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Five firms bid for Malaysia's 3G mobile licences

29 May 2002, Reuters
Five groups bid for three third-generation (3G) mobile phone licences in Malaysia on Wednesday, including one mystery company but excluding existing cellular provider DiGi.Com. The companies named by the Malaysian Communications and Multimedia Commission (MCMC) as seeking to run high-speed wireless Internet services included three of Malaysia's current five mobile operators: Telekom Malaysia Bhd, Technology Resources Industries Bhd, bidding under the name Celcom (Malaysia) Bhd, and Time dotCom unit Time Sat Sdn Bhd. A fourth bidder, UMTS (Malaysia), was identified by an industry source as Maxis Communications, another existing operator, but there was no news on who was the fifth bidder named by the MCMC, E-Touch Sdn Bhd. DiGi.Com, majority owned by Norwegian telecoms group Telenor, said it pulled out of the bidding in a decision it described as "strategic." DiGi shares were down two cents at 4.96 ringgit before their suspension during the morning session. TRI said in a statement its Celcom unit pledged to invest 150 million ringgit ($33.5 million) over 15 years to develop a 3G system for commercial launch by the end of 2003. The battle for licences to roll out costly 3G technology is seen as a spur to industry consolidation in Malaysia, with TRI already being pursued by Telekom. Outcome due by end-July The MCMC intends to grant up to three blocks of spectrum, charged at 50 million ringgit a piece, with a decision due by July 30 this year. "The successful bidders will be entitled to an allocation of spectrum for the period of 15 years," the MCMC said in a statement. It gave no details about the companies who bid. The commission promised to assess bidders' ability to ensure service roll-out and coverage, their capacity for infrastructure sharing, provision of roaming services, their financial standing and the quality and technical expertise of management. Malaysia has not set any minimum investment levels for successful candidates. Time dotCom highlighted its installed fibre optic trunk and metropolitan networks as offering opportunities to collaborate with others in the deployment of the new technologies. "The capacity and availability of our network offers a strong position in the rollout of mobile data services which will be more and more bandwidth hungry," Time dotCom Chief Executive Officer Robert Fox said in a statement. Malaysia's mobile industry has five telecom firms serving a population of 23 million, with analysts expecting the number of vendors to fall to three with the advent of 3G. Maxis lead the pack chasing last year's $2.2 billion mobile phone services market, boasting more than two million of the 6.9 million users, closely followed by Celcom. Telekom and DiGi held similar shares of more than a million while Time dotCom trailed in with under 600,000. Stephanie Wong, an analyst with IDC Malaysia, said local users had been cool towards any mobile services extending beyond voice and basic SMS text messaging, meaning faster Wireless Application Protocol (WAP) or General Packet Radio Service (GPRS) technologies had struggled. "The trend of mobile Internet has not really taken off, especially with the failure of WAP and now with the delays to the GPRS service," she said. Nor did Wong hold out much hope for 3G to hit the streets in any meaningful way by the government-anointed hour of late 2003. "We expect commercial roll out to be in 2004 or even 2005. We think the schedule is a bit too ambitious," she added.
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