YTL Comms to use base stations at schools till Sept 30

Datuk Mohd Ghazali Abas

He uttered the same words repeatedly – the decision was made “in the best interest of school children”.

Education Ministry secretary-general Datuk Mohd Ghazali Abas was rather diplomatic during the special press conference at Dewan Jamuan on Level 15, Menara 2 of the ministry’s building in Putrajaya at noon. Also present were several representatives from the National Union of the Teaching Profession.

The session was to address the usage of new Internet service providers (ISPs) in schools nationwide. YTL Communications and FrogAsia Sdn Bhd, via their Yes 4G Internet service and Frog virtual learning experience (Frog VLE), had been powering schools through 1BestariNet since winning an open tender in 2011.

The company said the programme, which was broken into phases, was a service contract.

In Phase 2, the contract called for the following bandwidth to be provided: 10 schools with 100Mbps, 987 schools with 30Mbps, 1,566 schools with 15Mbps, 2,563 schools with 10Mbps, 3,144 schools with 6Mbps and 1,933 schools with 2Mbps.

But Ghazali likened 4Mbps to the speed of “riding a bicycle” and that “Phase 2 was like riding a motorcycle when in fact for the same price today you can get a bullet train”.

He insisted it was a raw deal and that there were many hidden costs. He also stressed the government would save millions in the interim before a fresh tender is called by the end of the year.

Ghazali also singled out the use of 1BestariNet Receiver Integrated System (1BRIS) in some 2,000-odd schools which was leased for a nominal fee. As such, YTL Communications will be able to use its base stations at the current agreed rate until Sept 30, 2019 to which they will then be asked to pay a higher price for the lease, depending on the location of the base stations.

This would leave Yes 4G users wondering if their services would be disrupted if both parties fail to come to an agreement by then.

It is learnt that according to the contract between the government and YTL Communications, equipment erected by the telco is allowed to remain in the schools in line with the government’s initiative to strengthen the National Broadband Initiative.

To that, Ghazali said: “It’s tafsiran (that’s interpretation). I know what clause you are referring to.”

Here’s a low down of Ghazali’s address this afternoon:

What brought about the decision?

Ghazali: There were several factors including hidden costs. Since the start of the 1BestariNet contract, YTL Communications has not paid electricity for the towers it erected in schools. The estimated charge for the 2,715 sites is RM41,881,384.98. The Auditor-General’s Report had also ticked us off about the electricity charges, saying the bill should be footed by YTL Communications as the towers are not just for the schools but also used for commercial purposes. The Internet speed and lease of land in schools were also factors we considered. We were paying as high as RM19,000 per school per month. If we were to use some other Internet service provider it would be cheaper while Google Classroom is free compared to Frog VLE.

I can’t say everything was pretty and I can’t say everything was bad either. We admit there were some improvements in Phase 2 but we need to move forward. This interim period will allow us to evaluate what’s best for our school children. I repeat – any decision must be in the best interest of our students.

Why only Telekom Malaysia, Celcom Axiata and Maxis?

Ghazali: The ministry has never sidelined any telco including YTL Communications in our tender process. YTL Communications can still partake in the upcoming tender process starting Jan 1, 2020 and beyond when the tender process opens soon.

The ministry invited several telcos, including YTL Communications, to give their views regarding Internet services required by the ministry for six months, which is the interim period before a new tender is offered. Some telcos responded, some didn’t. As such, the ministry appointed three companies Telekom Malaysia, Maxis and Celcom Axiata who made the offers. YTL Communications got back to us after we obtained the approval of the Finance Ministry, in line with the policy of the government of today.

What will happen to YTL Communications’ base stations?

Ghazali: Although YTL Communications’ contract ended on June 30, we being considerate and responsible to ensure the company’s services for its consumers are not affected, approved YTL Communications’ request to retain its base stations in schools nationwide for three months until Sept 30, 2019. If it’s being used for commercial, then rightfully the company should pay commercial rates. Based on our checks of the market rate, the usage of such land is based on three categories: urban, suburban and rural. In urban areas, it can reach RM6,000 per month, in suburban areas between RM2,000 and RM3,000 (per month) while in rural areas about RM1,000 per month. Based on that calculation, we’ve lost at least RM150 milion over the three years and this is in addition to the RM3.8 billion spent by the government throughout the two phases. There’s also electricity to factor in.

It’s unfair for YTL Communications to throw allegations and dispute our decision to tarnish the ministry’s name.

If we continue giving the next six months (to YTL Communications) for free, some RM20 million will be foregone based on simple mathematics. We have spoken to YTL Communications about this and they have agreed to pay commercial rates.

When will a fresh tender be called?

Ghazali: We are in the midst of getting it done. YTL Communications is free to bid. The interim period will allow us to see which of the ISPs will be able to deliver and we may even consider having two service providers or may even base it on regions. This period will also allow us to find out the best practices to ensure our children get the best.

Will the ministry initiate legal action against YTL Communications following claims the ministry had breached the contract?

Ghazali: No. At this juncture, we don’t intend to do so. Claims that the ministry had breached the contract and had not acted in good faith are unfounded and they are unfair accusations against the ministry and the government.