TM eyes McKinsey to meet HSBB target
KUALA LUMPUR, Jan 4 — Telekom Malaysia Berhad (TM) is mulling to give a RM20 million project to McKinsey & Co to ensure its RM11 billion high-speed broadband (HSBB) is on time to meet the 50 per cent broadband penetration target this year.
The telecoms utility’s board is due to meet tomorrow to decide on the consultancy’s terms as it races to meet its deadline set recently by Information, Communication and Culture Minister Datuk Seri Rais Yatim. It is understood the current broadband penetration rate is now at 32 per cent.
“The board will meet tomorrow whether to award McKinsey the contract to make sure we meet this year’s target. It is a bit silly as we have the real targets to achieve,” a company source told The Malaysian Insider.
It is learnt that associates from McKinsey’s US headquarters have promised expertise from Telefonica, the Spanish multinational telecommunications giant, to help TM meet the targets, which now also include mobile broadband.
The source added that TM would have been better off to hire experts directly from Telefonica instead of going through McKinsey. “It will be cheaper to hire talent directly than just engage McKinsey,” he said.
Coincidentally, TM last May appointed former McKinsey partner Giorgio Migliarina as chief technology and innovation officer. Before joining the firm, he helped launch Infostrada, a
fixed-line operator in Italy, and worked at Olivetti as a business development manager.
McKinsey and the Boston Consulting Group have been consultants for a slew of projects for government-linked-companies held by sovereign wealth fund Khazanah Nasional Berhad. McKinsey was also involved in an earlier TM customer relations management project.
Another source said the TM tender board has asked the main board of directors to decide as they were concerned that the consultancy appointed to oversee the project would be paid in advance.
“It doesn’t matter if the HSBB meets targets or not, the consultancy is paid. The tender board wanted the directors to set real targets for the consultants,” he added.
The HSBB is a premium broadband service with speeds of 10Mbps (Megabits per seconds) to 100 Mbps for residential customers and up to 1Gbps (Gigabits per seconds) for businesses for high economic impact areas delivered via fibre optic infrastructure.
The infrastructure will be rolled out over 10 years with the federal government investing RM2.4 billion and TM RM8.9 billion to provide high-speed broadband access to over 1.3 million premises by 2012.
Phase 1 of the project will cover the inner Klang Valley, all key economic and industrial zones throughout the country, the Iskandar Malaysia region, all public universities and colleges throughout the nation and private tertiary institutions within the rollout areas.
“I feel that the 50 per cent achievement must be reached quickly and a part of it depends on permanent lines by Telekom and wireless lines including by Wi-Max and Wi-Fi,” Rais had said last October.
Under the HSBB initiative that began in 2008, TM will put last-mile access network to homes and businesses to facilitate HSBB services using three main technologies, i.e. fibre-to-the home (FTTH), Ethernet-to-the-home (ETTH) and Very High Speed Digital Subscriber Line (VDSL2).
In addition, TM will be rolling out its Next-Generation Network (NGN) core backbone network based on an all IP platform as well as grow the nation’s global capacities by building new international gateways for enhanced connectivity and network efficiency.
TM research had indicated that the positive impact of broadband services towards the annual GDP will be 1 per cent with an estimated 135,000 new jobs being created by 2010.
TM is Malaysia’s largest fixed line supplier and provides consumers and businesses throughout Southeast Asia with voice and data services.