Internet service providers (ISPs) and telecommunication companies (telcos) were taken to task by Energy, Communications and Multimedia Minister Dr Lim Keng Yaik today for not providing services to rural areas.

"If you have a licence but don't provide services, then give us back the licence," he said, in reference to the companies concerned.

Lim was speaking to reporters after opening a regional conference on 'French know-how in telecoms and ICT' in Kuala Lumpur.

He said 'many' licences have been issued to telecommunication companies but that the services provided have not been satisfactory.

"They just concentrate their services in urban areas," the minister said without disclosing the number of licences issued annually.

He also said the Malaysian Communication and Multimedia Commission has been directed to organise a meeting with ISPs and telcos to find out why they are not interested in extending services to rural areas.

Asked for the criteria in issuing licences, Lim said "as long as they provide services, we will give licences".

"Our policy is liberal. I don't think we will tighten the policy. Let us first find out what the problem is," he said.

Low coverage

In his keynote address, Lim disclosed that Internet uptake in Malaysia is still low.

"I presume this is the reason for the slow deployment of broadband services, which is still below one percent in terms of penetration rate," he said, noting that countries like Korea and Singapore have above 60 percent and 50 percent respectively.

"There is a dire need for something to be done,"he said.

He also revealed that the cellular phone penetration in the country is only at 46 percent.

"While there is satisfactory growth in telecommunications services in the urban areas, we still see a digital divide in the rural areas,"he told participants, including those from Bangladesh, Cambodia, Indonesia, the Philippines, Singapore, Thailand and Vietnam.

He said the availability of second-generation cellular phones and low bandwidth Internet will not be enough to take Malaysia into a k-economy or an e-society.

One major problem faced by the industry is coverage, as this is capital intensive in nature, he said.

"Coupled with continuously evolving technological advancements, industry players will be required to outlay further capital expenditure to keep up with current technological trends,"he said.

Lim said the government encourages all service providers to share their networks and have "planned and co-operative" capital expenditure programmes.

"This would not only improve coverage but also make the allocation of national resources more efficient," he added.