Is Telekom Malaysia trying to kill REDtone?

The Second Finance Minister, Datuk Nor Mohd Yakcop gave a most unsatisfactory reply in Parliament yesterday to the mountain of questions by MPs, mostly from Pakatan Rakyat, about the award of the RM11.3 billion High Speed Broadband (HSBB) monopoly to Telekom Malaysia, together with a RM2.4 billion subsidy with taxpayers’ money.

I stood up during thd 2009 Budget debate on the Finance Ministry to ask whether the government is prepared to review its award of the HSBB project to Telekom Malaysia or to allow the building of another HSBB network as there is an offer by another company to do so without a single sen of subsidy in order to promote broadband liberalization and enhance competition.

To this question and those by other MPs on the rationale of awarding the HSBB to Telekom which will encourage Telekom monopoly and discourage broadband liberalisation, Nor Mohd gave an ambivalent reply saying that the government was prepared to review the HSBB project if necessary – which means nothing at all.

Either the government is reviewing the HSBB project awarded to Telekom towards calling for a proper tender to be called or it is not reviewing at all!

The arguments for and against the RM11.3 billion HSBB award to Telekom Malaysia and the government subsidy of RM2.4 billion had been canvassed in Parliament during the winding-up by the Energy, Water and Communications Minister Dato Shaziman bin Abu Mansor in the 2009 Budget policy debate on November 3, 2008.

All the questions and issues which I had posed on Nov. 3 remain unanswered, whether by Shaziman at the time or by Nor Mohd yesterday, despite the latter’s promise to have “a review if necessary” but no commitment of any review!

Finally, we were back to square one when Nor Mohd said he would revert back to the Energy, Water and Communications Minister on the issue!

I maintain what I said on Nov. 3 and yesterday in Parliament – that Telekom Malaysia must bear the greatest responsibility for Malaysia’s failure to become a broadband power, left far behind in the past decade by other countries when Malaysia had started on an equal broadband footing with them.

South Korea has now a broadband penetration rate of 93 per cent and Hong Kong at 30 per cent, as compared to Malaysia’s 17 per cent which includes Malaysia’s most extraordinary “low broadband speed”!

I had said on Nov. 3 that Telekom Malaysia had acted as an absolute bully in refusing to open up the last mile copper to allow other industry players to buy the “last mile” at a fair price and thus promote a full liberalisation of the telco industry.

This monopoly has not only allowed Telekom Malaysia to have a stranglehold on the other industry players, it has been most costly to the country in terms of lost GDP in tens of billion of ringgit in the past decade, business competitiveness as well as more efficient public service delivery.

I had even asked whether it was true that Telekom Malaysia was trying to “kill” REDtone because the latter was too aggressive.

-Lim Kit Siang