Govt Reverses Telecom Merger Directive

by Julian Matthews

The Malaysian government has decided to abandon its plans to force telecommunication service operators in the country to merge. Instead, the go-ahead has been given for all operators that have licences for telecommunication services to proceed with their infrastructure build-up and let market forces decide their fates.

In January 1996, the government announced that the telecommunications industry would be rationalized, given the sudden rise of new players in the industry. Since 1991, when the government privatized national carrier Telekom Malaysia Berhad and liberalized the telecommunication industry, licenses had been issued on an ad hoc basis, mainly to politically-connected groups.

Left out in the cold under the government’s January plan were three companies. One, Time Telecommunications Sdn Bhd, had already completed 80% of its US$600 million optical fiber network and signed on 6,000 corporate subscribers.

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