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Celcom, Maxis, Digi & U Mobile to redesign mobile network, better coverage next year

All four major mobile operators in Malaysia have accepted the letter of spectrum offer from the Malaysian Communications and Multimedia Commission (MCMC) that will see a change in their mobile coverage, nationwide. The four mobile operators are Celcom Axiata, Maxis, Digi and U Mobile.

base-station

In August 2016, MCMC, which is responsible for the regulating radio frequencies in the country, has sent a letter of offer to the 4 major Telco for the spectrum relocation of the 900Mhz and 1800Mhz band. The letter includes the new spectrum fee that the Telcos will have to pay shall they accept the offer. MCMC intends to convert the annual apparatus assignment fee to an upfront spectrum assignment fee with long-term certainty for the spectrum.

Spectrum relates to the radio frequencies allocated to the mobile industry and other sectors for communication over the airwaves. In summary, more spectrum means faster Internet speeds, and better mobile coverage.

The spectrum in the 900MHz and 1800MHz are currently held by Maxis, Celcom and Digi. The 900Mhz was originally assigned for 2G network. However, over the past few years, Maxis, Celcom and Digi have been using these 2G spectrum for their 3G/4G network, to improve coverage.

In the 900Mhz spectrum, it was being occupied by Maxis, Celcom and DiGi with 32MHz, 34MHz and 4MHz respectively. In the 1800Mhz band, all the 3 Telcos (Maxis, Celcom, Digi) each has a 50Mhz spectrum.

With the new spectrum reallocation, effective 1 July 2017, Maxis and Celcom will have reduced spectrum in the 900Mhz and 1800Mhz band. This means both mobile operators will have to redesign their mobile network (example deploy more base stations & re-tuning coverage) by July 2017.

For the 1st time, U Mobile will have access to the 900Mhz and 1800Mhz band which will allow it to improve it 3G and 4G LTE network coverage nationwide. Digi will see its spectrum in the 1800Mhz reduced by 10Mhz however it will gain more spectrum in 900Mhz band allowing it to improve its 3G coverage.

Below are the spectrum that all the major mobile operators would have as per the new changes:

Spectrum Bands 900Mhz (2G/3G) 1800Mhz (2G/4G) 2100Mhz (3G) 2600Mhz (4G)
Celcom Axiata 20Mhz (2x10MHz) 40Mhz (2x20MHz) 30Mhz 20Mhz
Maxis 20Mhz  (2x10MHz) 40Mhz (2x20MHz) 30Mhz 20Mhz
Digi 10Mhz  (2x5MHz) 40Mhz (2 x 20Mhz) 30Mhz 20Mhz
U Mobile 10Mhz  (2x5MHz) 30Mhz (2 x 15Mhz) 30Mhz 20Mhz

 

Below are the copy of the announcements to Bursa Malaysia.

Axiata Berhad (Celcom Axiata)

Further to the announcement dated 30 August 2016 in relation to the spectrum assignment, Axiata wishes to announce that its wholly-owned subsidiary, Celcom Axiata Berhad (“Celcom”) had on 31 October 2016 received the letter from the Malaysian Communications and Multimedia Commission (“MCMC”) granting Celcom and its wholly-owned subsidiary, Celcom Mobile Sdn Bhd (“Celcom Mobile”) the full settlement of spectrum fees amounting to RM816.75 million by this financial year.

After considering the reinvestment opportunities, Celcom will be funding the spectrum fees mainly through its internal generated funds and existing Sukuk program.

The borrowings are not expected to have any material impact on Axiata’s consolidated earnings, earnings per share and net assets. The gearing level, net debt-to-EBITDA of Axiata, will be below 2.0x.

All other conditions contained in the Letters of Offer dated 30 August 2016 in respect of the spectrum assignment remain the same. Celcom and Celcom Mobile had today, submitted to MCMC, acceptance of the 900MHz and 1800MHz spectrum assignment with the above payment terms.

The announcement is dated 2 November 2016.

Maxis Berhad

Further to the announcement made by Maxis on 30 August 2016, Maxis’ relevant wholly owned subsidiaries licensed under the Communications and Multimedia Act 1998 have, today on 31 October 2016 accepted the letters of offer from the MCMC for the spectrum assignments of 2 x 10MHz of 900MHz and 2 x 20MHz of 1800MHz (“Offers”) for a lump sum full settlement fee of RM816.75 million.

After thorough consideration of all factors including future cash flow projections and reinvestment opportunities, the Board of Maxis has decided to fund the fee mainly through external borrowings.The gearing level (net debt-to-EBITDA) will remain at approximately 2x.

The borrowings are not expected to have material impact on Maxis’ consolidated earnings, earnings per share and net assets.

This announcement is dated 31 October 2016.

Digi.com Berhad

Further to the earlier announcements made by Digi on 2 February 2016 and 30 August 2016, and the Malaysian Communications and Multimedia Commission’s (“MCMC”) Letters of Offer dated 30 August 2016 in relation to the Spectrum Assignments (“SA”) for 900MHz and 1800MHz spectrum bands, Digi wishes to announce that its wholly-owned subsidiary, Digi Telecommunications Sdn Bhd (“DTSB”) had on 1 November 2016 accepted the offer in respect of the SA for 2x5MHz of 900MHz and 2x20MHz of 1800MHz spectrum bands to DTSB for 15 years effective 1 July 2017. The payment for the one-time fee component amounting RM598,545,000 was made within the deadline stipulated by MCMC on 1 November 2016.

The Board of Directors of Digi has decided to fund the one-time fee component mainly through its existing borrowing facilities and to maintain healthy net debt-to-EBITDA ratio below 1.0x.

The borrowings are not expected to have material impact on Digi’s consolidated earnings, earnings per share and net assets.

This announcement is dated 1 November 2016.

U Mobile Sdn Bhd

U Mobile have not made any official announcement yet however Chief Executive Officer, Wong Heang Tuck has confirmed with MalaysianWireless that the Telco will accept the spectrum offer from MCMC.

U Mobile has accepted the allocation of 2x5MHz of 900MHz and 2x15MHz of 1800MHz bands effective 1 July 2017, amounting at RM503,406,000.

Other spectrum bands to be reallocated

Previously, MCMC has said that it will also be looking at relocating the other spectrum bands such as the 700MHz, 2300MHz, 2600MHz bands by end of 2017.

The 700Mhz is current being used by TV stations such as TV1, TV2, TV3, ntv7, TV9 while Telcos like Packet One Network (P1) RedTone, Yes have spectrum in the 2300Mhz and 2600Mhz.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy