Of Money, Mandates and Telecommunication Towers

Ok this is a paper i wrote for an assignment. The question is just down here and my answer. Why I decided to post this? Because I wanted to post something on the subject and was too lazy to type it twice.

Question:
Discuss the policies that are applied by SACOFA Sdn. Bhd. and provide your opinion on these policies

Introduction and General Opinion

Sacofa’s policies on provision of services (as pertains to mobile service providers) and mobile telecommunication tower maintenance and service are examined in this paper (albeit in a cursory manner, for brevity). Opinions are provided on Sacofa’s policy implementation and results. The opinions expressed are that of the author and do not necessarily reflect the opinions of any other individual or entity (i.e. Dr Al-Khalid and UNIMAS).
Sacofa Sdn. Bhd. is the sole telecommunications infrastructure provider in Sarawak, a rather self-defeating model of service, which is mysteriously common in our general geographical area.
Sacofa was established in 2001 [www.sacofa.com.my] with the vision of being “the national model of a total telecommunication network facilitator and service provider for all communication services operators in Malaysia”. Their official website further explains that Sacofa aims to be a One-Stop centre for providing a suite of telecommunication technology services. Sacofa was one of the only business ventures in the world to immediately achieve their vision and aims upon conception, as Sacofa secured a mandate with the state government to be the sole provider for telecommunication infrastructure services in Sarawak for 20 years (and perhaps more), ensuring that no other ventures would compete with Sacofa and hence making it the “One-Stop Centre” for everything, seeing as there isn’t really any other choice.
Sacofa’s official website goes on further to explain that Sacofa provides equal access to all industry players, and aims to ensure that no service provider becomes dominant in the state.
The reason or rationale for direct interference in market dynamics is not explained.
It is the opinion of the author that allowing competition among service providers for market dominance (as naturally occurs in the business environment) will directly benefit the end users in terms of cost, quality and coverage. Perhaps in future, the state government will consider open competition.

A Towering Responsibility: Sacofa’s Tower Threesome Policy

Sacofa provides telecommunication infrastructure services (i.e. they build towers) for Celcom, Maxis and Digi in Sarawak.
Sacofa’s policy on telecommunication towers dictates that Sacofa is the only entity that has the right to erect towers for telecommunication use anywhere in Sarawak. Furthermore, all three mobile service providers can have a maximum of 1 antenna per tower. Hence, each tower will have a maximum of 3 antennas, one for each mobile service provider.
This policy is said to originate from allegations a few years ago of unsafe practice by telecommunication companies (telcos) in Sarawak, especially in terms of installing antennas on buildings. Therefore, this policy is lauded as a guarantee that such things will not occur again.
However, isn’t that what laws, regulations and enforcement are for?
The author feels that there is poor justification on why a corporate (and rather profitable) entity needs to be created on a monopoly basis to control the installation of antennas, when international laws and regulations on safety already explicitly outline safety procedures and practices. All that would be needed is to ensure enforcement on the ground.
Isn’t that what the Malaysian Communications and Multimedia Commission (MCMC) is for? Or is that a less profitable option?
Furthermore, this policy restrains the ability of telcos to configure their mobile networks for optimum efficiency, as they have to adhere to tower locations chosen by Sacofa.
Again, if there is concern that these mobile companies will erect antennas indiscriminately (in someone’s durian farm or outhouse, for example), existing laws and regulations already exist to ensure that there are legal restrictions to doing so. All that would be needed is the enforcement.

Maintaining and Servicing of Towers

Sacofa assumes responsibility for general maintenance of towers, including preventive, troubleshooting and corrective actions. General electrical and safety guidelines are followed (current grounding, etc.). Cost sharing measures are carried out with the mobile service providers for operating costs, generator fuel (for towers running on generators) and safety.
It is the author’s opinion that Sacofa’s policy on maintenance and servicing is an effective cost cutting tool for the company and can provide another source of revenue.
On a hypothetical basis, it can be argued that this arrangement benefits the mobile service operators as the cost of maintaining and servicing a telecommunications tower is shared with Sacofa. However, this needs to be balanced against the potential gains in terms of user volume, quality of service and income from complimentary services to voice traffic (e.g. 3G, internet services, etc.).
It is the opinion of the author that the maintenance and service costs would hardly make a dent in the potential gains a dedicated tower for the mobile service operator would offer. Therefore, the cost sharing agreement is mainly a cost cutting tool for Sacofa.

Conclusion

From the author’s point of view, Sacofa’s policies as briefly investigated here, seem to be ultimately self serving. Although further, in depth studies may prove otherwise, the author believes at this time that an open market and healthy competition by mobile service providers for market dominance would benefit the end users in terms of cost, quality and coverage. Of course, this competition needs to be regulated through enforcement of existing safety laws and regulations.