Malaysia trumps Australia in NBN connection race

Incumbent lends to faster rollout but sting in the tail.

Malaysia's equivalent of the National Broadband Network is "comfortably outpacing" Australia's rollout effort but a lack of independence at the wholesale level from the country's incumbent could bite its market later, according to analyst firm Informa.

The Malaysian NBN is 70 percent controlled by the country's incumbent telco Telekom Malaysia, with the remaining 30 percent stake owned by government.

Informa noted the Malaysian NBN had 310,000 subscribers at the end of April, had passed 1.2 million premises, and was on track to be completed "on time and under budget".

The firm contrasted the rollout schedule with Australia's "highly controversial" plan, which it said had "only about 7000 subscribers" and approximately 18,000 premises passed.

Malaysia's NBN initiative was announced in March 2010 while Australia's NBN plan was unveiled about a year earlier in April 2009.

"There is no doubt that Malaysia's decision to stick with the incumbent, Telekom Malaysia, in deploying its next-generation broadband networks is definitely bearing fruit at the moment," Informa senior analyst Tony Brown said.

"The other NBN markets in the region have deployed more complex NBN models with new and independent entities created to build and operate their NBN networks - and that has taken a lot of time and created some significant teething problems, especially in Australia."

While handing the NBN off to the incumbent had quickened the pace in Malaysia, Brown noted that the lack of "independent wholesale network access operator, as is being done in Australia, could be a negative in the longer term".

Australia's NBN grew out of a political desire to remove Telstra as the lynchpin in the new network, forcing it to structurally separate while establishing a new, government-owned wholesale monopoly to build and operate the infrastructure.

Telstra remains heavily involved in the NBN rollout, however, leasing its pit-and-pipe infrastructure to NBN Co and migrating copper customers to the next-generation network in a $9 billion deal.

Telstra's involvement could increase further if a future Coalition Government nixes the fibre-to-the-home rollout planned by NBN Co in favour of a mix of fibre-to-the-node, copper, cable, wireless and satellite.