In September this year, Extreme Broadband Sdn Bhd (EBB), an Internet Service Provider licensed by the Malaysian Communication and Multimedia Commission (MCMC) – announced they were privately funding Malaysia’s second Internet Exchange, the Johor Bahru Internet Exchange (JBIX).
JBIX was set up to be the first open internet exchange in Malaysia where both ISPs and any type of non-ISP businesses from Malaysia and the region, could peer to help keep internet traffic local.
3 months since its launch, EITN speaks to Weng Yew Wong the Managing Director of Extreme Broadband, on what drove them, a private company to start Malaysia’s second Internet exchange.
Weng: The first Internet Exchange (IX) in Malaysia was formed in 2006. It is a telco-consortium-based IX that have been serving the service providers well over the last decade and continues to do so.
However, with the proliferation of broadband in the region, we found that there are requirements both in Malaysia and in the region which are not easy or sometimes impossible to be addressed by a consortium-based IX. Some of these requirements if not addressed may put Malaysia at a competitively disadvantaged situation. That is how the idea of a privately-owned IX come about.
It is actually a lot easier to operate a private IX as we can move much quicker to address the market gap and make decisions that benefit the industry. As a nimble player in the market, we always compete based on innovation – be it through our product feature or business model. JBIX is no different. We are offering free port charges to all participants for the first 12-months, which is a first in Malaysia. An open IX environment will create more opportunities for the industry, thereby creating a bigger pie that all players can share. Through these collaborations, EBB hopes to leverage on new opportunity in cloud and connectivity.
EITN: While the government had announced plans to bring down the price of broadband in Malaysia, JBIX was launched before the price decrease. How has this affected the industry and JBIX?
Weng: The telco industry has undergone drastic change as the government pushed for cheaper broadband. There is no question that broadband price erosion has impacted every player in the market. Nevertheless, instead of engaging in a price war, EBB focussed on addressing the market gap in connectivity.
While JBIX was launched even before the price decrease, peering through us will further provide cost savings for the industry and Malaysians. We are committed to bring forth and share our peering and connectivity knowledge and services to Malaysians and ASIANs.
EITN: How has EBB fared in 2018 and where do you see yourself heading in 2019?
Weng: In 2018, EBB achieved a few wins that helped cushion the impact of the price erosion. We’ve added two new institutions as customers under the education vertical and another government body under the finance ministry for the financial sector. Also, we have spun off our Datacentre business into a wholly-owned subsidiary named Open DC Sdn Bhd where we’ve added over 10 new content providers, network security and corporate customers. We are looking to close the year with a revenue of RM33 million.
With the new alignment, we are looking to add at least one new DC and expand an additional 50% space in one of our existing DC space to cope with the growth forecast in 2019.
EITN: How has the industry and the government responded to JBIX?
Weng: The response from MCMC is cautiously encouraging, which is understandable, given that this is a private initiative. We hope to be able to further engage with the ministry in the near future.
The Internet Exchange business leverages heavily on its network effect to draw participants. For any exchange, creating this network effect at the beginning is always a challenge. So far we are pleased with the response from the industry, we have counted over 20 participants 3-months after our launch. With the latest 5 additional participants coming from regional players.
I have to admit that the response from the top Malaysian telcos has been a little slow. Given that they are already peered to each other, peering on JBIX might not be as attractive to them at this point. However, we are confident that, as news of ISPs from around the world who have already started joining us is announced, Malaysian players will see the value in joining JBIX. By opening doors to the region, we are providing an open gateway for all to peer and bring the region and the world closer.
What has been most positive is the number of corporate non ISP players that have shown interest in the open concept of JBIX. As of now, we have 5 corporate players from the education and financial sector. Some of them are currently in the process of applying for their IP addresses and AS number, which will be a first time venture for them.
We started JBIX to provide these corporations with the opportunity to peer and we are excited with the interest from this sector.