Merger of TM & Astro to drive IPTV take-up?

IPTV and merger of Telekom Malaysia (TM) and Astro is the right thing to do? The rumours and logical reasoning appears to point it in that direction

Let us study the numbers:

Currently TM has about 1.2 Million broadband subscribers where else Astro has passed the 1 million subscribers years ago. This gives us a present market potential of 1 million IPTV subscribers. The problem of deploying IPTV in Malaysia is quite evident. The Malaysian government will never allow free content through IPTV. Thus, Malaysians are expected to pay higher than Astro (excluding maintenance cost) for content that is believed to be the same if not less exciting than Astro since TM has very little experience in the broadcasting, media and film industry. Based on TM's main options it could approach the strategy by either:

1. Highlighting its superior content by working with other content providers or create its own content that will make it more difficult for new entrance. The fact is it doesn't matter anyway since content variety will be the same as long as the freedom to watch anything is not permitted.
2. TM could leverage on its capability to provide higher value added services such as chatting, user interactivity or HDTV quality. But this will be costly since it may either result in higher cost of Set Top Boxes, middleware maintenance or IPMS system and higher bandwidth (users need at least 17 to 18Mbps for HDTV). As of right now, users are still struggling for 1Mbps
3. TM could concentrate more on its bundling by making it clear to the market that the content matters little, but you can get broadband and digital TV at a discounted price. We believe TM would highly likely take this approach initially. The problem to this is that the model will not last since cable TV operators will not sit down and allow it to happen forever. Furthermore, the actual benefits to Malaysians become trivial.
   

For the sake of the progress of the country and profitability, TM should have its own division handling IPTV and it should merge with Astro. Of course that will lead to a more monopoly market, but building an industry by initially monopolizing it is something Malaysians are very much an expert of. Besides, IPTV will initially be deployed by a dominant company anyways.

Astro is very much way ahead in terms of delivering content and knows the interest and requirement of pay tv users. At the same time, TM knows where such value added services can be offered geographically due to its capability in building a nationwide broadband bandwidth. The synergy, aside from profitability for both companies, it will also give Malaysians a good first time impression of IPTV and gain more benefit out of it. In this way, Telecom and broadcast regulators can also combine and the IPTV service can then be deployed immediately. Malaysians are currently behind. Way behind others such as China, Singapore if not the rest of the world. It is advised that the country should stop playing around - testing and start the marriage for immediate productivity.