102016 Fox
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Malaysia,Telcos,SVOD

TM Eyes OTT Deals To Buoy Broadband

News that Telekom Malaysia (TM) has struck a deal with regional SVOD platform Iflix comes as no surprise.

Driven by fiber broadband, TM’s internet data revenues grew by almost 20% Y/Y in its most recent quarter, contributing 30% to total turnover.

TM's fiber broadband base (customers to its UniFi platform) grew 13% to 792,000 in Q3, with monthly Arpus at a high RM192 (US$53).

Broadband remains a key pillar of the company's business.

TM needs premium video content to sustain this momentum, and keep Arpus high.

Tying up with Iflix, which carries Hollywood and some local library titles, provides all of TM's 2.4 million broadband customers, including legacy ADSL subs, with a year’s free access to the SVOD service.

TM is expected to announce additional partnerships with more OTT providers next year, including PCCW-backed Viu, which has secured rights to popular Korean content.

Viu is gearing up to expand across Southeast Asia in the first half of 2016, adding some Chinese and Japanese content along the way.

FIBER & OTT

TM already operates an IPTV service called HyppTV, which is bundled for UniFi customers.

HyppTV, alongside upselling, are the main engines of TM’s recent broadband Arpu growth. More than half of TM’s broadband customers have download speeds faster than 4 Mbps.

In October, TM also launched a fiber broadband subscription with speedier download connections, called UniFi Advance.

“On HyppTV, it all depends on how we package it,” TM Group CEO, Zamzamzairani Mohamed Isa, said on a recent earnings call.

“In most instances, and in the case of high-Arpu broadband customers, HyppTV is thrown into the package, so whether you switch it on or not, it's already there for the customer,” he added.

"In the future, for UniFi Advance, it could be that people will have a choice of either having -- buying HyppTV inclusive of the premium content or not, or new video services."

TM’s Unifi Advance plan offers 30Mbps download speeds at RM169 a month, with subs required to take up HyppTV packs priced at RM30-60 for at least one year. Customers receive RM20 rebates during the current promotion period.

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