Malaysia surprises with another unusual spectrum handout

Once again, the Malaysian government has surprised the industry with a sudden and unexplained spectrum allocation.

This time it has handed out 10MHz in 900MHz frequencies to MVNO Altel, The Star newspaper reported Monday.

In a departure from usual practice, Communications and Multimedia Minister Datuk Saifuddin Abdullah did not issue any fresh spectrum to incumbent players, although he did extend their existing spectrum leases.

Figure 1: Raised eyebrows: Questions remain as to how a small player like Altel could be unilaterally awarded spectrum. Twice.
(Source: Altel)

Almost exactly a year ago Abdullah sent shockwaves across the industry when he suddenly awarded 5G frequencies to Altel and four MNOs.

The industry was stunned that scarce spectrum for critical 5G infrastructure would be issued without any tender process.

Within 24 hours the decision was rescinded and the regulator, MCMC, reverted to the original plan to build a single national wholesale network.

Riddle me this

Altel is a subsidiary of Puncak Semangat, owned by billionaire Syed Mokhtar al-Bukhary, who has built much of his wealth through government monopolies and licenses in sectors including rice trading, media and ports.

Then there is the curiosity of why Altel is being issued spectrum at all.

In 2012, it was awarded 40MHz in the 2.6GHz band – twice as much as any other operator – yet that allocation has remained idle as it went on to build an MVNO business using leased capacity.

The minister also extended the tenure for four MNOs in the 2.6GHz band for another five years, which is not unusual, except that typically it is the listed companies that make the disclosure after they have paid their fee.

In this case the minister did not stipulate a price.

As The Star says, the Altel allocation "has raised some eyebrows in the industry, thus spurring talk as to what led to such an allocation."

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The minister hasn't explained his decision, just as he has never given reasoning for last year's 5G licensing shock.

While Altel is well-supplied in spectrum, the new 5G wholesale network operator, Digital Nasional Berhad (DNB), is yet to receive any allocation.

The government has said it will issue 700MHz, 3.6GHz and 28GHz spectrum as required to support the national 5G rollout.

DNB, a special purpose vehicle (SPV) run by the Ministry of Finance, is expected to invest around RM15 billion (US$3.64 billion) over the next ten years. It says it will issue the first contracts in the third quarter.

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— Robert Clark, contributing editor, special to Light Reading