Week in Review: Malaysia’s spectrum refarming

By Karamjit Singh February 5, 2016

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Week in Review: Malaysia’s spectrum refarming THE long-awaited spectrum refarming exercise in Malaysia finally hit the headlines, and it’s causing turmoil with the telcos.

For starters, the market capitalisation of the three main mobile operators in Malaysia dropped by a collective RM9.4 billion (US$2.2 billion) on the day the Government announced that, to maximise its returns from this crucial asset, it would use the auction method to decide who gets how much spectrum.

It was certainly the biggest news of the week in Malaysia, but you can also be sure telco players across South-East Asia will be watching with interest what comes out of the spectrum refarming exercise in Malaysia – because the picture is not clear yet.

Four days after the Government announced the auction method would be preferred, industry regulator the Malaysian Communications and Multimedia Commission (MCMC) instead announced that ‘upfront spectrum assignment fees’ would be the method the Government chooses.

And while the regulator tried to sooth frayed nerves by reassuring that “payments will be in phases,” it did not help much as the amount to be paid has not been disclosed, and this plays havoc with telcos’ planned capital expenditure for the year.

With the spectrum fee not expected to be revealed until August, that’s six months of uncertainty to be endured.

And frankly, that’s unacceptable. The MCMC, from its chairman down, is staffed with smart people who know the telco industry inside out, and for them to give a six-month window before revealing the spectrum fee, does the industry a great disservice and frankly gives the impression they do not know what they are doing.

So what’s the real story here?

And I am sure you will be reading many stories in the coming months about what’s going on the background as every media outlet will be out to dig into the behind-the-scenes lobbying going on. You can get some idea already of the industry’s concerns by reading Goh Thean Eu’s excellent piece earlier this week.

Why is spectrum so important to telcos? Spectrum is basically the land on which telcos build and offer their services. This is the one industry where CEOs will say, “People are my most important asset – after my spectrum.”

We end with a look at the US$12-million Series A raised by Joel Neoh’s KFit this week. With participation from three new venture capitalists, I was however struck by the generous and glowing praise heaped on KFit’s performance by Sequoia Capital, an investor from its seed round, and new investor Venturra Capital.

The latter hailed how KFit “has truly redefined the fitness paradigm in Asia Pacific,” while, not to be left out, Sequoia Capital added, “Joel [Neoh] and the KFit team have executed extremely well in the last year and quickly emerged as the leading fitness platform for consumers in Asia Pacific.”

KFit was launched in June, just eight months ago.

Beware drinking too much Kool Aid, people. That sugar rush can be bad for the health.

Finally, here’s wishing our readers a Gong Xi Fa Cai and a Blessed Year of the Monkey.

Editor’s Picks:

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Previous Instalments:

Week in Review: Grab-bing a piece of the bigger pie