President of MCMC: “No more Ali-Baba business”

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  • Spectrum assignment replaces device assignment, comes with strict conditions
  • Ministerial orders not issued willy-nilly, governance with MCMC recommendations

President of the MCMC: I was wrong. The expected phone call did not come. After what has been a refreshing and informative spectrum briefing by Dr Fadhlullah Suhaimi (Photo), chairman of Malaysia’s Communications and Multimedia Commission on Wednesday – describing Malaysian telecom operators’ EBIDTA margins as “sinful margins” – I expected his communications team to call, urging me to falsify my reports on some of the comments made by Fadhlullah.

The timing of the spectrum briefing could not have been a coincidence, occurring 10 days after a series of ministerial orders (MO) around spectrum allocation with the specific allocation of a new 2x5Mhz allocation in the upper slice of the 900 MHz band at Altel Communications Sdn Bhd, raising eyebrows and eliciting a collective “Here we go” look from industry leaders and concerns about governance from market analysts. It’s no surprise that the MO has also revived talks about a behind-the-scenes deal involving Telekom Malaysia Bhd buying Altel in a deal that will benefit Altel’s largest shareholder, Syed Mokhtar Al-Bukhary, one of the most powerful tycoons. influential people from Malaysia.

Therefore, the briefing, intended for English media journalists only, began with Fadhlullah concisely outlining the seven steps to be taken before specter delivery in the ninth final step. The first step is the existence of the national spectrum plan.

The revealing key here was his insistence that no MO can be issued willy-nilly by a Minister of Communications without first being recommended by the MCMC and that the recommendation itself comes after analysis. appropriate market and current players. There are legal instruments that govern this process, he explains. But he acknowledges that the MCMC has communicated this poorly to the ecosystem, giving rise to all kinds of guesswork.

When asked if an MO issued had ever been done unilaterally by a minister in the past, Fadhlullah referred to a senior officer who served under various ministers. The officer said no MO was ever issued unilaterally.

“There will always be facts and hallucinations”

Fadhlullah didn’t shy away from my question about how this MO led to such conjectures to the point of almost becoming an accepted fatality. “Look, in our evaluations [in determining spectrum] there will always be facts and hallucinations. And we hear the sound of a possible merger or whatever not, ”he says. But he stressed that it is not for the regulator to determine who TM chooses to buy or not.

Oddly enough, he offered his own opinion if he was TM, noting that the board and its CEO have changed over the past year and they might have different views now. A former senior executive at TM himself, he says, “If I was in TM, I would wonder why would I need to buy Altel? Is there any real value? He poses, noting that TM has now offered greater clarity to the market in its direction of being a strong player in fiber. “TM has now moved a mobile narrative to landline and the market has responded positively and with fewer user complaints as well. “

Remembering his time at TM, he was stressed out by the many complaints from customers of his copper-based ADSL service under the Streamyx brand. “My life back then was dealing with the Streamyx issues, as I knew Pg11 in the New Straits Time daily was the Letters to the Editor page! “

A key factor in spectrum decisions and more business “Ali-Baba”

Subscribers are a key factor that the MCMC examines. “It’s more tangible and our goal is to ensure that subscribers get the best service possible because they all want better service.” Fadhlullah didn’t budge when it was pointed out that Altel hadn’t done enough to earn his current specter, let alone receive additional capacity. After all these years and recent years of partnering with Samsung and Huawei, MCMC data shows that Altel only has 29,000 paying subscribers. And, much to the industry’s chagrin, is using Celcom Axiata’s infrastructure to harness its spectrum.

This is where Fadhlullah explained that there are new rules for operators looking for spectrum and those who do not follow them “can get zero spectrum”.

“Rest assured that we are very aware of the problems of the past where spectrum holders do not build their infrastructure but, let’s be very open about this, Ali Baba le (to allow a third party to use the spectrum).”

Recognizing that this is bad for the country and that is not the way a finite resource such as spectrum should be used optimally, he explained that the new approach to spectrum allocation through the allocation of spectrum spectrum, and not the previous device allocation, will come with clear conditions that specify the activity of deploying the network with towers and equipment to be built and using its spectrum.

“It was not clearly specified in the past when allocating spectrum,” he admits, leading to irresponsible behavior. “I will be the first to apologize to the regulator if we have been less than strong in our previous spectrum allocations because we did not anticipate that there might be loopholes,” he said. .

But now the new conditions come into play. As he elaborates further, Fadhlullah explains, “We will evaluate their business plan and if it does not match the resources provided to them, we will reject the plan,” he said, promising that the MCMC will go over all business plans with a fine tooth comb and reject those that are inadequate for the spectrum resource given to them.

He also points out that they are halfway in terms of meeting all the milestones set before Altel can officially receive the spectrum, so “they haven’t received the spectrum yet,” he points out.

Another principle used to determine the current MO was that of achieving symmetry and taking into account the size of the market. Fadhlullah points out that apart from Altel, Redtone Engineering & Network Services Sdn Bhd and Asiaspace Sdn Bhd are the smallest players in the market. Looking at Redtone, which only has 600 clients but has 50 MHz of spectrum, the additional 2x5Mhz Altel receives will bring them up to Redtone because it already has 40Mhz.

Hence Fadhlullah describing Altel as a beneficiary of “preferential rights in this more difficult brownfield market” while stressing that he must accept the conditions of the spectrum allocation.

Whether or not industry players accept this logic, what is clear is that the days of off-spectrum or downsizing to other parties are over, as spectrum allocation gradually replaces the device allocation as the primary means by which the Malaysian government allocates spectrum to the market.


Tomorrow: How is the Celcom-Digi merger going in an open market while ensuring healthy competition?


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