Tuesday, July 05, 2016

Why is internet connectivity expensive?

The fact that internet connectivity is expensive in Malaysia is not exactly news. Usually the simple answer is that the incumbent, TM, is the monopoly and the root of all evil.

But what if TM could co-exist in a system that allowed for healthy competition?

Like many things, the solution is there. The question is can the leaders put the interests of the people before theirs?



Kenapa Internet Mahal?
Why is internet connectivity expensive?
Source: https://www.facebook.com/mohamed.awanglah/posts/10206189901681436:0


1. Setelah Internet wujud lebih 30 tahun di dunia, saya tidak lagi membezakan antara Internet dan telekomunikasi - dari segi teknologi, perkhidmatan dan kesannya kepada pengguna.
1. 30 years after the internet was unleashed onto the world, I no longer differentiate between the internet and telecommunications – from a technological, service and impact perspective, they are all the same to end users

2. Secara kasarnya, ada tiga bahagian yang membentuk Internet:

a) prasarana untuk penyambungan asas - menggunakan kabel, gelombang radio (wayarles), cahaya (gentian optik), menara telekomunikasi dan sebagainya

b) prasarana untuk penghantaran data dari satu tempat ke tempat yang lain dengan kelajuan yang berbeza.

c) prasarana aplikasi yang membolehkan kita menggunakan Internet - termasuklah telefon, TV, facebook, tweeter, e-mel dan sebagainya.


2) Broadly speaking, there are 3 parts that make up the internet:

a) core infrastructure – using cables, radio waves (wireless), light (fibre optic), telecommunication towers and the such

b) delivery infrastructure for moving data from point A to point B over different speeds

c) application infrastructure that allows us to use the internet – including telephones, TV, Facebook, Twitter, email, and so on

3. Analogi mudahnya ialah seperti jalan raya yang diguna oleh lori untuk menghantar barang dari satu tempat ke tempat yang lain.

a) Jalan raya dibina oleh pihak tertentu seperti JKR, PLUS, Kerajaan Negeri dan sebagainya - biasanya agensi kerajaan atau pihak yang mendapat konsesi.

b) Lori pula dimiliki oleh syarikat pengangkutan yang beroperasi di mana-mana sahaja mengunakan jalan raya.

c) Barang-barang yang diangkut menggunakan lori untuk memenuhi keperluan seharian pengguna.

3) A simple analogy to explain all this is to describe things like roads which are used by lorries to deliver goods from one place to another
a) Roads are built by certain parties such as JKR (Jabatan Kerja Rakyat; Public Works Department), PLUS (Project Lebuhraya Utara Selatan; North South Highway Project), state governments and the such – usually by government agencies or concessionaires.
b) Lorries are owned by transportation companies which operate wherever there are roads
c) Goods that are transported by lorries are for the daily use of consumers

4. Apa agaknya yang akan berlaku jika syarikat pengangkutan juga memiliki jalan raya dan lorinya sendiri dan lori pihak lain tidak boleh menggunakan jalan raya miliknya? Kalau ada sepuluh syarikat pengangkutan, setiap satunya akan memliki lori sendiri dan rangkaian jalan raya sendiri!

4) What would happen if transportation companies also owned the roads, in addition to their own vehicles, and that vehicles from other transportation companies were not given permission to use the roads that it owned? If there were 10 transportation companies, each company would have its own vehicle fleet and road network!

5. Tentunya, bila jalan raya tidak dikongsi, kos pembinaannya ditanggung oleh satu syarikat sahaja dan untuk menampung kos ini ia terpaksa mengenakan bayaran yang tinggi kepada penyewa lori. Untuk bersaing mereka menggunakan kaedah yang berbeza untuk merekabentuk dan membina jalan raya dan lori.

5) In such a situation, where roads are not shared, the cost of constructing them is borne by one company/party, and to recoup the costs of constructing the road, it is forced to levy higher costs to lorry fleet users. Competition will mean that different parties will use different methods to design and construct their roads and trucks.

6. Itu yang berlaku dengan Internet sekarang. Syarikat yang ada prasarana penyambungan asas seperti gentian optik (termasuk right-of-way, ducts, manholes) [= jalan raya] tidak membenarkan syarikat lain menyewanya secara langsung. Mereka hanya menyewa lebar-jalur (bandwidth) [= lori] sahaja. Oleh kerana tiada perkongsian, kos mereka tinggi. Inilah yang terpaksa ditanggung oleh pengguna.

6) This is what is happening with the internet at the moment. Companies who have the core infrastructure such as fibre optic [networks] (including right-of-way, ducts, manholes) [= road network] do not allow other companies to lease/rent the said infrastructure directly. These companies only rent out bandwidth [= lorries]. Without any sharing of infrastructure, their costs are high. These are inevitably passed down to the consumer.

7. Bandwidth adalah setara dengan lori dalam industri pengangkutan. Syarikat kecil boleh menyewa lori sahaja untuk menghantar barang dan pada masa yang sama mereka terpaksa bersaing dengan pemilik lori yang juga menjalankan bisnes penghantaran barang. Tentulah pemilik lori lebih berkuasa kerana mereka bukan sahaja memiliki lori tetapi juga jalan raya. Harga ditentukan oleh mereka. Jadi syarikat besar akan kekal besar. Syarikat kecil terus merana.

7) [Internet] Bandwidth is analogous to the lorries of the transportation industry. Small delivery companies can only rent out lorry services to perform distribution of goods, while needing to compete with lorry fleet owners who are in the business of transporting things. In such a situation the lorry fleet owners have the upper hand, as they not only own the transportation method but also the roads. The price is set by them. So large companies maintain their size at the expense of small companies who do not have economies of scale.

8. Inilah yang menyebabkan harga Internet tidak dapat diturunkan. Ini adalah kepincangan dasar. Apa opsyennya?

8) This leads to a situation where the cost of internet connectivity does not fall. This is the core issue. What options are available [to overcome this]?

a) Prasarana asas dimiliki oleh pihak ketiga yang tidak mengendalikan perkhidmatan Internet - boleh disewa kepada semua pengendali berlesen; atau

a) What if Core infrastructure was owned by a 3rd party that does not provide internet services – the infrastructure can be leased out to licence operators; or

b) Pengendali yang memiliki prasarana asas “dipaksa" menyewakan prasarana asas (gentian optik dan sebagainya) kepada pengendali lain yang berlesen dengan harga yang sama.

b) Operators who own the Core Infrastructure are “forced” to rent out access (such as fibre optic networks and the such) to other licenced operators with regulated uniform pricing

9. Kedua-dua opsyen memerlukan "political will!" Ada opsyen lain?

9) Both options require “political will”! Are there any alternative options?

(c)MAL@20151002