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How transparent is the awarding of spectrum to cellular firms in Malaysia?


The industry is hoping that Gobind Singh Deo, the new Communications and Multimedia Minister, will relook at the way spectrum is awarded, so that only those who can pay for the spectrum and deliver the services should be entitled to use it. His move will be watched as that will determine how future spectrum allocations are made. Up for grabs next is the 2600MHz band.

The industry is hoping that Gobind Singh Deo, the new Communications and Multimedia Minister, will relook at the way spectrum is awarded, so that only those who can pay for the spectrum and deliver the services should be entitled to use it. His move will be watched as that will determine how future spectrum allocations are made. Up for grabs next is the 2600MHz band.

MANY questions have been raised on the way spectrum for cellular companies has been awarded inMalaysia.

Political patronage appears to have had a role in some awards despite pledges for transparency in the past. Some of those who got blocks of the spectrum used it, others traded it, and some even hoarded it.

Last year, the tender bid for the controversial 700MHz was closed and winners have yet to be announced.

However, there is talk within the industry that some pre-allocations have been made to some parties and the biggest blocks are going to players that may not be among the big three in the mobile world.

Under the tender process, the spectrum limit of four spectrum blocks per applicant was set with each spectrum block of 2x5MHz, which means that a total of eight blocks of 5MHz are up for grabs.

The entire block of 700MHz is 2x45MHz, wonder why the last block of 2x5MHz was not part of the tender. This has given rise to talk that it could be reserved for one player.

There is also talk that prior to the tender bid, some players were assured of certain blocks, some 2x10MHz, some 2x5MHz and one even 2x20MHz (under two companies but in the same group).

If indeed there are pre-allocations, why then go through the entire tender bid process? Was it just for show?

Spectrum is a prized commodity, especially the 700MHz as the cost to roll out services is half that of others and it covers a wider pathway.

Years ago, a player had secured the entire block via intense lobbying until the industry got wind of it and made enough noise to stop it. Can’t blame them, it was a clever strategy on their part because then the system allowed them to do so.

Pre-allocations should never happen if the entire bid process is transparent enough.

The industry is hoping that Gobind Singh Deo, the new Communications and Multimedia Minister, will relook at the way spectrum is awarded, so that only those who can pay for the spectrum and deliver the services should be entitled to use it. His move will be watched as that will determine how future spectrum allocations are made. Up for grabs next is the 2600MHz band.

The other hot subject he has to handle is the Universal Service Provision (USP) Funds. Much has been said on the way the funds were disbursed and much of the remaining monies is said to have been pre-allocated.

The question is, can all the disbursed monies be measured against deliveries?

It is said that there have been cases of non-deliveries and new allocations were made to complete some projects. That means some projects could have cost way more than budgeted but have those who did not delivered been taken to task?

Rough estimates of the fund size is over RM15bil. If industry players had faithfully forked out their monies, that sum would have grown by about RM1bil a year since 2002.

Number portability for fixed lines is something that needs to be implemented, as it allows users to move networks similar to mobile number portability, which has been in existence for nearly a decade. Surely some players have resisted doing it in the past but in the spirit of competition, this should be pushed through pretty soon.

Gobind also has to make sure there are no more delays in the implementation of the wholesale access pricing.

Those who do not want it be implemented should be penalised, as they would be seen as not wanting to help the Government push the agenda of “doubling the speed of Internet/broadband at half the price” since the pricing has been mandated.

Telcos , Corporate News , 700MHz , broadband , spectrum , mcmc

   

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