Two-year wait for fixed-line competition

Macau might have to wait more than two years to feel the effects of the liberalisation of the telecommunication market, even though the government is now launching a tender for the licensing of two new fixed-line operators.
The Administration is expecting to issue three licenses under the new regulation. One will include Companhia de Telecomunicações de Macau (CTM), which holds the monopoly over fixed telephone and Internet access services.
Two others licenses will be issued during the first half of this year to the winners of the tender, the Telecommunications Regulation Bureau (DSRT) director Lawrence Tou Veng Keong said last month.
But, according to the tender regulation, the DSRT will only open the proposals by March 28 and, after that, it will have six months to make a decision. And the Chief Executive can extend this deadline by four more months.
After the two winners receive a license, they will have a year and a half to begin operations, Tou stressed yesterday in a press conference. During that period the new operators will have to build their own fixed-line network, covering at least 30 percent of the territory, he added.
If all deadlines are met – which hasn’t happened in the latest public tenders launched by the government – then the telecommunications market would only have competition in September 2014.
In 2011 alone tenders for the Light Rapid Transit system, the operation of the Macau peninsula wastewater treatment plant and the new public bus system have suffered delays.
Last October the president of the Final Appeal Court (TUI), Sam Hou Fai, slammed the way public tenders are carried out.
“It turns out that many tenders for service-providers are only launched when the previous contract is about to expire. Once an appeal against a particular administrative decision is accepted, even though the TA [Administrative Court] or the TUI speed up the process, (...) they will not be able to respond timely to the needs of society,” he explained.
“In many administrative decisions, courts are unable to confirm these decisions simply because there are procedural errors and omissions, or flaws resulting from lack of knowledge about the laws and regulations,” Sam said.

Lower prices

The head of DSRT is confident that the introduction of two new fixed-line networks will eventually lead to lower prices and better quality. “With more competition, there will be more conditions for prices to drop,” he explained.
The networks will be able to provide bandwidth to telecommunication operators, not only for fixed-line telephone service but also for Internet services. In 2000 the market for Internet service providers was liberalised but so far CTM is the only operator.
The new operators will also cover the future campus of University of Macau in Hengqin Island, Tou added.
“In the end the consumers will come out as the real winners,” he assured. He recalled that the government has to approve all telecommunication tariffs. For instance in 2010 the DSRT forced CTM to lower tariffs for residential fibre broadband service.
The official also defended the decision to grant the operation of the existing network – which is owned by the government – to CTM. “We must ensure the stability of telecommunications and to change it now would bring no benefits,” he said.
CTM will sign a contract to manage the network for five years, with the possibility to renew it for a further five. “That will happen if we see that CTM followed the contract requirements and did not break the law,” Tou explained.           

V.Q.