The nation’s broadband monopoly : Good or bad?
A monopoly
can be defined simply as a market with
only one seller and no close substitutes for that seller's product. In this case TM, TM (formerly Telekom Malaysia) is one of the most
prominent government listed companies in Malaysia. TM was appointed
the main distributor and controller of broadband services by the government in 2009.
Now, why was TM granted control of the broadband
business? Because it controls all the telephone lines in the country,
resulting in the company having a monopoly.
TM started introducing a new service called ''UNIFI''. A super fast interest using optic fiber cables. Maxis opted to start using these cables as well. In order for Maxis to provide this service, Maxis has to obtain these cables from TM through a contract which is based on TM's terms; amount of cables, speed limit of their internet service and etc. This is because TM is the monopoly for distributing optic fiber cables in Malaysia.
Being the main controller of telephone lines in Malaysia, it made it difficult for new entrants to the market, even ones with substantial resources such as Maxis to compete with TM.
The lack of competition
has sparked a debate among people centered about the service being provided by
TM in which, hasn’t been up to scratch. What are the methods to overcome the
staleness of the lack of competition in the broadband business?
Now, there are two possible solutions that could have been applied
instead of appointing TM as the main controller of broadband services. For
starters, the government could have split TM into separate companies for different
localities, simillar to how the American government broke up AT&T into
several smaller companies. And for a change, the government could also regulate
the industry as a whole without dictating how individual firms run their
business.
The other would have been to declare TM's monopoly a natural monopoly, and regulate how TM conducts its business to ensure it provided a fair level of service at a reasonable price.
As we all know, competition is the key to driving prices
down and increasing the quality and quantity of service provided. With TM established
in its monopoly power, competition is effectively stifled.
In my opinion, a change has to be made in order for the
nation to progress even further and with the unlimited potential of technology, become an economy giant in the eyes of the world.
Written by : David Tan Jia Ming ( 0315300 )
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