Malaysia is at the stage of an infrastructure-efficiency driven country and major improvements in broadband infrastructure will help turn its economy into an innovation-driven one according to Bill Chang, Malaysia country director of Nokia Siemens Networks (NSN).

 “Japan and South Korea are well connected by fixed broadband due to government subsidies, while in Canada and the United States, broadband growth is driven by competition and the middle-ground between these two approaches is Malaysia’s recently launched High Speed Broadband (HSBB) project,” Chang said on the sidelines of the myBroadband 2008 conference and ACM:2008 Expo in Kuala Lumpur in October.

Digressing: According to Malaysian Communication and Multimedia Commission (SKMM) and Informa Telecoms & Media, Malaysia broadband penetration was 15.5% of households as of end of 2007 and there’s still a large market to grow for many operators.

Malaysia’s strategy to rollout broadband connectivity nationwide comprises HSBB in high economic impact areas and Broadband to the General Population (BGPP) in other areas.

BBGP connectivity will be provided by current licensees using fixed ADSL (asynchronous digital subscriber line), wireless HSPA (High-Speed Packet Access) or WiMAX (Wireless interoperability for Microwave Access),with speeds ranging from 100Kbps to 1Mbps.

These service providers roll out HSBB based on its business viability, while in less profitable rural areas rollout will be funded through the SKMM’s (Malaysia’s content and communication regulator’s) Universal Service Provision (USP) fund.

Under its 2008 budget, the Ministry of Finance approved tax allowances on expenditure on last-mile broadband equipment as an incentive for operators to roll out their BBGP networks.

Among them, last mile network facilities providers will be given Investment Allowance of 100% on capital expenditure incurred for broadband up to 31 December 2010

Import duty and sales tax exemptions will be given on broadband equipment and consumer access devices

Reuse of legacy ducts

Launched in September, 2008, Malaysia’s HSBB project is a 10 year collaborative effort by incumbent telephone company Telekom Malaysia (TM) and Malaysia’s Ministry of Energy, Water and Communications provide fixed broadband connectivity nationwide and under its first phase, it aims to provide HSBB access to over 1.3 million premises by 2012.

TM will provide the last mile access homes and businesses to using fibre-to-the home (FTTH), Ethernet-to-the-home (ETTH) and Very High Speed Digital Subscriber Line (VDSL2) technologies. This will provide homes with broadband speeds between 10Mbps and 100Mbps, and up to 1Gbps to businesses.

The government will contribute RM2.4 billion (US$685 million) towards the project, while TM will provide RM8.9 billion (US$2.54 billion). The government’s part is mostly to make up for lower nett presence value in areas such as new housing estates and new industrial zones which are regarded as commercially non-profitable for telecommunications companies.

Some within Malaysia’s telecommunications industry and other commentators see this partnership as the government providing an unfair advantage to one telephone company over the others but the government sees it as the only practical way – Neo-Liberal ideology aside -- to roll out HSBB infrastructure quickly.

Malaysia does not have a common trenching policy whereby several operators can share common ducting, unlike in some other countries.

Moreover, given its 120 year legacy, TM is the only telephone company with an extensive network of fixed line infrastructure and ducts in place nationwide, while its fixed line competitors, simply did not have the financial resources to roll out fixed infrastructure as extensively as Telekom had soon enough to effectively compete with it.

In an article published on 8 May, 2001 in In.Tech, the technology pullout of The Star newspaper, this same writer wrote that the then managing director and chairman of the Malaysian chapter of the UK-based International Institute of Communications (http://www.iicom.org/) had pointed out to him that, “The other telephone companies are too small and simply do not have the funds which TM, the incumbent telephone company has.”

TM’s challengers in the fixed line space were Maxis, DiGi and Time dotCom and TM’s turnover as of 31 December, 1999 was RM7.8 billion and its profit after taxes was RM820 billion.

On the other hand, DiGi reported a turnover of RM645.5 million for the nine months ended January 1, 2001, Time dotCom reported a loss of RM2.6 million in 2000 and this writer was unable to obtain any financial information about Maxis at that time.

Anyway, all the three are also cellular communications service providers and they focused on that and today, Maxis also provides HSPA-based wireless broadband Internet access, together with Celcom and new cellular telephone company uMobile, while DiGi currently provides EDGE-based wireless connectivity and expects to launch HSPA-based wireless broadband service using Time dotCom’s 3G license in early 2009 

So that being the case, it’s simpler, cheaper and faster for Telekom to do the job of rolling out HSBB by removing all the copper cabling over 20 years old from its ducts and replace it with fibre, while its upgrades its newer copper infrastructure.

Open network

To ensure there’s no unfair advantage for TM, HSBB will be an open network with open access and competitive pricing so other operators can provide their own services over it for a reasonable fee.

As for its economic benefits, Malaysia’s Economic Planning Unit believes HSBB expects that achieving 50% household broadband penetration by 2010 can result in tangible contribution of 1% to country’s gross domestic product (GDP) and create 135,000 new high-value jobs in 2010 and also create opportunities and markets of application and content developers.
 
The SKMM expects that this can potentially contribute over RM3 billion (US$857 million) to Malaysia’s GDP.

TM will provide HSBB service to government offices, institutes of higher learning, will build telecentres for communities not covered by the USP programme.

It will also build a content development ecosystem which will help small content providers to port their content to the HSBB platform, while TM provide a support system, such as billing services and others which content developers can use.

It will also enable information sharing and technology transfer to Malaysian companies. For example, some of the components for the network will be bought from overseas and TM will ensure that some of that technology is transferred to Malaysian companies.

By 2010 40% of the target of 3.2 million homes will be served by BBGP, while the remainder will be served by HSBB.

Wireless to predominate

However, NSN believes that wireless broadband will predominate worldwide, especially in emerging economies.

“Five billion people worldwide will be connected in 2015, primarily by wireless broadband as investments in copper and fibre fixed connections will take too long, so the focus will be on wireless broadband, especially in emerging economies,” said Chang.

Many innovation-driven solutions have come from emerging markets, such for fishermen and farmers to obtain market prices of fish and produce on GSM phones.

There already were 606 broadband wireless access licenses issued worldwide as of February, 2008 according to Maravedis, ClearSpectrum and WiMAX Counts.

Over 134 of these licenses were issued in Latin America, followed closely in Russia & Scandinavia and in Asia, which came third, and as of now, these licenses potentially cover five billion persons worldwide and the demand for wireless broadband is unending.

According to Deutsche Telekom chief executive officer, Rene Obermann, the Apple iPhone in particular has driven up average usage of wireless data by as much as 30 times compared to other phones.

“While operators are important to the success of wireless broadband, suitable devices and available spectrum are also needed,” said Chang.

“3GPP (3G Partnership Project) technologies such as GSM, UMTS and HSPA have evolved from the telephone company space which is highly regulated, is primarily voice-oriented, focused on providing national coverage and supports global roaming, while WiMAX comes from the Internet space, is based on best-effort, is primarily data-oriented, broadband focused with mostly urban and regional coverage,” said Chang.

While the HSPA speeds based on earlier 3GPP releases were initially slower than WiMAX while its about 180ms latency was very high, HSPA speeds based on later 3GPP releases have rapidly risen and will to match the 40Mbps of WiMAX in 2009, especially with 3GPP release 8, and in 2010, HSPA+ speeds will increase    dramatically to 80Mbps compared to 40Mbps for WiMAX.

Since HSPA operates at lower frequencies ranging from 900 to 2,100MHz compared to 2,300 to 3500 for WiMAX, HSPA will have better indoor penetration and greater range, hence three-times fewer base stations to cover the same area, though the 700MHz band is under consideration for use by WiMAX.

“The success of 3GPP technologies such as GSM is largely attributed to it being based on open standards, which provides and positive ecosystem of suppliers, operators and subscribers, while WiMAX is in its initial stages of open standards development and is still going through its certification and standardisation processes,” said Chang.

GSM and other 3GPP technologies are based on open air interfaces and supports mobility, roaming, backwards and forwards compatibility, while Mobile WiMAX 802.16e is also based on open standards and supports mobility and roaming but is not is only forwards compatible, so it can’t work over legacy networks when outside WiMAX coverage.

There are numerous HSPA devices available today, with multiple price points, multiple device types, numerous vendors and multi-band support and in 2009, we’ll see HSPA+ devices making their debut.

On the other hand, WiMAX devices have similar price points, mostly work with fixed wireless broadband, are supplied by base-station specific vendors and operate in a single band, though in 2009, we can expect to see mobile tablets with Intel chips and more WiMAX-enabled PDA devices, such as the Nokia N810 Internet Tablet.

In 2007, the 3GPP ecosystem comprised 206 network equipment vendors, 718 operators, 2.5 billion subscribers and it earned US$744 billion in total revenue worldwide, while the WiMAX ecosystem only had nine network equipment vendors, 100 operators, less than one million subscribers and it earned about US$1 billion revenue that same year.

Not HSPA vs WiMAX

However, despite all that comparison suggesting that HSPA will trump WiMAX, Chang is emphatic that both HSPA and WiMAX are required for the successful implementation of wireless broadband services.

“There is no demand for WiMAX or HSPA but there is tremendous demand for wireless broadband,” said Chang.

So far, HSPA traffic has grown phenomenally over 2007, with 4TB/day/network, according to NSN but still, but all technologies are needed for wireless broadband’s success.

Also, while HSPA is the dominant for now, NSN Business Intelligence forecasts that WiMAX’ share will grow from nothing in 2005 to around 15% in 2012.

“We’ll most likely see mixed 2G, 3G, WiMAX and LTE networks with integration mechanisms required based on devices and usage and these multi-modal networks will drive standardisation and inter-working, hence multi-mode products; all of which are desirable and necessary for operators,” said Chang.

“We’ll also see multi-mode base stations such as our Flexi WiMAX, GSM, WCDMA and LTE base station tranceivers,” he added.

The future

There will be a shift towards an all-IP (Internet Protocol) based architecture in the future, and all user devices including desktop PCs, PDAs, mobile phones and others will be all-IP based and the capabilities of handheld devices will increase and move further away from juts network capabilities.

Operators will see an increase in wireless data use, while more green-friendly technologies will emerge with lower power consumption, with minimised changes on sites and antennas.

More customers will subscribe to flat rate packages for more predictable communication costs, though 3G HSPA operators are likely to face problems due to a scarcity of available spectrum, which will require further spectrum allocation and liberalisation by regulators.

However, flat rate data packages can be a bane for operators, since as traffic volume increases, so will network costs based on existing technologies but 3G LTE-based  networks will help to keep network costs, hence cost per megabyte lower than earlier technologies and ensure continued profitability for operators.

“LTE protects operator investment as it lets them reuse their sites and infrastructure, backhaul links and frequency bands, since it can co-exist in the same band with existing GSM service and provide them with a gradual technology upgrade path,” said Chang.

“Users will also experience the fastest throughput with the lowest latency compared to previous technologies and customer satisfaction will drive greater revenue for operators,” he added.

Since LTE uses OFDMA (orthogonal frequency division multiple access) in the downlink it has improved spectral efficiency, reduced interference and is very well suited for use of MIMO (Multiple-Input, Multiple-Output) antennas.

On the uplink it uses Single Carrier – FDMA (SC-FDMA) which provides for greater power efficiency on the uplink which increases battery life, improved cell-edge performance by a low peak-to-average ratio and reduced terminal complexity.

LTE peak cell data rates with a 20MHz channel bandwidth, FDD (frequency division duplex, 2 x transmit, 2 x receive and downlink MIMO can achieve peak cell data rates of 173 Mbps downlink and 58 Mbps uplink physical layer gross bit rates.

Latency will also be between 10 and 20ms based on a round trip ping delay with a server near the radio access network (RAN).

Its channel bandwidth is scalable from 20MHz down to 1.4MHz for use in lower frequency bands to serve rural areas and allow operators to reuse their existing licensed spectrum.

The evolution path from GSM &GPRS, Wideband CDMA & HSPA, Greenfield and CDMA operators to Internet-HSPA and finally LTE or directly to LTE lets operators leverage upon the existing handsets used by their customers and the LTE network architecture will be flatter with fewer components than earlier HSPA technologies.

I-HSPA, also known as Evolved HSPA, HSPA Evolution or HSPA+ is defined in 3GPP release 7 and provides data rates up to 42 Mbps on the downlink and 22 Mbps on the uplink with MIMO technologies and higher order modulation.

It also introduces an optional all-IP architecture for the network where base stations are directly connected to the internet cloud, so Internet traffic bypasses the network routing core, much like what the DSLAM in the local exchange does with Internet traffic over ADSL.

However, I-HSPA use a different air interface from LTE which uses a new air interface. Several I-HSPA commercial trials are underway and on 5 December 2008, Australia’s Telstra announced that the first 21 Mbps (downlink) and 5.8 Mbps (uplink) data link was established on a commercial network.

“However, WiMAX is here to stay and NSN will support both greenfield and mixed networks,” said Chang.