PERIKATAN Nasional’s abrupt U-turn over the fifth generation (5G) mobile-frequency spectrum awards recently is sending the wrong signal to the telecommunications industry at a time when the country needs investment in the digital economy, said lawmakers and industry players.

Questions are also being asked as to whether the ministry and agency involved, and the selected companies ran afoul of the law by not announcing it clearly.

On May 15, the 700MHz band was given out directly to five telcos: Telekom Malaysia (TM), Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, Maxis Broadband Sdn Bhd and Altel Communications Sdn Bhd.

In several posts buried in the legal section of its website, the Multimedia and Communications Commission (MCMC) said the awards were made by order by Communications and Multimedia Minister Saifuddin Abdullah under the Multimedia and Communications Act 1998.

On June 3, a day after the awards were reported in the media, Saifuddin retracted the decision.

Industry players said the initial decision was buried by the MCMC for 15 days before it was uncovered by the media.

The five telecommunication companies awarded the bands did not inform the stock market of what should have been a “material development” that would have huge impacts on share prices, said one investor.

The 700-800MHz spectrum band, used to transmit mobile data is a highly prized but finite resource much sought after by telcos because it provides the best balance between coverage and capacity.

“Getting something like this is like getting the rights to an oil reserve. It’s a competitive advantage to any company that is publicly traded and affects the share prices for everyone in the industry,” said one investor who requested anonymity.

The direct awards were criticised by Saifuddin’s predecessor Gobind Singh Deo, who said the former Pakatan Harapan administration decided on an open tender process last December.

By doing so, only the best companies with the best business plans would receive the bands while ensuring that Malaysians would get the best coverage and services at competitive prices, Gobind said.

An industry official said the episode left a bad taste in the mouth for telcos and the private sector because the decision to tender it out had been agreed upon by all in a series of public inquiries.

“The decision was agreed by the industry, including the telcos, in consultation with the ministry,” said the official involved in the public inquiry meetings last year.

“The PH government wanted to ensure that telcos would get a fair price for the spectrums they were bidding and that consumers, especially in rural areas and B40 folk, get the best coverage and services.

“The process would have benefitted everyone. So, the question is how can the MCMC and the ministry suddenly abandon the tender process without notifying anyone? Why go back on something that would have benefited everyone?”

Starting off wrong

In response to the issues raised by critics, Saifuddin said: “I have already given instructions to cancel the earlier awards.”

However, Lembah Pantai MP Fahmi Fadzil said the entire fiasco and the ministry’s seemingly flippant stand sent a troubling message to the market and public.

“It is worrying on so many fronts. The first is that previous discussions and agreements were not followed through.

“Second, there was no public tender.

“Last, the decision and subsequent retraction did not come with a clear explanation,” said Fahmi, who is also PKR communications director.

He said the industry will ask how do they assess any decision made by the current administration.

“They will compare this to the previous government where we laid out the rules on how things will be done,” he said.

Darell Leiking, a former International trade and industry minister, said it’s worrying how the PN administration bungled something as important as this.

He said the movement-control order (MCO) showed how accessible, stable and affordable internet is now a necessity for all Malaysians, especially those in rural areas and low-income families.

Pupils from low-income and rural households are more likely to be left behind in their online lessons during the MCO because their homes did not have adequate mobile coverage or their parents could not afford basic internet.

“Post-MCO, any government that is rebuilding the economy needs to provide broadband at the fairest price to telcos and consumers because it is now a mainstay,” said the Penampang MP.

“The minute you start it wrong, the development of it will be wrong.” – June 9, 2020.