Murmurs of discontent
The arrival of high-speed mobile access technology on Malaysian shores in the form of EDGE (DiGi) and 3G (Maxis and Celcom), has made it imperative for network operators to find content that’s attractive to customers.

Mary Anne Tan

Entertainment in the form of music downloads (ringtones, truetones and yes, even rudetones), mobile gaming and mobile video, are some new media offerings designed to get consumers to use their phones for data access.

Among the telcos, DiGi was first to launch its Content Provider Access for its EDGE services while Maxis has been the most active in getting the content development industry to churn out applications through its Maxis Developer Programme (MDP). Celcom, interestingly, doesn’t yet have its own content development programme.

One would expect the content developer segment of the mobile industry to be quite happy now that high speed data access is a reality. But a quick survey of local players indicates that content developers are anything but a contented bunch.

Top on their list of grouses is the perennial issue of revenue sharing ratio which is slanted very much more towards the network operator’s advantage.

Even the Minister of Energy, Water and Telecommunications Datuk Seri Dr Lim Keng Yaik weighed in on this issue last month urging telcos to increase the profit split with content providers to 20:80 (in favour of content providers). The current profit ratio split between the telco and the content developers range from 30:70 (DiGi and Maxis) to as high as 50:50 (Celcom).

Content developers are usually small players who have to invest their time, resources and skills to create cutting-edge mobile applications that will differentiate them from their rivals and ensure their products get noticed by the network operators.

Network operators own the “mobile pipes” but pipes, however sophisticated they may be, are useless without something flowing through them, hence their need for content. So, the network operators definitely need the content providers too. Yet, they don’t treat them very well.

For example, the telcos insist that content developers must abide by the telcos’ own revenue calculations regardless of whether the content developer’s calculations differ from that of the telcos’.



Darren Ang, CEO of Wizardome Enterprise, which makes mobile games, says that programmes like Maxi’s MDP are well-intentioned but that there’s still plenty of room for improvement.

“MDP should consider boosting its workforce to cope with the increasing number of participants and applications,” he says. “More advice and guidance from the MDP team can be helpful to developers to understand the market direction and various aspects of the mobile business,” he adds.

Datuk Ahmad Kabeer Nagoor, executive chairman of AKN Technology, says there are many issues that need to be settled if the Malaysian mobile content industry is to thrive and grow, in particular revenue sharing arrangements.

AKN, a leading local mobile content provider, has started seeking new markets overseas where the business is more conducive in terms of revenue sharing. “However, remember AKN is a big player, so we can move on from Malaysia to the rest of the world but what about the smaller content players here?” he asks rhetorically.

Indeed, local content developers have been a patient bunch, hoping against hope that the relevant authorities will step in and proactively get the telcos to play fair but except for the occasional “call to be reasonable” the authorities have left the telco barons to lay down the rules as they see fit.

The mobile gaming sector is a hot favourite with telcos but some moves made by the government have not actually helped the players. Take the case of Terra ICT, an online game aggregator. The company obtained an RM61million loan from Malaysian Debt Ventures, a government-owned project financing institution, in 2003, to help local companies develop new games and market them abroad.

This hasn’t worked out at all. A source familiar with Terra ICT says the company has not been able to develop the local content development industry because there is more demand for content in the local lingo which is not saleable elsewhere. Meanwhile those that do create in English face fierce competition from the more established foreign gaming developers.

With the RM61 million loan due for repayment in 2008, that’s one massive headache for Terra ICT.

Kabeer says for Malaysia to tap into the mobile content sector, the government needs to take an active effort to turn Malaysian into a developer for the region and globally.

“Formulate the kind of policies that will turn Malaysia into a content factory and since the government is the biggest procurement agency in the country, it should lead the way towards making this into a reality,” he says. “Turning Malaysia into one giant content factory is a good way to start off because right now, the content industry here doesn’t seem to have any direction.”

Kabeer’s vision is one where all the content developers will thrive in an innovative environment conducive for developing cutting-edge applications and anything and everything related to their efforts in content development are put into a national databank.

This way, anyone keen to buy content will have easy access to it. Right now, the content providers are too scattered and individualistic. Without such a national databank, future generations and future buyers will not be able to know what Malaysians are capable of and all history of local skill sets will be lost as well.
The powers that be would do well to take heed of this smart piece of advice from someone who angel-invested in messaging services at a time when hardly anyone knew what SMS stood for.