done, according to the ministry, by the private sector without any additional spending by the government. The government will facilitate, regulate and provide institutional assistance only.
While the national blueprint is far-sighted and timely, it must be noted that Malaysia is not alone in this approach. South Korea, a country that has leaped to the very forefront of the digital age in just a decade, launched a very similar strategy even earlier than Malaysia. The name of their plan: Korea IT839.

The similarities between the two strategies are striking. South Korea’s strategy calls for a concerted action in eight services, three infrastructural projects and nine growth engines – in about the same areas of MyICMS 886. It is the differences between the two plans however that raises eyebrows.

Firstly, South Korea’s plan is specific to the point of dollars and cents. It calls for US$70 billion to be invested by both the government and private sectors in the push to keep the country in the forefront of technology and innovation. South Korea also has a central agency and R&D facility to direct and spearhead the implementation of its plan. It has a very measurable overall goal which is to push the per capita income of South Korea to US$20,000.



MyICMS 886, on the other hand, will be generally driven by the Ministry of Energy, Water and Communications but it was made clear during launch that some of the areas identified in the 886 programme are under different ministries and agencies, raising questions as to whether there will be full support of these plans by the other bodies.
There was also one other glaring hole in MyICMS 886. There is no mention of government projects in the booklet. No timelines, goals or deadlines for any IT, communications or multimedia projects of the government. When the Minister was asked why the government’s  “e” projects were missing from the strategy, he conceded that they should have been included and pledged to do so later.

One question on many lips is whether the mobile industry will carry out its share of the goals. This is a realistic question to be asked as time and time again, the mobile operators have dragged their feet on deadlines and goals set for them. Nationwide coverage and prepaid registrations are two recent examples where private sector initiative alone has been ineffective.

To compound matters, the goals itself are a bit confusing. On the one hand, there are only expected to be about five million 3G users by 2010 – around the time 4G should realistically be in Malaysia. It would have been expected that by then a lot more would have signed up for 3G. Notwithstanding that, another goal calls for 75% of mobile users to embrace mobile TV by end 2008. That would be at least 15 million users but mobile TV is all but impracticable without 3G. 3G usage however is expected to be only five million two years after 2008.

Similarly the plan calls for nationwide 3G coverage by end 2010 but the goal for universal service provision which is meant to ensure that underserved rural areas in Malaysia are provided with access to ICMS services only envisage 60% coverage of rural households. Clearly, there has to be a lot of fine tuning of the MyICMS 886 strategy.

Nevertheless, we sent some questions to Celcom and Maxis, the current 3G operators. Our aim was to gauge their readiness and commitment to the MyICMS 886 blueprint.
The MyICMS 886 timeline calls for 300,000 3G subscribers by end 2006. Maxis said it was confident of getting 150, 000 subscribers. Celcom did not respond to our e-mails and phone calls.

Maxis confirms that it has 30,000 active subscribers currently and is concentrating efforts on bringing another 50,000 existing Maxis 3G phone owners onto the 3G platform. Maxis also pointed out that 3G handset prices were dropping and would fall below RM1000 this year. In addition to that, Maxis will be launching dedicated campaigns and promotions to stimulate use of 3G services, especially, video centric services such as live World Cup updates and video contests. All these efforts are expected to increase its 3G subscriber base significantly by year end.

As to coverage, Maxis will be concentrating its 3G stations in Klang Valley, Penang and Johor Bahru. Instead of going for coverage of more cities, it is instead going for dense coverage of these three cities, with 1,400-1,500 sites targeted for by the end of this year. Maxis has already laid claim to having the largest 3G network in the country. According to Maxis, it will have close to 800 sites deployed by February 2006.

Infrastructure would be useless without proper applications. In that light, MyICMS 886 calls for greater attention to be paid towards developing local digital content. Maxis is ahead of the rest in this area. Its Maxis Developer Programme (MDP) has been running for some time. This programme seeks to assist local developers to come up with world class applications. It has committed to spend RM30 million spread over five years to boost the programme.To date, the Maxis MDP programme has more than 90 MDP participants.

Despite its enthusiasm, Maxis and even more so, Celcom will have to redouble efforts if they are to keep up with the goals envisaged in the MyICMS 886 blueprint. The goals are very ambitious but universally recognized by industry players as inescapable if Malaysia has to move forward.

The mobile related goals will be among the toughest to achieve. To date, it has been proven time and time again that prodding alone doesn’t move telcos in the desired direction. A fair bit of bite will be needed if the goals of MyICMS 886 are to be realized. Unfortunately, that’s missing in the blueprint at this point in time.