PKR MP: Minister’s order to directly allocate spectrum band to telcos lacks transparency

KUALA LUMPUR, June 3 — The ministerial directive for the Malaysian Communications and Multimedia Commission (MCMC) to allocate five firms with spectrum band for mobile internet services without tender violated the ideals of transparent governance, said a federal lawmaker.

Lembah Pantai MP Fahmi Fadzil called Communications and Multimedia Minister Datuk Saifuddin Abdullah’s directive shocking, saying it begged the question of how the firms were selected for the allocations.

“On July 1, 2019, the MCMC commenced a public inquiry process, where several guidelines were proposed, including awardings via tenders, and some technical details such as: 3.1.2.5 An assignment of less than 2x10 MHz spectrum may not be ideal to deliver high data rate and this may affect the ability of operators to achieve the NFCP (National Fiberisation and Connectivity Plan) targets and ensure improvements of QoS.

“In addition, in a reply to Altel Communication Sdn Bhd (one of the five spectrum receivers) to MCMC dated August 30, 2019, Altel itself stated that it is best to have one operator i provided with the entire 700 MHz spectrum, to facilitate telecommunication infrastructure to be more coordinated, avoiding waste and to be more fair to all mobile telecommunications service operators,” he said.

Fahmi said the MCMC report dated September 29, 2019 also indicated that the majority of companies that responded had called for a tendering process to be done, with almost no one stating that the 2x5 MHz spectrum block was suitable.

“Unfortunately, the minister’s directive observed that no tender process was carried out or announced, no operator or consortium was given the entire spectrum, and the total 2x5 MHz spectrum block awarded to Altel and Telekom Malaysia did not follow MCMC’s initial views on July 1, 2019 nor MCMC’s September 29, 2019 report,” he added.

Fahmi pointed out that the public was not informed about the fee imposed on the recipients, and said Saifuddin must explain matters.

In his statement, Fahmi asked why the 700 MHz spectrum blocks were provided through a ministerial directive, and not via a consortium that is more efficient.

He also asked about the eligibility criteria for the chosen companies, including their success in building mobile networks, the size of their subscriber base, and specifically why Altel and Telekom Malaysia were given 2x5 MHz spectrum blocks when the MCMC had said this was not ideal.

Fahmi further demanded to know how much the companies will charge, and their plans for their allocated spectrum blocks over the next five years, especially in terms of infrastructure and services.

“I felt called to raise these questions because the 700 MHz spectrum is closely linked to the implementation of the 5G technology and the NFCP programme, which is the future of telecommunications technology, and will surely impact the people.

“If mistakes of the past are repeated, including infrastructures which fail to be built or coordinated, it is the users who would end up losing,” he added.

Apart from Altel, the other companies which were listed as recipients are Celcom Axiata Berhad, Digi Telecommunications Sdn Bhd, Maxis Broadband Sdn Bhd, and Telekom Malaysian Berhad.

The directive was issued under Section 7 of the Communications and Multimedia Act 1998 (Act 588), according to the letter.

The prioritisation for contract recipients was done under Section 174 of the same Act.

MCMC had said in January this year that it would adopt “an innovative and forward-looking approach” on the allocation of spectrum bands to set a critical foundation for the country’s transition toward 5G.

The 700 MHz, 3.5 GHz and 26/28 GHz bands have been identified for the initial deployment of 5G in Malaysia, the commission said in a statement.

In the same statement, MCMC said the 700 MHz and 3.5 GHz bands are being considered for allocation to a single entity comprising a consortium formed by multiple licensees, instead of individual licensees.

It pledged to undertake a tender process for this purpose.

Altel has been allocated a spectrum band of 713Mhz to 718MHz paired with 768MHz to 773MHz.

Celcom will be 723MHz to 733MHz paired with 778MHz to 788MHz. Digi has received the lowest allocation, of 703MHz to 713MHz paired with 758MHz to 768MHz.

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