Singapore-based Internet Service Provider (ISP) Viewqwest which entered the Malaysian broadband market this month could prove a tough rival in future to local telecommunications giant Telekom Malaysia and spark a price war.
BMI Research said the newcomer offering “disruptively-priced fibre broadband service” will not make an immediate splash to the domestic fixed broadband market due to its current limited scale.
“However, the emergence of low-cost rivals could compel incumbent Telekom Malaysia to reduce its prices, boosting uptake of broadband, and consequently, IT services,” the unit of global credit ratings company Fitch Group said in its report today.
BMI Research said the result could see a wider broadband uptake in the country should a rival in the market build enough momentum to compel TM to take such an action.
“As ViewQwest’s broadband network only caters to the state of Kuala Lumpur, impact on our country-level broadband, and IT, market forecasts at this moment will be limited.
“However, we will continue to monitor the market for developments indicative of an escalation of such a trend that might warrant a revision of the country’s broadband and IT outlooks,” it added.
According to the report, ViewQwest offers 1Gbps connectivity at RM1,510 compared to the existing prices, which the company said currently averages at RM30,000 for 100 Mbps to enterprises a month.
The Singaporean ISP’s services are currently limited to businesses within Kuala Lumpur’s “Golden Triangle” district in the city centre and suburbs Bangsar South and tech hub Cyberjaya in Selangor.
It also announced that it plans to launch a 1Gbps fibre service for residences in the same locations by the end of the year.
The launch would see ViewQwest offering the fastest residential broadband internet service in the country.
Currently, Telekom Malaysia is by far the biggest player with the furthest reach in the fixed broadband market domestically. Among the other players are Maxis, Packet One Networks and YTL Communications.
Malaysia, which is aiming for developed nation station by 2020, has been focusing on increasing its household broadband penetration rate to boost the switch to a knowledge-based economy from manufacturing.
Its household broadband penetration rate has surpassed 70 per cent, according to the October 2015 data from the Malaysian Communications and Multimedia Commission.
The Malay Mail Online