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Tenaga wants to provide fixed-line phone services

Posted on: Sunday, 22 June 2003, 06:00 CDT

MALAYSIAN power giant Tenaga Nasional Bhd said yesterday it was seeking a licence to provide fixed-line phone services nationwide, a move that could see it rival dominant phone company Telekom Malaysia Bhd.

Tenaga chairman Datuk Dr Awang Adek Hussin told Reuters that the company had already built a nationwide network of fibre optics that runs alongside its transmission lines in a joint venture with Celcom (Malaysia) Bhd.

"What we need is the licence for the last mile," he said. "It will allow us to link up. The infrastructure is all there."

State-controlled Tenaga owns 60 per cent of the fibre optics network and Celcom, the country's second largest mobile phone operator, the remainder. Celcom has since been taken over by Telekom.

Awang Adek said Tenaga would sort out the ownership structure of the fibre optics venture with Telekom. He declined to give details.

Industry sources said Tenaga, which has a virtual monopoly on the transmission and distribution of electricity in Malaysia, could buy out Celcom's share of the fibre optics network.

Giving Tenaga a licence will open up competition for the fixed- lined business in Malaysia, which has in the past few months succeeded in cutting mobile phone operators to three from five to ease overcrowding.

"The Government is cautious because it will affect existing players," Awang Adek said.

Telekom currently has nearly five million fixed-line subscribers, but it expects slower growth in the future due to the growing popularity of cellular phones.

Meanwhile, in a statement, Tenaga said the nation's daily power consumption registered a new all-time high when demand peaked at 11,329MW on June 9.

This exceeded the earlier peak of 11,251MW recorded in May, barely a month before.

Tenaga said the increase in peak demand indicates that the consumption of electricity is on the rise, underscoring general economic upturn for the country.

Activities spurred by the latest economic stimulus package seem to have boosted electricity consumption to the June peak in daily power usage. Warm weather also made a minor contribution.

"We are very confident that the uptrend will continue for the rest of financial year 2003 and should result in a sales growth of at least 7 per cent as projected.

"We believe that the growth trend in electricity consumption indicates the renewed strong growth of our nation's economy," Awang Adek said in the statement.

During the first half of financial year 2003, for instance, Tenaga recorded a sales growth of about 7.5 per cent against the backdrop of real growth in gross domestic product (GDP) of 4.2 per cent.

"Given the projected GDP growth of 4.5 per cent this year, we expect electricity sales to continue growing along with the economy," he said.

He added that Tenaga's confidence is also based on the upward trend of the Industrial Production Index (IPI).

The IPI for April this year stood at 210.7 compared with 188.5 in the previous corresponding period, an increase of 11.8 per cent.

"This increase in the IPI, when read together with the growth of electricity consumption, is considered very encouraging.

"This growth will provide Tenaga with the opportunity to absorb excess generation capacity to meet the rising demand for electricity in the months to come," Awang Adek said.

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