‘Jendela could bring more benefits to consumers’

KUALA LUMPUR: The Jalinan Digital Negara (Jendela) could bring more benefits to consumers as the necessity of 5G in the country might not be that urgent at the moment, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) opines.

Following an analysts’ briefing chaired by Malaysian Communications and Multimedia Commission (MCMC) chairman Dr Fadhlullah Suhaimi, Kenanga Research gathered that Of the RM21 billion budgeted for Jendela, 40 per cent is derived from MCMC’s Universal Service Provision (USP) funds with the remaining 60 per cent is to be funded by industry players.

“In clarifying, Jendela does not demand additional capex from telcos and its ambitions have been laid out according to the existing capex plans of the telcos,” the research arm recapped.

“That said, to achieve the new objectives, some plans have been accelerated which we reckon are for more urgent maintenance works and expansion in high traffic zones from the concentrated surge of usage in residential areas.”

The research arm also recalled that for its part, MCMC will help to manage the delivery of Jendela’s targets by telcos by setting up a Specialised Project Management Service unit where it will closely monitor industry progress with respective managements and provide solutions to resolve any hiccups.

“Overall, the Jendela initiative could bring more benefits to consumers as the necessity of 5G in the country might not be that urgent at the moment.

“On hindsight, building a stronger backbone would enhance the national 5G preparedness and enable a more seamless adoption.

“Also, as network capabilities become more all-encompassing, it is possible that we could see greater converged offerings in the future.

“For the time being, the industry is challenged by affordability being a pressing concern for consumers and loss of customers (namely enterprises) which could be a result of slowing economic activity.”

For that, Telekom Malaysia Bhd (TM) stayed as Kenanga Research’s favourite pick for the sector, as the fixed-line or broadband space stands on firmer ground against heavy price competition in the mobile space.

“Additionally, on the path of wider premise coverage as outlined in Jendela, TM could be poised to tap into a wider market share.”

Kenanga Research also anticipated TM to be more cash accretive from cost saving initiatives anticipated from potential plans by new management.

The research arm envisaged these to include contract renegotiations with vendors and manpower re-organisation to boost efficiencies in certain business units.

“Additionally, though only likely down the longer road ahead, TM could play a meaningful role in the eventual deployment of the 5G network on the back of its extensive fibre network to support its backhaul.”