Malaysia's P1 Expands WiMax Coverage, Waiting on Intel

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Malaysian WiMax operator Packet One (P1) is expanding the coverage of its network as fast it can, aiming to dramatically increase the number of sites it covers in western Malaysia and recently winning government approval to extend services to eastern Malaysia.

"We're going full speed. There's no looking back," CEO Michael Lai said in a telephone interview.

P1, which launched its commercial service last year, had more than 80,000 subscribers by the end of August and the operator hopes to see its subscriber numbers climb higher as network coverage grows.

Getting to this point hasn't been easy. Permitting delays for base stations and other hurdles, including the lack of WiMax chipset support from Intel, mean the company hasn't been able to move as fast as it would like.

P1 started off last year by offering a fixed-wireless service since its network didn't have enough coverage for a mobile service. While P1 began offering mobile WiMax during the middle of this year and roughly 10 percent of users subscribe to this service, the company says the mobile offering offers "portable" access, rather than true mobile connectivity.

"We want to manage our customers' expectations well, so they don't expect to have a mobile broadband service right from the beginning," Lai said.

That's because network coverage remains limited, despite an aggressive construction schedule. At the end of 2008, the operator had less than 200 sites, each with three WiMax base stations. The company aims to increase that number to at least 1,000 sites before the end of this year, and add a similar number of sites next year. P1 is also ready to expand coverage to more parts of Malaysia.

Malaysia is split into two principal regions, western Malaysia and eastern Malaysia. Western Malaysia lies on the Malay Peninsula, south of Thailand, while eastern Malaysia lies on the northern coast of Borneo and includes the states of Sabah and Serawak.

Approximately 80 percent of Malaysia's total population lives in western Malaysia and this is where P1's network is located, with the greatest coverage in the Klang Valley region, which includes the country's capital, Kuala Lumpur, and Selangor state.

"We hope to cover about 38 percent to 40 percent of the western Malaysia population by the end of this year," Lai said.

After receiving government approval last week, P1 also plans to expand its network to eastern Malaysia, where broadband penetration is lower relative to western Malaysia and there is pent up demand from consumers for such services, he said

Although P1 now offers a USB dongle for its mobile WiMax service, the company isn't yet able to offer laptops with built-in WiMax, largely because Intel hasn't released the required chipset.

Last year, Intel -- which invested 50 million ringgit (US$14.9 million) in Packet One's parent company -- said it would release WiMax chipsets in 2009 that support different frequencies, not just the 2.5GHz band supported by its first-generation WiMax chipset, but that hasn't happened yet.

Intel's existing 5350 and 5150 chipsets still only support the 2.5GHz profile, which is used by operators in the U.S., Japan and Taiwan. There is no support for the 2.3GHz version used in South Korea and Malaysia or the 3.5GHz profile used in Pakistan.

The absence of an Intel WiMax chipset that supports 2.3GHz limits the options P1 can offer customers. While Centrino laptops with 2.5GHz WiMax are offered by operators in Japan and the U.S., P1 can't offer the same products to its customers.

"We have been waiting for that from Intel for a long time. I wish I could have that today," Lai said.

P1 hopes the release of laptops with WiMax support for its 2.3GHz network will help bring in more subscribers, both by making it easier for users to get online and allowing the operator to offer subsidized laptops to customers willing to sign service contracts.

"Based on what we've been told, hopefully by second half of next year we'll have laptops embedded with Wi-Fi and WiMax on 2.3GHz in Malaysia," Lai said.

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