Opinion

Malaysia Telco Industry is in a Mess because of MCMC [Opinion]

This is an opinion piece.

As a consumer, I have been observing the Malaysia Telecommunication Industry for close to two decades now. Over the years, there have been many problems in the Industry, from tons of consumer issues, too much politics, bribes and not to forget, all the Ministry of Communications and Multimedia (KKMM) Ministers who failed to do their job in the past (note, I do admire the current Minister).

But, most importantly, in my opinion, the Malaysian Communications and Multimedia Commission (MCMC) is the main reason why our Telecommunications Industry is in a mess.

mcmc-disappointment-trump-meme

Over the two decade, I am still trying to understand the true function of MCMC, because whenever there is a new Minister or a new Chairman, there’s a new direction and focus. Honestly, I am confused.

As far as I know, some of MCMC’s function as a regulator are to encourage Industry collaboration and protect consumer rights. But as a consumer, I don’t have any faith on MCMC to protect my rights. As for Industry collaboration, MCMC isn’t doing enough, nothing worth mentioning yet.

The Telco Industry in Malaysia today is commercially driven and it will continue to be in business without MCMC. The regulator calls this self regulation although this has a lot of meaning because MCMC still has the power to set access pricing, determine network quality, among others.

Since the Industry is self driven, for commercial reasons, consumers are not a priority. That is why certain Telcos choose to deploy mobile/Internet coverage at areas where there are high demand while one particular Telco have been charging a high price for broadband access for decades.

MCMC is supposed to balance the Industry, between the need of consumers and commercially driven Telcos. But as I said earlier, I am not sure if MCMC is doing its job all over these years.

[So here’s a scenario, imagine an unnamed regulator calls for a very important meeting, to resolve an industry issue or consumer related matter, but hey, wait, let’s take a group selfie first, because picture session is more important. What are their priorities here?]

Let’s talk 5G.

While MCMC and KKMM are pushing the industry to move forward with 5G, they have been ignorant of the current issues in the industry, in my opinion. I say this because most of these issues have existed since the era of 2G for decades, 3G and now 4G. I bet it will continue with 5G as well because MCMC failed to resolve these repeating issues such as coverage (3G, 4G, HSBB), protecting consumer rights, true network sharing, network quality among others.

And here are three facts that MCMC can’t deny:

  • Malaysia Telcos have invested billions on 4G and 3G but yet to fully gain back from their investment.
  • The cost of deploying TRUE 5G Infrastructure is more expensive than 4G ( I personally think that true 5G Infrastructure will cost more than 3G+4G combined)
  • Telcos are not done with 4G yet.

Yet, it seems that the Malaysia Telcos don’t have any choice but to move forward with 5G, or they get left behind, all thanks to KKMM and MCMC.

While MCMC encourages Industry collaboration, it played no direct role, as far as I know, in the 5G network partnership between Celcom-Maxis, TM-U Mobile and TM-Digi as these are all commercially driven, to save cost for the Telcos. Plus, each Telcos have their own 5G uses cases and I don’t think there’s a single 5G use case resulting from a partnership of two or more major Telcos.

When it comes to consumers, there’s only two use cases for consumers at the moment for 5G- Fixed Wireless Access (FWA) and Mobile Broadband Service. Most of the current 5G uses cases that MCMC and the Telcos have been promoting so far are for private/public sector and business. Let’s keep in mind that the majority customers of the Telcos today are Consumers. I guess they are being forgotten.

Truth is, a number of these uses cases can be achieved with existing 4G technology because 5G is mainly designed for Internet of Things (IoT). Even if 5G is launched right now, Telcos will focus at super fast broadband services instead of IoT.

Yet, we are rushing to deploy 5G.

I also see problems with the allocation of 5G spectrum that MCMC has proposed.

KKMM and MCMC have set the following frequencies for 5G in Malaysia: 700MHz band (2x30MHz ); 3.5GHz band (1x100MHz), 26Ghz band and 28GHz band. MCMC said it will award the spectrum in the 700Mhz and 3.5Ghz band to a single entity comprising a consortium formed by multiple licensees.

Most the 5G devices today supports the following 5G bands, sorted by most number of devices below:

  1. N78 C-Band (TDD 3.5Ghz)
  2. N41 band (TDD 2.5Ghz)
  3. N79 C-Band (4.7Ghz)
  4. N77 C-Band (3.7Ghz)
  5. N3 Band (FDD 1800Mhz)
  6. N1 Band (FDD 2100Mhz)
  7. N28 Band (700Mhz)

So the only global 5G band that makes sense today is the 3.5Ghz band. It is estimated that a total of RM5.1 billion is required to achieve 90% population coverage with the 3.5Ghz band in Malaysia.

[90% coverage measured by Telco but in reality only half of the coverage truly usable by consumers]

This RM5.1 billion is only estimated for 10,000 5G sites and doesn’t include the cost of upgrading the existing network Infrastructure such as core, radio and transport network, IT system which are estimated to be another RM7.5 billion. The total cost of deploying 5G in Malaysia would be estimated at RM12.6 billion, at minimum for the Telcos.

If Telcos had access to RM12.6 billion, why not improve 4G coverage 1st?

[Note: Maxis and Celcom Axiata each are spending around RM1 billion a year on CAPEX and they are trying to further reduce cost every year]

The 700Mhz that MCMC has proposed for 5G are making things complicated. While 700Mhz could offer exceptional mobile coverage, it won’t be able to offer Gigabit speeds. A recent speedtest by Telekom Malaysia (TM) in Langkawi demonstrated download speeds of just 200Mbps on 5G via the 700Mhz band. The speedtest result is based from a controlled environment, with just one device (or 1 person) in the network. Imagine hundreds of people are using it at the same time, over a distance of 5-10km, will there be enough “gigabit” bandwidth for all? Consumers are expecting 5G to deliver at least hundreds of Megabits not 1 or 2Mbps. What is MCMC trying to accomplish here?

[Note: MCMC wants an average 30Mbps mobile broadband speeds by end of 2023 but it makes no sense to achieve these kind of speeds on 700Mhz]

The 700Mhz is not even a global standard band for 5G deployment, at least not yet. At the moment, the 700Mhz band is being used to improve 4G coverage, a popular trend around the world. So why aren’t Malaysia following this trend since 4G coverage in the country is terrible especially in buildings, rural areas and in East Malaysia.

As for the 5G consortium, will this become another HSBB story which is a big disappointment? In my opinion, those companies that are part of the consortium should not be allowed to compete in consumer services. For example, I would love to see a partnership between edotco, TIME dotcom and Telekom Malaysia (TM). The consortium itself must be independent and all members must have equal rights. Access pricing to the 5G network must be regulated and controlled by the Government. There should also be some sort of Key Performance Indicator (KPI) on network quality and coverage that must be met every year.

But again, looking at HSBB, where MCMC plays an important role, a lot of consumers can’t even get fixed broadband service in city areas. So I wouldn’t put high hopes on MCMC to do the right thing for consumers.

Here are some of the MCMC track record, which are a huge disappointment, in my opinion:

  • Failure to make available fixed broadband service to all, especially HSBB service in city areas.
  • Failure to protect consumer rights such as on network quality, customer service, coverage, unrealistic service contract/penalty.
  • Failure to regulate, specifically on companies such as Altel, redtone and AsiaSpace which recently got their spectrum bands renewed for another 2 years despite they failed to deploy the networks.

And here are some questions to be discussed:

  • When will Malaysia be shutting down 2G networks so that these 2G frequencies can be better used to improve 3G and 4G coverage. Is there a clear future roadmap? [Singapore has shut down 2G in 2017]
  • When will MCMC investigate consumer issues directly, especially all the serious ones? For example, making a visit directly to a consumer’s home/reported location. At the moment, all complaints are forwarded back to Telcos which makes no sense.
  • When will MCMC allow Malaysian consumers to rate on its Complaints Resolution performance? All I see today is MCMC is satisfied with its own complaints resolution. Question: Is MCMC serving the public or itself?
  • What if a certain Telco don’t perform up to expectation (slow speed, poor coverage), what happens next? The whole process of the penalty are not transparent. Question: Is MCMC deciding itself on which Telcos should receive a compound? Shouldn’t this be an automated process based on the valid complaints it gets?
  • Will MCMC insist on domestic roaming or 3G RAN sharing for basic mobile service in areas where only a single Telco has mobile coverage? Will it take MCMC a few more decades to fix the issue of basic mobile coverage?
  • Why did MCMC renewed the spectrum access given to Altel, Asiaspace, Redtone. Also how did YTL get access to the 800Mhz band? More question: Was this a political decision or is MCMC influenced by politics?
  • Will Telcos be penalised if an area is found to have poor coverage despite they claim to offer great coverage on its website? How about a MCMC Mobile Coverage Map on its website listing down the areas with poor mobile coverage from all Telcos, based on the network complaints it gets?
  • Will MCMC engage consumers directly every month/quarter to discuss the issues they are facing? This isn’t happening right now.

Honestly, I have lost faith in MCMC because the Government may be new, but its the same old regulator, all over again. MCMC is the reason why the Malaysia Telco Industry is in a mess.

P.s: scamboy believes that a true regulator will serve in the interest of consumers. Unfortunately MCMC has not been transparent enough all over these years. scamboy will still be here, observing the Telco industry, hopefully for another few more decades. This article is a personal opinion of the writer.

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