MCMC opens up 700Mhz spectrum for tender

PETALING JAYA: The Malaysian Communications and Multimedia Commission (MCMC) is opening up spectrum blocks for the 700Mhz spectrum by way of tender which will be carried out through the process of a beauty contest. Comprising blocks A to H, these spectrums will be assigned on a nationwide basis.

The commission has set the spectrum limit of four spectrum blocks per applicant. Each spectrum block is 2x5MHz.

Applicants must submit their bid with deposits of RM10mil, which shall be valid for one year from the date of application. The deposit will be returned to the applicant if the bid is unsuccessful.

This long-awaited 700MHz band is said to have wider reach and better indoor penetration.

In a document titled “Marketing Plan No. 1 of 2017”, the regulator said that the cost of a 2x5MHz block in the 700MHz band is RM215.54mil, if based on a one lump sum payment, whereas an installment payment of up to 15 years would almost double to RM417.12mil.

The annual fee for each 2x5MHz spectrum block would be RM18.54mil with a 15-year time frame for usage of the airwaves.

The previous allocation involved the 900MHz and 1800MHz bands. The cost of a 2x5MHz block in the 900MHz band was RM499.72mil, while the total cost of a 2x5MHz block in the 1800MHz band was RM217.77mil.

For the 900MHz and 1800MHz bands, it is understood that four mobile players, namely Celcom Axiata Bhd, Digi.Com Bhd, Maxis Bhd and U Mobile Sdn Bhd paid RM2.7bil.

In addition, yearly payments from the four are about RM3.5bil.

The intense price competition, as well as the entry of new players into the mobile and date space, have dragged down the industry’s average revenue per user (Arpu) in recent years. Weaker consumer sentiment has also impacted the telcos’ prepaid segment, prompting industry players to aggressively promote both postpaid as well as mobile

broadband Internet offerings.

The 700MHz band would further drive up capital expenditure (capex) requirements of telcos. “The effective date of the spectrum assignment shall be on Jan 1, 2019. The 700MHz frequency bands are currently used for analogue broadcasting services in Malaysia,” MCMC said.

“The 700MHz frequency bands shall be used as coverage band for deployment of high speed mobile broadband services using Long Term Evolution (LTE) technology and beyond,” it added.

The application will be open on Oct 31 until Jan 2, 2018.