Friday May 21, 2010
Friday Reflections - BY B.K. Sidhu
MALAYSIA should consider auction of spectrum in the future.
India just netted a cool US$14.6bil from its 3Ghz spectrum auction two days ago. It has also plans to auction the 4Ghz spectrum.
Several years ago some governments in Europe netted several billion dollars each for auctioning 3G spectrum.
Spectrum allocation in Malaysia in the past has been done in so many ways with political patronage not excluded. That also explains why some players are hogging more spectrum than they need while there are others hoping to get more.
The journey of spectrum award began many years go when frequency was awarded for broadcasting of TV and radio, the UHF and VHF as well as satellite broadcasting. In the mobile world the old Atur network began over three decades ago and it was running on the 450 band.
Then came the GSM and PCN 1800 standards. In early 2000, the 3Ghz spectrum was given out via a beauty pageant-like contest, which means the best man with the best business plan wins.
The regulator has also awarded a host of other spectrum including 2.5Ghz, 2.3Ghz and last year, the 10.5Ghz for mobile backhaul and wireless local loop. Next is 4Ghz.
To make sure there is better spectrum management in the future the regulator has come up with a draft spectrum plan. With the plan, the regulator is a bit like “stargazing” as to what is needed for the future by the players. It wants feedback so that it can twig the plan.
We are a bit late in crafting the comprehensive spectrum plan, it should have been done at least two years ago. Re-farming is a must for efficiency spectrum planning and several blocks will be up for grabs in due time.
Why go for auctions?
It is adopted globally, it can be a money spinner for the Government and only serious players get into the game. It will do away with political patronage provided of course the whole process is transparent.
There should not be “behind the scenes price fixing'' and the final word should that be of the regulator and there should be no room for “over-riding of decisions'' made by the commission.
Of course, the process also marks the start of life under a pile of debt for the companies that put in high bids to secure the spectrum and this could strain their balance sheets for years. There is also fear that all this will drive up prices for consumers.
But let's look at how Europe has done it where consumers still get fair value packages. There are pros and cons but auctions is a viable option.
For a country that thrives to be in the forefront of technology the spectrum plan is vital. More important is the way the spectrum will be awarded as that will determine if fairness prevails and whether there really is a level playing field.
● Deputy news editor B.K. Sidhu says reading parts of the 280-page document was a trying experience.
http://biz.thestar.com.my/news/story.asp?file=/2010/5/21/business/6309209&sec=business
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