KUALA LUMPUR: DiGi.Com Bhd, the country’s third-largest mobile operator, expects positive impact from the potential refarming of the 2G telecom spectrum in the frequency range of between 900MHz and 1,800MHz by the Malaysian Communications and Multimedia Commission (MCMC), said its newly-appointed chief executive officer Lars-Ake Norling.

He said the regulator has been meeting with DiGi about refarming the 2G spectrum and the latter’s spectrum needs.

“Hopefully we will be affected in a positive way. We need the spectrum for driving mobile Internet, so we hope that there will be a structured refarming process,” he told reporters on the sidelines of the KL Converge event yesterday.

“We’ve had a positive dialogue with MCMC and (MCMC chairman) Datuk Mohamed Sharil (Tarmizi) and I think he is open to [hearing] the industry’s views on this. He definitely [wants to understand] the future needs for [the] spectrum,” Norling said.

In a note dated Sept 12, 2014, AllianceDBS Research Sdn Bhd said the 900MHz to 1,800MHz range of the 2G spectrum is currently held by the “Big Three” incumbents: Maxis Bhd, Celcom Axiata Bhd and DiGi and as such, they stand to lose if there is a refarming, regardless of the outcome.

“At best, if those spectrums (frequencies) are retained by the three major players, there are still risks of high spectrum fees imposed by the regulator or a fierce bidding process.

“The MCMC has never chosen the auction route for spectrum allocation before, so we think a good gauge for spectrum [pricing] in Malaysia [would] be DiGi’s purchase of 3G spectrum (the 2x15MHz  to  2,100MHz band) for about RM650 million in 2007,” said AllianceDBS Research.

Nevertheless, the research firm believes DiGi would be the least affected as it owns very little  [portions] of the coveted 900MHz frequency.
Norling said the group is keen to acquire more of the low frequency 900MHz .

“Our mission is to have all our customers on the Internet, especially in rural areas. But to do that in an efficient way, we need the spectrum. [Thus] we have invested heavily into our network to roll it out and make it more efficient,” he said.

Lower bandwidth frequencies (700MHz, 850MHz and 900MHz) are necessary for telco companies as it gives them the ability to serve rural areas, while higher bandwidth frequencies (2,100 MHz, 2,300 MHz and 2,600MHz) are required to handle the large volumes of data within urban areas.


This article first appeared in The Edge Financial Daily, on Sept 18, 2014.