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Sakmongkol ak 47

Monday 29 November 2010

Trouble in the heavens

You may ask, what's the fuss about? The fuss my dear friends, is that something rotten may be happening in MCMC and by extension in the Communications Ministry.
MCMC's function is regulatory basically. It's to the communications industry like Indah Water is to the sewage industry. It does nothing other than wield its big dick stick. . The infra are all done by property developers and they just receive contributory money. Yet they talk big because the stick they wield is big.
Secondly, all the fuss has exposed the real character of Telekom Malaysia- it remains a eunuch. Who's the bloody CEO? Now, in this particular instance, what happened to the supposed brilliance of those brain boxes from McKinsey and others who infest the inner recesses of Khazanah? Telekom Malaysia is owned by them right? This earliest on the scene passes on like history.
I would have thought, rather than building up the infra from stretch, TM is the best business entity to provide the base infrastructure. What MCMC and the Minister of Communications and Information and whatever should do, is to remove the monopoly enjoyed thus far by ASTRO. Then let other players, Astro kah, Mediaprima kah, YTL communications kah, Mamat Communications rent/lease the space from TM.
But PM must replace the entire management team at TM for failing to see the emerging business trends. Then he should cut the umbilical cord that binds it to Khazanah because the sustenance that is passing through is unhealthy and maybe even arsenic.
This idea of giving monopolies to the select group is abhorrent to free market economics. It is unjust to hardworking people of all races. It matters not whether that monopoly is given to any particular race. It is inherently despicable.
The 700 mHz band is a hot property and up for grabs to the highest multi-billion dollar bidder if an auction is carried out. In other countries, the bandwidth is auctioned off. Here in Malaysia, they are given to a select group. Why? Because they are clever, they can manage better ad nauseum. These select groups of companies have their eyes on acquiring the 700 mHz spectrum and are prepared to spend whatever it takes to gain control of it. Who gets it and what they do with it will have an indelible impact on whether anyone who lives in our society will ever have any chance of privacy or anonymity in any form. The 700 mHz spectrum is extremely valuable for digital use because of its excellent signal propagation properties, especially when applied to broadband wireless computer networks, similar to what we know today as WiFi. In the analog days of broadcasting, we became accustomed to being able to tune our TVs and radios just about anywhere, in our homes or outdoors, and elsewhere.
Currently used for UHF analog channels portions of the 700Mhz band could be re-purposed to wireless carriers, mobile TV platform providers, or open access internet for anyone – perhaps especially in rural areas. So, what is this piece of the spectrum useful for and why is there such a frenzy of political wrangling over it? Obviously is the monopoly over it and the chance to make lots of money.
The other telcos are upset that the 700 MHz spectrum is given to YTL. They will make a lot of noises over who gets control over the spectrum. In actuality, they ALL want a piece of the action.
Now is the time to set things right and make money for the government for once. Reconstitute TM first . Inject  it with visionary management leadership. Make it the owner of the spectrum and let others lease space from it. If the content providers used the spectrum for hybrid communications its ok. Later of they use it for telephonic or internet purposes, that's ok too.
Imagine the capabilities of the 700 MHz spectrum. They go far and can penetrate walls. After all, they've worked for analog TV and we all remember we can switch our TVs on almost anywhere with clarity right? So any cellular phone service provider might instantly lust after the possibility of fewer towers yet better reception. So what's the bull YTL is saying they will have to spend billions of money?
Of course the longer-range, more accessible signal comes with a price. And that price – at least with today's technology – appears to be bandwidth. But despite the apparent limitation this spectrum appears to have captured the imagination of lobbyists and corporations alike on the possibility of providing a 3rd pipe. Everyone wants a piece of the action. Everyone wants to be able to broadcast their content.
Our government is poised to set the terms of the most valuable sale/grant or auction of spectrum — the public airwaves over which broadcasters and cell phone companies operate. We hope the government will use this authority to earn money for our government.
When the award of the spectrum takes place, incumbent broadcasters are to return their bandwidth to the government as nation moves on to digital TV. By the way, has somebody in the MCMC ben feeding insider information to Astro allowing them to hype up its HD TV?
The characteristics and location (in the 700 MHz band) of this spectrum make it ideal for the development of a third, nationwide broadband Internet provider that could compete with the powerful incumbent telephone and cable companies which control broadband lines in this country. But unless the government takes a very different course than it has in the past by giving a monopoly to somebody, this valuable resource will most likely end up in the hands of those very companies eager to retain their stranglehold on the communications industry.
Think of it this way – do you want to be trapped by a monopoly or near-monopoly environment for access to the public internet? Should 1 or 2 companies control access and set pricing? And if that were to happen then will restrictions on content and applications come next.
I certainly welcome the clarification by MCMC issued through Bernama. It clarified that the 700 MHz spectrum given to YTL communications is for broadcasting purposes so that YTL can launch its hybrid broadcasting. Another spectrum, the 800 MHz will be dedicated for LTE and Telcos.
I hope MCMC will follow through with this statement. If some people perceived this award of the 700 MHz spectrum to YTL as breaking up the monopoly thus far enjoyed by Ananda's Astro that is a curious perception. Why break a monopoly by giving another monopoly?
Why not open up the market to as many competitors who want to offer hybrid broadcasting and make them promise, they will not use the 700 MHz spectrum for any other purposes. I am sure we can treat their promises as sacred and on equal footing as the promise given by YTL communications.


Anonymous,  29 November 2010 at 09:15  

Giving that spectrum to TM? That is pure monopolistic to the highest.

TM had already been given HSBB, and we all know what TM did to Malaysian broadband when they controlled the last mile.

Your suggestion of giving TM the sole right and dish it out is EXACTLY the last thing should be done. If you say , everyone can have the licence, then it is okay.

My suggestion, a group of major players form a consortium and manage it. This consortium will then rent it out to any player at a price subject to agreement of all.

This will ensure NO monopoly and everyone can offer any price and let the best wins.

We have had enough of past stupidities of giving monopolies to ANYONE.

Admit it, today Malaysian broadband is far far behind, thanks to know.

Pak Zawi 29 November 2010 at 09:16  

Dato' Sak,
Another great piece from you. You are a true Malaysian Warrior.

OneMalaysian,  29 November 2010 at 09:48  

Dear Sakmongkol

"This idea of giving monopolies to the select group is abhorrent to free market economics. It is unjust to hardworking people of all races. It matters not whether that monopoly is given to any particular race. It is inherently despicable".

I can't say it better, so I won't.

This morning the papers report that MCMC has denied giving YTL the 700MHz spectrum. Some months ago government also denied giving Vincent Tan a licence to operate football betting. Perhaps Najib should set up a Ministry for Denials.

Anonymous,  29 November 2010 at 10:47  

Saya amat bersetuju dgn pandangan Dato'. Cuma saya rasa bab TM management tidak sensitif kepada emerging trend tu perlu diqualifykan. Saya bimbang Dato' tidak berlaku adil kepada mereka. I am just curious apa yang berlaku di peringkat MCMC / Kementerian kerana kuasa pelesenan adalah di sini.


Anonymous,  29 November 2010 at 11:11  


Sorry to say that yr last few articles about the 700 MHz spectrum is, yr word, full of bulls. That’s surface scanning spin-doctoring!

What’s happened? Lack of rigorous research investigation? Fed by hp6 informers? Ketuanan pride? Or all rolled into one?

Let’s spin together & here it goes;

- In America, which is much larger than Malaysia, the cost of building a nationwide wireless network over the 700 MHz spectrum is around $2 billion. That's about RM 8 billion.

WTF is that info comes from? In US of A, an open market devil, spectrum is openly bid for & believe me NO any single entity can manage to cover the whole of USA. Technology & economy aside, the antitrust law WILL forbid that scheme!

Anyway, for masak-masak sake, the financial numbers r all wrong, iff the hp6 schemer knew what they r talking about. This is not about pylon tower building alone. There r new & untested technologies here. Simply, there is financial RISKS.

- Award this contract to build the infrastructure to Telekom Malaysia. Then open bids for all operators to get a slice of the business by renting the facilities provided for Telecom Malaysia.

Award to TM? Please-lah, aint the horror stories of last mile connectivity to home & the HSBB taught us that that animal is NOT salvageable? TM was/is not ran by corporate raiders and bean counters (what glorified terrific business leaders?) – it’s purely operating as a cash cow heirloom for umno cartel via nincompoops & incompetents on a monopolistic handout.

- The costs are lower in rural areas, due to less interference issues and wide-open spaces. That's because each tower broadcasting at 700MHz covers twice as many square miles. Some estimates say that a single 700 MHz tower can cover 20-miles.

The above statement covers frequency coverage alone – ie only the transmission & repeater pylon towers & their associated equipment. What about the financial connectivity to the brain centre, where all the other contents r been held, managed, planed & produced? Inevitably these centres r located at the cities. What about ROI parameters covering a rural operational settings etc etc?

- MCMC have been spending inordinate time at Marriot or Pangkor Laut.

That I’m sure is just part of the M’sian way of canvassing for business. I happens even if TM is been awarded.

cont 2

Anonymous,  29 November 2010 at 11:13  


- Thus, we have asked and fought everyone on the issue of 30% ownership of this country's wealth. The group that is fighting for the 30 % share constitutes some 65 % of this country. And they have achieved only about 20%.

U forget about the amount of money & efforts that go into achieving that 20%! This bread story is a typical ketuanan talk – the skin color issue has been SIMPLY camouflaged.

All over the world, the distribution of wealth is always skew-sided. Majority of the wealth goes to the risk-takers & well connected. & most of all, these minority must have the intelligence to take the opportunity & work for it.

Nothing like what one sees in bolihland, where most of the money is lost through politico-skin-related connections. Give me the contract, then sub & get the 1st cut. What happens latter is none of his concern anymore.

- Effectively they are giving a head start to YTL for 5 years.

Wrong! the 1st crack was done by Daim in giving the ART900 mobile lessen to Celcom way back, just to prove the Malay ‘enterprenuership’ of Tajuddin. & see what happens to Celcom/TRI subsequently & at what costs to the nation!

lan 29 November 2010 at 11:20  

why YTL in the first place? it has done literally nothing interms of creating value in the telco sphere in Malaysia

lan 29 November 2010 at 11:20  

why YTL in the first place? it has done literally nothing interms of creating value in the telco sphere in Malaysia

Ariff Sabri 29 November 2010 at 11:22  

anon at 11:11

don't wtf quickly. the facts came frm American sources. as for the rest, i don't have to answer. this answer of yours is typical of the oversensitive who cant accept criticism and of those who think being superior in education is enough.
hence, gifting the 700 MHz spectrum to YTL is justified on the grounds that YTL is full of superior and competitive people. that's bull.
its not allright for content providers to leave space from TM but its ok for people to rent from YTL?

Anonymous,  29 November 2010 at 11:56  


‘don't wtf quickly. the facts came frm American sources.’

So u see even the American sources can be bull. So why the acceptance-of-the-fact-in-the-face-only?

Could it be there r people always looking at anything foreign, source/consultant, as more superior than home-growth? Better been conned by the foreigners than been told the truth by the pendatang, yes?


’this answer of yours is typical of the oversensitive who cant accept criticism and of those who think being superior in education is enough.’

So can this apply in yr argument?

Did I mention anything about – ‘YTL is full of superior and competitive people.’? So who’s full of bull?

IT IS definitely NOT alright for content providers to leave space from TM. There r amble proof about their incompetency from the past & present managements.

I don’t know about the 2nd part - but its ok for people to rent from YTL? Bcoz whoever give the 700 Mhz to YTL must have as u said ‘spending inordinate time at Marriot or Pangkor Laut.’ So, been business, YTL will sure to ask for exclusivity, sort of monopoly, to recover this ‘intrinsic’ investment. U’ll do likewise, don’t u?

Anonymous,  29 November 2010 at 12:36  

The role of govt is to regulate the telecoms sector.
The govt should this opportunity to sell out of telekom malaysia and axiata.
The combined market cap of TM + AXIATA is less than MAXIS,DIGI. Which can only mean shareholder wealth has migrated to privately owned telecoms companies. Which also means that GLC owned TELCOs have managed to destroy shareholder value.
I would think the most appropriate action will be to SELL TM and AXIATA to the best Bidder.
It's sillly for MOF and KNB to keep lame horses in their stables.
MCMC and GoM can then regulate once they are no more equity and debt investors.

Anonymous,  29 November 2010 at 12:42  

Dato' SAK,
I wonder why YTL and P1 claimed their services as 4G? ITU definition for 4G is 1Gbps download as opposed to a few Mbps that Wimax 802.16e (which was deployed by them now) can give.

Don't get it wrong...we should have charge them in court for such hype in their mktg publicity.

Let me share with you some knowledge:-
ITU defined 4G as 1Gbps download and this can only be achieved by using LTE Advance and WiMax 802.16m system which only can be realized in 2013 onward.

The current data rates for 3G/WiMax/LTE wireless technologies available as of now is as follow:-

- 3.5G HSPA+ that give up to 21Mbps
- WiMax 802.16e that give up to 40Mbps
- LTE that give you up to 100Mbps

All data rates above is achievable only at a "clean" area with only 1 sub...once more subs hop in the area then the speed drop in a sharing basis manner. That's a physic that we can't change.


Wenger J Khairy 29 November 2010 at 13:38  

Hi Dato',

Some ammo for your arguments:

(this puts in context why 700 Mhz is so valuable)

Part II
In the US a company called Aloha Partners had to engage in a competitive bid for the 700 Mhz band. It spent less that 30 million acquiring the rights in a COMPETITIVE bid and turned it around and flipped it to AT&T for 2.5 billion US.

So Dato has a point.

(a) Why YTL without competitive bid?
(b) Do they or do they not have the access to spectrum? Only when Dato makes noise does the Gomen feel it is necessary to issue a clarification
(c) Sounds a lot like the Sports Gaming issue init?
(d) Where was the Telekom Malaysia execs? Why the brouhaha over the title product of McKinseh but no forward thinking.

Dato's point is 30% indignation on how the relationship between the Gomen and YTL, 30% lamentation on why Telekom is so slow behind the curve and 10% sarcasm.

The re butters are focusing on 100% cynicism.

Dato wins.

Those who attack Dato better come out with facts and not mere conjecture.

Anonymous,  29 November 2010 at 14:46  

Obviously the 700/800 MHz spectrum are valuable properties by virtue of being the last large scale availibility of a scarce resource.Its indeed a beachfront renovation opportunity.

However,there are risk involved.The technology is still evolving,handsets/modems are still not widely available and the more developed Wimax,Wifi n HSBB have a good head start.

Quadruple play is very dependent on content vs cost.

Thus,its wise to tread carefully and to appreciate whats the most pressing issue on internet connectivity currently i,e service levels n cost.

The current 3G is too expensive for widescale adoption by most people.Unlimited data packages of RM 99 is too expensive for most people and especially those that will benefit the most from the technology i.e students,small entrepreneurs and the like.And the speeds/reliability of current service providers is also more advertising then reality.

MCMC should try to maximise benefits to the people by giving licenses to those who can meet the aspirations of the rakyat rather then those looking to maximise returns.

Set the roll outs,max charges and service standards >>then invite bids.Lets see who can deliver?

FYI TM have spectrum available on the 800/900 MHz i,e their Atur days that they can develop.But,the way their KPI is set,innovation is not likely to happen cos its all on short term results.You can't blanme the bean counters for that.

And the smaller innovative guys will not have the resources to really develop the spectrum in view of the high development/holding cost.

So,lets call for bids ( but set the operating conditions i,e tariffs) and get the best for the rakyat.

I would really love to think that free broadband subsidised by revenues from "pay TV or other more exotic premium services" is not a dream.

Anonymous,  29 November 2010 at 16:09  

the 700/800 MHz with about 60 MHz channel is worth about RM200 per population.Obviously it will vary with population density..

One node can service 900 subscribers..coverage dependent on visibility and intensity.

Potentially can dissect to 3 providers nationwide...2 on open bids providing market driven services and one FOC/subsidised social net to cover schools,rural links etc..

It should never be always about money.At this rate,someone is going to be given license to collect tolls for the air we breathe,  29 November 2010 at 18:05  

Dear Dato',

Thank you for opening the pandora’s box. This is the kind of Government decision that can only fasten the demise of the premiership status enjoyed by PM and his beloved wife. The people despise all this hideous

There's one comment made to your article, hidden as Anonymous and I wish to share my opinion on his comment.

Maybe this “mangkok” do have some knowledge and information on the spectrum issue but may not have the ability to articulate it properly, perhaps he is from Cheras!. Perhaps, also he reads between the line way too much.

I believe I can summarized your discussion as follows. The question we should ask the Minister, as you’ve highlighted are :-

Why ONLY YTL gets the 700Mhz spectrum? Are they the only one qualify? If so what are the criteria? If the key criteria is licking the ball of certain Minister, sponsoring certain fashion show, then that criteria should be an open tender exercise.

Why ONLY YTL? What do they have that other don’t, in respect to the telecommunication industry. Are they abundance with industry experience and expertise? I don’t think so. They may think that if they’ve built the IPP or fast train tracks, then building a nationwide telco network is sap sap sui. Perhaps the game plan is to enjoy “the benefits” of building and if it tak jadi, there always Khazanah to clean the shit.

......end of part 1,  29 November 2010 at 18:06  

.....part 2

Why 700Mhz for digital broadcasting even for IPTV. If YTL sole purpose is to provide IPTV broadcast, there are other lower frequency which offers more efficiency, using DBVT technology. Lower spectrum also offers the most cost effective infrastructure deployment.

The proposed idea of granting to TM is probably not the best considering the condition of TM today. It CAN ONLY WORK IF THERE IS CHANGE IN TM MANAGEMENT. At his moment its like GIVING FLOWER TO MONKEY!

Yes Daim starts all this, but I think he should be applauded, otherwise we would not be able to enjoy the cellular phone let alone 3G. And it is not Tajudin who delivers. He is a moron! and should be in jail.

Back then, no private company or investor has the audacity to apply for the license and build a nationwide telco infrastructure. Celcom did, but not with out blood, sweat and tears. The banking industry actually shy away and have little or no confident on funding this project. If not for a believer amongst the banker, i.e a small development bank called Bank Pembangunan, Celcom wouldn’t have started its business.

Yes in the early days Celcom idid enjoy the monopolistic status, but not by design. A high risk business with high capex and expensive mobile phones with unknown market acceptance( back then) who wants to put money in the unknown!

In less than 2 years Mobikom came along. Then everybody jump the band wagon and the rest is history.

So back to the main concern why is MCMC or its Minister is soooooooooooooooo DGU to award the 700Mhz spectrum to YTL?

Anonymous,  29 November 2010 at 18:08  

HSBB,HSPDA,WIMAX..all advertising that never delivers.
We are good at spending on capex but very poor at maximising returns.I believe our 3g n broadband is one of the most expensive in the world..n also the most unreliable n slow.

I can't help thinking..when will this "build,build,build" mindset end.

Try the RM 43 bil MRT for starters...we have great trunks on Komuter,LRT that are not max out due to poor linkages n bad mgmt.Its so much cheaper to invest in additional trainsets..
And its cheaper to have multimodal links such as buses,trams,taxis to tie up the three services.

I don't think the decision makers understand the commuter needs.

MRT will be feasible only if everyone is forced to use it and pay 10 bucks per trip.

But not everyone can or will use the MRT..and those that needs to use the service can't afford the 10 bucks.

MRT n the High Speed train is a RM 3 k debt per Msian before interest.Privatise that and your grandchild is RM 10 k in debt before he sees the light of day.

Yes Dato...we need help badly.This EPP/ETP/GTP nonsense will create more suffering and cost then PLUS/IPPs have or ever will.

Its not the Middle Income Trap that we need to get out of...its the High COST trap that is our burden now.

All govt infra is hugely overpriced..even on open bids..the engineering,specs n design will just balloon the costs.

Do a benchmarking on similar facilities built in India,Turkey,Thailand..and its so obvious.Compare UMP to Notts Uni in Semenyih..

Compare the RM 1.5 mil per bed Hospitals..

I pray that PM will set up a Cost Control Unit instead of Pemandu.

OneMalaysian,  29 November 2010 at 18:38  

Dear Sakmongkol

This particular posting of yours and the responses have left me both happy and sad. Happy because so many knowledgeable and concerned readers have surfaced and contributed so constructively to this debate. So sad because they say so many things about how badly this government works that should trouble those who love this country.

Ariff Sabri 29 November 2010 at 18:59  

one malaysian.

in our own way, we are trying to save this country which belongs to all of us.
i could have chosen not to write on this topic but i am sure others will do so eventually. we are all driven by some conscience.

walla 29 November 2010 at 19:41  

18.38, 18.59:


It's mahathirism all over again, isn't it? YTL is to Najib as Maxis was to Mahathir?

All it would have taken was to tender out with a simplifying condition - that the government will forgo any revenue in exchange for public confirmation by the successful tenderer that the price to the consumer will be the lowest possible based on the specs, network coverage and guaranteed content level. Including supporting services - and the tenderer will be held to that guarantee on pains of cancellation of license.

Then you will have competition for best service at lowest cost to consumer.

This would be in line with the social objective of privatisation - highest efficiency at lowest cost for widest benefit.

Which are the three competitive elements for nation-building, innit?

Something one would have expected the government to have learned a bitter lesson from the toll concession agreements by now, wouldn't it be so?

There are however at least two other matters.

One, the NEP part. If the above conditions are set, how to apply them complying with the NEP but without forfeiting the benefit to the people where it matters most - their wallets?

Two, the government approach to modernization. By government, one should include the GLCs. In this particular case, are the GLCs so sleepy that they must wait for a private concern to push such an idea and just because the government is now leaving it to the private sector to drive the modernization process?

Or is it because the g-men are still on an overdose of tidakpathy? Like why the aircond has remained unrepaired for too long in the immigration office in Subang?

There is one other matter. YTL will have to make a press communication soon to clarify things.

It would however be hoping too much that there will be some candor at the same time that says, no, we will not be contributing to Umno's GE13 election funds out of this award.

Which the speed of the award seems to invite just such a question.

Anonymous,  30 November 2010 at 00:51  

In actually fact YTL is holding the shares of the BN. So when erection time, BN can make payment to buy many votes. Tak caya lu tengok ma. Haiya, banyak olang dalam bodoh ke mau lulok tiam tiam. Mana itu Siolek? Mana itu SUKoon. Mana itu Samy? Mana itu Zahid and budak Isham.

Apa ni pemimpin? Lakyat manyak bodoh ma...pilih ini olang..kasi kaya lagi kaya..miskin kasi bersama mu saja..Kalu kasi projek pada lakyat miskin...apamacam buat bikin show bersama mu kasi olang sedih sedih n lerma semua rakyat jadi kaya..lagi susah mau pelintah ooooo

Anonymous,  30 November 2010 at 01:35  

dear dato',

i dont't know whether to cry or to laugh and some say we malaysians could end up being nut someday.

malaysia so small & the population is around +- 30 mill but in one's sound head why there are so many billionaires? the rate of of ordinary butt face retards person becoming millionaires in the rate that quiet disturbing.

everybody knows that distribution of wealth is going butt crap and nothing anybody can do about it.

where are all the butt craps slogans and bullshit agendas for equality, fairness and whatever.

Anonymous,  30 November 2010 at 13:13  

Dear Datuk Sak,
this is one of the 'rare' cases where a common theme has found outrage and anger among Malaysians.
No way we are going to be taken for a ride again.
Let this be a warning to PM and BN, when they face up at elecion time. So many excellent comments and proposals, again with a common approach, TENDER and AWARD out to as many as possible, TM, Digi and the rest of the telcos, without conditions or with simplifying conditions favouring the consumer.


SKorupMM,  3 December 2010 at 17:07  

The frequency spectrum is a natural resource of Malaysia. Therefore UMNO and Rais Yatim had unconstitutionally awarded the WIMAX frequencies to Chinese gambling companies, YTL and RedTone.

Instead of 70 percent to the Malays, MCM awarded 70 percent to the Chinese.

The selling of satellite frequencies to ANanda a Malaysian
Indian by Khazanah/TM is also unconstitutional as this means the Indians control 100% of our satellite resources. TM is owned by Malaysians and Malays engineers and management run the companies.

The Chinese are jealous and put up stupid, unfair and ridiculous demands on TM because they want to monopolise communications in Malaysia.

TM is owned by the Government and whatever profit goes to the people and not make multibillionaires like Ananda or Yeoh Tiong Lay. They are not smart. They are greedy capitalists who have corrupted UMNO and MCMC management into giving them obscene wealth with monopolies while the normal people struggle to feed their families.

Perkasa or Malays NGOs must sue MCMC or the Government as has been done in Thailand or India where corrupt regulators have been sued.

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