UPDATED @ 09:27:25 PM 30-11-2010
November 30, 2010
Malaysian Insider
KUALA LUMPUR, Nov 30 – The Najib Administration was forced to stave off continuous accusations of cronyism in Parliament today for its alleged award of the prized 700MHz spectrum to YTL Communications Sdn Bhd (YTL Comms).
Information, Communications and Technology Minister Datuk Seri Dr Rais Yatim manned the fort for a good hour when speaking on the issue and continued to deny that government regulator Malaysian Communication and Multimedia Commission (MCMC) had ever given approval to anyone to operate in the 700MHz band, which can be used for broadcasting or broadband services.
The issue was raised by Jeff Ooi (DAP-Jelutong) in the House when debating a RM10 pay cut motion for Rais, who accused the government of “quietly” awarding the spectrum to YTL Comms, a unit of tycoon Tan Sri Francis Yeoh’s YTL property-to-power group.
In his debate speech, Ooi said the alleged award had been shrouded in mystery and reeked of cronyism and lacked transparency.
“It also means that if YTL is awarded the spectrum without fair consideration given to other MCMC licensees in the industry, including Telekom Malaysia, Axiata, Maxis, Digi, Packet One and others. This has become a monopoly and is similar to a 100m race where YTL is give a 50m head-start privilege while the others are left behind.
“Why was YTL given this privilege?” he asked.
He added that without the apparatus assignment (AA) rights, other industry players like Axiata, Maxis and Digi would not be on a level playing field and would likely face a shutdown or be forced to buy bandwidth from YTL.
Ooi dared the ministry to come clean on the issue and questioned if the saga was a mere repeat of the sports betting episode earlier this year when the government flip-flopped on its decision to award a license to tycoon Tan Sri Vincent Tan’s Ascot Sports Sdn Bhd.
“I put it to you, Mr Minister, that you as the minister is fully aware that YTL was given the 700MHz spectrum in writing but the Prime Minister was forced to be dragged into this, and forced to do another flip-flop because of objections from Axiata and others?” he charged.
Last May, Tan had told Bursa Malaysia that his Ascots Sports Sdn Bhd had received a letter from the government dated January 13, 2010 that his sports betting licence had been re-issued.
But following the uproar that his announcement had caused and the silence from the government that followed, the licence was eventually rescinded.
In his response today, Rais stressed that the prized spectrum had never been awarded to anyone and claimed that Ooi’s debate was void of facts.
“The 700MHz spectrum was never awarded to anyone. So YB, you should first know the facts before you make such unfounded statements.
“The two spectrum commodities – the 700MHz and 2.6GHz spectrums – are important to help us in the future to compete in the communications sector.
“We have to be aware that the 700MHz spectrum is held by MCMC and is important for our future programmes in the country,” he said.
He added that despite what was reported in Singapore and local media, all allegations were merely “hearsay”.
“So I invite MP Jelutong to attend a briefing with the MCMC. Come and see for yourself where your debate stands.
“It is easy to use such eloquence to accuse MCMC but this should not be done. This is akin to punishing a person before asking the question, instead of asking the question first, and then meting out a punishment.
“I would like to state here that little knowledge is dangerous,” he said.
Ooi interjected at this juncture, pointing out that news of the contentious award of a 80MHz block in the 700MHz spectrum had hit the headlines on November 26.
“But it took MCMC 48 hours to deny it. And why was there a special meeting held between the chiefs of Axiata with the Prime Minister? If there is no wind, the leaves on the tree will not sway,” he said.
Rais continued to deny the rumours, however, and reasoned that the Prime Minister had every right to meet with the telco chiefs.
“I invite you again to check your facts. The 48-hour issue is not the problem. The problem is whether what you say is based on facts or not. So let me repeat the facts – the 700MHz spectrum was not given to anyone,” he said.
Rais admitted to a meeting with the Prime Minister and industry players recently and revealed that it was also attended by the country’s economic adviser.
“But discussions centered on the country’s plans for the future in the communications sector. So in the future, whether or not we choose an auction or to create new rules, what is more important is that we do not lose our source of revenue,” he said.
Rais pledged the government’s intention to incorporate the services of the new players in the telco industry, insisting that none would be left behind.
The Malaysian Insider reported today that Prime Minister Datuk Seri Najib Razak had directed regulators to review the 700MHz apparatus assignment rights allegedly granted to YTL Comms, following the MCMC’s denial on the matter on Sunday.
In its denial, the regulator had however conceded that it was presently “assessing a detailed business plan by YTL for the roll out of digital pay-TV and not 4G mobile services as reported.
“MCMC would like to reiterate that no spectrum assignment has been issued to YTL of the 700MHz spectrum band for pay-TV broadcasting, hence the reports and commentaries on a spectrum issuance are inaccurate.
“The operating licence issued to them on August 30 is for a content applications service provider individual licence, to provide subscription-based Internet protocol television services using their 2.3GHz WiMAX network,” it said in its statement on Sunday.
Industry sources were tight-lipped over a closed-door meeting between the prime minister and telco executives but The Straits Times reported that Najib had told the MCMC to consult “the private sector before awarding the rights of the 700MHz spectrum”, which is seen as a key component of the 4G high-speed wireless broadband.
He also directed the ministry to complete its review before the end of January, and to submit recommendations on how the government should proceed with the award, executives familiar with the meeting told The Straits Times.
YTL Comms executive director Datuk Yeoh Seok Hong had told The Malaysian Insider last week that the company had a five-year concession to operate in the 700MHz band for a pay-television operation competing with the dominant Astro network.
MCMC has regulations on award of spectrum but executives familiar with the process told The Malaysian Insider that the regulator had ignored the rules in the recent apparatus assignment exercise for the 700MHz and the 2.5/2.6GHz spectrum recently.
Broadband spectrums are now highly coveted by telecommunications and multimedia companies, and the alleged award of apparatus assignment in the prized spectrum to YTL Communications had seriously upset the country’s telcos who can use it to offer their services in rural areas.
They had feared that it would allow a new provider like “YTL a stranglehold over the next wave of new technologies, called Long Term Evolution (LTE) which will power the 4G market”.
But in its release, the MCMC said: “Under Malaysia’s National Spectrum Plan, the 700MHz spectrum band is allocated for broadcasting service, and not for LTE or 4G mobile services as speculated.”
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