MCMC: Stricter conditions for telcos awarded spectrum

More conditions are in store for telcos awarded spectrum licences, including a requirement for infrastructure development, says MCMC. — FAIHAN GHANI/The Star

Stricter conditions will be imposed on telcos awarded spectrum licences to ensure they help develop the nation’s telecommunications infrastructure, says Malaysian Communications and Multimedia Commission (MCMC).

Its chairman Dr Fadhlullah Suhaimi Abdul Malek said the licences assigned to companies under preferential rights would be given on a conditional offer, with requirements to build towers, invest in equipment and ensure the usage of spectrum, such as by offering plans that would allow subscribers to use services that run on the spectrum.

Companies can acquire spectrum licenses through three methods: auction, tender or preferential rights.

Dr Fadhlullah Suhaimi said the commission was well aware of past problems with licensees, where they didn’t build up infrastructure and instead rented out their spectrum; a situation that he said is bad for the country.

Speaking during a media briefing, he said the exact conditions could not be revealed, being kept private due to competition concerns.

He said spectrum allocation was also related to a company’s usage to ensure quality of service for customers, like how telcos with more subscribers required more spectrum.

According to MCMC data, as of Q1 2021, Celcom and Maxis had 12.52 million subscribers and 12.48 million subscribers respectively, followed by Digi with 9.97 million subscribers. In comparison, Altel Communications Sdn Bhd had 28,700 subscribers.

The Star reported on Monday that the government had issued ministerial orders/direction (MO), in the form of allocating 10MHz of spectrum on the 900MHz band to Altel for five years. This is in addition to the 40MHz block of spectrum on the 2,600MHz band that it already has.

Asked whether the MO was justified given the number of Altel’s subscribers, Dr Fadhlullah Suhaimi said spectrum allocation was also dependent on the market size. Unlike Celcom, Maxis, Digi and U Mobile in the large sized market, Altel was in the small sized market along with Redtone and AsiaSpace, which respectively have 600 and 0 subscribers.

He warned that if a company failed to meet conditions, action would be taken against them.

He said companies could file an appeal for a remedial plan if they failed to deliver due to market conditions, but if no progress was made at all, MCMC would not let the matter slide. “They can end up with no spectrum,” he warned.

He said the commission would not change the goalposts on previous agreements, with stricter conditions to apply only to the new spectrum allocated and on renewed spectrum tenure.

In the recent MO, the other telcos were not assigned any new spectrum and were instead given a five-year tenure extension for the blocks of spectrum they already have on the 2,600MHz band.

Dr Fadhlullah Suhaimi said the MO was a conditional offer to Altel, meaning the company could turn down the offer if it felt unable to meet the requirements.

While no timeline was given for accepting the offer, he said he expected a response in one to two months.

On May 31, an MO posted on MCMC’s website said that the 20MHz block on the 900MHz band had been earlier allocated for the KL-Singapore high speed rail, but reassigned to Altel after the project was cancelled.

Altel, a mobile virtual network operator or MVNO, is sharing its existing spectrum with Celcom and Digi for 4G.

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