State-owned Telekom Malaysia may lose its fixed-line monopoly as regulators consider opening its network to rivals to improve liberalise the sector and speed up the development of broadband services, a report said today.

The Malaysian Communications and Multimedia Commission (MCMC) wants Telekom to let other operators rent access to its monopoly on wired connections to homes and offices, the New Straits Times said.

The MCMC prefers Telekom to do this voluntarily but may resort to legislation if that does not happen, the newspaper said.

This is a second attempt in four years by regulators to liberalise the industry and step up competition in the fixed-line network, it said.

More choices

If the plan is successful, Telekom could be renting out its lines to rivals by early 2005, bringing fixed-line connections in populated areas to 95 percent by 2010, one MCMC official told the daily.

He said freeing up the local loop would also encourage other operators to roll out high-speed broadband applications and services.

"This gives consumers more choices in terms of quality of service and better price bargains for both voice and data services, even the opportunity to change their fixed-line service provider," he said.

"It also augurs well with growing electronic-commerce and building a knowledge-based society."

The move would allow rivals to piggy-back on Telekom's infrastructure and grab a share of the fixed-line market of more than 4.5 million customers, the newspaper said.

The officials said under the plan, Telekom would be made to rent out its network at a discount to how much it retails its services to motivate new players.

No time to lose

There will also be other mandatory standards but the MCMC policy is to encourage self-regulation, he added.

One analyst with an international market consultancy said regulators must be "prepared to bite the bullet because our neighbours are advancing and we cannot afford further delays."

But the move is bad news for Telekom, which closed the morning session at RM7.90, down 0.05.

"This would be negative for Telekom as the income from renting out its lines would most likely be lower than the revenue it collects from the provision of (its own) fixed-line services," said a senior dealer.

Another dealer said investors were trimming their holdings because they believe "the regulator clearly intends to dismantle Telekom's monopoly and promote efficiency and more services via competition in the fixed-line segment." - AFP