TM's LTE rollout rocked by corporate espionage

KUALA LUMPUR, July 10 — Telekom Malaysia Bhd is investigating a case of industrial espionage after an employee of one of its multinational partners allegedly gained access to a rival’s facility abroad by masquerading as a member of the telecommunication utility’s entourage.

TM confirmed in a statement to The Malay Mail Online yesterday that it was investigating complaints that the person was part of a group of TM employees visiting the facility at that time.

The Malay Mail Online understands that the person involved worked for a multinational telecommunications equipment company based in a developing economy, and had allegedly gained unauthorised access to the facilities of another TM partner, a Europe-based equipment company—also a rival of the former.

Both companies are understood to be bidding to be an infrastructure vendor for TM’s plans for 4G Long Term Evolution (LTE) deployment.

“TM was made aware by one of our long standing partners of an incident where allegedly an employee of another partner of TM gained unauthorised access to one of its facilities abroad. In this incident, the person was part of a group of current TM employees who were visiting the facility at that time, as part of a business trip in the ordinary course of TM’s operations.

“As a model and responsible corporate citizen committed to good governance, transparency and the highest standards of ethical business conduct, we are of course, concerned with what has allegedly transpired,” said TM in its statement to The Malay Mail Online.

In its statement, TM did not name the companies involved in the alleged spying incident.

But it was reported last week that TM had invited a number of major LTE vendors, including Huawei, Ericsson, Samsung and Alcatel-Lucent, to submit their tenders.

The multinational’s employee was said to have got in as part of TM’s entourage during a business visit, prompting accusations from the European firm that TM was enabling its strongest rival to accomplish industrial espionage.

It is understood that a complaint has been lodged by the European firm to both TM and the Malaysian Communication and Multimedia Commission (MCMC), which regulates the LTE rollout.

TM also  stressed that its Code of Business Ethics (CBE) applies equally to its board of directors, management staff, and all employees, as it undertakes an internal investigation to safeguard its integrity.

“In line with our zero tolerance policy on improper and irregular practices, we have already taken immediate action by suspending the TM employees involved, and a Board Sub-Committee (BSC) has also been formed to oversee the investigation process and outcome,” TM, Malaysia’s largest integrated telecommunications provider, said.

It was however unable to comment on the LTE tender and verify the two companies involved, in order, it said, to be fair to all parties in the ongoing tender process.

The two equipment companies could not be reached for comment at the time of writing. The MCMC has also yet to reply to The Malay Mail Online’s request for comment.

The LTE is a next generation technology, also called ‘4G’, which promises mobile broadband speed up to 300 Mbps and would allow providers to offer high-definition video streaming and better connectivity.

TM was originally expected to finish its tender evaluation by the middle of September, and roll out commercial service by February 2013.

Unlike its competitors, pre-request for proposal (RFP) notes showed that TM is planning to utilise the 800MHz spectrum band, which will give better signal transmission with less base stations, thus making it more cost-effective.

TM’s competitors Maxis, Celcom and DiGi have deployed their LTE broadband using the 1.8GHz band, instead of the 2.6 GHz band officially awarded to them by MCMC in December last year.

MCMC had also awarded five other companies in the 2.6GHz band: tycoon Tan Sri Syed Mokhtar Al-Bukhary-owned Puncak Semangat Sdn Bhd, U Mobile Sdn Bhd, REDtone Marketing Sdn Bhd, YTL Communications Sdn Bhd, and Packet One Networks Sdn Bhd.

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