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12 October 2017
| Natalie Bannerman
Earlier this week the Malaysian Communications and Multimedia Commission opened up bids for spectrum in the 700MHz range.
The bids has to be in by 2 January
2018 and the bandwidth will be split over eight spectrum
blocks. Winning these bids will enable telecoms companies to
provide high-speed telephone services, though because of the
hefty fees attached to the deal it could also put a squeeze on
their future earnings.
As a result, digi – a leading Malaysian mobile
operator saw its shares drop 3.4% before settling at 4.88
ringgit ($1.16), its lowest level this month. State-run Telekom
Malaysia fell to 6.26 ringgit ($1.48), the lowest since March,
Maxis dropped 0.9% to 5.85 ringgit ($1.39), while Axiata Group
fell by 0.6%.
If successful bidders can choose to pay either a lump sum of
215.54 million ringgit ($51.12 million) for each 2x5 MHz
spectrum packet or make gradual payments of 18.54 million
ringgit ($4.39 million) a year, over a 15 year period, though
this would increase the spectrum fee to 417.12 million ringgit
($98.8 million), the regulator said.
Though fears are mounting that competition for a piece of
the spectrum could drive up prices and harm cash flows. Alex
Goh, bank analyst at AmInvestment, said to the Asian
Review: "It's a race that all players have to run, so that
they can provide the best service quality to users."
Due to the high use of video calls and internet gaming,
mobile penetration levels in Malaysia is at an all-time high.
The capital required to meet those demands and handle the surge
in data traffic, have been affect profit margins and causing
price wars among top operators.
As bidding process begins, companies are required to detail
its plans to introduce mobile broadband services that offer a
minimum of 30Mbps by the year 2020.
In addition, to the news the Malaysian Communications and
Multimedia Commission, is attempting to reallocate the
bandwidth currently used for analogue broadcasts to mobile
service providers. Following on from the announcement made in
June, Malaysia said that it would switch entirely to digital TV
transmissions, freeing up spectrum that can be used by other
The NEC last month completed the Sistem Kabel Rakyat 1
Malaysia (SKR1M), linking Peninsular Malaysia with Sabah
and Sarawak. The 3,800km cable connects six landing points,
Kuantan, Mersing, Kuching, Bintulu, Miri and Kota Kinabalu,
offering speeds of up to 100Gbps.
Malaysian Communications and Multimedia Commission,