Malaysian Communications and Multimedia Commission (MCMC) chairman Datuk V. Danapalan gives a rare interview to Starbiz assistant news editor B.K. Sidhu on the concerns of the industry players
StarBiz: Operators are baffled over the Time 2 timeline as the definition is vague. Are they to provide total nationwide coverage by 2005? Please explain.
Danapalan: Our definition of Time 2 is that cellular coverage should increase to cover highways, tourist spots, major towns and even industrial zones; generally where the population is 80 persons per sq kilometre.
That is the direction set by the Minister and we are meeting the three major cellular players regularly to plan their coverage for these areas.
There certainly cannot be blanket coverage of the nation at this stage. If we go for that kind of arrangement then there are commercial considerations since the investments are going to be very large.
In the case where the population is low, and the commercial returns are very small, we would consider some sort of assistance. In this context, the Universal Service Provision (USP) fund, which is used to provide coverage to underserved areas, is progressing well and 86 areas would soon be connected.
The sharing of infrastructure or domestic roaming are options for operators to consider when going into areas where the return on investments are low.
One such area, for example, is Sabah, where one party can go in and invest while the others can opt for domestic roaming. These are options to go into low usage areas.
StarBiz: The operator’s biggest hurdle in meeting the Time 1 deadline is securing sites and getting approvals for transmission sites. They need help from the government to facilitate the process. Your views please.
Danapalan: We know all the celcos are committed to Time 1. They are committed to funding the expansion and agreed to share infrastructure. Previously the sharing concept was on the basis of one for one but now it is on the basis of rentals.
We understand the key issue is time to get the towers, rooftop and in-building sites up to meet Time 1, but we are working with the relevant authorities to facilitate the entire approval process. There is coordination work going on and the operators have to list out the areas where sites should be built so as to expedite the matter.
StarBiz: Securing sites for Time 2 is not really a hassle; the issue is getting approval. How can this be resolved so that the second timeline is also met?
Danapalan: As the Minister announced on Tuesday, state-backed companies would be invited to facilitate in identifying sites and act as one-stop clearance centres. A state-backed company means the government has an interest in it and it would be a challenge for the states to facilitate in making services available to the population.
StarBiz: What coverage levels would the government have achieved if Time 1 and 2 were met?
Danapalan: With the exercise, 87% of the country would have cellular coverage by end-2005. We would have covered major populated areas, industrial zones, tourist spots and highways. But we will continue to provide communication access to very remote areas that are seen to be uneconomical for operators to invest in via the USP concept.
StarBiz: The cellular operators are hoping they can use USP funds to provide coverage to areas that do not make economic sense to them. What are your views?
Danapalan: The USP fund is defined for usage in underserved areas where the penetration rate is below 20% of national average. That is going on. In the new formula for Time 2, where commercial viability is an issue and we want coverage, we will consider a proposal from the service providers.
StarBiz: Since the investments to provide additional coverage run into billions of ringgit, should this be not considered as a national infrastructure project?
Danapalan: Where it is commercially viable for operators to extend services, there is no need for the government to interfere. In the case of non-viability, we have the USP.
However, for non-commercially viable areas, we will consider some assistance, for example, the USP.
We know the operators are really committed, but it is also good that we have set timelines for coverage.