April 9, 2002 – According to a Business Times Malaysia report, TENAGA National Bhd's bid for a licence to provide telecommunications infrastructure may be rejected because of concerns over the possible creation of a monopoly.

"Tenaga…wants to expand into the lucrative media and telecommunications sector, but there are obvious obstacles. While certain regulatory authority people are supportive of the utility's ambitions, the Ministry of Energy, Communications and Multimedia is concerned that a monopoly could be created as a result," a source reported.

An NFP licence, which is issued by the Malaysian Communication and Multimedia Commission (MCMC), will give Tenaga the right to provide, construct and maintain such facilities as earth stations, satellite hubs, towers, poles, and ducts and pits. Tenaga could easily leverage new technologies to offer consumers high-speed broadband Internet access. With its huge customer base, Tenaga already has a captive market for a host of information and communications technology (ICT) services.

Telecommunications industry officials are aware of Tenaga's application, and are particularly concerned about the company's possible involvement in the consolidation of telecommunications infrastructure. "If a third party is to take the lead in the consolidation exercise, then so be it, but it would be unfair to the telcos to allow Tenaga to get involved," a telco official said.

"Network consolidation will begin with the telcos having to share their basic infrastructure needs, like base transceiver stations (BTS) and their sites, as well as power supply. I don't think it will be right to allow a company that has the right of way in so many locations to enter the industry... it has the potential to monopolise the industry," he said.

"If telcos have to share infrastructure, we would prefer an independent non-telco to play the co-ordinating role so that it would not pose a competitive threat to us," an executive from another telco said.

The MCMC had previously rejected an application by Tenaga affiliate FibreComm for an NFP. FibreComm is a consortium formed by Tenaga, Celcom and Malaysian Resources Corp Bhd. It owns and operates an extensive fibre optic backbone consisting of a land-based network comprising about 3,600km of fibre optic lines, and submarine cables another 1,600km. Together, the network links up more than 100 urban centres.

Although FibreComm has been in operation since 1997, the company does not have an NFP licence. "This is what concerns the telcos. The regulator cannot just leave FibreComm to carry on without a licence." a telco executive said.