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Enhancing The Digital Experience For Malaysians Through Faster, Better Quality And Affordable Broadband

22 Nov 2018


When the Communications and Multimedia Act 1998 (CMA) came into effect in April 1999 it had four key areas of regulatory oversight; economic regulation, technical regulation, social regulation and consumer protection.  

These regulations were designed to develop the communications and multimedia industry for the ultimate benefit of consumers. In economic regulation for example, access to bottleneck facilities and services are key to promoting competition in the telecommunications market. Examples of such bottlenecks are last mile copper and fibre networks.  

When the Government and TM entered into public private partnership agreement (PPP) on deployment of high speed broadband network in 2008, the Government had deferred implementation of three wholesale services in the Access List, namely Full Access Service, Line Sharing Service and Subloop Service for a period of 7 years. This means that during the period of 7 years, TM can offer these services on commercially negotiated basis, without any regulatory intervention from MCMC.   

Significant Dates  

The Commission has been regulating access to these facilities and services since 2001 when the first Access List was issued followed by mandated maximum prices for such facilities and services since 2003 with the first Mandatory Standard on Access Pricing. The latest review of these matters was in 2015, when MCMC carried out a review and issued a Commission Determination on Access List. This regulated facilities and services that service providers should provide to other service providers at the wholesale level. This step is necessary in order to ensure effective competition that would ultimately benefit consumers who would have more choices. More choices should eventually lead to better products, services, and rates. Access regulation has been an ongoing exercise by MCMC.    

 Other countries such as Australia, United Kingdom, Singapore and New Zealand had adopted more onerous approaches such as functional or structural separation for the entities holding their high-speed broadband networks to promote competition that will ultimately benefit consumers. Thus far, MCMC has not focused on functional or structural separation as existing regulatory tools have generally proved adequate. However, MCMC is tracking developments in other jurisdictions so as to leverage on their experience in managing these networks.     In 2016, MCMC carried out a review of the non-pricing terms and conditions of access and issued the Commission Determination on the Mandatory Standard on Access. This had the effect of ensuring that access to networks is provided in a fair and non-discriminatory manner.  

 In 2017, MCMC embarked on a cost review to set access prices for the facilities and services listed in the Access List. This was done in a transparent manner by way of a Public Inquiry as required under the law. During the inquiry stage, licensees as well as the public were given opportunities to make submissions to MCMC. All the main operators such as Celcom Axiata Berhad, Digi Telecommunications Sdn Bhd, Maxis Berhad, TT dotcom Sdn Bhd and Telekom Malaysia Berhad (TM) made detailed submissions to MCMC. Additionally, others such as U Mobile Sdn Bhd, edotco Malaysia Sdn Bhd, webe Digital Sdn Bhd and YTL Communications Sdn Bhd also made submissions The MCMC considered all the submissions before issuing its report on the Inquiry.  
The Mandatory Standard on Access Pricing (MSAP) was then issued in December 2017. The MSAP regulated wholesale prices for facilities and services in the Access List, including for the first time, high-speed broadband services. This MSAP came into effect on 1 January 2018.  

In June 2018, the MSAP was fully implemented. The positive impact of the MSAP was immediate. Lower wholesale prices for access to high-speed broadband networks led to greater competition. This translated into lower retail prices for high-speed broadband services with entry-level packages prices being reduced by more than thirty percent (30%) and more attractive higher speed packages for the consumer. For example, a consumer who initially paid RM149 for 5Mbps would now pay only RM79 for 30Mbps. When compared with other countries in the ASEAN region, the prices of 30Mbps packages in Malaysia are the cheapest, while Malaysia ranked second after Thailand for the 100Mbps package.     

Broadband speed also improved as a result of the MSAP. A recent internet speed survey by The Speedtest Global Index in October 2018 stated that Malaysia rose 10 spots in the month of October 2018 to become the 26th fastest country in the world for internet speeds with average speeds of 61.97 Mbps, vis-à-vis the global average of 50.88Mbps. Amongst ASEAN   
countries, with the exception of Singapore, Malaysia is ranked the highest and is above Thailand (33), Vietnam (62) and Indonesia (92) out of 130 countries. A far cry from a few months prior when The World Bank reported that in February 2018, Malaysia’s average download speed was 22.56 Mbps.    

The Way Forward  

With increased sharing of infrastructure, including fibre, value to consumers is expected to improve. Malaysia’s progress in terms of high-speed broadband development and making access to the Internet as a utility does not end here, naturally. The government is already developing a plan to invest and further improve the nation’s digital infrastructure. This is intended to result in greater availability of broadband services, by promoting competition.  

Digital infrastructure improvement is a key focus of MCMC and right-of-way issues continue to be discussed with State governments and local councils. Addressing these issues effectively would help in reducing the cost to deploy infrastructure and enable wider coverage of high-speed broadband. The availability of digital infrastructure is a key factor in bringing about economic benefits and growth equally to all states, not just selected areas within the country.  

Other measures being considered include liberalising activities in key strategic areas that lack competition. MCMC will use all regulatory tools within its purview to ensure availability of world class infrastructure in Malaysia as we strive to build a strong and sustainable communications network that can effectively contribute to the economic development of the country. Studies are also being undertaken to push for spectrum optimisation and 5G planning for 2019.  

Government policy is critical to ensure that the rakyat truly receives the benefit of all the efforts expended, whether to improve the digital infrastructure or to reduce the cost of deployment and price to the consumer. The Alliance for Affordable Internet (A4AI) reported that the policies of an active Malaysian government and a transparent regulator resulted in Malaysia being placed first out of 61 countries. This ranking took into account government policies that supported the expansion of public access, digital infrastructure and the adoption of smartphones.  
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