The Edge Malaysia, October 25,
Last week, YTL communications
executive chairman Tan Sri Francis Yeoh spoke to email@example.com about his desire to up the ante in the
broadband services market in Malaysia.
Yeoh, who is also YTL Corp Bhd
managing director, said he was looking beyond broadband and at an eventual quad
play by the end of next year when YTL will offer consumers voice, data,
mobile TV and fixed TV services.
The services will be delivered via
a combination of two networks. YTL will officially launch its 4G network on
Nov18, with the services offered focusing on the wireless dual play of broadband
and voice. Mobile and TV services will come into play through an end-to-end
delivery platform that will be built by US-based Sezmi Corp, which Yeoh says is
a Google-like company with a niche. It delivers hybrid TV viewing by combining
traditional TV content, movies and Internet video in a single service.
For the moment, all Yeoh is saying
about YTL's relationship with Sezmi is that it is strategic. He is reluctant to
reveal if YTL has plans to take up equity interest in Sezmi, although this has
been reported in the media. However, he was more than happy to talk about YTL's
investment in 4G.
When we Invest in 4G we are forcing
the other operators to invest in 4G, which is great for the country, Then our
broadband penetration will shoot up to 70% to 75%, even 100%, in a short period.
Malaysia will then become a very investible country, Can you imagine the whole
country being like the Silicon Valley?
An excerpt of the interview
firstname.lastname@example.org:I understand that you plan to offer
an Asian-wide content service aided by your partnership with Sezmi. Is there
Yeoh: well, we are
a strategic partnership. I want you to look up Sezmi. It has appeared on the
cover of BusinessWeek and is considered to be a Google-like company in its area.
And for it to come to KL, you have
to ask yourself, why? And even why our YTL Communications CEO Wing K Lee came to
Malaysia. Because despite the technology being available there [in the US], it
is difficult to find companies to undertake this initiative. Here, Sezmi has a
clear field in which to launch the service. And have a look at this [shows an
article on The Malay Mail website on Astro being sued]. About 70% of those who
left comments feel that they are not getting a fair deal. Why this monopoly? I
think it is a good time for Sezmi to come here. I think people are screaming for
an alternative. At the end of the day, it is a fantastic opportunity for us to
launch such a service [hybrid TV].
But is Sezmi an acquisition
or will it be a strategic partnership?
For us, it is a strategic
partnership. It is confidential and we have non- disclosure agreements in place
to protect Sezmi in the US. We cannot say more than what has been said.
Sezmi is like Google in the US. It
has many people behind it, including venture capitalists. We have to be
sensitive. We don't want to beat our chests and say something out of turn. I
think Sezmi has also been courageous to move its team here and partner with us.
[Using our hybrid TV service] the
best teachers need not go to the kampungs. They can teach and train teachers and
give students tutoring from their own living rooms through the power of this
converged network we will build, which will deliver the best of television and
We can link two things that people hope for. TV programmes on
their mobiles while certain portions of the TV audiences would like to access
Internet video and surf the web on their TV. With our service, they can have
just one number and enjoy services on multiple platforms.
You know, we are making Malaysians
pay too much for too many things. You want voice, video or data, you have to put
money down. You can see that people are quite tired of that. With YTL Comms,
there will be no strings. It will be like a utility. Just pay as you like. Give
the people a chance. They will vote with their purse. Let's see how this goes.
But from the little that I know from the projects that we have done so far, I
think this will work. I remember the scepticism when we launched the ERL. Many
said customers won't pay RM35 for a trip to the city but I said that was cheaper
than a taxi. Why won't they use the service? Today, about 20 million people have
taken the train.
Today, people will be up in arms if
you took that service away. So, just think about it. Reflecting on that project,
the Malaysian government was building an airport and a railway hub and in
history, the railways were built in advance of airports simply because it was an
But to connect railways to an
airport later is very difficult and costs a lot, as in the case of the Heathrow
Airport. So, I told the government that if it connected the two, I would be able
to charge a cheaper fare than a taxi. You know what was offered to the
government? A particular consortium was asking the government to subsidise a
RM200 round-trip taxi service from the airport. We said, they must be kidding!
The taxpayer will not subsidise that. I asked to be given a chance at RM35.
So, people must know YTL. We always
say we build world-class infrastructure at Third World prices.So, why can't we
do this for the Internet too? This is my passion, as you can see.
I know we cannot live without the
mobile phone today. For instance, my sons cannot live without mobile Internet
and I know my grandchildren will blame and curse me if I did not at least have a
hand in pushing mobile Internet, directly or indirectly into their laps. How can
people do business today without mobile Internet? Those who are using it are
clearly winning too as the world is changing. Things are moving faster. Remember
Moore's law. The Internet is all about speed and not like the slow pace of
change in industrial-type technology.
Nobody waits for you. The first
trains in England were built for a speed of 26mph. Some thought people would die
moving at this speed compared with horse carriages!
You say nobody will wait
for you. So, will your 4G service be a game changer?
You know I am engaging with the
game changers of this country [YTL has a programme to give university students
300MB of data for free], I want to give all the universities the power and I
want their students to taste it. These are students and opinion makers, the
brightest and the best who will likely change the nation's direction and we are
going to engage with them. We are going to introduce many programmes to enhance
their entrepreneurship and thinking capabilities. For example, MyPrize, which
offers Malaysians up to RM100,000 for coming up with great apps for our 4G
network. I am engaging 400,000 students already. Not many people will do that,
let alone offer them free connectivity.
Let's step away from your grand
vision and plans. Do you have a sustainable business model that can be wrapped
around all these things that you want to do? You will be competing with existing
players that also offer voice and data.
No, no. I mean today, can you watch
a CNN programme on your 3G? Can you inter-conference with multiple parties?
please do not be satisfied with this level. But you ask if I can be sustainable?
I can tell you that the 3G model of voice is not sustainable. So, our model is
definitely more sustainable than the old telco model.
What about the pricing of the 4G
service? I get the sense that it will be a lot cheaper than what is out there.
I can't comment on that yet but we
will be competitive. If you see our history with Extiva [YTL's VoIP service
launched in 2000], I can be very competitive.
What is your biggest fear
about launching on Nov 18?
I have no fear about the consumer
not wanting this. It is like a fast train or a highway. When they built a fast
train in Taiwan between Kaoshing and Taipeh, they thought three million people
would use it. Some 33 million actually did. Same with this. Why would people not
want this service? There is no doubt in my mind. I do not fear the demand.
I only fear for my people and the
vision and courage they have to move on with this vision and not make
compromises. That is probably an internal thing which we have addressed. I do
not think they fear anymore. They get it now. They are like Apple, part of a
positive revolution for good. They are evangelists promoting Internet for all.
Otherwise, you would have a telco
mentality. Spend and advertise like a telco. This is not a Red Ocean strategy,
getting market share from the telcos. There is no comparison. I have said many
times that 4G is almost like colour TV while 3G is black and white. Once you
have tasted it, you will never go back.
But people have tasted 4G with
Packet One and REDtone. Yet their subscriber numbers do not reflect any first
That is correct but that is because
they are doing it in spots which we never believed in. This is an unsustainable
model. Where people want mobility, you cannot tell them they can only get it in
KL. From your PC to your phone to your TV, we will give you one number only wake
up. It will be the first time in this country that your computer rings.
The smartest people are now in YTL
Comms and YTL group always uses the smartest people in the world. We believe in
using the best global brains to run our business. We never compromise on that.
Your cost of leasing sites
to set up your base stations has got to be huge. How are you managing
Well, we will have 65% coverage of
populated areas when we launch and this is better than when Maxis first launched
its service. We have around 1,000 sites. But the cost of WiMAX is cheaper
because it is a more modern technology. This has been to our advantage.
How does the 2.6GHz
spectrum change the dynamics of your business model?
It does not. Like I said, we are a
4G network. I do not say we are a WiMAX or LTE network. To re-emphasise my open
system, we welcome the best technology at any point. That is our whole culture.
We are open and welcome anything. If LTE catches up and moves ahead of
WiMAX, no problem.
With a few upgrades, we can use
LTE. But for now, you cannot deny WiMAX is a few years ahead of LTE. But WiMAX
will continue to evolve. It is Moore's Law. The good news is, 4G has come.
What have you learnt from
the failure of U Mobile to gain meaningful market traction thus far?
Theirs is a voice play. I have
always said that that market is not sustainable. I am not in that space. There
are no competitors out there for me.
Are you going to have
YTL-branded phones when you launch next month?
They will be Samsung phones but
with our brand.
How will that work?
You will see. Follow our progress.
History is being made.