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Malaysia Scraps 5G Permits After Backlash Over Lack of Tender

Malaysia Scraps 5G Permits After Backlash Over Lack of Tender

(Bloomberg) -- Malaysia revoked an order to grant 5G airwaves to telecommunications companies including Telekom Malaysia Bhd. and Celcom Axiata Bhd., citing transparency as well as technical and legal issues.

Malaysia’s Communications Minister Saifuddin Abdullah ordered the Multimedia and Communications Commission to immediately review the matter, after news reports that he awarded the 5G spectrum on May 15 without tender. The companies that were set to gain also included Maxis Bhd., Digi.Com Bhd., and Altel Communications Sdn.

The earlier decision had surprised markets as it was an “abrupt departure” from regulators’ original proposal for a tender to be undertaken, RHB Research analyst Jeffrey Tan wrote in a note on Wednesday. Opposition lawmakers had also criticized Saifuddin for not selecting the companies through an open tender.

Under the previous government, Malaysia said it would forgo revenue from spectrum auctions and instead allocate airwaves to a consortium of carriers that would be chosen via a tender process. The policy would free up funds for the companies to invest in 5G infrastructure that could cost at least 7 billion ringgit ($1.6 billion) over the next five years.

©2020 Bloomberg L.P.