PM tells MCMC to review 700MHz rights by January

KUALA LUMPUR, Nov 30 — Datuk Seri Najib Razak has directed regulators to review the 700MHz spectrum apparatus assignment (AA) rights granted to YTL Communications Sdn Bhd (YTL Comms) as he sought to fend off accusations of cronyism in the lucrative telecommunications industry.

His decision yesterday came after the Malaysian Communication and Multimedia Commission (MCMC) denied it had given approval to anyone to operate in the 700MHz band although conceding it was “assessing a detailed business plan by YTL for the roll out of digital pay TV and not 4G mobile services as reported.

Industry sources were tight-lipped over a closed-door meeting between the prime minister and telco executives but The Straits Times reported that Najib 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 of Information, Communications and Culture 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.

It is understood that Information, Communications and Culture Minister Datuk Seri Dr Rais Yatim could be grilled in Parliament today over the issue as MPs will debate Budget 2011 allocations for his ministry at the committee stage this afternoon. The debate was due on December 8 but has been moved to today, said Jelutong MP Jeff Ooi.

When contacted late last night, YTL Comms executives declined to comment on the outcome of the meeting.

“We will not be commenting further. We trust you understand our decision,” an official told The Malaysian Insider.

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.

But the MCMC took 48 hours to deny the assertion by YTL Comms, a unit of tycoon Tan Sri Francis Yeoh’s YTL property-to-power group.

The release late Sunday night had said: “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.”

A senior telco industry executive briefed about the meeting told The Straits Times: “The PM has brought an end to the confusion over the 700MHz spectrum. But we wouldn’t be in this situation if the regulator had consulted the industry before deciding on how to assign the spectrum.”

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.”

Nevertheless, led by state-controlled Celcom Axiata, telcos had aggressively lobbied senior government officials, including Najib, for a review, prompting the PM to schedule the meeting although industry executives and bankers close to YTL said the company maintains that it has the rights.

Said a financial consultant close to the company: “I don’t think YTL would have gone out with such an elaborate public relations and advertising blitz if it didn’t have rights to the 700MHz spectrum.”