The Malaysian Insider quoted a The Straits Times report today that Datuk Seri Najib Razak will meet senior telco officials next Monday to defuse the widening controversy over the 700Mhz spectrum said to be given to tycoon Tan Sri Francis Yeoh’s YTL to operate its hybrid television service slated for end 2011.
It can also be used to widen its broadband service.
“We are not here to block others from doing business. This spectrum is for broadcasting, for a pay television service, not a mobile spectrum,” YTL Communications executive director Datuk Yeoh Seok Hong told The Malaysian Insider in a phone interview.
He said YTL Communications, which launched its YES 4G WIMAX service last week, had applied for the 700MHz spectrum from the Malaysian Communciations and Multimedia Commission (MCMC) for its pay television service together with US-based Sezmi Corporation.
“We got the spectrum because we want to introduce it quicker than the MCMC plan for full digitalisation of the television service by December 2015.
“But they can always move us from that spectrum later once there is full digitalisation which will free up 300Mhz between the 400Mhz and 700Mhz spectrum,” Seok Hong added.
The YTL Communications executive director said the spectrum given to the firm will enable it to offer more channels and compete with Astro, which offers 119 channels including high-definition television. Astro began its service in 1996 with a 17-year exclusive licence.
“Competition should be encouraged and we are bringing an alternative to the market,” said Seok Hong, stressing YES is already running its 4G WIMAX service through the 2.3GHz wireless broadband spectrum.
MCMC had previously said that Malaysia had decided to allocate the 700MHz band – i.e. 710 to 790 MHz for digital broadcast.
But The Straits Times report quoted the chief executive officer of a large financial institution which has made huge loans to the country’s mobile operators, describing the award of the licence to YTL as “scandalous.”
“Without access to the (700MHz) spectrum, the big three won’t be able to expand.”
With this stranglehold, YTL “can either shut out other telcos, or resell bandwidth to them.”
Seok Hong rubbished the claims, saying YTL is not monopolising the spectrum.
“The government is not silly,” he said.
The other WIMAX provider is P1 but the new spectrum could give YTL total control over the next wave of new technologies in the telco sector.
Called Long Term Evolution (LTE), it powers the 4G market which both YTL and P1 claim to provide now. However, their current services do not meet the International Telecommunication Union’s (ITU) criteria for 4G.
The other two big players are Maxis Broadband and Digi Telecommunications. There were previously nine telcos in Malaysia but the regional financial crisis in 1997 forced a consolidation in the sector.
Broadband spectrums are highly coveted in the industry, and in Europe, these are auctioned, a move which raises huge amounts of capital for the countries.
Sources said YTL will deploy the Sezmi service using DVB-T2 (Digital Video Broadcasting – Second Generation Terrestrial) technology, which is now used in the United Kingdom and Italy, and being on trial in Spain and Germany.
United Kingdom regulator Ofcom has laid out the timetable which will pave the way for next-generation mobile services in the UK that will involve the redistribution of spectrum, similar to Malaysia which awarded nine firms 20MHz blocks in the 2.5/2.6 GHz spectrum for the 4G or Long Term Evolution (LTE) service.
Ofcom chief executive Ed Richards said the airwaves that will enable 4G networks will be auctioned off in the first half of 2012 and spectrum will become available from 2013.
The auction was originally earmarked for 2009 but was delayed because of legal action by mobile firms. Mobile operators have been arguing over the distribution of existing spectrum.
The auction will see two chunks of the spectrum — the 800MHz and 2.6GHz bands — sold off. Both have great value to operators, reported the British Broadcasting Corporation (BBC) recently.
The 800MHz slice — which has been freed up by the switchover to digital TV — allows mobile signals to travel over greater distances, making it invaluable in the search to find ways of bringing broadband to rural areas.
The higher capacity 2.6GHz band will be more useful in towns and cities where lots of users require services.
The delay in the sale of spectrum means that the UK will be behind other countries in offering services. Germany has already auctioned off its digital dividend spectrum and others are planning to do so soon.