Sabah and Sarawak likely to get more for telecommunications and broadcasting

So, what will Salleh(inset) do differently for the industry? Two days after his appointment, he says he will consider fresh approaches that are good for the industry, but there may not be many changes in terms of policies. Salleh says he is a

EVEN before Datuk Seri Salleh Said Keruak can warm up his seat as the new Communications and Multimedia Minister, the buzz is that both Sabah and Sarawak are likely to get more in capital expenditure (capex) to improve the level of telecommunications and broadcasting services there.

Coming from Sabah, Salleh should know that a lot needs to be done to improve the reach and level of service there. Eventually, it needs to match the levels in Peninsular Malaysia.

To do that, a lot more investments will have to be pumped in. And the funding can easily come from the Universal Service Provision (USP) fund – the fund that has been set up to finance capex to provide infrastructure in areas where the services are not sufficiently available to the community at large.

Over RM8bil sits in the fund, as every year telecoms players fork out 6% of their earnings towards the fund.

From the statistics listed on the regulator’s website, clearly, the level of access in the two states needs to be widened.

As at end-2014, there were only 934 and 1,889 hotspots in Sabah and Sarawak, respectively, versus 4,709 in Wilayah Persekutuan (WP), 4,895 in Selangor, 4,494 in Penang, and 3,048 in Johor.

Similarly, cellular penetration is highest in WP at 231%, Selangor (164%), Penang (162%) and Johor (140%), compared with 120% and 111% in Sabah and Sarawak, respectively.

Salleh takes over from Datuk Seri Ahmad Shabery Cheek next week as the new minister of the communications industry.

During his time, Ahmad Shabery did quite a bit for the industry. He managed to bring down call and broadband rates, something which had been impossible in the past.

So, what will Salleh do differently for the industry?

Two days after his appointment, he says he will consider fresh approaches that are good for the industry, but there may not be many changes in terms of policies.

Salleh says he is a “leader who listens to views and opinions of all quarters, because I feel that we must evaluate new methods of implementation to ensure that policies and any amendments are carried out well”.

But still, the industry has its own wish list.

Top of the list is that the management and usage of the USP fund is transparent so that the players themselves know where their monies are going.

To be fair, the players have been investing, but the need for common infrastructure in remote areas can help over-building and over-investing by all parties. The weaker ringgit is affecting capital spending. So, new ways of investing needs to be looked into so that the wider population still gets the service.

In the past, the monies from the USP fund were used to enhance telecommunications services in rural areas. But with some level of failure and lack of enforcement, the deliverables were not up to the mark.

There is an RM600mil contract coming out soon to widen the reach by the industry regulator using the USP fund as part of the timeline 3 expansion. But the new minister has to ensure that the deliverables are up to the mark this time around.

It is really time to show tangible results and the USP fund cannot be used to simply dish out computers in areas where there are no Internet services in the first place.

Stiffer penalties and tougher enforcement are in store for the telecoms and broadcasting industries once the existing Communications and Multimedia Act is amended, and the hope is that he pushes for the amendments to be carried out.

Salleh, a blogger himself since 2008, should know why the Act of the old era needs to be changed to cater to the new one.

There had been too many licences issued in the past, with spectrum left unused. Some may not be viable and the minister may need to take stock and do something about it.

Too many contracts have also gone to a few parties – something that creates monopolies. That should stop and more players should get involved in the provision of common infrastructure.

As to pricing, that can be lowered further. He should talk to the telcos to help the rakyat, as telecoms services are now a necessity and not a luxury.

Prices of calls and broadband should come down further.

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