Communications Minister Revokes 5G Spectrum Awards That He Quietly Gave Out To 5 Telcos

Prior to the revocation, the minister's decision represented a major reversal of infrastructure policy, as the prior Pakatan Harapan government had promised an open tender.

Cover image via SoyaCincau & New Straits Times

Editor's Note: This story has been updated to report the revocation of the awards.

Amidst the pandemic, the Malaysian Communications and Multimedia Commission (MCMC) has quietly awarded 5G telecommunication spectrum bands to five companies

Maxis, Celcom, Digi, Telekom Malaysia, and the little-known Altel represent the five telcos taking charge of providing 5G services.

Approved by Communications and Multimedia Minister Saifuddin Abdullah, a document outlining the decision was released on the MCMC website on 15 May.

Each company was awarded a certain bandwidth to prevent conflict between different service providers.

5G, which is the planned successor to the current 4G networks, promises greater bandwidth, allowing companies to transmit data within a broader spectrum at higher and lower frequencies. This will mean faster download speeds.

Two bands of 10MHz were awarded to Maxis, Celcom, and Digi. Meanwhile, two bands of 5MHz were given to state telecommunications firm Telekom Malaysia and Altel which is headed by local tycoon Syed Mokhtar al-Bukhary.

A breakdown of the allotments.

Image via MCMC

There was no media statement issued regarding the directive

Until its discovery by Malaysian Wireless, the document - labelled as Minister Directive No. 4 for 2020 on the MCMC's site - went largely unnoticed.

According to an article by the The Straits Times, "[T]he signed orders were only uploaded to the MCMC website in a buried section on spectrums, with no media statements issued since."

Although the instruction came under Section 7 of the Communications and Multimedia Act 1998 (Act 588), which recognises the minister's ability to issue directions directly to the commission, no tenders were called on the MCMC website. 

Communications and Multimedia Minister Saifuddin Abdullah.

Image via Borneo Post

Even with some of the telcos being publicly listed, the companies did not make an announcement to Bursa Malaysia, the stock exchange.

It was anticipated that the companies would have to pay up to RM600 million upfront plus RM51 million in annual fees for their 15-year allotments. 

But, it is unknown if an agreement was made surrounding fees for the 5G spectrum. 

Image via MCMC

The minister's decision represented a major reversal of infrastructure policy

Under the previous Pakatan Harapan (PH) administration, the MCMC had announced that it would award two 30MHz of the 700MHz band alongside 100MHz of the 3.5Hz band to a single consortium through a tender process that was supposed to take place within the first quarter of 2020. 

Their reasoning for encouraging such, as reported by The Straits Times, was to prevent "duplication of heavy expenses" associated with the infrastructure required to support 5G spectrum. 

The MCMC, under PH, had also agreed that the 700MHz and 3.5Hz bands were not to be assigned to individual licensees. 

Some are questioning the involvement of the lesser-known player, Altel

Despite its minor involvement in telecommunications, Altel was awarded a two 5MHz block of the 900MHz band which was previously reserved for the "postponed high-speed rail line", according to The Edge

Altel does, however, have a history in telecommunications. In late 2012, they were involved in the provision of 4G services as the MCMC had allocated the most amount of spectrum in the 2.6GHz band to them. At the time, Altel leased its spectrum to other companies, collaborating with Celcom to "offer services as a mobile virtual network operator", as reported by The Straits Times

There is a lot of speculation as to how Syed Mokhtar amassed his wealth, many zeroing in on the government's role in providing licences through which Syed Mokhtar has created various monopolies. 

Syed Mokhtar al-Bukhary.

Image via Perak Today

Following reports of the award, Minister Saifuddin Abdullah has since released a media statement rescinding the 5G spectrum awards to the five companies

He notes 18 instruments, including the usage of the spectrum on the bandwidths of 700MHz, 900MHz, and 2600MHz, were presented to him.

In the statement, Saifuddin Abdullah says, "On the basis of technical issues, laws, and the need to adhere to transparent processes, I have instructed the Chairman of the MCMC to revoke the previous order and reassess the instruments as soon as possible."

Several telecommunication companies rolled out 5G tests in Malaysia last year: