Monday, January 14, 2013

1BestariNet and my flawed rationale

I am no telco expert. But I have enough of experience to know what makes sense, what don't. 1Bestarinet is a project awarded to YTL Communications for delivering fast enough internet experience to all 10,000 schools nationwide. It is claimed to have been an open tender and YTL came out top out of a total 19 companies which tendered.

Frankly, I have originally almost written off the YTL's telecommunication initiative until there are quite a number of postings which makes me wanting to rethink (thanks for the comment) - no disrespect to YTL, but I have discounted all the other telco players like Green Packet, Redtone, and even UMobile anyway. Hence, I am not putting YTL as the only one as a punching bag for my telco thoughts. Let me put it this way, among the tycoons, Ananda Krishnan has already won this war among the telcos - while the other two, Celcom and Digi are corporate owned today. Anyone wants to take a share out from Ananda, do something else. It was the same as when Vincent Tan attempted with Digi (did not go far) and now UMobile which will not go far as well - in my thoughts. In telecommunication, its either you have it or you don't. It is not like a power generation business where it is dependent on the areas served, grid etc.

Now 1BestariNet is a way for YTL to reduce its costs of deploying wireless data communication nationwide while using the government's money to help it to achieve its dreams. It is actually not wrong as schools will need to be digitally covered anyway. Anyone who can do it most cost efficiently should get the project. Now my thoughts are this - the one which probably can do it most costs efficient should be a combination of a strong wireless provider and a fiber provider. From there, where does YES stands?

A fiber provider should no doubt be Telekom Malaysia while for a wireless provider they should be any of the three telcos - Maxis, Celcom, Digi. For YTL to get this project, it must have very strong connections or may have priced them very low to beat the competition or even both. If YTL has the committed ambition to cover the entire country with YES network, then maybe it would have used this project to achieve its ambition. For Maxis, Celcom and Digi it is a given that they must cover the entire nation or at least the bigger cities and towns with 4G.

Now, why do I think it should be a combination of a strong fiber provider and wireless player. The cities - Klang Valley, Penang, Johor Bahru and ultimately to other cities as well. Ain't TM is currently laying the fiber already? If it is charging less than RM1,000 for a 20Mbps fiber internet or more ultimately, what else can beat that from among the wireless providers? Are we saying that every student will be provided a dongle for their notebooks? What the schools need to do is to cover the entire school with wifi. Isn't that a cheaper and longer term solution? Imagine every new student will be provided with a YES dongle...that does not make economic sense.

Say 50% of the schools are located in the cities or suburban areas, providing internet to these schools are hence not expensive. A one off costs of covering with wifi (should not be much) and just monthly internet bill of not more than RM1,000 to TM. Another 40% of schools in the smaller towns? (The real problem as usual is tackling the real rural areas which probably makes up the 10%) Well, they need wireless providers which is why the 4G LTE and WIMAX providers are for. Please tell me if I am wrong deploying WIMAX solution is initially supposed to be cheaper but with the need to pay for the CPE (Customer Premises Equipment) I would think 4G LTE will be ultimately used hence that's why all the telcos are getting some spectrum for the deployment of LTE.

Going back to 1BestariNet. If YTL is to deploy fully, it would be getting RM1.5 billion in 5 years - that's what the press statement says. What the press statement does not say is whether it includes costs of accessing internet. I would think so as it does not make sense to just cover and do not provide access for it. Again, I would think the government would not ask the students to pay for access, am I right? The project is RM1.5 billion in 5 years. That comes to
RM1.5 billion / 5 years / 10,000 schools / 12 months = RM2,500 per school per month
and we are still not getting the fiber speed which can be deployed to many of the urban schools as at now.

Every student is supposed to be provided with a dongle from YES or could it be a CPE in every classroom or something like that?

Now, comes YTL's grand plan...Its objectives of doing the 1BestariNet is to grab hold of the student's market - 5 million of them altogether. It is trying to get a market share out of it to achieve its initial target of 1 million subscribers that pay so that it can breakeven. To do that it has to achieve something like 15% from the student market assuming YES already has about 300,000 subscribers currently. Hence, the students will have to be provided with a dongle so that they can access the network from anywhere, anytime - either in school, home or any public area. In school, it is free but anywhere out of school it will not be free anymore.

HOWEVER, for those students whose houses are in the more urban areas, most of them would have access at home anyway - in fact many homes today and most in future will be wirelessly connected - either from 4G LTE, Unifi (fiber to the home) or Streamyx (old ADSL technology). They do not want to pay the extra.

As for the more rural students, chances are they do not want (or could not afford) to pay anyway and if they are, their homes may also be connected with Telekom's Streamyx. And if there are no Streamyx, chances are there's no YES access as well. Hence, how is the 1BestariNet going to turn YTL into a serious enough contender in Malaysian telecommunication sector?

Anyone care to comment as I think this speculation may not run too far although may sound simplistic...as I still could not get the rationale.


Note that these are my thoughts and it may be flawed.

16 comments:

hng said...

1BestariNet is a project initiated by the Malaysian Ministry of Education (MoE) and carried out in partnership with YTL Communications. Under the project, 10,000 primary and secondary public schools in Malaysia will be equipped with high-speed 4G Internet access and a virtual learning platform, providing fast and reliable Internet connectivity as well as access to a world-class Integrated Learning Solution known as The Frog VLE.




The 1BestariNet Yes ID is a unique ID that lets you gain access to The Frog VLE, Global Resources such as Google Suite and Khan Academy via the Yes 4G network with Internet speeds of up to 20 Mbps and coverage through 70% of Peninsular Malaysia.

The 1BestariNet Yes ID is provided for free to teachers, students and parents of all the government schools nationwide under the MOE's 1BestariNet initiative

A 1BestariNet Yes ID is a Yes ID with exclusive privileges for 1BestariNet users. This ID provides you access to the Frog VLE, free Internet access to the Frog VLE when on the Yes network, Yes Mail powered by Google, access to the Google app suite, single sign-on to global resources from Khan Academy, and more! 1BestariNet Yes ID holders also have special Prepaid rates at 2.5 sen/MB

hng said...

The 1BestariNet Yes ID gives all teachers, students and parents access to the Frog Virtual Learning Environment (VLE) . The Frog VLE is a web-based learning system that replicates real-world learning by integrating virtual equivalents of conventional concepts of education. For example, teachers can assign lessons, tests, and marks virtually, while students can submit homework and view their marks through the VLE. Parents can view school news and important documents while school administrators can organise their school calendars and disseminate school notices via the Internet.

The 1BestariNet Yes ID also gives teachers access to the The Frog Community Site on the Frog VLE. It is a space to support educators by providing video tutorials, training guides, and user manuals to help them acquire new Frog Skills. Through the Frog Community Site, teachers can gain new insights and share best practices and success stories by connecting with other educators from across the country. They can also search for groups by subject of interest or create new ones, invite other teachers to join their groups, blog, post messages and participate in forums. Furthermore, the Frog Community Site provides resources and other materials to challenge and inspire educators.

The Pond is a student portal which can be accessed through the Frog VLE and provides Frog Student Champions with all the resources they need to learn about Frog and help them drive the use of Frog among their fellow students. Not only that, it is a place for all students to participate in contests, browse through educational links, videos, games and tips, and learn about what other Frog Student Champions have been up to on the Wall of Fame. Additionally, students can connect with peers and share ideas by speaking up in The Voice, a section on The Pond for students' opinions to be heard.

Parents are given a 1BestariNet Yes ID to access the Parent Portal on www.yes.my/1bestarinet.do. This portal allows you to access the Frog VLE Parent Noticeboard for each child's school, purchase resources from the FrogStore and keep up-to-date with news about 1BestariNet. With their ID, parents are able to keep track of their children school's activities and view and purchase educational content for their children all in one place.

hng said...

felicity

1Bestarinet as explain in above posting is unique and exclusive offer by YTLP, Yes network installed in every school to offer The Frog VLE, which is part of the curriculum in school now. While these VLE is free for every student, teacher, and parent, YTLP will derive earning from steady rental fees payable by Gov under first 5year contract worth 1.5b (RM300m/yr), extendable by another 5year + 5year.

On top of that, if student/teacher/parent wanted to surf internet, they have to paid extra cost at rate 2.5sen/MB

hoseadavids said...

Once PR take over the government, we can scrap off Crony projects like 1BestariNet.

Obviously YTL could not compete with the likes of DIGI, MAXIS and Celcom thus the idea of 1BestariNet.

Gark said...

I agree with hng's view.

Basically YTLC is providing the 1Bestari & e-learning suite at very low cost. And this might not be profitable for YTLC in the immediate future. But it does mitigate some cost to build the infrastructure.

What YES is hoping that at least some of the 5 million students/teacher/parents will convert to paying customer. If YES can attract at least 10%-15% of them, YES will be profitable.

Currently YES have 300K subscribers, and need another 700K to breakeven.

The reach is to all schools, which includes some 30%-40% in the 'kampongs' with no fiber access.

hoseadavids said...

"Now 1BestariNet is a way for YTL to reduce its costs of deploying wireless data communication nationwide while using the government's money to help it to achieve its dreams."

Reading this line just makes me puke at YTL.

How low/unethical can they go?

Goverment's money = Rakyat's money.

hoseadavids said...

How can a business make money by selling to STUDENTS and RURAL FOLKS?

Think about it.

hoseadavids said...

I think the main objective of 1BestariNet for YTL is to milk it for building its own infrastructure.

Subsequently this infrastructure will be used for the general consumer meaning you and me who has stable income (unlike poor students and rural folks).

felicity said...

Thanks for all the comments. While I am still questioning YTL's telco initiatives moving forward with the 1Bestari project, I do not discount that it is one of the better ways to create reach and coverage. Even then, my opinion or rather I opened it to the floor to provide opinion on whether it will change the landscape of telecommunication especially for YTL.

To be fair to them, YTL has spent a substantial amount of money and this telco thing is a problem child so far to YTL Power in terms of its performance. I am also questioning how is it possible that a wireless telco can be provided a RM1.5billion project to cover all schools despite we knowing that over in the cities, with fixed line broadband, it is the best way to approach it, I think.

Anyhow, YTL being a competitive company - it definitely will want to win the tender as in many other companies that compete against it.

micheal clark said...

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Kwang Khim Chua said...

Hmmm, it is quite interesting that everyone did not factor into the picture that, 1BestariNet could actually be part of grand plan of the government and to ensure that the existing telco companies have sufficient share in the existing market to do fairly well. Given this being the case, it is logical for the government to have a totally different company that has the financial deep pockets to manage 1BestariNet successfully. By so doing, there will not be one overly dominant company benefitting from the growing internet market and also because telco infrastructure should be diversified to reduce risk

This is my humble layman interpretation .. hope it make sense

leeshink said...

spot on with this write-up, i like the way you discuss the things. i'm impressed, i must say. i'll probably be back again to read more. thanks for sharing this with us.

Lee Shin
www.trendone.net

humaira ISMH said...

I just got this account to to the so called 'dashboard' thingy...at scholl,yes i got the connection though very slow indeed...now i'm at my home with my forever fav maxis home internet(which offer fast internet for rural area in my case)...n you know what?the frog OS is being still for about almost 15mins now...no wonder...thanks felicity,now I know that there's no YES when there's no STREAMYX..man this is such a toll!

Kim Hiong said...

Refer YES web site https://www.yes.my/v3/personal/devices/samsung-4g-chromebook.do
1. Dongle is not required. The Chromebook comes with
- Built-in dual band Wi-Fi 802.11 a/b/g/n
- Built-in Yes 4G Connectivity
The cost of chromebook RM1264 is pay by government under 1BestariNet project budget.

2. The killing part is the monthly data plan
https://www.yes.my/v3/1bestarinet.do
- YES only give 4mths free data access (via rebate)
- Subsequently RM69/mth for 3.5GB data quota !!

Who is going to pay for this RM69 per month for 5million students in 10,000 school ?!!
--> Parent or Government?
If don't pay, means student cannot use the Chromebook in classroom??

Unknown said...

Now today is 2014 already. YTL 4G has been expanding in this country via putting a 4G tower in the school compound for FREE !!!. so what they said is that, the school needs this tower to connect to the 1BestariNet ? VLE Frog ?? What they don't tell is that with the 4G tower in place in the school, they are extending the 4G wireless coverage to probably unto 5-6 KM radius and then they can sell YES 4G access to the public !!!!... so they are using government money to built their 4G infrastructure !!!.

Please look at VLE Frog...ask you children who has access to login and see what kind of portal they show ?? they are doing advertising ?? and selling e-books, prepaid ??

Where is the content ?? for the fact that YTL acquired the FROG based in UK for this project because they know they can make tons of money on this government.... and acquired a e-Learning or whatever you want to call it, just a small hole in their pocket...

PLEASE PARENTS all out there , take a look at this1BestariNet...

to the government... i don't know what to say...

-Concerned Parent LTd"

riveraaissa said...

truly a good read. thanks!

www.joeydavila.net