| Equal Access Trial for Telcos Set for July
April 17, 1998 (KUALA LUMPUR) -- Malaysia will roll out a trial
run for equal access to all fixed-line telecommunication services
beginning in July.
|Minister of Energy, Telecommunications and Posts Leo Moggie said
the government will test the new policy on selected exchanges to
allow consumers and operators to familiarize themselves with its
operational and billing aspects.
Equal access will allow subscribers to choose from one of five
telecommunication service providers when making calls, regardless
of the network he or she is on. Currently, such calls are mainly
routed by the dominant fixed-line operator Telekom Malaysia Bhd.
The four competing telcos are Technology Resources Industries
Bhd., Binariang Bhd., Time Telecommunications Sdn., Bhd. and
Mutiara Swisscom Bhd.
The equal access policy requires the five telcos to share the
costs to interconnect their individual networks and agree on a
The government expects equal access to be fully operational
nationwide by January 1, 1999.
Moggie said equal access, announced in May 1996, is part of a
series of policies to liberalize the local telecommunications
industry, which was once monopolized by state-owned Telekom
On whether the new policy would eat into Telekom Malaysia's
earnings, Moggie said some re-adjustment in its market share is
likely, but it will continue to be a dominant player. Telekom
Malaysia, which is 70-percent government-owned, has over 4.2
million fixed-line subscribers.
Moggie said the government will also set up a "local access fund"
to compensate local access operators for losses arising from the
introduction of equal access.
"The government will determine the cost of local access and
review this cost from time to time," he said. All equal access
providers are expected to contribute to the fund, Moggie said.
The local access fund is seen as a means to compensate primarily
Telekom Malaysia for exposing its large subscriber base to
Moggie said the government also may impose a floor on call
charges in order to curb undercutting among operators.
"The government would like to see market forces drive the call
charges down first before initiating any floor pricing. We would
like to see reasonable and fair competition," he said. Initially,
the equal access policy will be implemented using the call-by-
call with default system, which means the user can make a trunk
or international call using the carrier of his or her choice by
dialing a three-digit code first, or otherwise by default use the
one to which he or she already is connected.
Moggie said that by Jan. 1, 2000 a preselection system or non-
code access will be introduced by which users can register with
the carrier of their choice to route all their calls and take
advantage of attractive special rates or packages of services.
In a related development, Moggie said the government has decided
that all licensed fixed and mobile network operators will be
required to contribute to a universal service obligation (USO)
fund to share the responsibility and costs for such services.
"The government wants to ensure accessibility to telephony
services at affordable prices to all consumers in both rural and
urban areas," he said. The universal service scope covers the
provision of basic telephones, emergency services, public pay
phones and services for the disabled.
Moggie said during the two-year period beginning Jan. 1, 1999,
Telekom Malaysia will be designated as the sole USO provider and
will receive contributions from other operators via a USO charge
on all interconnect traffic.
Beyond that, any operator that agrees to provide those non-
profitable services will be compensated for its losses.
(Julian Matthews, Asia BizTech Correspondent)