MCMC grants Starlink 10-year licence despite being 100% foreign owned, says report

The government has granted US internet provider Starlink a 10-year licence to operate in Malaysia, despite the company not fulfilling a requirement for a 49% threshold for foreign equity that is imposed on those applying to be Network Facilities Provider (NFP) and Network Service Provider (NSP), current affairs site Soya Cincau reports.

It quoted the Malaysian Communications and Multimedia Commission (MCMC), which issues licences to digital network players in the country, as saying that the usual conditions imposed on applicants can be exempted by the relevant minister, in this case Communications and Digital Minister Fahmi Fadzil.

"The present position in assessing such requests is to firstly look at the applicant's organisational set-up, global presence, and decision-making structure. Policy considerations include a review of the applicant's 'Malaysia Digital' status, the country's commitments in any free trade agreement with the country of origin of the applicant, and the direct and indirect benefits the applicant can bring into Malaysia," MCMC was quoted as saying.

According to MCMC's licencing guidelines, individual licence holders for NFP and NSP are allowed to set up fixed cables, satellite hubs and control stations, submarine cable landing centres, towers, and poles.

They are also allowed to operate bandwidth services, broadcast distribution services, and cellular mobile services.

MCMC's guidebook, updated in April this year, also states that an applicant must have a minimum paid-up capital of RM2 million and a 30% Bumiputera stake.

However, the internet regulator told Soya Cincau that despite its current ownership status not fulfilling the conditions, Starlink's application was approved because it passed an evaluation of its "value and benefits".

A check on the Companies Commission listed Lauren Ashley Dreyer and Ngoh Choo Ann as two directors of Starlink Malaysia, with 100% ownership of shares by Starlink Holdings Netherlands.

It also listed the company's secretaries as Chia Poh Tin and Lim Hui Ming, the latter being the daughter of DAP veteran Lim Kit Siang.

Starlink's foray into Malaysia has been mired in controversy after Prime Minister Anwar Ibrahim announced the purchase of 40 units of the company's satellite kits to provide internet services in various locations.

Anwar made the decision following a 25-minute video conference with Elon Musk, triggering lively exchanges on social media over the viability of turning to a foreign internet service provider.

At the heart of the debate is whether the decision was a form of "impulse buy" by Anwar bypassing procurement procedures, as well as whether the coverage offered by Starlink was worth its high price compared to the fibre broadband and mobile internet connections spread across the country.

One video commentary by American analyst Shahid Bolsen said it was "notoriously less reliable" even when compared to existing Malaysian ISPs.

"You are paying more for slower, less reliable internet from a foreign company to replace faster, more reliable internet from domestic providers? Why? Because Elon Musk is a prestigious name?

"When Starlink came to Nigeria, people were excited, just like Anwar was excited. But the cost per month turned out to be prohibitively too high for people living in villages and outside areas. Why would you not prioritise your own companies?" Bolson said in a video that has gone viral on Malaysian social media.