NFCP to be funded by telcos, not taxpayers, says MCMC chairman

Malaysian Communications and Multimedia Commission chairman Al-Ishsal Ishak speaks during media briefing on National Fiberisation and Connectivity Plan (NFCP) in Cyberjaya September 5, 2019. ― Picture by Miera Zulyana
Malaysian Communications and Multimedia Commission chairman Al-Ishsal Ishak speaks during media briefing on National Fiberisation and Connectivity Plan (NFCP) in Cyberjaya September 5, 2019. ― Picture by Miera Zulyana

CYBERJAYA, Sept 5 — The National Fiberisation and Connectivity Plan (NFCP) will be funded by the telecommunications industry’s Universal Service Provider (USP) fund, stemming from 6 per cent of the collective industry’s revenue and part of its planned capital expenditure.

Malaysian Communications and Multimedia Commission (MCMC) chairman Al-Ishsal Ishak told journalists in a special briefing today that the breakdown for the estimated RM21.6 billion will be roughly 50-50 or 60-40.

“It’s not really fixed because it’s a rolling action plan and the estimate of the RM21.6 billion comes from our database on the USP fund.

“(We look at) how much we can invest and how much is the gap in the sectors and also our engagement with service provider stakeholders. 

“As independent companies listed on the stock exchange, they announce every quarter their financial achievements and what they intend to invest,” said Al-Ishsal, adding that the government will not allocate any funds for the USP.

He added that MCMC has frequent stakeholder engagements not only to collate the investment but also to ensure that the companies void duplicating their infrastructure.

He explained that since Malaysia is a net importer of telco equipment, it loses out on the foreign exchange market if each company installs its own towers. 

Therefore, moving forward, the policy emphasises the sharing of infrastructure and resources with the end goal being to give the public high quality and broader coverage coupled with affordability.

At the briefing, he also reiterated that the NFCP, which was announced on August 28, is a mega project, saying that he believed the perception came from its RM21.6 billion estimated value. 

“I believe that the perception of mega projects came from the value of the NFCP.

“The quantum is over multiple years and it stems from the amount which came from the Universal Service Provider (USP) fund and also the capital expenditure from the telecommunications service providers,” he said, adding that MCMC is not a political organisation.

Furthermore, he pointed out that MCMC and Communications and Multimedia Ministry have formed policies that benefited Malaysia’s leading telecommunications (telco) players and the general public alike.

From October 31, 2018 to August 16, 2019, public-listed telcos have increased their market capitalisation by 24.5 per cent — jumping to RM147.96 billion from RM118.81 billion in less than one year.

“For the first time through policies, we have been given recognition by the World Bank in their report dated 30 June 2019 whereby World Bank acknowledged that Malaysia’s intervention policy has led to better, faster and more affordable broadband in Malaysia.

“So the layer of policy intervention, engagement with state governments, stakeholders and local authorities are the steps taken under NFCP,” said Al-Ishsal. 

He also quoted from the report that once Malaysia hits a 10 per cent increase in broadband penetration, the nation’s economy will experience a 1.38 per cent growth in its gross national income per capita annually. 

Currently, Malaysia’s penetration stands at 8.1 per cent.

Under the Pakatan Harapan administration, broadband prices have also dropped by 49 per cent, which has allowed more subscription, leading to an increase in market capitalisation for the telco companies such as Maxis, Telekom Malaysia, Digi and Time, among others.

Touching on the so-called monopoly by Opcom Holdings Bhd, whose shares spiked as much as 8.5 sen or 16 per cent to 63 sen on Bursa Malaysia yesterday, Al-Ishsal again pointed out that Opcom is a fibre optics company.

“They happen to be a fibre optic manufacturer. There are many fibre optic manufacturers. MCMC doesn’t buy the fibre optics. If you ask the telcos, they are the ones who buy the fibre optics.

“They (telcos) go through multiple processes of purchasing, procurement, governance etc. That is just an accusation and there is no link to that,” said Al-Ishsal.

According to Opcom’s Bursa Malaysia filing on August 13, the company’s deputy CEO Chhoa Kwang Hua co-founded the firm with Kedah Mentri Besar Datuk Mukhriz Mahathir, who is also the son of Prime Minister Tun Dr Mahathir Mohamad, in 1994.

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