Kementerian Tenaga, Air Dan Komunikasi

www.ktak.gov.my

The Telemanagement Forum's Asean Regional Summit, Sheraton Imperial

Hotel, Kuala Lumpur
Speaker: Y.B. Dato Seri Dr. Lim Keng Yaik (12/09/2005)

1. Firstly, I would like to thank Telemanagement Forum for giving me this honour to
address such a distinguished audience at this ASEAN Regional Summit 2005.
2. I would also like to convey my warm welcome to our foreign guests at this Forum by
saying "SELAMAT DATANG."
Ladies and Gentlemen,
3. When I got the invitation to speak at this forum, I immediately jumped at the
opportunity because it was on issues concerning the transformation of operators to lean
operators. If there is anything we in the ICT industry should aim for, it is to be a lean,
mean fighting machine, because this business is probably the most dynamic and
competitive. It has to be, for survival in this global age. If operators are not lean and
mean but still rake in good profits, it merely means that the industry players are being
protected by the government to the detriment of efficiency, optimum utilisation of the
nation's resources, and, of course, the socio-economic welfare of the state and its people.
Frankly, the government is using power and resources that have more urgent use to
protect several fat, inefficient and bureaucratic private businesses. I do believe that this is
both politically and socially unacceptable.
4. Lean and mean is a pre-requisite in this era of globalisation - no arguments there. One
of the main contributory elements to be a mean and lean fighting machine is to streamline
your processes and systems and make them efficient and, more importantly, effective.
5. I have reviewed some of the presentations by Telemanagement Forum and am indeed
very impressed at the excellent ideas that are going to be proposed and shared here by
them. I would recommend that you not only be attentive to the ideas to be presented, but
also take them with and you and apply them.
6. I do not want to pre-empt Telemanagement Forum on their presentations, but one of
the ideas that attracted me the most was that value is in VAS (value-added services or
content-based services). This is what I have been stressing to our Malaysian service
providers all along.
7. The traditional way of looking at the nature of a telco business is that it provides
appropriate infrastructure, touches every potential customer and hangs on to them by just

having them connected to you. This concept is based on the ideology that once tied to one
telco, there is no reason to migrate to another when telecommunications were just for
voice. In the traditional model, prices for voice do not differ much between providers.
8. So, competition was based on how best to snare a customer and keep them by
providing the best price. But, with convergence now, the value chain has been
transformed. People do not subscribe to telecommunications services just to talk.
Convergence has brought in the more potent factor for competition - value-added services
or content-based services. Telecommunications for talking has changed to
telecommunications for content-based services.
9. Formerly, people picked up a phone, chatted for a few minutes and hung up. For local
call chats, the time taken was until you got tired and for STD or IDD calls, the time was
until you passed your important message QUICKLY, because of the cost of the call.
10. But now, this is no longer true. It is said that an average Korean spends more than 20
hours a week surfing the Internet - no talk involved. And imagine the scenario - he is
hooked to, the telco that provides him the biggest BANDWIDTH, with the lowest FLAT
RATE PRICES and obviously accessing websites which have the best CONTENT. This
is the competitive advantage of the telco business in this modern day.
11. Anybody not taking this into cognisance will fail as soon as the protective curtain
comes down - it being soon; whether as a domestic policy for enhancing efficiency,
optimum utilisation of resources, consumer welfare or as something pushed down our
throats due to liberalisation and globalisation, WTO or Free Trade Agreements!
12. Thus, competing using one's own infrastructure and facilities and denying others
entry, is an outdated business strategy or, maybe, a protected business strategy that is
only applicable for the short term - and with me around, probably, a VERY short term for
the Malaysian telcos.
Ladies and Gentlemen,
13. We see an influx of new technology in the ICT sector and most are geared to the
multimedia content market. As stated earlier, content-based services will be the key to
success. And for that, we need broadband infrastructure.
14. This is already happening. As stated earlier, an average Korean surfs 20 hours a week
and this is clearly reflected in the revenue composition of KT, the biggest telco in Korea.
For the last year, Broadband Internet access revenue for the company was about $2.1
billion, or nearly 20 percent of its total revenue - making up a core part of their revenue
stream. They are already the world's largest broadband service provider, but have only
over 6 million r'\ broadband customers. Imagine the potential!
15. We in the ASEAN region have about 600 million people as our citizens and most of
us have very low penetration rates for communications services and practically none for

broadband Internet. Can you imagine what our telcos could become if we exploited this
population base. Imagine the potential, again!
16. However, our telcos are still fighting among themselves. Our business strategy is
based on exclusion for monopoly, whereby we strive to maintain our monopolies by way
of protective mechanisms.
Ladies and Gentlemen,
17. In the case of Malaysia, there is plenty of business opportunities in our
telecommunications sector. For example, the fixed line penetration rate is about 20% and
broadband is approximately less than 5%. In such a situation, why should an exclusion
business strategy be applied? There is so much potential and everybody can have so
much, just by forging a co-operative and collaborative business strategy.
18. Taking Korea as an example again, it is said that mobile broadband (WiFi) and fixedline broadband need not compete but complement each other. Due to the complementing
nature of their businesses, Korea has achieved tremendous achievements in wireless
broadband. It is said that 30 percent of the world's WiFi hot spots are in Korea.
Ladies and Gentlemen,
19. Would providing broadband Internet services be enough to push the business?
Obviously not. Would providing cheap broadband Internet services be enough? Again,
obviously not.
20. I stated earlier about the success factors of the Korean broadband business - the
provision of BIG BANDWIDTH, CHEAP FLAT RATE TARIFFS and EXCELLENT
CONTENT. However, I forgot to mention which of the 3 is the key.
21. Why would anyone switch from narrow-band Internet to broadband Internet if it is
just for emails and to browse the Internet occasionally? I believe that there is no reason or
justification for subscribing to broadband. We can read and send our emails and browse
the Internet at the office. Why would we want to do that at home again? Bearing this
scenario in mind, these are not good-enough reasons for attracting the man of the house
to subscribe to broadband for his home. Thus, either the wife or children have to pester
him to subscribe to broadband at home. But, why should they?
22. Because, with broadband, the wife can indulge in some relaxing tunes by
downloading them straight off the Internet. She can access recipes to cook great food for
the family. She could help the children by referring to e-Iearning educational resources to
teach the children. She could pay household bills through e-payment or through egovernment applications.
23. Come on, who am I kidding.

24. With broadband, the lady folk would be able to download nice Hong Kong or
Bollywood serials to watch endlessly or go shopping in Paris and New York through the
Internet. This is the utility of broadband to wives. Whoever said utility had to be "good"
things? It is merely what gives satisfaction. Do our providers provide that?
25. For the children, utility would be e-Iearning materials, pop music downloads, movie
downloads, game downloads, exchanging multimedia items and probably buying
expensive sports shoes or computer items and etc. Do our providers provide that?
26. For men, after work, we may want to watch some movies or play some games to
perfect our golf shots or, at least, be able to play virtual golf with our buddies over the
Net. Karaoke over the Net would be good too. After a hard day's work, who wants to
send more emails? Do our providers provide that?
27. If all these are not available over the Net, what is the big idea for broadband?
28. Broadband is for enhanced applications and nothing short of that. Again, multimedia
content is the key. There must be enough content out there for people to be attracted to
subscribe to broadband.
29. Thus, content providers are the main key in expanding broadband penetration and
nations should focus on content creation - preferably local content. Service providers
must seek out content providers, engage them in constructive partnerships and pac~age
those content in their services.
30. And that is the way to compete. Add value to your services. When the offerings have
enough utility or satisfaction to customers, then subscriptions would increase
dramatically and revenue would pour in.
31. There would then be no issue for service providers on low demand for broadband and
the lack of commercial viability to provide.
32. We are now promoting 3-G services around the region and Malaysia already has 2
providers. I would use my 3-G phone to talk to my wife whilst seeing her and her body
language as she talks. There is, of course, a great disadvantage in that she would be able
to see where I am when talking to her.
By the way, I would like to know if there were a way to programme some kind of
permanent background picture on my 3-G phone so that nobody would know where I am
when they see me on their 3-G phones. See, this is one content that would sell well!
33. Coming back to my earlier point; do I want to spend so much money to subscribe to
3-G services just because I want to see someone's face when talking? Obviously not. I
need more than that to fork out that extra money for 3-G.

34. As stated over and over again, content is key. Subscription to advanced services like
3-G requires content, otherwise 3-G is doomed for failure. So, against bandwidth, prices
and content, I do believe content is king.
Ladies and Gentlemen,
35. Once again, I thank Telemanagement Forum for organising a great event and
congratulate them for their excellent ideas to be shared here. To our foreign guests, please
take time to experience our city, food and the great shopping you can get here in KL.
36. On that note, I would like to wish all participants a very fruitful summit.
Thank you.