What are AsiaSpace’s top priorities in terms of infrastructure developments?
ABDULLAH: AsiaSpace has been in business for the last 10 years. We have worked very hard to build towers for telecommunication companies, specifically DiGi, Maxis, and Celcom. We are also working with U Mobile, YTL and P1. At the moment, we have many challenges that come with the acquisition of sites. This is an old problem. When the idea to share towers took hold in 2003, we signed agreements with the leading telecommunication companies. These companies were not able to build their own towers during the last 10 years. To build these towers, you must get the approval of the authorities. Local authorities are not very easy to deal with. In Europe, I have been told this process takes several years. In Malaysia, we are fortunate because it only takes about a year. Waiting for a year to connect these towers is still too long. The government has helped us in discussions with the local authorities, and they are now helping us to acquire permits for building these towers. We must be approved by the fire department, and the landowners. The local authorities will not give you permits to build the tower without approval from these landowners. If the landowner is an individual, this process is rather easy. If the land is owned by the government, bureaucratic issues come into play. This can be complicated, as there are many issues to deal with. In 1994, when the licenses were given to DiGi, Maxis, and Celcom, they did not need approval from the local authorities. They built the towers on their own. By 2003, 70% - 90% of the towers were built without approval. Today, if they want to build a tower, they must get approval. This takes time. These companies were very fortunate that the government did not force them to take down the towers. Today, they are successful because of the illegally built towers.
What are AsiaSpace’s future investment plans for building new towers?
ABDULLAH: We currently have 138 towers that are all shared. I think by the end of 2013, we will have another 15-20 towers. We are looking at about 150-160 towers. The Prime Minister recently made a statement that the Government Linked Companies (GLCs), specifically the telecommunication companies, should turn over their towers to companies like AsiaSpace. We can buy their towers, and lease them back to these companies. If I buy 1,000 towers, I must borrow RM 200m – RM 300m ($64m - $97m) from the bank, or issue bonds. This is what I mean by trying to take the business to a different level.
What are AsiaSpace’s international plans for growth?
ABDULLAH: I want to expand outside of Malaysia. If there is an Indian company prepared to make an offer, I will listen. Bharti Infratel has 34,000 towers. They are treating this as a separate entity, and they are listing them. I believe they want to raise $800m - $900m. We would like to buy more towers. We can raise a large amount of money by going public.
How does Malaysia compare to other ASEAN countries in terms of ICT sophistication?
ABDULLAH: In Malaysia, we have achieved 65% penetration as far as the Internet is concerned. People are now able to access the Internet all over the urban areas. The rural areas do not have this level of access. There are many young people living and working in the urban areas. As far as Malaysia is concerned, we are more advanced than other ASEAN countries. Even in Thailand, 3G is not the greatest. We launched WiMAX in 2008. After spending RM 80m ($26m), I pulled out. It is hard to compete with DiGi, Maxis, and Celcom. They are making billions of dollars. Our strategy is to work with one large player in the industry.
Is there any appetite for mergers and acquisitions among the telecommunication companies in Malaysia?
ABDULLAH: I do not think so. If you look at the three big telecommunication companies, they are not interested in taking over any other companies unless they come at a cheap price. They will only work with you provided there is a benefit for them. I think there will be collaboration in Malaysia, but I do not think there will be any mergers or acquisitions.
All of the telecommunication companies want to make money. They make money through voice, and Internet access. They are not interested in anything else. All of the technology in Malaysia is borrowed technology. We do not create technology in this country.
What partnerships has AsiaSpace formed? Are there any further partnerships on the horizon?
ABDULLAH: As far as AsisSpace is concerned, we are very happy that the Malaysian Communications and Multimedia Commission (MCMC) is pushing for collaboration. There are potential collaborations for infrastructure sharing, and spectrum sharing. LTE is so advanced that you can reach speeds of 100 Mbps. In Malaysia, the spectrum for LTE is coming out in the middle of 2013. The collaboration promoted by MCMC is an excellent suggestion. We are working with one local company now. We are waiting for MCMC to issue its approval. I cannot operate on my own because it will cost a lot of money. I must form a partnership. We have to collaborate with the larger players. We cannot do this on our own. Today, broadband revenue is relatively small. Broadband revenue is fixed. Broadband is not attractive for telecommunication companies. They cannot stop pursing broadband, as everything is going to be IP based. As far as LTE is concerned, it is moving so fast that AsiaSpace needs to collaborate with another company.
What is your outlook for the Malaysian ICT sector? What are the positive signs, and what signs represent challenges?
ABDULLAH: All of the telecommunication companies want to make money. They make money through voice, and Internet access. They are not interested in anything else. All of the technology in Malaysia is borrowed technology. We do not create technology in this country. For example, in 2007, the spectrum of 2.3 MHz was granted by the government. They did not know that in 3 years the technology would be outdated. Qualcom, which was supporting LTE, began saying that WiMax is dead. People who invested money in WiMax are now suffering. The telecommunication companies have evolved from 2G, to 3G, and now to LTE. They have made billions of dollars. They were the first ones to the market, which means any new players that do not collaborate with them will struggle. They are only interested in the spectrum. They are not interested in anything else.