Telekom is now a private company, hence it has to be commercially driven. While the fixed tariffs are government controlled, Telekom has to make commercially driven decisions to remain a viable business operation.

Telecommunications is a capital-intensive business as the network infrastructure is very costly. For example, the average cost to roll out one fixed line from the trunk switch to the home is around RM4,000, without considering recurrent operational costs. It takes more than six years to recoup the outlay from a consumer with a RM50 monthly bill.

Telecom was traditionally a government monopoly, which defrayed costs by charging exceptionally high international and long -distance tariffs to cover costs of local line deployment, in essence subsidising cheap residential local calls and rentals by taxing the business user. Consumers took for granted cheap local calls and rentals and assumed that this would always be the case.

Liberalisation of the industry means that telecommunications is now privately run by companies who must compete with each other. These companies cannot afford to cross-subsidise as they have to ensure returns on investment. In return, they can provide innovative pricing and better service.

An important fact is that the existence of high profits in international and long-distance calls encourages operators to target this sector. The effect is that downward pricing pressure occurs in international and national long-distance calls as seen by cheap voice-over Internet protocol (VoIP) calls.

The fixed-line operator, without full rebalancing, can end up bearing losses in the local line and simultaneously see erosion of revenues from long distance! This is not ideal and as such, local charges have to rise to reflect costs.

In Malaysia, unfortunately, low line rentals (even with the proposed increases) do not make it a business case of line roll-out for many and thus little choice in physical fixed lines.

As competition has arrived, consumers now need to realise that they cannot forever rely on cheap local calls and line rentals. It is wrong to assume that consumers do not benefit from cheaper long distance or international calls as there are those who have relatives across Malaysia.

It is wrong to assume that businesses should be indirectly taxed with high international and long-distance calls. Malaysia is an export-oriented economy and cost reductions are good for business who can then generate jobs and wealth.

For the socially disadvantaged like the blind, there can be special packages for them but the average man on the street has to realise that telecommunications provision can no longer be cheap anymore.

The government has only introduced RM22 line rental charges and four sen for local calls. In reality, this is minimal and does not go the full extent of aligning costs of provision with charges.