Malaysia flexible over 3G licence applications

The Malaysian Communications and Multimedia Commission (MCMC) will adopt a flexible approach in considering submissions for 3G (third-generation telephony) spectrum allocations. MCMC officials said that while all considerations will be based on set criteria for the 3G "beauty contest" that is scheduled to begin next month, the MCMC will "keep all our options open." Three spectrum allocations are up for grabs, but officials indicated that if required, a flexible hand would be wielded in evaluating the expected bids and deciding on the number of eventual 3G operators. The MCMC said it would not constrain itself in evaluating the submissions if the quality of some or all of the bids were below expectations, as some leeway would be given in ensuring that bidders have the opportunity "to put up their best show." "Everybody will be given the same chance to bring their submissions up on par with the others," said an official. "Rest assured that if we talk to one (bidder after submissions have been made), we will talk to all (the bidders) ... if clarification or further information is required, we will ask for it." Such assurances of even-handedness would be more than welcome for the country's highly competitive telecommunications market, which was recently rattled by a news report alleging that a decision had already been made to award the 3G spectrum allocations to three companies. The report was denied by the Energy, Communications and Multimedia Ministry, which issued a statement that expressed the ministry's "extreme concern (on) the serious implications of the news article" and reiterated that "the Government has not made a decision on the assignment of 3G spectrum to any service provider." A subsequent increase in the share prices of two of the companies named was attributed to the report, which was also picked up by foreign news wire services. Observers say that it was unlikely that three individual companies would win the contest, as the MCMC had already stated that priority would be given to bids from consortiums. In response to questions on the issues raised by the news report concerned, the MCMC reiterated its indicated preference for bids from consortiums or joint-venture companies that "promote the consolidation of existing network assets." "It may be that no single company can be 'beautiful' enough, but if they join together, they might have a better chance," the official said. Asked of the possibility that less than three spectrum allocations would be made if the rest of the bids were below par, the MCMC said that "we'll have to see what comes out (of the tender process), although it would be too speculative at the moment (to discuss the issue at length)." "The Government intends to have three operators because, besides spectrum limitations, that number of operators would be sufficient to promote competition and make for a vibrant market, but whether it will eventually be three or two or one ... that decision would be based on the beauty contest," the official said. He added that "if it is less than three because less than three bids were submitted, then it would mean that market forces have decided that the appropriate number of operators would be less than three." However, indications are that the MCMC would not be short of bids to evaluate when the "beauty contest" kicks off. "There is a lot of interest among existing local players, although some are still figuring out how they are going to tackle the consortium thing, while quite a number of people have written in for more information," said the official. Local companies will be allowed to have foreign partners for their proposed consortium or joint venture company, although MCMC said that existing rules on foreign investment would still apply.