TM’s RESPONSE TO MCMC’s PUBLIC INQUIRY (PI) ON ALLOCATION OF SPECTRUM BANDS FOR MOBILE BROADBAND SERVICE IN MALAYSIA

Telekom Malaysia Berhad (TM) Level 7, South Wing, Menara TM, Jalan Pantai Baharu, 50672 Kuala Lumpur

PI- Allocation of Spectrum Bands for Mobile Broadband Service in Malaysia Page 2 of 33 Introduction Telekom Malaysia Berhad (“TM”) expresses its appreciation to the Malaysian Communications and Multimedia Commission (“MCMC”) for issuing this Public Inquiry paper to seek views from the industry and general public on the allocation of the 700MHz, 2300MHz and 2600MHz spectrum bands. Internet is a right of every citizen1 . Today, as the Internet Service becomes a commodity and technologies evolve, consumers access the internet anytime, anywhere, across multiple devices regardless of the technology or infrastructure behind it. Consumers need and want seamless internet connectivity that is fast, reliable and low price wherever they go. Shifting consumer preferences towards wireless access via small screens will drive internet consumption, whether they are at home or in the office. Even on a fixed connection, consumers access the internet via WiFi. Going into the future, addressing consumer needs and preferences should be taken into account as we work towards shaping and building the provision of Internet Access to all of Malaysia’s population. In anticipation of the Industrial Revolution 4.0 (IR 4.0) and implementation of 5G wireless technology, Malaysia has to take a drastic approach to improving its wireless connectivity, especially for mobile broadband.

The basic supply side economics of individual mobile rollouts and multiple overlapping networks can no longer work. Every generation (from 2G to 3G to 4G) of mobile technology costs billions to rollout, and the time of development between the different generations is getting shorter. Hence industry players have less time to recoup sunk costs of their billion ringgit rollouts. To the detriment of the nation, this leads to passing increasing costs to end consumers and/or delays in adopting the next generation of mobile technology e.g. 5G. Moreover, wireless will take on a whole new future in an IR 4.0 world with 5G. The dynamics of wireless usage will largely be driven by masses of connected devices as the Internet of Things (IoT) gains popularity and low latency use cases that will control critical services. This new world will bring about new opportunities in areas such as health, public safety and etc that are needed, especially in the rural areas. Fast broadband, in particular, can drive more advanced applications such as data analytics, IoT and artificial intelligence not just for businesses but also can support 1 https://www.thestar.com.my/news/nation/2018/08/04/internet-access-for-all-vows-gobind-move-expectedto-result-in-lower-broadband-prices-and-higher-spe#FluSwyWuyPD6Fb8z.99 PI- Allocation of Spectrum Bands for Mobile Broadband Service in Malaysia Page 3 of 33 improved public service delivery and the growing demands of households

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https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/TM_PI_Response_1.pdf

. Hence, it is crucial for the spectrum to be allocated wisely to ensure that it maximizes its benefit to the Rakyat. Splitting the spectrum bands to many operators is neither efficient nor economical for the country. The allocation of the whole spectrum to TM as the national InfraCo is needed to achieve economies of scale to effectively serve the nation and at the same time is not an arrangement that is detrimental to the country. A single national InfraCo will avoid duplication of infrastructure and networks, thus reducing the total cost of ownership for the industry. It will enable competitive, quality and low price products/services for the Rakyat which will encourage service providers to be more focused and creative in offering innovative solutions and services to consumers as infrastructure expansion and maintenance is taken care by the national InfraCo. In the end, the Rakyat will benefit from lower subscription costs, better coverage and a variety of service offerings. TM as the National Telecommunications Infrastructure Provider (NTIP) with 5G (InfraCo) TM intends to be the fully converged National Telecommunications Infrastructure Provider for 5G (InfraCo) and will provide all service providers equal and fair opportunity to use its network through regulated Open Access Wholesale Service arrangements. The InfraCo model will result in significant improvements in network coverage, quality and low prices to the Rakyat. TM will be the key enabler and driver of national initiatives, especially to facilitate faster adoption of IR 4.0 which will help to develop the Malaysian digital economy

. Why TM? TM has the most extensive fiber coverage nationwide with more than 540,000 km fiber and core capacity which will serve as the necessary backbone to the 5G network in the near future. Since the massive roll-out of the High Speed Broadband (HSBB) network in 2008, TM invested aggressively in its fiber network. TM had invested as much CAPEX compared to the three major mobile operators combined. Furthermore, TM has proven its dependability, experience and capability in delivering large national infrastructure under HSBB1, HSBB2 and SUBB over the past 10 years, repeatedly delivering ahead of time, under budget and to the expected quality and specifications promised. Malaysia maintains a highly open and competitive market with more than 300 Network Facility Provider (NFP) and Network Service Provider (NSP) license holders, yet very few are willing to make the necessary huge investments required to build a Fixed network. Most are unwilling to PI- Allocation of Spectrum Bands for Mobile Broadband

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TM has the most extensive fiber coverage nationwide with more than 540,000 km fiber