Media Statement by Lim Kit Siang in Parliament on Tuesday, 4th November 2008: 

Are MCMC/Ministry dumb or just subservient to Telekom Malaysia?

This is the question I posed to the Minister for Energy, Water and Communications Datuk Shaziman Abu Mansor in Parliament at close to 11 pm last night when winding up the debate on behalf of his Ministry on the 2009 Budget debate.

I had queried Shaziman on why Telekom Malaysia Bhd (TM) was awarded the RM11.3 billion HSBB (High Speed Broadband) project, subsidised with RM2.4 billion of taxpayers’ money, when there was an alternative proposal by HSBT (High Speed Broadband Technology Sdn Bhd) offering to build a similar network without any subsidy?

I also challenged the government’s rationale in awarding the HSBB to Telekom when Telekom 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 , Hong Kong at 30 per cent, as compared to Malaysia’s 13 per cent (Shaziman corrected me and claimed that Malaysia’s broadband penetration rate is now 17%) which includes Malaysia’s most extraordinary “low broadband speed”!

The main reason why Malaysia has lagged behind other countries in broadband development must lie at the doorsteps of Telekom, which 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 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 asked Shaziman whether he was aware of almost unanimous industry opposition to the award of the HSSB project with RM2.4 billion government subsidy to Telekom in view of its monopoly and role in stunting the broadband growth of the nation in refusing to open up the “last mile copper”.

As a result, the question that is universally asked in the industry is whether the MCMC (Malaysia Communications and Multimedia Commission) and the Ministry of Energy, Water and Communications are dumb or just subservient to Telekom to allow Telekom to continue with its untrammelled monopoly position and baneful influence on broadband growth impeding and undermining a successful national broadband policy?

In the exchanges with Shaziman, I specifically asked why there was no open tender for the HSBB project and why HSBT offer to execute the HSBB project without a single sen of public funds, depending on Middle East funding and expertise from South Korea and Japan, was rejected by the government.

Even in Singapore, SingTel which is like TM as the erstwhile monopoly Telco, was not given the sole right to build the island republic’s HSSB.

Shaziman did not have the answers to my questions, except to give an assurance that as the Minister responsible, he would not allow Telekom Malaysia to be a “bully” in the IT industry.

I concluded my intervention in the debate by recommending four measures for Shaziman to consider to resolve the national misgivings as well as the concerns of the IT industry to the award of the RM11.3 billion HSBB project to Telekom, viz:

• Carry out using a third party to review industry feedback on the award of the HSBB project (RM2.4 billion subsidy) to TM.

• Turn the TM HSSB network into a truly open network from the outset and not to wait for seven years.

• Call a tender for the award of another HSSB network.

• Use a third party to derive the formula for fair access pricing to TM HSSB network.

* Lim Kit Siang,  DAP Parliamentary leader & MP for Ipoh Timor