Review of Access Pricing. Malaysian telecommunication service providers may soon have to review their prices for the facilities and services on the Access List for the period of 2013-2015. The previous revision to these cost-based prices occurred in 2006 where the mandated prices from that review have now expired in the intervening period. The Malaysian Communications and Multimedia Commission (MCMC) has earlier conducted a public inquiry on the review of the access pricing, which outlined the authority's  preliminary views on which facilities and services on the Access List should be subject to price regulation and, where relevant, provides tables of proposed regulated prices for the next three calendar years. We understand that the public inquiry has ended on 14 November and the final or mandated paper will be due out in 1QCY13. 

Lower interconnection rate. The proposed new interconnection rates will apply to all voice calls that originate and terminate on fixed network and mobile network. In general, fixed and mobile local origination rates are to be reduced by 11.4%-12.2% and 7.4%-22.2% while the termination rate will be cut by 18.4%-19.4% and 9%-27%, respectively, during CY13-CY15 from the existing 5 sen/minute flat rate. On top of that, MCMC, for the first time, has also proposed to set a regulated price for the fixed access services (mainly in fixed wholesale services) and HSBB wholesale services. Note that, MCMC only proposed to set the maximum HSBB wholesale price for 10 Mb/s downstream with a 10.1 contention ratio in the aggregation network (please refer to the overleaf page for further details) while the other categories would still be subject to commercial negotiation based on service demand and take-up rate assumptions. We understand that the proposed calculated prices were prepared by MCMC and are still subject to the finding of the industry and public feedbacks. 

Subscribers ' the ultimate winner. While the actual interconnection rates have yet to be finalised, the intention of MCMC is very clear at this juncture, which is to lower telcos' direct cost and thus providing the room for further voice  tariff reductions in the future. This will ultimately benefit the end users in our view. From  the telco's perspective, while the net earnings impact to them is hard to gauge at this juncture, the proposed lower interconnection rates will benefit to the net sender of the interconnection charges such as TM given that the fixed-line operator subscribers tend to make more calls to mobile rather than receiving calls. Digi could benefit to a certain extent as well given that the company has fewer subscribers as compared to its mobile peers.