Why the change of heart to reduce cost of phone calls?


YESTERDAY was a dramatic day for players in the telecoms industry. And the lobbyists must have been keeping themselves busy.

On Tuesday, the Information, Communications and Culture Minister issued a directive for action to be taken to reduce mobile interconnection rates between fixed line and mobile networks to 3 sen per minute. The minister also wanted broadband and high-speed broadband rates lowered.

The directive was dated April 28 and posted on the regulator’s website on May 25.

The posting of the directive on the regulator’s website in itself has raised eyebrows in the industry. Telcos have not seen the trend before but it appears that the minister is not mincing his words. He just wants action taken, and taken fast.

To some telcos, the directive leaves more answers than questions. They would prefer more work be done, even though some old issues should have been resolved much earlier.

Following the directive, industry players received a letter from the regulator before noon yesterday, asking them to implement the 3 sen rate by July 1.

But before they could sip their afternoon tea, the letter was withdrawn. That was shocking. The change of heart was so swift, the reasons unknown.

One can only speculate that the lobbyists may have been at work because at 3 sen, not many players will benefit. A more reasonable rate is 5 sen per minute.

Whatever the reason, those in the know claim that fixed-line incumbent Telekom Malaysia Bhd (TM) will benefit from a 3 sen rate while Maxis Communications Bhd could be the biggest loser by virtue of the volume of traffic they carry.

The 3 sen rate refers to wholesale rate paid by operators to terminate calls from fixed line to mobile networks and vice versa and the payment runs into millions of ringgit. Maxis is the largest cellular player with 12 million users while TM is the largest fixed-line player with four million users.

The current rate is 8.36 sen per minute for fixed line to mobile networks and 6.07 sen for mobile network to fixed line and with this, TM loses more than Maxis.

All the access pricing issues have taken so long to conclude. So have many issues as spelt out in the directive. But rushing to implement something without conducting proper study will not bode well for the industry.

By right, the access pricing should have been completed by November 2009 but one celco was sticking its gun by not signing the agreement and that has delayed the whole process.

The question is should we review our stance in non-intervention and hands-off approach and give stronger players the upper hand, or should we bring them to the negotiation table earlier.

So the minister may have taken his whip out and while changes are good, it is also necessary to study the impact these will have on the nation, consumers, players and industry. Are we changing to favour one party or everyone?

We can continue to give excuses as to why we need more time and money or lower interconnection rates, but other nations are not waiting for us – they are racing ahead to make changes and make themselves attractive to foreign investors while we grapple with issues such as perception, attitude, priorities, policies and execution.

All these affect our efforts in building up competition and choices for the people. It is time that we think about what is the best for the industry and stop taking U-turns. We should have the interest of the nation and the consumers at heart instead of one or two companeis.

Related Stories: Rais wants lower phone call rates

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