MCMC’s Jendela Internet programme on schedule

PETALING JAYA: Closing the internet connectivity gap in the remaining segments of the population is challenging and requires fit-for-purpose technological approaches.

Technologies would include fiber broadband, wireless broadband/satellite access, fixed wireless access and 5G.

The expedient approach is what industry regulator Malaysian Communication and Multimedia Commission (MCMC) believes can fill the remaining internet connectivity gap.

This will happen from 2023 to 2025 under the second phase program of Jendela.

Currently, targets for 4G coverage and fiber connectivity are being met in most locations as Phase 1 of the Jendela program is completed by the end of this year.

Kenanga Research said the details of its phase two rollout plan would be addressed by MCMC later this year.

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Kenanga believes that closing the remaining coverage gap of 1.1% (target of 96.9% by the end of 2022) is the most challenging given the remote locations and accessibility issues.

The total cost of implementing the first phase was previously estimated at RM28 billion. Of this, 60% was funded by industry/telecoms and the remaining 40% by the Universal Service Provisioning (USP) fund.

It’s not clear how much the second phase will cost, but most experts believe it will be covered by the USP fund.

CGS-CIMB Research adds that MCMC is now targeting 100% internet coverage (instead of 4G) in populated areas by the end of 2025 as part of the second phase of Jendela.

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It added that while this might seem like a minor change in wording, it still makes sense.

It also clearly reflects MCMC’s approach to leveraging various appropriate connectivity technologies (e.g. satellite, TV white space, 5G) to cover the remaining 3.1% of the population, said CGS-CIMB Research.

This avoids overloading mobile network operators when there are cheaper methods.

According to Kenanga Research, at the current run rate, the industry is still on track to meet the year-end goal of 7.5 million existing premises (7.2 million in Q2 2022).

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The industry has surpassed the mobile broadband speed target of 35 Mbps by the end of 2022 with a median speed of 47.04 Mbps (29.89 median) in Q2 22 (Ookla) with additional capacity from the 3G shutdown.

It added that while 5G coverage reached 27% in 2Q22, bureaucracy could hamper state-level network deployment.

CGS-CIMB Research rates the sector as “overweight” and Kenanga Research as “neutral”.

According to CGS-CIMB Research, Telekom Malaysia Bhd was the best choice for telecom companiesbut the industry’s cited downside is delays in final 5G resolution.

Kenanga’s downside risks include competition, regulatory backlash and further delays in the 5G process.

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