With yet another failed bid, will Digi ever make a breakthrough?

Digi.Com, the smallest of Malaysia's three mobile-phone operators, has failed on its second attempt to get a license for high-speed wireless Internet services.

Digi, which is 61 percent owned by Norway's state-run phone operator Telenor ASA, is now considering “all options” to start high-speed services.
Mobile phone operators in Malaysia are turning to high-speed products to attract subscribers in a country where four out of five people are mobile phone users. Digi had previously lost the bid for the 2.3 Gigahertz spectrum permit to offer so-called WiMAX services.

Digi also lost a bid last year for a third-generation, or 3G, license which would have allowed it to offer faster Web access and movie downloads through mobile phones. The company spent about 450 million ringgit in a second capital repayment in2006 after it failed to obtain the 3G license.

Malaysia anticipates the number of homes with broadband access to increase from less than 30 percent to 75 is percent by 2010. The country is depending on WiMAX technology, which some analysts say is cheaper to roll out than more advanced wireless systems, to help reach its target.

WiMAX, which allows faster Web access on cell phones, uses radio networks to provide broadband connections over greater distances than WiFi, which is limited to hotspot areas of about 50 to 100 meters.

Digi wants to offer WiMAX to avoid lagging behind rivals such as Telekom Malaysia and Maxis Communications which started 3G last year. However, Maxis said last month it would start WiMAX services using its existing 2.5 Gigahertz spectrum, while Telekom said it may spend as much as 300 million ringgit ($87 million) on WiMAX. With Digi always one step behind its rivals, will it ever be able to compete successfully in Malaysia’s telecommunications arena?