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Malaysia awards Altel with sought-after 5G spectrum

Malaysia awards Altel with sought-after 5G spectrum

Malaysia has quietly awarded the highly sought-after 5G telecommunications spectrum to several players, including the little-known Altel Communications Sdn Bhd, a firm controlled by the reclusive but politically connected tycoon Syed Mokhtar al-Bukhary, without an open tender as previously promised.

The May 15 decision, signed off by Minister of Communications and Multimedia Saifuddin Abdullah, went unannounced to the public and appears to be the first major reversal of infrastructure policy by the three-month-old Perikatan Nasional (PN) government.

Before being ousted in February, the Pakatan Harapan (PH) administration had promised an open tender to allocate the spectrum – reserved frequencies to avoid interference of transmission – but encouraged industry players to form a consortium that would avoid duplication of heavy expenses in rolling out infrastructure for the next-generation broadband service.

“The commission will take immediate action under the Act and laws on relevant subsidiaries to implement the spectrum assignment to all licence holders,” Saifuddin, who was foreign minister under PH, said in the order to regulator Malaysian Communications and Multimedia Commission (MCMC).

Despite much fanfare concerning the potential of 5G services – which could be up to 20 times faster than current 4G mobile connections – the signed orders were only uploaded to the MCMC website in a buried section on spectrums, with no media statements issued since.

The rollout of 5G is a key plank in the MYR22 billion ($5.2 billion) National Fiberisation and Connectivity Plan, which PN has promised would continue despite the change of government.

A check on the MCMC website found that no tenders were called, and executives from various telecoms firms also told The Straits Times that they were not aware of any invitations to bid for the spectrum.

“It is strange because some of the companies that were awarded are public listed. They would have to announce it to the stock exchange once they are aware as there are also hundreds of millions in fees involved,” one executive who spoke on condition of anonymity said.

Leading mobile service providers Maxis, Celcom and DiGi were awarded two bands of 10 megahertz (2x10MHz), while Altel, despite being a minor player, was given 2x5MHz. Telekom Malaysia, the state telecommunications firm which largely operates fixed line services, was allocated 2x5MHz.

Telcos must pay an upfront sum as well as annual fees for spectrum allocations. Although not fixed, some firms have paid up to MYR600 million upfront, with MYR51 million in annual fees for their allotments which last for over 15 years.

Maxis proposed to MCMC during last year’s stakeholder engagements on 5G that a 2x10MHz band in the 700MHz range allocated last month be charged at 323.3 million ringgit upfront with a 27.8 million ringgit annual fee.

However, it is not known if any fees have been agreed for the 5G spectrum. The ministry did not respond to requests for comment.

Altel, a subsidiary of Syed Mokhtar’s Puncak Semangat Sdn Bhd, was awarded the most amount of spectrum in the 2.6GHz band to deploy 4G services by MCMC late in 2012.

Instead of building up its infrastructure, it leased the spectrum to other telcos and piggybacked on Celcom to offer services as a mobile virtual network operator.

The government’s role in how Syed Mokhtar built his business empire to become one of Malaysia’s richest men has been criticised for decades.

The tycoon runs various monopolies based on government licences such as in the distribution of rice and inspection of road vehicles and controls the postal service, several ports and media companies.

THE STRAITS TIMES (SINGAPORE)/ASIA NEWS NETWORK

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