When digital mobile communications arrived in Malaysia about 10 years back, five operators went head to head against each other. More would surely have entered the fray but it was not easy to get licenses. But even five proved too large a number. Timecel ended up being taken over by Maxis and Celcom joined forces with TMTouch. Over the last three years, Maxis, DiGi and Celcom have pretty much gotten used to competing against each other in the mobile industry.

The neighbourhood is not about to stay so cosy for much longer.

These celcos will soon have to prepare for assaults from relatively unfamiliar competitors. A host of telecommunication companies, new or established, are starting to jostle for position in this coming fight. The prize that is luring this sudden rush into mobile territory is a lucrative slice of the coming boom for mobile or wireless broadband services.

The easing of government regulations and the move towards a free trade environment now makes it possible for others to aspire for a share of the mobile telecommunications market. A marketing battle is all but certain to erupt in 2006 and it is going to be a crowded and chaotic marketplace. Aspiring companies are adopting many different strategies and embarking in various directions with similar aims: to enrich the mobile Internet experience of people and make a lot of money.

Companies are planning their forays into mobile broadband services because of the growing realisation that businesses and individuals are hungering for these types of services. Broadband is changing the Internet into something vastly different from its original roots. No longer is it just e-mails and HTML pages. Now everyone wants to instant messaging, streaming audio and video and browsing.

Having experienced such wonders on their PC screens, people are learning that they cannot do without this “always on, always connected” lifestyle when they move around. Even for plain old e-mail, they no longer have to content themselves with receiving stripped-down text-based versions of e-mails on mobile devices. They can now get HTML-based e-mails with attachments and read them on the move.

The answer to this emerging demand according to many people is 3G mobile services. Others believe that incoming new technologies like WiMax holds out greater promise. Since the stakes are very high – you need to have big money to play this game – it is all but certain that companies that end up backing the wrong technologies will suffer deep losses.

Warfare was always unavoidable. Revenue growth from voice calls has been slowing. This state of affairs is the same for all types of telecommunication service providers.  Whether they operate in the mobile, fixed lines or VoIP (Voice over Internet Protocol) segments, returns are fast becoming razor thin. VoIP service providers; who triggered the plunge in voice call rates in the first place, have been hit by free calls providers like Skype. Established telcos, themselves stung by falling call revenues, have responded with their own VoIP discounted calls services. Telekom came up with its iTalk service. Mobile operators have not stayed quiet either. Maxis has quietly but effectively made an impact with its Voice Away service which is targeted at the corporate sector. With voice calls becoming commoditised, the attention of most of these companies has turned towards the mobile data sector.

Danesh Pannirselvam of Asia Telecoms may end up becoming the poster boy for mobile broadband services. Asia Telecoms has been handed the opportunity to become Malaysia’s first Mobile Virtual Network Operator (MVNO). This means that Asia Telecoms will be able to rent airtime and network capacity from any of the telcos and become an operator with minimal overheads.

In principle, it is an interesting idea. No need to set up any physical infrastructure, simply buy capacity from the telcos at wholesale prices and invite subscribers to sign up for Malaysia’s “fourth” telco. Apparently Asia Telecoms also enjoys a one-year period during which no other MVNO license will be given out.

Just how does Danesh plan to take on the big boys? His plans call for walking a fine line between friends and competitors. Danesh says that he will build good ties with Maxis, Celcom and DiGi. They will benefit as Asia Telecoms will be buying spare capacity form them. However, Asia Telecoms will compete with those same three telcos. Danesh says that shouldn’t be a problem as he is not going for the mass market which is pretty much in the hands of the three telcos.

What he hopes to do is build a unique service aimed at creating a rich multimedia experience for its subscribers. Unlike current telcos which are simply pushing a service like 3G, he plans to market a lifestyle built around these services. “Nobody will want to sign up for 3G services if they cannot see why it will benefit them,” he says. “We will do it differently. When people use our service they won’t know or care that it is a 3G service. To them it will be an application they want to use because it enhances their lives in some way.”

Danesh believes in order to achieve their goals that they must be in control of the business model which is why the MVNO license is important. As an MVNO, Asia Telecoms will be able to create its own service rather than sell an application through current celcos. It will have its own 01X number prefix, be able to issue its own SIM cards and market its own prepaid and postpaid plans.

As to how successful the MVNO strategy will be remains to be seen. Asia Telecoms will only start operations late in 2006. Elsewhere, Virgin Mobile of UK has operated as MVNO successfully in Europe for some years now. However it failed to make any headway when it tried the same thing in Singapore in 2001. That venture folded within a year.

Of course, others who believe in 3G are eyeing a full 3G license instead of becoming an MVNO. Two more 3G licenses are available for tender in Malaysia. Bidding closed on November 11 and there were three bids. DiGi, the only celco without a 3G license is bidding for a license this time round and really should have no problems acquiring it. That essentially leaves one license up for grabs. The other two bidders are Time Dotcom and MiTV.

Time Dotcom’s 3G strategy is not clear at this moment but may include a tie-in with foreign celcos like Hutchison. It has been languishing in unexciting telecommunications and IT undertakings. It did attempt to launch the Webbit wireless broadband service some time ago but that fizzled out after an initial euphoria. Problems with the type and capacity of the wireless broadband service it used are believed to be responsible for the failure of Webbit after its initial soft launch. The big question is whether Time Dotcom has the expertise to launch and sustain a 3G network. Furthermore, there is also the problem of turning it into a profitable service. Hardly any operator in the world has made money out of 3G yet.

MiTV, on the other hand, looks to be seeking the license to capitalise on digital mobile TV. This is an interesting area with huge potential. Rather than crowd the 3G market with operators offering the same products, the authorities could go with MiTV which promises alternative 3G based products. It won’t be alone in its approach. Astro has already carried out trials of mobile digital TV broadcasts and is likely to seek an alliance with Maxis and come up with its own version of digital mobile TV.

Redtone, a VoIP player, has moved strongly to seize the first mover advantage in the wireless broadband niche application area. It has just launched the Mobile Money wireless mobile payment system that aims to change the way consumers buy and pay for items in Malaysia. It has received strong backing from Hong Leong Bank in this venture. Mobile Money will be structured as a separate corporate entity from Redtone. While it may seem that Redtone has made a smart and fast move by identifying a niche sector; it may not be alone in that area. Sapura Telecommunications, rather quiet for a long time in the mobile scene, is believed to be launching a similar service which is being called M2.

Nasioncom too says that they are not just a VoIP company. One of its directors, Shamsul Khalid Ismail was quoted recently as saying, “We are a full-fledged telco company with many services. Apart from VoIP, we have network, broadband and data services.”

Nasioncom is trying to deploy Wimax services in selected locations in the Klang Valley. It is believed to have forged a partnership with selected 7-11 stores to plant its base stations. Earlier this year, company officials said that they would launch limited WiMax services in some areas by year-end but to date, there has been no further updates.

Wimax is probably the most serious challenger to 3G in the wireless broadband sector. Its backers include powerful names like Intel. However technical issues still remain to be resolved. But those issues are sure to be resolved and when that happens, WiMax and especially its mobile version could emerge as the spoiler to 3G.

There are also companies like Jaring which have not revealed their wireless broadband ambitions or plans yet. One thing is sure though. The pot of honey that is perceived to lie in mobile broadband will attract many raiders. One other thing is also certain. Just like the days of GSM services, only a few will survive and prosper.