Malaysia telecom regulator names WiMAX winners

KUALA LUMPUR, Mar 16 (Reuters) Malaysia's telecoms industry regulator on Friday named four newcomers as winners of much-coveted WiMAX licences, further pressuring established players such as state-controlled Telekom Malaysia Bhd .

Malaysia badly lags more tech savvy nations such as Singapore and South Korea, despite a decade-long plan to become a high-tech nation.

Analysts say the decision to award the licences for WiMAX -- an emerging mobile broadband technology -- to smaller companies is aimed at accelerating competition to meet its objective of wirelessly connecting more households.

''The government is slowly trying to open up the telecommunications market from the big players by introducing smaller, nimbler players offering much more choice for consumers,'' said Kelvin Miranda, a fund manager with Asian Asset Management.

''Telekom Malaysia through its fixed-line business is going to be affected the most because WiMAX has enough bandwidth to take voice calls.'' The licence winners were Bizsurf, a unit of YTL E-Solutions , an investor in young technology businesses; MIB Comm, a unit of telecoms software maker Green Packet Bhd ; telecoms service provider Redtone International , and infrastructure maker Asiaspace Dotcom, industry regulator Malaysian Communications and Multimedia Commission said.

Shares of Redtone gained 3.7 percent to 84.5 sen at the midday break. But YTL E-Solutions shares slipped 5.4 percent to 88 sen and Green Packet declined 2.2 percent to 4.94 ringgit.

More competition would impact established firms such as Telekom, which counts on broadband revenue to help stem dwindling contributions from its monopoly fixed-line business.

The government had said that up to four blocks of the 2.3 GHz spectrum would be up for grabs. Bizsurf, MIB and Asiaspace will operate the service within peninsula Malaysia while Redtone will cover the eastern states of Sabah and Sarawak on Borneo island.

The commission said it expected the winners to roll out the service to 25 percent of their target areas by the end of 2007, expanding to at least 40 percent by the end of the third year.

INVESTMENT The regulator also expects each firm to invest between 250 million and 300 million ringgit (-86 million) in the first three years of implementation of WiMAX.

''Winning the licence is positive, and even if there is no financial muscle at first, the winners can still partner people,'' a dealer with a local brokerage said.

Seventeen firms had applied for the high-speed WiMAX spectrum. They included Telekom and mobile phone services operators Maxis Communications and DiGi.Com .

Telekom and Maxis already have licences to operate third-generation, or 3G, telecommunications services.

In a separate statement, DiGi, Malaysia's smallest mobile phone operator, said it regretted losing its bid, but the decision would not impact its core business.

DiGi, controlled by Norway's Telenor , was also not successful in an earlier bid for a 3G licence.

DiGi shares rose 0.6 percent to 17.20 ringgit, Telekom was up 0.5 percent to 10 ringgit and Maxis unchanged at 11.40 ringgit.

In evaluating the applications, the regulator said it took into account that the 2.3 GHz spectrum was similar to 2.5 GHz and 3.4 GHz, which have been designed more for small and medium enterprises.

WiMAX -- short for wireless interoperability for microwave access -- allows super high-speed Internet access and file downloads from laptops, phones or other mobile devices over greater distances than previous technologies.

WiMAX can blanket entire cities with high-speed wireless connections and is a longer-range version of the popular WiFi technology used to connect to the Internet in public spaces such as coffee shops. It is cheaper to set up and run than the high-speed 3G connection for mobile phones.

REUTERS CS KP1132