P1: Competing in the Broadband Service Industry

Abstract

In 2008, Packet One Networks (Malaysia) Sdn. Bhd., or P1, launched its Worldwide Interoperability for Microwave Access (WiMAX) service, P1W1MAX, in Kuala Lumpur. This event kicked off the company's pioneering effort to provide Malaysians with WiMAX wireless broadband access, which it promised to be a better alternative to the current wired and 3G broadband offerings. Within a year, it had built a customer base of about 80,000 subscribers, and achieved an average revenue per user of about RM89 (approximately US$30). One year later, the company rolled out its Sudah Potong (Cut Already) marketing campaign and by the end of 2010, it had gathered about 280,000 customers and its ARPU of RM72 was among the highest in the industry. P1's five-year, three-phase plan (2007–2012) involving an investment of RM1 billion (about US$330 million) for the development of its WiMAX services, aimed to reach 65% area coverage throughout Malaysia by 2012. In December 2010, it announced its goal to increase its customer base to 450,000 by the end of 2011 to achieve its planned break-even. These efforts, however, attracted increased attention from the public, and even more so from its industry rivals, which reacted aggressively to P1's expansion. P1's top management knew that the company needed to act quickly, especially since the company's breakeven target date had reportedly been deferred several times. This case provides a scenario that can stimulate discussion on business strategies to be pursued by the top management of a growing firm operating in a very competitive industry.