Malaysian regulators are taking credit for lower connectivity prices, according to a report by Mobile World Live. In the three quarters to end-June, fibre access prices fell 48 per cent, uptake increased 21 per cent, and operators introduced higher-speed mobile and fixed broadband packages, according to Al-Ishsal Ishak, Malaysian Communications and Multimedia Commission chairman.
What is not reported is that prices are down because of price reductions required by MCMC.
And, as always, when the financial return from a given investment is reduced, investment simply is reduced as well.
“Actually, given that wholesale carrier prices have been capped, the opposite situation has happened,” says Richard Then, of SACOFA SDN BHD. “Fiber operators have ceased to invest in greenfield builds unless a property developer or the regulator was subsidizing the build.”
It's become an "on-net or no-net" situation, Then says.
Among the investment barriers are “unprecedented hikes in deposit/bank guarantee requirements, recurring easement lease fees, and the need to award work to designated surveyors or contractors before they can bury the first metre of glass into the ground, often imposed by state, district or city authorities,” says Then.
“The ecosystem would benefit much more if the legislators worked on these factors rather than squeezing the operators' top line directly,” he says. “Likewise by introducing a ceiling rate for how much landlords can charge operators for putting a tower on their land or rooftops.”
It long has been the case that regulators can choose to emphasize competition and lower prices, or get much more investment. They cannot emphasize both, at the same time. This appears to be another example of that.
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