Malaysia yesterday rescinded the awarding of the highly sought-after 5G telecommunications spectrum after questions were raised over the sudden allocation to several players, including the little-known Altel, a firm controlled by politically linked tycoon Syed Mokhtar al-Bukhary.
Communications and Multimedia Minister Saifuddin Abdullah said in a statement that the May 15 decisions, which he had signed off on, have been immediately revoked. “With regard to this, 18 instruments including orders and assignments concerning the use of spectrum in the 700MHz, 900MHz and 2600MHz ranges were presented to me,” he said.
“Due to technical and legal issues, as well as the need for a transparent process, I have ordered the MCMC (Malaysian Communications and Multimedia Commission) chairman to cancel the orders and assignments and to review these instruments immediately.” MCMC is the regulator for all broadcast communications, and had been ordered to assign the spectrum according to the May 15 orders.
The Straits Times reported on Tuesday that the allocations were issued despite no open tender being called, as previously promised by the Pakatan Harapan government before it was ousted in February.
Despite wide publicity on Malaysia’s progress towards 5G services – which could be up to 20 times faster than current 4G mobile connections – the signed orders were uploaded to the MCMC website in a buried section on spectrums, with no media statements issued.
The roll-out of 5G is a key plank in the RM22 billion (S$7.2 billion) National Fiberisation and Connectivity Plan, which the Perikatan Nasional administration has promised to maintain despite the change of government.
According to the now-rescinded orders, leading mobile service providers Maxis, Celcom and DiGi were each awarded two bands of 10MHz (2x10MHz), while Altel, despite being a minor player, was given 2x5MHz.
Telco providers must pay an upfront sum as well as annual fees for spectrum allocations.
Although not fixed, some firms have paid up to RM600 million upfront, with RM51 million in annual fees for their allotments which last for over 15 years.
Maxis had proposed to MCMC during last year’s stakeholder engagements on 5G that a 2x10MHz band in the 700MHz range be charged at RM323.3 million upfront, with a RM27.8 million annual fee.
MCMC awarded Altel, a subsidiary of Tan Sri Syed Mokhtar’s Puncak Semangat, the most amount of spectrum in the 2.6GHz band to deploy 4G services in late 2012. Instead of building up its own infrastructure, Altel leased the spectrum to other telcos and piggybacked on Celcom to offer services as a mobile virtual network operator.
The government’s role in how Mr Syed Mokhtar built his business empire to become one of Malaysia’s richest men has been criticised for decades. He runs various monopolies based on government licences, such as the distribution of rice, and controls the postal service, several ports and media companies.