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Malaysia awards 3G licenses

31 Jul 2002, Raslan Sharif, The Star
The Malaysian Communications and Multimedia Commission (MCMC) has assigned only two 3G or third generation spectrum blocks out of the three up for grabs, opening the door for unsuccessful bidders and new ones to potentially stake a claim for the remaining block. The MCMC announced Tuesday that it would tentatively allocate spectrum for the provision of third-generation communications services to two companies, which meant that the remaining three bidders failed to make the grade even though there was an additional block on offer. The two successful bidders were Telekom Malaysia and Maxis Communications subsidiary UMTS Malaysia, while those that missed out were Celcom, Time dotCom subsidiary TimeSat, and E-Touch. MCMC chairman Nuraizah Abdul Hamid said the remaining block was not assigned because "only two companies qualified." Telekom and UMTS Malaysia have to submit detailed business plans within six months, at the end of which MCMC would decide whether the proposals were good enough for spectrum to be definitively allocated to the two companies. They would then be required to pay RM50 million (US$13 million) as an assignment fee - several payment options are provided - when the spectrum is allocated, plus additional maintenance fees based on the number of transmitters that would be set up in their respective 3G networks. MCMC had tendered for bids for the three spectrum blocks up for allocation earlier this year. The bidders were evaluated via a "beauty contest", which required that the bidders' proposed plans meet certain standards from an established set of criteria, with the greatest weightage placed on service rollout and coverage, and infrastructure sharing proposed by bidders. "All spectrum holders are committed to sharing or providing access to their networks," Nuraizah told a packed conference room prior to announcing the names of the winning bidders. The "beauty contest" method gave the MCMC flexibility in assigning all, some or none of the spectrum blocks on offer. As only two companies were successful in their bids, some observers said the MCMC could theoretically call for bids in a new tender exercise for on the remaining spectrum block - or additional blocks if Telekom and UMTS Malaysia's business plans fail to convince the MCMC. Nuraizah did not rule out the possibility, saying that "we will decide later" when queried on the matter. The prospect of having an additional round of bidding for the unallocated spectrum block was clearly on the minds of some telecommunications company executives met on Tuesday after the spectrum assignments were announced. "There's still one more block, and as long as it remains unassigned, you will have people giving a go at getting their hands on it," said an official from one of the losing bidders. In addition, Malaysia's communications and multimedia regulatory regime does not disqualify anyone - including non-telcos - from bidding for and being assigned spectrum, however remote the possibility. A press briefing held by the MCMC last week, officials emphasized that a spectrum assignment holder need not be a licensee. Telecommunications companies like Telekom and Maxis currently require licenses from the MCMC to provide network facilities and services. Other communications and multimedia related activities that require a license include the provision of services like Internet access and Voice-over-IP. A company that does not already own and operate a telecommunications network could technically be assigned spectrum if it could demonstrate satisfactorily to the MCMC its abilities to fulfil the criteria required. All the bidders for spectrum that were evaluated by the MCMC were either existing telecommunications companies or their subsidiaries, with the exception of little-known E-Touch, which is believed to be linked to Sarawak-based investors.
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