Broadband Will Reduce In Price Despite GST

Broadband services in Malaysia are expected to drop in prices by more than 6%, despite the implementation of the Goods and Services Tax (GST).

According to Datuk Seri Ahmad Shabery Cheek, the Communications and Multimedia Minister, the announcement for the reduced price will be made this month, and the effects of the new pricing would be immediate.

The move to reduce the broadband rates is to encourage more Internet use in the country, he added.

He met with the chiefs of the telecommunications companies recently and was scheduled to see them next week to further push for lower broadband rates.

“The telcos have agreed in principle to reduce the tariff.

“They will be announcing the (new) rates this month and these will be better. There will be more than a 6% reduction,” he said at a #TanyaGomen session, as reported by The Star.

However, the new lower rates have not been confirmed or revealed by Ahmad Shabery.
Industry experts believe the drop should be more than 10% to 20% for a meaningful impact on consumers.

This reduction will be timely as prepaid users are feeling the pinch due to the 6% hike in prepaid top-up after the implementation of GST.

Previously the cellular companies absorbed the 6% Sales and Services Tax for prepaid customers but have now passed the 6% GST on to the consumers and this has irked many users.

Ahmad Shabery said there was a need for standardisation of the tax between postpaid and prepaid users because previously only the postpaid customers bore the 6% sales tax.

“If the overall charge can be reduced and it is more than 6%, then why not,” he said.

This rates reduction will help cushion the impact of GST, especially for the prepaid used.

According to the ministry statistics, there are about 20 million Internet users in the country, according to ministry statistics.

Meanwhile, the big four telco chief executives in separate statements said they were supportive of the minister’s call to lower broadband rates.

Celcom Axiata Bhd chief executive officer Datuk Seri Shazalli Ramly said it would introduce more affordable packages in about 30 days.

DiGi.com Bhd CEO Albern Murty said that “lower prices are in line with our aspirations to deliver Internet For All, which is rooted in the principle of affordable access for broadband and mobile Internet services”.

Telekom Malaysia Bhd CEO Datuk Seri Zamzamzairani Mohd Isa Zam said it would look for opportunities to offer more value-added packages.

Maxis Bhd CEO Morten Lundal said it would work with the ministry on this matter.

[Source]