Fahmi Fadzil said recently that Malaysians can look forward to cheaper internet when the latest Mandatory Standard on Access Pricing (MSAP) is implemented. A new MSAP is long overdue as the last revision was issued in 2018 and it is about time for a new revision to ensure broadband is affordable to all.
MSAP sets maximum pricing for wholesale services
To recap, the MSAP sets the wholesale pricing for various telecommunications services including fibre broadband on HSBB. The MSAP sets mandatory wholesale prices for various wholesale telecommunication services including Layer 3 HSBB.
If the wholesale cost of HSBB is reduced, fibre providers that rely on TM’s HSBB network such as Unifi, Astro, CelcomDigi, Maxis and ViewQwest will be able to enjoy additional savings which should lead to more attractive retail prices for consumers. According to MCMC’s determination on MCMC, the prices for the provision of Facilities and Services shall not exceed the maximum prices as prescribed in the document.
According to the latest MSAP which took effect in March 2023, the wholesale price for 100Mbps is set at RM254.64/month which is half of the MSAP price of RM515/month for 2020. Take note that these are wholesale prices for the telcos and it is not the same as what consumers are paying. There’s a contention ratio where access providers will only require enough bandwidth to ensure that it can sustain the overall peak traffic of their network.
TM implements tiered pricing for wholesale HSBB
As we’ve covered recently, the TM has issued its new Reference Access Offer (RAO) to comply with the new MSAP but it comes with a tiered pricing structure which was also practised in 2018. Despite the tiered pricing, TM says all access seekers will enjoy cheaper HSBB wholesale rates across the board as the new RAO has lower rates than the previous RAO issued in 2018.
As illustrated above, the wholesale rates offered by TM for HSBB is higher than the set pricing under the MSAP especially for lower volume commitments. Based on TM’s RAO, access seekers will only be able to enjoy the current MSAP rate of RM255 per 100Mbps if they commit to to 9Tbps and above. This means providers with lower volume would have to pay higher rates according to their tier.
MCMC to review RAO published by TM
We’ve reached out to the regulator for clarification since there’s a disparity between TM’s wholesale pricing and the maximum wholesale price set by the new MSAP. According to MCMC, they will review the RAO that was recently published by TM and will also seek clarification from the telecommunications giant to understand the basis and rationale of their tiered pricing approach adopted.
We asked MCMC if a tiered pricing structure is allowed, they told us that based on their experience, sometimes difference in rates or structure of pricing could be justifiable based on different quality of service or value-added services that are offered by access providers to access seekers. It added that the MSAP has been determined by the MCMC to ensure that wholesale prices offered by access providers are reasonable and affordable for the long-term benefit of the end users.
Based on our own checks, other telcos such as CelcomDigi, Maxis, U Mobile, Time, Allo and YTL Communications, do not apply a tiered pricing and most of their wholesale pricing for fibre access are either on-par or lower than the MSAP 2023 rates. When we asked TM about the price gap versus the MSAP, they said their wholesale pricing is not actually higher as they are tiering it for better economics.
As we’ve mentioned earlier, despite the lower rates across all tiers, it appears that only bigger players that can commit to higher monthly volume will enjoy the lower rates. TM’s Unifi is currently the biggest fibre player with over 3 million subscribers, followed by Maxis with 600,000 subscribers and CelcomDigi with 107,000. Time doesn’t disclose its home fibre subscription numbers in its quarterly report.
Related reading
- Fahmi says broadband prices will be cheaper this September
- Despite tiered pricing, TM says all fibre broadband players will enjoy lower HSBB wholesale price with latest RAO
- TM releases new HSBB pricing to comply with MSAP, but it may not significantly cut broadband prices for all
- MCMC on MSAP: Expect price reduction for broadband services after September 2023
Can TM charge higher HSBB wholesale rates than MSAP? Here’s MCMC’s response
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