Auction, not gift 4G spectrum to Syed Mokhtar, MCMC told

Pua asked if the MCMC’s justification could be interpreted as meaning there was no competition among telcos at the moment. — File pic

KUALA LUMPUR, Dec 13 ― 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, an opposition MP said today.

DAP federal lawmaker Tony Pua insisted here 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.

The Petaling Jaya Utara MP 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,” he said in a statement here.

Pua asked if Sharil’s statement meant that these other eight players have not already been in competition to provide innovation, and said 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,” he reminded.

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 Pua had on Monday criticised for 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,” Pua complained.

He pointed out that, 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.

Pua said that instead, 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,” he pointed out.

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 Pua called 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.

He said that should 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,” Pua said.

The DAP national publicity secretary reminded MCMC to adhere to Prime Minister Datuk Seri Najib Razak’s own slogan that the “era of government knows best is over”, saying 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,” he said.