UNABLE TO MILK THE NAJIB CASH COW, GREEDY TELCOS NOW TRY TO HOODWINK GOBIND & CONSUMERS – BUT TO THEIR OWN PERIL: BEWARE GOBIND THE SON OF KARPAL – HE’S DONE IN A FEW MONTHS WHAT ‘NAJIB MOUTHPIECE’ SALLEH KERUAK REFUSED TO DO IN NEARLY A DECADE

The local telecommunication companies appear to be upset with the new government’s noble plan to provide more affordable entry-level plans for Internet access. For as long as one can remember, the greedy telcos have been milking consumers with pathetic packages – highest price for lowest speed possible – until the spectacular collapse of Barisan Nasional government.

The new Communications and Multimedia Minister – Gobind Singh Deo – has made it his personal mission to give the local telcos a run for their money. Of course, the service providers, Telekom Malaysia (TM), Maxis, Celcom and Time, aren’t happy that their cash cow cannot be milked the same way anymore. Initially, they dragged their feet and demanded more time.

Unfortunately, Mr. Gobind isn’t the same minister from the previous incompetent government who could be pushed around. On paper, the telcos seemed agreeable to the price reduction and speed increase brought about by the Mandatory Standard on Access Pricing (MSAP), first announced by the new Pakatan Harapan government in on June 20.

Gobind announced in June – “The relevant parties are currently in commercial discussions to finalise the wholesale prices. The process is scheduled to be concluded in July or August, after which new, lower priced broadband packages will be rolled out to consumers.” He also said the Government was considering recognising access to the Internet as a basic human right in Malaysia.

Mr. Gobind wants broadband “pricing to be halved” and “speed doubled”. But that’s easier said than done. Telekom Malaysia, probably emboldened by the fact that they are the big boy in the market, deliberately published a pricing structure on its website that seemed different from what the regulator, Malaysian Communications Multimedia Commission’s (MCMC), had suggested.

TM, being the biggest access provider of fast broadband, could strong-arm the government because other companies like Celcom Axiata Bhd, Digi.Com Bhd, Maxis Bhd, U Mobile and others were the access seekers. Eventually, it was announced that fixed broadband prices in the country are expected to drop by at least 25% by year’s end – only half of what Mr. Gobind had wanted.

However, even a 25% reduction has sent TM’s stock price plunging as investors didn’t like the impact on TM’s earnings in the future. The long term solution is to break the monopoly currently enjoyed by TM and allows electricity provider TNB (Tenaga Nasional Berhad) – even foreign players for that matter – to leverage on its network to penetrate more households across the nation.

Under Communications and Multimedia Ministry and MCMC’s tremendous pressure, four telecommunication companies finally announced starter packages for under RM100 per month. For TM, the 30 Mbps plan priced at RM139 a month is reduced by 43% to RM79, while Celcom’s 40 Mbps package, is down by 56% from RM180 down to RM80 a month.

TIME, which offers the fastest speed at 100 Mbps, reduced its monthly package price by 34% from RM149 to RM99 while Maxis reduced its 30 Mbps plan from RM139 to RM89 per month, giving users a saving of 36%. Heck, TIME even offers higher-speed packages via the introduction of a Gigabit level package for RM199, the first time that Gigabit level speed is made available.

So, what does all this mean? The simple fact that the telcos can cut their packages to 34% to 56% cheaper means the greedy service providers have been fleecing the consumers for years, if not decades. They have been taking the people for a ride with overpriced packages and inferior services. Even after the latest discounts (34% to 56%), they can still make good profits.

But even with the introduction of new entry-level plans below RM100 that are more than 30% cheaper, the service providers could still find ways to cheat consumers. Without consumers realizing it, it was nothing but marketing gimmick. The gimmick was to give the consumers higher speed, not lower price. The objective was to maintain as much as possible their annual revenue.

Exactly how could you save money driving a Ferrari from your home to office during peak hour? Sure, the internet speed has been given a bump of up to 10 times more. It was like forcing a consumer to buy a 20-piece bucket of chicken at KFC when he / she could only eat 2 or 3 pieces. Telcos knew not everyone requires the 30 Mbps plan, let alone the 100 Mbps.

Selling 10Mbps at RM30 a month obviously isn’t as profitable as dumping 30Mbps for RM90. Adding insult to the injury, there’s no guarantee that subscribers will get the full 30Mbps speed advertised due to technical jargons such as throttling, network latency, congestion, distance from ISP, port issues and whatnot. So, telcos can simply say they are giving free speed bump without actually giving the real juice.

Even then, the so-called lower price packages come with lots of obstacles. Maxis, for example, said the upgrade was not automatic for existing customers as they have to first pick one of two plans – 30Mbps at RM89 or 100Mbps at RM129 per month. TM’s free upgrade for existing users, which supposedly started in August, is crawling at snail pace and could go beyond the first quarter of next year.

Amusingly, TM Unifi sales have told long-time customers that the only way to opt for the cheaper and faster plan is to terminate their current package and sign up for a new one. Yes, not every existing TM users are on the list for the free upgrade. The priority is given to new customers for obvious reason – to capture new market.

Another issue discovered by Mr. Gobind Singh is that many Streamyx users are still not eligible to be upgraded to Unifi due to lack of infrastructure. In other words, customers staying at condos or apartments could be short-changed. The government should give the telcos an ultimatum – if they still pussyfooting, they would be slapped with penalties.

– Finance Twitter