State Relations in the Telecommunications Industry in Malaysia

May Fong Cheong


This article seeks to draw out the unique and multi-faceted roles of the state in relation to the telecommunications industry in Malaysia. It traces the industry’s historical development to present day challenges and highlights the state’s changing role from an early relationship of “sole owner-operator and regulator” to that of “state ownership to state regulation.” This part also features the beginnings of Telekom Malaysia Bhd, now Malaysia’s leading telecommunications company, due to privatisation and liberalization of the former state owned entity, Jabatan Telekom Malaysia. The later phase of state regulation captures a pro-competitive approach arising from a bold convergence framework adopted in the Communications and Multimedia Act 1998 and implemented by a new regulator, the Malaysian Communications and Multimedia Commission. The telecommunications industry continues to face challenges from within and outside the industry. The response to these challenges will depend in part on the role that the state continues to play in the industry. While review of the role of government in business and the need for a clear delineation between regulator and market players have been acknowledged, there is a need to introduce competitive neutrality principles to renew and sustain competitiveness in the telecommunications industry. This will be consistent with the continuing development of competition law in Malaysia in light of the passing of the Competition Act 2010 which will be in force on 1 January 2012 and Malaysia’s aim for a developed nation status through its Vision 2020. Externally ASEAN’s aim for regional economic integration presents a challenge to the local competitiveness of the telecommunications industry in Malaysia.