Equal Access Trial for Telcos Set for July

Posted on April 17, 1998 
Filed Under AsiaBizTech, Julian

By Julian Matthews

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 billing structure.

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 Malaysia.

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 competing operators.

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.

Published in Asia BizTech, Apr 17, 1998

by Julian Matthews, Asia BizTech Correspondent

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