Telekom Malaysia's 3G network waits for right market conditions

April 27, 2004

Telekom Malaysia is aiming to have its 3G mobile phone service operational by the end of the year but will only do so when the market is ready.

Chief of group business restructuring and coordination, Datuk Dr Mohamed Khir Harun, said it must first solve some technical problems, reported The Star.

Khir said Telekom's 3G network has to be compliant with 3GPP's Release 4 (R4) specifications before it can launch commercially. The current network is based on Release 99 (R99) but the signalling specifications are incomplete and means manufacturers have developed their own signalling where no specifications is given. This could lead to interoperability problems between the network and handsets.

Telekom expects R4-compliant equipment to be available in the third quarter and expects its 3G network to be commercially ready by the end of the year. Khir added that Telekom won't launch until the market is ready and a strong business case to justify the launch exist. Therefore, a launch in the middle of next year would be more realistic.

Telekom expects the market to be ready when there are sufficient choice of handsets available to consumers that are not more than 30% above the prices of current top-end GSM/ GPRS phones. There must also be enough applications and content which take advantage of 3G's 384Kbps to 2Mbps data rates. Khir expects the price of data download with 3G to be less than GPRS.

Despite owning a 3G license, Telekom won't sell its 3G services directly to subscribers but rather through mobile virtual network operators such as its subsidiary Celcom Malaysia.