In May 2020, in a publicly unannounced ministerial order, Communication and Multimedia Minister Datuk Seri Saifuddin Abdullah quietly awarded the prized 5G spectrum to several players including to the politically-linked firm Altel Communication.
Needless to say, the controversial ministerial order was eventually retracted, citing technical issues, law and the need for transparency, amidst heavy criticisms from industry players and observers.
Barely a year passes by, earlier this week the same Minister has raised eyebrows again with another ministerial order. With technicality, law and transparency remain unaddressed, he has awarded 900MHz mobile spectrum to Altel Communication, in addition to the extension of existing 2600MHz for another 5 years.
To industry players, it is hard to understand how Altel Communication can be awarded 40MHz, allowing it to possess the largest block in 2600MHz – twice as much as any other operator, and be awarded with more spectrum, despite never building any single infra since hogging these spectrums for many years.
Altel currently operates as a Mobile Virtual Network Operator (MVNO), leasing its 2600MHz spectrum to both Celcom (20MHz) and Digi (20MHz) instead of using it for their own mobile services.
Spectrum is a very valuable resource, worth billions of dollars. It has become everybody’s business as mobile communication has become essential. This is why its assignment catches attention very quickly, and any allocation without an open tender or some form of bidding process easily causes an uproar.
Spectrum refers to radio frequencies, that allow signals to be sent to a wireless device. All possible frequencies put together make up the spectrum. Everything that communicates wirelessly, including our television, radio and our mobile phones uses a small slice of the spectrum.
Not all spectrum bands are the same. Different frequencies have different characteristics that make them suitable for different needs. Imagine the spectrum as roads with all sorts of data travelling back and forth. Each signal type travels in its own special lane. Different spectrum bands are used for different purposes, and utilises different technologies.
Consequently, some spectrum bands are more valuable than others. For instance, for 4G technologies, 2600MHz is more valuable compared to 850MHz in high data traffic urban areas.
In Malaysia, the Communication and Multimedia Ministry together with Malaysian Communication and Multimedia Commission (MCMC) are the regulatory bodies responsible to determine which parts of the spectrum are used for which type of service. This governance role is crucial, in determining how the spectrum can be utilised most efficiently to deliver the greatest benefit to society, and more importantly, to whom these spectrums should be awarded to ensure that the nation can stretch the advantage of mobile communication from serious reputable players.
Roads can only handle so much traffic – so is spectrum. That is why serious mobile operators continuously invest in technologies and infrastructure to handle more traffic with the same amount of spectrum.
Unfortunately, we did not see this from Altel. Since obtaining the licence as a mobile operator in 2013, Altel has yet to grow its capabilities as a respectable telco, compared to its peers who received the 2.6GHz in the same year such as Yes and Packet One (later bought over by TM and rebranded as webe digital). Instead of making good use of the spectrum allocation by building their own mobile infrastructure and meeting the ever growing customer hunger for more data bandwidth, it merely leases them to serious players. It unnecessarily increases the cost-to-serve to the lessee, and this higher cost is subsequently passed on to end consumers in the form of higher service fees.
Higher demand for connectivity means we still need more lanes. Spectrum used for older, obsolete technologies are often freed up, or refarmed, in order to accommodate new technologies. The Jalinan Digital Negara (Jendela) initiative gradually retires the 3G network by end of 2021 to make way to 4G. However, new roads require clinical and careful planning.
To extract the most economic benefit, valuable spectrum, if not allocated through a level-playing bidding process, should only be assigned to serious service providers with demonstrated commitment and capabilities to own and build the facilities, not to rent-seeking organisations looking to generate easy money. How can we achieve an equitable digital society if mobile telecommunication, which has become a necessity today, is still seen as a luxurious service?
