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3G 'blind spots'

Reasons why DiGi was denied a 3G license are starting to surface one week after the result of successful bidders were announced.

3G_060312.jpg
SOURCE: Sunday Star, March 12, 2006

There are some blind spots that need to be covered, let me just list five out of the many:

  • Telenor, which owns 61% of DiGi equity, has to fulfil regulatory compliance by diluting its share equity to 49%. Who was the Datuk who allegedly, on the 11th hour before the 3G results were announced, tried to 'pursuade' Morten Lundal to sell off 12% DiGi to a preferred party but was thrown out from DiGi's office?

  • Was MCMC's recommendation on the two new 3G winners over-ruled?

  • Did Time dotcom actually pass the financial assessment in accordance to the published requirements?

  • How did MCMC respond to media enquiries on the day the winners were announced, when all its general manager level officers were allegedly in Singapore?

  • Why did MCMC chairman V. Danabalan leave office in a huff?

Frankly, I have no answers to all the above, and neither do industry players I had coffee and meals with. So, I played a quiet, obedient listener and chronicler of market talks.

And more questions keep coming in, forming pattern of new blind spots.

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» Goldman Sachs buys 37.8m DiGi shares, giving it 5.34% stake from Screenshots
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» Goldman Sachs in bed with DiGi? from Screenshots
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Comments

DiGi was not awarded a third-generation (3G) spectrum licence because it is a foreign company, said Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik.

Then what was the point of DiGi being in the "beauty pageant" ? Waste their time and money only. Money. Yeah.

“DiGi can still be involved by renting the 3G spectrum or buying into the companies,”

HELLLLOOOOO ALI BABA! How can i serve the 40 theives today?

“If I had given it to an unqualified company, then it is not fair,”

how does an
internet compay
and a a cable tv provider be a quilified company vs Digi?


“We didn’t go through an auction. We went through a beauty contest,”

Lol. At least in a beauty pagent we get to see what marks each of the contestant gets.

*sigh* Digi is a great company. It might be foreign own but Digi still gives the consumer what they want. It would be sad that oneday Telenor pull out of Malaysia and left us with Telekom, Celcom and Maxis.. :\

Not LKY's decision ....hidden hands at work.

Not LKY's decision ....hidden hands at work.

LKY said (TheStar 12/3/06) the award of the 3G spectrum was evaluated based on technical, financial management and business plan of all the companies.

I do not know if Time dotcom and MiTV or even Digi fulfilled any of the criteria.

Lets pretend that :-
Techical (Time & MiTV - PASS) (Digi - PASS)
Financial management(Time & MiTV - PASS) (Digi - PASS)
Business plan (Time & MiTV - PASS) (Digi - PASS)
Equity ownership ((Time & MiTV - PASS) (Digi - FAILED)

Perhaps its the hidden agenda not explictly spelt out that is "Equity ownership" that decides Digi's fate.

A nationalistic agenda point of view?, yes, we may give priority to local companies (if we were in the emerging 80's)

Open market point of view? WTF did MCMC accept Digi's participation if they very well knowing that a foreign owned co will not be getting the so-called "scarce national resources"?!

Hey! why was I not taught that 3G is one of M'sian's "Scarce Resources" during my Alam & Manusia - primary day, Ekonomi Asas - secondary day and Economics - LSE day?!!!

Why waste Digi's effort in preparing for the "Beauty contest"!!.

reminds me of the dubai ports deal in the US. nationalistic.

Well, this is normal in malaysia, but i think the decission makers are far from mature by giving such reasons for the decission. I wonder whats so precious about malaysia that everything has to be given to local companies, HELLO wake up ...these foreign companies still employ locals...dont they? Same old stupid ala-proton excuses.

Telenors networks worlwide caters for over 70M subs. and NO there isnt 70M subs. in norway. It's worlwide, including many muslim countries, like pakistan & bangladesh.

Vodaphone is another worlwide giant that are eveywhere, including Egypt & Japan. Malaysians are NO more patriotic and country concious then the japanese and yet still the government offered a license to Vodaphone KK to operate.

So whats wrong in malaysia? We have become totally screwed up in our thoughts that leads to really incompetent companies superceeding others in getting business becoz of issues such as race, religion & foreign ownership.

This is the only country where who you are, what race you are, what nationality you are MATTERS when doing business! Maybe, Telenot should just dump all the locals being hired by DIGI and replace them with cheaper chinese resources, why bother since the government has labelled it such!

Also, government should look at Maxis 3G's companies in klangv alley, see who's running the networks for them and what nationality is teh company running it ..then respond!

This who thing is bizarre and stupid. Malaysia has lost it, thanks to less then competent people sitting on the chairs of the decission makers.

What a way to spoil my morning!

Oh well I reckon Digi didn't wanna pay any kickbacks since it was confident that it would secure a license considering that it has the strongest financial, technical and management plan.

Oh well I strongly believe that this failure could be a blessing in disguise for Digi. I did some research whilst at uni and found that 3G is too expensive to make money. I actually started using 3G 2 years ago in Australia. When I first bought the phone I was fasinated by the rich multimedia content that 3G offers. However as time passes by I don;t even use the additional features and just use my phone to make calls. I don;t even bother using the Video calls which I think is a waste of money.

There are many new technologies that are currently under development - these new technologies are much cheaper to roll out and faster than 3G. So i reckon Digi just gotta wait a couple more years and wait for the industry to standardise.

Did anyone note who got the 3G licences in Singapore?

If I remember right, they are all Singaporean telcos, in which Singaporeans have a majority stake.

Many foreign telcos - such as Telstra, BT, AT&T & KDD have offices in Singapore. None of them bothered to bid for a 3G licence. Reason - stringent conditions laid down by the Spore govt.

So, why the angst if Digi did not get a 3G licence?

And, in any case, there are better and faster technologies down the road.

goks, you are so right!!

This whole bullshit takes my appetite away, even before breakfast. Make us Malaysians a bloody laughing stock in the international comunity. I feel so ashamed (though not fully my fault) , for letting such leaders exist in my country.

Remember that song "Standing in the eyes of the world"? Yeah right... stand out like a joker. This so called "Nationalist" practice is disgusting. I can't help but relate this to a very common promotional practice in Malaysia.

Imagine, yourself, a capable person to rise to a higher position, but another clearly less qualified, less experienced person of another skin colour comes in and gets the job. All in the name of helping the "weaker" community. THAT'S the Malaysian mentality.... That's why we'll never progress as a country. NOT IN THE NEXT 20 YEARS!!!

If we still hang on to such protectionist mentalities, how are we going to progress to be a first world country?? We will ALWAYS be an inferior country because of our immaturity and 3rd world thinking. No wonder so many Malaysians leave to render their services to other countries that recognises them, by their skills but not nationality. See "Meet Dr Chan, high achiever with a PhD at 21" in this same blog. We can never become a 1st world country unless we do away with these 3rd world leaders.

Another thing I can't understand, we already have Celcom and Maxis, if LKY gave the 3G license to Digi, we have 3 LOCAL 3G holders (2 of them had a head start) versus 1 FOREIGN player. Are Malaysians that useless that we can't withstand a 3:1 competition? LKY's response to this is just a balless lame excuse (probably with some behind the scene agenda). Disgrace to us Malaysians!!!
Make use look like a chickens with no balls. I so pissed I felt like migrating...

yeah.. kinda sad & embarassing for malaysians.

how would the 2 local companies help boost 3G anyway, if they will need 2G network to ensure good coverage all over the country? they will take forever to build the network, let alone develop useful services available for us!

how can we have government servants (aka. ministers) make short-sighted decisions like this?

how to develop the industry with this backward mentality? *sigh*

Did anyone else read Onn Yeoh's article in the EDGE weekly? I think he (and many other so-called analysts) are shooting themselves in the foot. It gives me a feeling that it is all sour grapes. Here's my rationale :

1) before the results were announced, most of them said 3G is the way forward (at least for a traditional telco like Digi)
2) Digi's share price shot up to an alltime high (I was told it even surpassed Maxis at one point) on expectation that Digi will get the 3G license.
3) then it dropped like a rock when the results were announced.
4) now many of those who heralded the "power of 3G" are now saying that Digi doesn't need 3G, the technology is over-rated, there are better technologies coming soon, Digi is better off saving the money needed to build the 3G network, Digi's EDGE can do everything that 3G can, etc etc.

Now if all these people are correct (on point 4), then why complain that Digi has been denied the license? Shouldn't they celebrate that LKY is doing Digi (and Telenor) a great favour by awarding the license to two upstarts (and thus pulling them further into the red)??

yo, chanwk.. wat's your point on (2) and (3)... everyone in the stock market knows that's a knee-jerk market reaction.

and u r right, there are a few potential "4G" technology out there.

but the next logical step from GSM or 2G, is 3G. Greenfield 3G will will die in the womb, unless having wide coverage as 2G. ROI will be negative for many years for these greenfielders, despite however many statements made by the CEOs.

who cares DiGi wins 3G or not... but

a. how our G conducted themselves in light of foreign investment and development of mobile services
b. how malaysians can benefit!

i think it was Telenor that brought the idea of 5-digit number (eg. 32788 to download ringtones, or vote for Msian Idol) irregardless of 012,013,016,017,019.

that move boosted the entire industry, and public use of mobile services.

sadly.. this beauty contest called "Miss Malaysia", but somebody forgot to lay down the rules that Malaysian only need to apply.

ed!son said..
"how can we have government servants (aka. ministers) make short-sighted decisions like this?"

Just take a look at LKY's Nokia 8310 and you'll know how update he is in the Telco field. Who needs 3G-10G when he's contented with his trusty phone. Somebody pls introduce him to color screen, polyphonic ringtone, streaming video and mobile broadband pls.. oops I forgot, you don't require that for 3G, all you need is "content" and a "fiber backbone" for it to take off big time..

"DiGi was not awarded a third-generation (3G) spectrum licence because it is a foreign company, said Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik."

Wow .. and in the next sentence Dr Lim commented on the importance of foreign direct investment.

Hmmm... seems like a case of foot-in-mouth disease. Amazing coming from a senior minister who knows the importance of FDI to Malaysia.

Kak Fidah must be having a fit. Dr. Lim has just undone her hardwork. Say anything you wish for Kak Fidah have been working hard for years along with Tun M and even Pak Lah before this shocking revelation.

Looks like things are out of control in our gomen.

Another fine mess we got ourselves in ..

peace

Huh, as if we'll die without Digi. No doubt they had put in a good fight in the past, but don't forget the other telcos would do similar things for better market share. If they (Digi) are so good, why are they still the smallest player compare to the other two ? They have the strongest background(Telenor), don't they ? If our locals can do it ? Why not let the locals do it ? TT and MiTV might not do well in the past, but don't we all learn from failure ?

When introducing more players, which will heat up competition, and drive the prices down. Disregard any of the players (old or new) make or break, the ultimate winners will be us ! Why is the fuss when the government is doing us good ? Who would benefit most if only Digi gets the license, hmmm...

The amount of b******* being spewed in this thread is amazing!

It's as if Digi has some inalienable right to be awarded a 3G licence!

The hard truth is that Telenor is in Msia to make money. Good old-fashioned dinero! If there is no money to be made in Msia, they'd pack up and be out the door before you can say "LKY".

So, let's not get all mushy and sentimental about FDI. Foreign investors go where there's money to be made. No more, no less.

Less of the crap, and more of hard-headed reality would be welcome!

eh, voter... i wish that were true, but do u believe mitv or time can drive 3g service prices down?

i think they can hardly put up a good fight, since their potential market is going to b very niche... i mean, their core biznes is going to b mobiletv and mobile broadband.. how many subscribers would u expect? think.....

surely maxis and celcom will take their time to milk the market.. that's fer sure. being a maxis user myself, i was looking forward to the competition to heat up.

and u think the gov is doing us good? or them? (when the spectrum was hastily awarded to tt.com)

it's not whether DG gets 3g or not, but the whole "beauty contest" is a sham.

should hv just saved mcmc's time, and just award to the two companies.

if our G dont want foreign companies to have the spectrum, then why mention, "DiGi can still be involved by renting the 3G spectrum or buying into the companies". unless....

digi is qualified to enter the "beauty contest" mean bolehland is a OPEN MARKET!!!

digi is failed for 3G license cause it is not belong to "U Must Not Object" party!!!

uncle energy, watery n mis-communication, LKY is just another "U Must Not Object" party's "shield". to be a shield of this party, 1st requirement always is "u must not a bumi". so LKY does fit it nicely.

uncle LKY also mentioned... bolehland can squeeze in 5 telco's, yet only 4 numbers of 3G license have given. mean still have another session of "beauty contest"?

Do you know that Malaysian operators have the highest EBITDA in the region ? More than 100% compared to HK and 60% compared to Singapore. Which means our existing telcos are happily sharing the pie right now. I believe the government is well aware of this and by issueing new licenses to some new players, for whom will have to fight harder to get a piece of the market, and definitely put up a fight. It's been proven times and times in other regions. But for ed!son's question, I would say let's wait and see. Spock is right, everyone is here to make money, as simple as that. Digi has all the right to invest in our country or others, while we shouldn't feel sour if they don't get the license too, we don't owe them anything. Let's move on from here......

I think the main issue here is the transparency of the decision. LKY said in his comments that someone you think is beautiful might not be beautiful to him. SO basically even people with broken teeth and missing nostrils may win beauty contests if LKY was one of the judges?

I think DiGi with 3G license will be bigger competitors to the other 2 telcos than MiTV and tt. DiGi has existing structure, experience in telecommunications industry, etc.

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