Regulatory Landscape
Regulation for the Long-Term Interests of Consumers

Exciting times are ahead for the telecommunications industry as the spotlight shifts from the provision of fixed-line telephony to wireless communications for voice, data and content-rich applications.

Following Telekom Malaysia Berhad's acquisition of a 31% stake in Technology Resources Bhd (TRI), the industry eagerly awaits the latter's proposed merger with TM Touch (Telekom's own mobile business). Some analysts also expect Maxis Communications Berhad to consolidate its mobile services with DiGi Telecommunications Sdn Bhd or TimedotCom Berhad following Maxis' successful debut on the Kuala Lumpur Stock Exchange.

Regulatory Landscape

Consolidation from 3G
The award of the third generation (3G) spectrum is to be announced shortly. New players in the form of mobile virtual network operators are expected to emerge and utilize other licensees' infrastructure to provide services.

Fierce competition for customers is likely to ensue following market consolidation. The repeal of tariffs for cellular services has already paved the way for market-driven rates, and operators are already fighting to increase their market share, with various plans targeted at specific types of consumer.

3G standards
Among the important criteria of the 3G system is the ability to handle data delivered at a maximum speed of 384 kilo bits per second (kbps) while travelling and 2 megabits per second (Mbps) while stationary. 3G technology is intended to be the natural successor to existing systems such as Global System for Mobile Communication - Mobile Application Part, Time Division Multiplexing Access (American National Standards Institute-136) and Code Division Multiplexing Access (Interim Standard 95). It is also hoped that 3G technology will exploit the core network of existing second generation systems so that current radio interface components will require little modification.

The international telecommunications community, through the International Telecommunications Union, has agreed that the following five technologies may be used and adapted to meet the needs of current networks:

  • International Mobile Telecommunications 2000 Code Division Multiplexing Access (IMT-2000 CDMA) Direct Spread;
  • IMT-2000 CDMA Multi Carrier;
  • IMT-2000 CDMA Time Division Duplex;
  • IMT-2000 CDMA Single Carrier; and
  • IMT-2000 Frequency Division Multiplexing Access/Time Division Multiplexing Access.

Currently, the Malaysian Communications and Multimedia Commission (MCMC) is conducting a public consultation on the appropriate standards to be adopted in Malaysia.

Domestic roaming
Cellular telephone operators were obliged by the minister of energy, communications and multimedia to devise a plan for domestic roaming by end of June 2002 with a view to wider cellular coverage for all mobile phone subscribers regardless of their service provider. Once implemented, domestic roaming will:

  • increase service coverage and reception;
  • curb infrastructure duplication and under-utilization;
  • reduce the costs involved in establishing new telecommunications infrastructures; and
  • allow the infrastructure of one operator to be used by rival operators to boost their service coverage area and reception.

The MCMC is monitoring relevant negotiations between service providers and providing progress reports to the minister. Domestic roaming will be introduced in Malaysia by December 2002, initially in popular tourist locations, industrial parks and along major highways.

Mobile telephone number portability
The MCMC recently published a consultation paper on numbering and electronic addressing (NEA). Feedback was invited on a number of proposals, including mobile telephone number portability.

The consultants appointed by the MCMC to develop an NEA plan recommended that number portability should not be introduced in Malaysia until an in-depth costs and benefits study is conducted. The following pre-conditions are proposed for the introduction of number portability in Malaysia:

  • Competitive neutrality - technical implementation and other procedural matters should not affect competition between service providers nor provide any party with a competitive advantage;
  • Non-discrimination - number portability must be administered in a manner which does not discriminate between/against end-users (or categories of end-users);
  • Reciprocity - service providers shall not switch numbers unless at the end user's request;
  • Performance standards - performance standards should be established for the switching process, the operation of associated services, the maximum permitted elapsed time for successful switches and equivalent service standards, among other things;
  • procedural compliance - procedures should be established for the responsibilities of end users and service providers, as well as charges to be imposed for recovering switching costs and the process by which end users authorize a number switch, among other things;
  • Privacy - customer information disclosed in the course of number switching shall not be used for any other purpose;
  • Least cost - the systems and procedures required for specific types of number portability shall reflect the approach that has the least cost for the industry in the long term; and
  • Cost allocation - service providers should share costs for the establishment and operation of systems for number portability (excluding those associated with the provision of leased circuits or other communications services).

Regulation for the Long-Term Interests of Consumers

Mandatory standards
The MCMC has proposed mandatory standards on quality of service for communications and multimedia services following two consumer satisfaction surveys concerning the services provided in 2001 (and pursuant to a ministerial direction on quality of service).

The standards are intended to ensure the high quality of Malaysia's telecommunications services. According to the MCMC, the mandatory standards will apply to the following:

  • public switched telephone network services;
  • public cellular services;
  • content application services; and
  • internet access services.

The standards relate to:

  • customer service (including dealing with customer complaints);
  • endpoint service availability;
  • network connectivity; and
  • billings.

The new standards are expected to take effect on January 1 2003.

Under Section 242 of the Communications and Multimedia Act 1998, it is an offence to breach any of the mandatory standards. Fines of up to M$100,000 may be imposed as well as imprisonment for up to two years, or both.

Required applications services
Under the act, the following required applications services are deemed essential for customers:

  • emergency call services;
  • directory inquiries services;
  • operator assistance services; and
  • services for disabled customers.

All licensed domestic network operators and cellular telecommunication operators were obliged to provide these services under the now repealed Telecommunications Act 1950.

The MCMC is conducting a public consultation on the services to be included in the list of required applications services and the category of licensees which must provide such services.

For further information on this topic please contact Sharon Suyin Tan at Zaid Ibrahim & Co by telephone (+603 257 9999) or by fax (+603 254 4888) or by email ([email protected]).