Questions raised over Syed Mokhtar’s 4G licence

KUALA LUMPUR, Dec 10 — The government’s award last week of a licence to a company linked to logistics tycoon Tan Sri Syed Mokhtar Al-Bukhary to offer the next generation of high-speed broadband services has led to question marks about its lack of experience and “zero track record”.

DAP MP Tony Pua has questioned the rationale behind the award of a huge part of the high-speed 4G, or Long Term Evolution (LTE) broadband spectrum, by the Malaysian Communications and Multimedia Commission (MCMC) to Syed Mokhtar’s Puncak Semangat Sdn Bhd.

The company was allocated 40 MHz of the band, while seven other companies were allocated only 20 MHz each.

Syed Mokhtar’s firm was allocated 40 MHz while the other bidders were given only 20 MHz. — File pic

“It appears that in Malaysia, our regulators are more interested in enhancing the profits of our telecommunication companies, and even then favouring certain connected parties despite their lack of track record,” the DAP national publicity secretary said in a press statement.

Pua also pointed out that the government had lost a source of revenue by not setting an auction requirement for the award, as practised in most developed countries.

The Petaling Jaya Utara MP had given the example of United Kingdom, where its independent telecommunication regulator, the Office of Communications, had set a reserve auction price of £1.3 billion (RM6.5 billion), and is expected to raise between £3 billion to £4 billion from the bid.

In 2010, German had raised €7.5 million (RM30 million) from auctioning two blocks in the 800 MHz band.

In 2008, Sweden had auctioned nine 4G licences in the 2.6 GHz band with a minimum requirement of 50 million Swedish kronas (RM24 million), but had received bids up to US$314 million (RM975 million).

According to Pua, Thailand had just concluded its own 3G auction and had raised US$1.4 billion despite a more depressed market environment and alleged collusion to lower the auction price.

On Thursday, the MCMC had awarded eight companies with the 4G-LTE spectrum band, which also included Maxis Broadband Sdn Bhd, Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, U Mobile Sdn Bhd, REDtone Marketing Sdn Bhd, YTL Communications Sdn Bhd and Packet One Networks (M) Sdn Bhd.

Nine companies had initially entered the bid, with the ninth company being AsiaSpace Sdn Bhd, a minor player in the industry.

The 4G-LTE is a next generation technology which promises mobile broadband speed up to 300 Mbps, and would allow providers to offer high-definition video streaming and better connectivity.

Business daily The Edge had reported last month that Puncak Semangat was planning to share its band with Celcom, which would grant the two companies an advantage.

Meanwhile, Maxis and U Mobile had already agreed to share Maxis’ 3G radio access network in October.

These sharing agreements, which are expected by MCMC, would mean companies can use larger bandwidths and incur lower rollout cost.