Malaysia awards only two 3G mobile licenses

Malaysia awarded only two of the expected three licenses for third-generation mobile phone services on Tuesday. The country's two biggest telcos, Telekom Malaysia and Maxis Communications, were awarded licenses by the government. "Only two met the criteria," said Nuraizah Abdul Hamid, chairman of the Malaysian Communications and Multimedia Commission. Bids from Time dotCom, Technology Resources Industries (TRI) and E-Touch all failed to garner the third license. Winners not a surprise Although the lack of a third licensee was a surprise, the winning bidders were not. Many had tipped Telekom, the country's leading fixed-line telephone operator, and Maxis, the biggest mobile phone provider, to obtain licenses. The Malaysian Government sold them for 50 million ringgit ($13.2 million) each - a far cry from the billions spent on licenses at the height of the telecoms boom in Europe. "After what happened in Germany and the U.K., we decided to take our own time but in November 2001, we took steps to begin the spectrum assignment process," Nuraizah told reporters. Analysts told Reuters that Malaysia's mobile sector is too crowded to support five mobile operators. Telekom bought TRI after the bidding began and is merging its mobile operations with its new acquisition, while speculation mounts that Maxis might soon make a takeover bid for Time dotCom. DiGi.Com, the third-ranked mobile phone operator, was the only Malaysian mobile operator not to bid on the license. Still work to do Nuraizah added that licensees still have some work to do. "They have to submit a detailed business plan within six months or run the risk of not getting spectrum at all." According to Reuters, both companies are expected to spend 2.5 billion to 3.5 billion ringgit ($660 million to $921 million) on building the infrastructure for 3G networks over the next two years. The news didn't affect the value of shares in both the winning and losing bidders in trading on the Malaysian stock exchange Tuesday, as they remained virtually unchanged. Malaysia, which intends to launch the services in 2004, and Singapore are the only countries in Southeast Asia with solid 3G plans. Third-generation mobile technology, or 3G, allows phones to download music and video over high-speed wireless Internet connections. But a lack of applications, handsets and infrastructure has thus far limited the technology.