The Malaysian Communications and Multimedia Commission (MCMC) should not to play the industry’s “God” by selecting which companies’ pockets to fatten with arbitrary awards.
We insisted that the regulator should have auctioned off the Long-Term Evolution (4G-LTE) broadband spectrum instead of awarding a comparatively large block to logistics tycoon Tan Sri Syed Mokhtar Al-Bukhary.
We scoffed at MCMC chairman Datuk Mohd Sharil Tarmizi’s claim that the award of 40MHz to Syed Mokhtar’s Puncak Semangat was to “introduce additional competition”, saying his explanation defied logic as the eight existing players in the industry was adequate to offer a surfeit of consumer choice.
By international standards, eight players are more than sufficient to generate a highly competitive environment.Most other developed nations have far fewer than eight players in the industry, and yet remain highly competitive and innovative..
If Sharil’s statement meant that these other eight players have not already been in competition to provide innovation, and the MCMC should then be held responsible for allowing the firms to collude if this was the case.
Under the Malaysia Communications and Multimedia Act, the MCMC is the authority to promote competition and bar collusion between telecommunication players..
According to The Edge on Tuesday, Shahril defended the MCMC’s award of the largest share of the high speed 4G-LTE broadband spectrum to Puncak Semangat, which its “zero track record” in the field.
We wanted to introduce additional competition,” Shahril was quoted in the report. “Look at the market now, if we left those eight players on their own, where would the solutions, applications and innovation be?”
The MCMC had announced last week that eight firms would be allowed access to the 2.6 GHz spectrum band that would enable them to provide 4G-LTE services with speeds in excess of 100Mbps.
Celcom Axiata Bhd, DiGi Telecommunications Sdn Bhd, Maxis Broadband Sdn Bhd, Packet One Networks (M) Sdn Bhd, REDtone Marketing Sdn Bhd, U Mobile Sdn Bhd and YTL Communications Sdn Bhd were each awarded 20MHz, while Puncak Semangat ― a new player ― was given 40MHz.
While we are all for competition in the industry, the manner in which the licence and quota is awarded must be questioned..
In the past, some of the companies awarded the 3G and WIMAX licences by the MCMC had failed miserably, lending weight to his assertion that the regulator could not play “God” by assuming which firm would succeed.
MCMC’s role was to facilitate competition, prevent monopolistic practices and ensure quality service, adding that this could have been upheld if the regulator had opted to auction off the 4G spectrum.
MCMC’s decision against an auction for the bandwidth is contrary to international best practices where both developed and developing countries have raised valuable income for the government while promoting a highly competitive telecommunications industry.
UK, Germany, Sweden and even Thailand have held auctions, raising (the equivalent of) billions of ringgit in proceeds, while Singapore, Taiwan and Brazil are planning their auctions for next year..
Sharil, when defending MCMC’s decision against holding an auction, had said that an auction was best only when the spectrum is convenient and quality of the spectrum is not a problem.
But this nonsensical, pointing out that any committed firm that believes in its own ability to trump the competition would be more than willing to participate in an auction for the spectrum.
If the company fail, the MCMC would still have the power to withdraw its award while keeping the proceeds of the auction.
Hence under such circumstances, there is even greater incentive for the players to compete and innovate to ensure a successful business. This will at the same time benefit consumers..
We reminded MCMC to adhere to Prime Minister Datuk Seri Najib Razak’s own slogan that the “era of government knows best is over”, then the market should be allowed to play its part in determining the winner in an auction.
Otherwise, it becomes clear that MCMC is over-extending its regulatory role to play ‘god’ of the industry by deciding which company’s profit to fatten, and ignoring the interest of the millions of telecommunication users in Malaysia..
comments
it is worth billions of ringgit in years down the road, laughing to the bank after a big bank robbery! PR should file a case against MCMC
In Bolehland, even if you are an Arab descendent but call yourself a Malay Muslim by practicing the faith superficially and profess to fight for the myth of protecting the Malays, you will be enriched by BN. 1Malaysia is the same as Sapu Malaysia.
For decades, we have seen all the contracts being awarded to this one person. Contracts should be awarded based on merit and I think it's appropriate to award contracts to multiple people i.e. say 5-6 companies to promote competition but, the government can decide to say award something like additional 1-2 more to smaller and lesser known companies who have made their mark and done well. But, never never never just award contract to someone just because you know his name but, he do not have any track record at all in managing or running it
Puncak Semangat, Packet One, Redtone and U-Mobile will just rent or sell their spectrum to Celcom, Maxis and Digi for buta money. This rent-seeking culture must stop. MCMC must put a clause that those spectrum cannot be rent or sold to others.
Report
This is not the first time Syed Mokhtar got something for nothing.
Syed Mokhtar got important Malaysian seaports such as Port of Tanjung Pelepas, for ridiculously cheap.
When Tenaga Nasional wanted to sell of their power generating plant - Syed Mokhtar got it despite sent in the second lowest bid.
Now this 4G thing.
The corruption case in between Syed Mokhtar and BN is so darn obvious one has to wonder what is the use of MACC in the first place.
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