The MCMC is the country’s regulatory agency and oversees both the communications and multimedia industries. Together with the Ministry of Energy, Water and Communications, the MCMC provides the regulatory guidance for the market. We expect some progress on issues (such as LLU and other initiatives) to be implemented in an effort to achieve the National Broadband Plan targets. These targets seek to increase broadband penetration to 15 percent by 2008,

3G Auction Results Are In

  • Malaysia’s second round of 3G licensing was finalized in early 2006 with highly unexpected results as two mobile newcomers, Pay TV operator MiTV and data communications provider Timedotcom were awarded licenses, snubbing established provider Digi. The reason that Digi was denied stems from the fact that Digi is controlled by Norwegian operator Telenor while the other two are owned by Malaysian companies. As a result of the auction, the MCMC is currently forming regulations on 3G MVNOs and will likely force existing 3G players to give Digi and other companies the right to lease lines. As a result, Malaysia will emerge as one of Asia’s most active MVNO markets both in terms of service launches and regulation.

Interconnection Changes Will Benefit the Incumbent, Telekom Malaysia

  • On January 1, 2006 regulator MCMC set new interconnection rates for both fixed-mobile and mobile-fixed calls. The net mobile fixed charge was raised by 38 percent to 6.6 sen (US$0.185) per minute while the fixed-mobile charge was reduced by 21 percent to 8.9 sen per minute (US$0.248). The move will be a boon to incumbent Telekom Malaysia as it will receive more money from the country’s three mobile operators while having to pay less to competitors to access their wireless networks. The move is important for TM as the company has faced mounting tariff erosion in the ILD and DLD markets and has looked to expand internationally as a new source of revenue growth.

  • Recently, there has been a flurry of activity in interconnection agreements for advanced data services as operators try to compensate for a relatively lukewarm reception to 3G services. Market leader Maxis and TM’s mobile arm Celcom announced a 3G interconnection agreement, which will enable UMTS users to send video messages across networks in hopes of doubling the video calling market in May 2006. Maxis and third player Digi also signed a similar deal to allow SMS interconnection over their WAP service.