Gobind: Spectrum award mechanism to be reviewed

It is a nite resource and telcos have to pay a lot of money to secure a chunk of it, says minister

by DASHVEENJIT KAUR / pic by MUHD AMIN NAHARUL

THE government via the Ministry of Communications and Multimedia is looking at different options and proposals to determine the method of spectrum allocation to telecommunication companies (telcos), amid the impending announcement on the much-awaited 700MHz spectrum award.

Communications and Multimedia Minister Gobind Singh Deo said the ministry will study and relook at the way the spectrum is awarded to ensure that allocations are rightfully assigned, while allowing full transparency on the whole process.

“My ministry is working on this. I will have to present it to the Cabinet because it involves a huge amount of money, before any decision is made,” he told The Malaysian Reserve (TMR) recently.

Spectrum is the space in the air that is used for wireless communication including television (TV), radio, mobile and WiFi.

It is a finite resource and telcos have to pay a lot of money to secure a chunk of it and the regulatory body that manages the spectrum allocation in Malaysia is the Malaysian Communications and Multimedia Commission (MCMC).

The current process to render a spectrum is when MCMC informs the available frequency and the awarding process includes tender and auction.

The 700MHz spectrum — of which the winner was supposed to be announced in the first quarter of last year (1Q18) — has received interests from the three biggest telcos by users, namely Maxis Bhd, Digi.Com Bhd and Celcom Axiata Bhd.

Industry observers earlier suggested that the Pakatan Harapan government to review the prior mechanism for spectrum awards by MCMC.

The suggestion was made after concerns were raised on how the spectrum was awarded during the tenure of the previous administration, which was claimed to be based on political leanings.

On the other hand, sources claimed that only certain quarters that were assigned blocks of the spectrum have used it effectively. Others were claimed to have traded it, and some even hoarded it.

There have also been talks 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 said three biggest telcos.

In June last year, the Consumers Association of Penang (CAP) voiced its concern over the potential loss of billions of ringgit in government revenue due to the lack of transparency in the awarding of spectrum licences to mobile phone operators.

The association urged MCMC to undertake an auction with transparency and accountability for fresh allocations of this award.

CAP also suggested transparency in the issuing of spectrum licence and the pricing must generate suitable and justifiable income to government coffers.

Currently, unlike Thailand, Canada and a handful of others, Malaysia has not gone into intense auctioning where billions of dollars are raised by governments in awarding the spectrum.

“We do not want to burden the consumers this way. When it is auctioned, the price skyrockets,” Gobind told TMR.

He added that there is a need for the government to look back into the previously awarded spectrum and if it has been optimised.

“Some of the companies have actually changed in their business model in order to evolve with time and when that happens, they sometimes don’t fully utilise the spectrum they possess.

“I don’t blame them. Businesses have to survive. That is why we need to relook into it especially into certain bands or frequencies, and perform the whole re-evaluation process,” he said.

Gobind said the process includes a check if there is any wastage of spectrum.

Should there be any wastage, the ministry will discuss with the respective telcos and proceed with the refarming exercise — a process of withdrawing the spectrum from the operators and reissuing it for a different technology.

Refarming frees up the spectrum which is inefficiently used with outdated technology to be utilised for services with higher demand and less spectrum usage. As for the full shutdown of analogue TV broadcast by 3Q19, Gobind told TMR that the process is taking place in stages.

“We are working on it, it is moving but, not easy. The only way for us is to get it started and ask them to do it stage by stage. So, I’ve said, let’s start small, and if we can even achieve between 80% and 90%, then another 10% will follow suit,” he added.