Did Rais do a ‘Flip-Flop’?

The Astro subscription price hike notice to its 3 million customers is now a national interest. After being raised by Independent MP for Wangsa Maju Wee Choo Keong in April, it now became an agenda that was discussed in Cabinet. On Friday, Minister in-charge of Information, Communication and Multimedia Dato’ Seri Utama Dr Rais Yatim Ph.D announced that Astro would not able to increase its charges before Malaysian Communication and Multimedia Commission’s explicit approval.

Bernama.com reported:

Saturday July 2, 2011

Cabinet rejects Astro’s rate hike pending MCMC consent

 KUALA LUMPUR: The Cabinet has decided against allowing Astro to raise its rates until the company gets clearance from the Malaysian Communications and Multimedia Commission (MCMC), Datuk Seri Dr Rais Yatim said.

The Information, Communication and Culture Minister said the matter was discussed at yesterday’s Cabinet meeting and members felt it was not appropriate for Astro to raise its rates at this time.

“I agreed that Astro’s rates could only be hiked with MCMC’s approval and that any increase must be reasonable and conform to the law,” he said after chairing his ministry’s post-Cabinet meeting at Angkasapuri here yesterday.

He said Astro had violated MCMC’s regulations by issuing notices on its rate hike to customers without the commission’s clearance.

“As such, I have asked MCMC to take appropriate action and instruct Astro to not continue with the rate hike until a time deemed more suitable.”

Explaining what he meant by “appropriate action”, Dr Rais said this was up to MCMC to determine and that Astro could be fined as allowed under the Communications and Multimedia Act 1998.

Astro recently announced it would be streamlining the packages it was offering, which would take effect on July 11.

According to Astro, following the streamlining exercise, customers could save between RM4 and RM14.95 or pay nominal increases of between RM1 and RM15, depending on the packages chosen.

An Astro spokesman said it viewed the minister’s statement with concern as the price revision was conducted in consultation with MCMC and in accordance with the Communications and Multimedia Act 1998 and licence conditions. — Bernama

*************

The Cabinet is the highest executive forum for decisions to be made. It is compelled to discuss what the Minister-in-charge had brought it upon them and they decide on the facts and information presented. Ministers rely on the Ministry officials to prepare the ‘Cabinet Paper’. What and how it happened on Friday’s Cabinet is still unclear.

Less than 24 hours later, a lawyer-by-training Dr Rais made this statement instead on affirming the one he made after the Cabinet’s decision on Astro’s intention. He now wants Astro subscribers to decide on the price hike issue, which is due to be implemented in this July.

The Malaysian Insider’s story on the same issue:

Rais tells Astro subscribers to complain over price hike

KUALA LUMPUR, July 2 — A day after saying pay TV operator Astro had failed to secure regulatory approval for a rates hike, Datuk Seri Rais Yatim has now urged subscribers to speak out on the matter.

“I call upon subscribers who oppose the hike to express their concerns to us, but it is clear that Astro wants to stick to their decision for profits without considering the interests of the rural community,” Rais was quoted in a Bernama Online report today.

 Rais yesterday said the price hike was discussed and rejected by the Cabinet, which felt the timing of the hike was inopportune.  

Shortly after the announcement by the information minister yesterday, the satellite TV provider responded by saying it had adhered to the necessary steps before announcing the move.

 “Astro noted the minister’s statement with concern as the price revision was conducted in consultation with the Malaysian Communications and Multimedia Commission (MCMC) and in accordance with the Communications and Multimedia Act (CMA) 1998 and the licence conditions,” an Astro spokesman said in a statement yesterday.

 Astro is planning to streamline its packages effective July 11, after which subscribers will see savings of between RM4 and RM14.95 or pay nominal increases of between RM1 and RM15, depending on packages preferred.

 Rais yesterday said the firm had jumped the gun with the announcement, and told the MCMC to take “appropriate action” against Astro.

 *************************

The fact is that, Astro was issued a concession license to do a satelite TV broadcast at the times before MCMC was formed. The merits of the important and fundamental points of the service are still embodied in the current license and still being followed through till now. It was about giving basic service which include free channels (as per available on TV plus a few more) and a premium service which is divided into several packages as options.

Another interesting point to consider is that in the license, there is no mention of a price control mechanism. More interesting to that, in the license too there is no provision for MCMC to impose any control on the price charged to subscribers. Under the Section 198 Communications and Multimedia Act, MCMC was accorded with the power to act against anti-competitive practices or abusing market power.

Astro's logo when it started broadcasting to Malaysians back in 1996

It was said that Astro sent a letter to MCMC of their proposal price hike in early May. They presented their proposal with figures justify to MCMC a little over a month ago. And MCMC did not make any comments on the proposal of the price hike. Then it came to the Minister-in-charge Dr Rais’s attention and he made this statement when answering a question by a member of the press at a FINAS do.

Bernama reported on 15 June 2011:

Astro must get MCMC approval before increasing price – Rais Yatim

2011-06-16 10:49

PETALING JAYA, June 15 (Bernama) — Astro must seek the approval of the Malaysian Communications and Multimedia Commission (MCMC) before raising the price of its paid television channel services, said the Minister of Information Communication and Culture Datuk Seri Dr Rais Yatim.

“The payment for basic services charged by Astro to its subscribers will not be changed. For whatever addition, Astro must discuss first with the MCMC before deciding to increase its service charges,” he said.

Rais said the ministry would discuss with Astro on the issue and the notice issued by Astro to its subscribers was considered invalid as it did not get permission from MCMC beforehand.

He said this to reporters after attending the Film Industry Appreciation Night 2011 organised by the National Film Development Corporation (Finas), here tonight. Also present was Finas Director-General Mohd Mahyidin Mustakim.

Astro recently announced that it would carry out a price adjustment on the packages offered effective July 11 with the subscription based on the subscribers’ package selection.

Some subscribers may be charged an increase of between RM1 and RM15 per month, while some would enjoy a reduction of between RM4 and RM14.95 per month.

Meanwhile, on the development of the national film industry, Rais said the ministry, through Finas, had allocated about RM15 million to boost the production of creative and animated films.

The minister also said that he would consider amending Section 6 of the Finas Act in a bid to boost the industry, but refused to comment further.

***************

It is unsure whether the Minister-in-charge did thoroughly go through the license that was issued to Astro as a retail satelite broadcaster and reflect on the earlier issued licenses.

However, it was believed that there after, KSU of KPKK Dato’ Kamaruddin Siaraf and MCMC Chairman Tan Sri Khalid Ramli met with Astro to request that the intended price hike should be delayed. They perfectly understood that the proposed price hike is inevitable. It was also said that Astro told them that they cannot simply postpone a commercial decision which will affect third parties including their bankers just to pander on a Minister’s ‘slip-of-the-tongue’, which is more of a ‘face saving for the Minister’.

The basic plan of RM 37.95 is said to remain as is after this price hike. Infact, the Minister-in-charge publicly acknowldged this:

Astro basic packages to stay competitive

Published: 2011/04/06

SATELLITE broadcaster, Astro, will work towards ensuring that subscription fees for basic packages for its future channels will not be increased.

Information, Communication and Arts Minister Datuk Seri Dr Rais Yatim said Astro’s current minimum subscription fee for the basic package was competitive compared to other countries in the region, at RM37.95 for 33 multi-lingual and multi-genre channels.

“The basic package was originally priced at RM49.95 in 2004 but with fewer channels than what’s available now,” he said in a written reply made available to the media at the Dewan Rakyat here today.

He was responding to a query from Wee Choo Keong (Bebas-Wangsa Maju) on the ministry’s move to control what was described as Astro’s “high” monthly charges considering that it had made a net profit of RM689 million last year on the back of 2.911 million subscriptions.

On claims of content monopoly of popular channels on the part of Astro, he said the Malaysian Communications and Multimedia Commission (MCMC) had done a survey on this matter in addition to holding talks with foreign content rights holders such as HBO, Disney and Discovery.

“The MCMC has found that content and broadcast rights procurement was very competitive. As to premium content from abroad, they are sourced in accordance with the terms and conditions stipulated by content rights holders as well as prices offered by broadcast stations,” he said.

The minister said broadcasters were free to negotiate with the relevant parties to secure broadcast rights.

“There’s no monopoly by anybody, including Astro,” he said.

Citing MCMC’s study, Rais said although Astro had asked several content providers to customise certain channels, rival broadcasters could still procure other channels and content.

He said the commission would continue to keep an eye on the industry and act against anti-competitive practices. – BERNAMA

***************

Astro is also said planning to do a surprise package to its less fortunate consumers, which the expect to launch something at a national level sometime in September at no extra cost to these category. There is also market talk that Astro is planning a special transmission which probably include  the issuance of 50,000 units free digital decoders for the rural folks of Sabah and Sarawak, as their ‘1 Malaysia’ national integration CSR work.

If any of this is true, from a political angle that could be a boon for Barisan Nasional. Sabah and Sarawak are important vote contributing states for BN to remain the ruling party and particularly, having the 2/3 majority in the Dewan Rakyat. If Astro decided to do a reversal of their CSR plan, who would tend to lose the most?

Minister-in-charge of Communications, Information & Culture Dr. Rais Yatim

So, did Dr Rais just do a ‘Flip-Flop’?

If he did, it would be something much to be desired. Despite being very successful, making a handsome profit and have a healthy cash-flow, Astro is a business dependent on the support of its financiers. Six out of ten banks which are supporting Astro are non local institutions. They have to service the hefty commitment Astro is having with these financiers. If it was a ‘Flip-Flop’ decision or even a mere ‘blunder-of-the-tongue’ announcement which looked more like ‘shooting from the hips’, then it must reflect badly in the eyes of these foreign bankers.

This is an example that would impair Prime Minister Dato’ Seri Mohd. Najib Tun Abdul Razak’s hardwork to bring in FDIs, convincing the continuance to re-invest in existing successful corporations and expanding business projects. These six banks would ‘do their market talk’ and eventually reach to the attention of potential investors. Bankers and investors would lose confidence on a market where the government, regulatory bodies or authorities could do a ‘Flip-Flop’.

Especially, pandering so a Minister’s whims.

Then again, is the Minister-in-charge invoking his ultra vires power of Section 199? If he is, the probably she should a public inquiry on it first. KPKK would have to publish the inquiry and get public to respond, probably within 45 days or so. Then the findings must be made public. Regardless, it is a process and we don’t think it has been carried out yet.

Inconsistency is bad. Worse still, ‘Flip-Flop’. Probably Dr Rais could once and for all clear the air with regards to this Astro subscriptions price hike if it is true he blundered in his earlier statements and did a ‘Flip-Flop’  in the past two days, at the journalists award do tomorrow night.

Published in: on July 3, 2011 at 13:11  Comments (19)  

The URI to TrackBack this entry is: https://bigdogdotcom.wordpress.com/2011/07/03/did-rais-do-a-flip-flop/trackback/

RSS feed for comments on this post.

19 CommentsLeave a comment

  1. Doesnt concern me how the powers that be do it. Just maintain the price or better still reduce it.

  2. What “competitiveness” are they talking about?

    Astro has a monopoly, hasn’t it?

    If they are arrogant about increasing prices, just allow another party to operate satellite TV on a scale like Astro. Only then can people talk about competitiveness with some sense.

    As it stands, it’s nonsense.

    • Good idea.

      Then again, broadcasting licenses been issued to other parties besides Astro. MiTV which eventually went under Berjaya Group had one, since the late 90s. They failed.

      Then now Unifi has one.

      Lets see how they can do this business.

      I am not pro-Astro. But then again, it has to be realistic. Is Astro’s request justified?

      Like other utility services electricity, water, phone and internet charges and tolled highway, cost of operation has gone up. At least thats what the service providers been telling the authorities and consumers. Probably its true increased charges is inevitable.

      • Agree with BD.

        Operating a commercial TV Station/ network is a very expensive business. It works on the basis of commercial not charity. Some viewers expect good quality contents but tend to whine and complain about subscription fees whenever there were hints of adjustments. Viewers themselves have to be very discerning and use discretion as to what package to subscribe based on their ability to pay. Some say they only like the sports package without realising the sports package is an expensive package.

        Vilifying Astro is not the answer. Viewers themselves should decide what to watch coz you watch , you pay, and vice versa. That’s the deal one seals with Astro on the day one decides to subscribe.

      • What then is the basis for determining whether the rates are reasonable or not?

        Usually the adverts bring in the most money in mass media operations. In times of low-performing economy, revenue from adverts may be down. But has buoyant economy income been taken into consideration?

        The cost of running Astro – are they engaged only in cable TV and movie production? If so are they properly apportioned or the income from other business activities taken into account?

        There must be some experts engaged to advise the Cabinet or the Minister concerned, as well as the MMC, as to the reasonableness of the rates proposed. Qualified accountants experienced in such an industry income-expenditure analysis, etc.

        Hopefully not the kind of experts who keep the NEP rather silent in the NEM. Or who can get bought one way or another.

        And have the non-tangible aspects of Astro services been valued? E.g promotion of Bahasa Malaysia, instilling Rukun Negara, loyalty, respect for and abiding by the Constitution of the country among the citizens.

        And, please, don’t let any Opposition Party blokes cry out for a Commission of Inquiry on this, too!

      • PS:

        One also wonders how much income billionaire Ananda Krishnan, one of the richest men in the country, derives from his Astro operations.

        If a lot, then he certainly should be chivalrous (compassionate a more appropriate word?) to the subscribers, and make money from the business people who advertise in Astro.

      • Wan,

        That is the thing. I was told the bit about increment of subscription rates is not specifically mention as a condition in the license. Therefore, MCMC as the regulatory body simply cannot stop if Astro want to increase the rates.

        Then again, in the interest of public, Dr Rais should hv instructed KPKK to do the public inquiry on Astro’s intention. Do a proper inquiry with the right process. Afterall, Astro did tell MCMC 3 months before they want to do it.

        I’m sure MCMC has some sort of mechanism and resource to determine whether the price hike is justified or otherwise, especially with some comprehensive study.

        Unfortunately, I was told that did not happen. Only yesterday the Minister made a statement that the consumers should decide. Before that, he was assertive in his statements of the ‘dos’ and ‘don’ts’.

        So now this would be deemed unpopular with the rakyat, the Minister started to react and make ‘Flip-Flop’ decision if not statements. That is something that shouldn’t happen. After all, the Minister is not someone who is not conversant of the law and/or conditions to the license.

      • Agree with you, Big Dog.

        Rais’ performance has been disappointing. What has he done about instilling loyalty among Malaysians, spreading the message of Rukun Negara, love of country, respect for and adhering to the Consitution fully?

        That is definitely the job of the Information Minister. Don’t have to do like Joseph Goebel did for Hitler and/or Germany during World War II. All sorts of propaganda and incitement of the German population to loyalty to Hitler and patriotism to Germany.

        But at least get all Government mass media to speak about love to King and Country periodically. Especially Bernama – aren’t they the national news agency? We’ve got all sorts of people whose loyalty to the country appears questionable these days. Bernama even make people pay to read and copy their news. There have been a lot of complaints in this regard.

        Rais should tell Bernama they should let the public copy as much as they like their news, FOC. Aren’t they given financial grants by the Government? The public can help them spread the government news they are supposed to propagate to the public. What a shame.

        And Rais can use his “influence”, if not the force of the law or amendment of license conditions as and when necessary, to get Astro to do the what is desired of them. Surely the issuer of the license has the prerogative. If not, don’t use any licensing system. Just let every tom, dick and harry run radio and tv stations, etc.

      • Forgot to say:

        I’m not so much concerned about Rais flip-flopping as about Rais flopping as Minister of Information etc.

  3. Not everyone subscribes to ASTRO or is forced to (unlike for electricity, where we have no choice). They have a right to increase the rates. As I felt I couldn’t afford to pay more, I decided to cut down on some packages. As a subscriber, you can decide whether to continue or cancel your subscription. Cable TV is not a necessity to live. So, don’t complain when the price goes up.
    On the other hand, TNB is a monopoly that is a necessity for everyone. Unless you expect us to buy our own generators. When the electricity rates go up, especially for the manufacturing sector, the cost is passed down to ALL consumers. The Minister should complain about TNB and not ASTRO which doesn’t affect everybody..

  4. Exactly. I was wondering why our Cabinet was making decisions on a private company that handles non-essential services… Its not like Astro offers water, electricity or food. Since when are premium services considered controlled items? Once we let the Govt interfere with commercial decisions, its a slippery slope that will ruin Malaysia in the eyes of foreign investors.

  5. ananda tak cukup kaya lagi ke…..hope the goverment issue another broadcasting license to another player….see how good competition will be….

  6. At present , Astro is in a monopolistic position as far as satellite streaming broadcasting is concerned . The right to use of the Government satellite to beam images is only for Astro usage till 2015 if am not mistaken . If so , Rais is still protecting Astro and in the same tone he favors monopoly while the Government is in the move amicably to a non monopolistic environment in broadcasting .

    In order to break Astro monopoly , TM has to be more proactive in speeding up the overpriced 13 billion comprehensive and stable fiber optic high-ways complex and the last miles connectivity to TM’s millions immediate customers . Thousand hours of demanded contents in TM’s content library is the game of being competitive .

    The irony is the incompetency of TM management . TM does not in its priority to seek out popular , attractive and demanded contents to stream down for broadcasting . And to monetize TM investment ( people money ) is not in TM’s business road map . TM are more interested in slowing down the construction of the infrastructure . Ultimately , collecting toll as the main revenue to repay back the investment from the toll fees from the users of TM Fiber optic high ways . It smells fishy or incompetence here for not being proactive in their long term business plan , strategy and returns .

    If TM can stream down the demanded contents , ( if TM don’t have which I believe they don’t , why it takes so slow to get the contents ) , like HBO , Discovery , history , BBC , CNN , Al Jazeera , APSN , Live entertainment , Education , Cooking , Travels , interactive games and many more into channels more than Astro , TM ‘s Unifi aggressive marketing programs will reach its subscriber target of 75 % in three months period ( Kelang Valley ) . It is TM a go to compete with Astro and become a price leader with in mind that services are given back to the people in considering marginal , satisfactory long term profit and taxes . After all , it is people money invested .

    With good mathematic in crunching out the figures , TM’s customers and consumers will not be for concerned . The subscription fee of not more than 150 ringgits a month having more than 200 hundred channels , free house to house calls for subscribers , speedy Internet service and communication is TM’s role of change . Advertisements in between programs are recommended and a bonus to TM as the 1 Malaysia National broadband and broadcasting Inc . of the GLCs ‘ .

    Khazanah , Azman Moktar and Rais the Minister in charged have not taken the full initiative to address the long term monetization of this huge investment in relation to the above argument .

    • What is “demanded contents”, pray tell, Sir.

      And kindly explain your statement

      “The subscription fee of not more than 150 ringgits a month having more than 200 hundred channels, free house to house calls for subscribers, speedy Internet service and communication is TM’s role of change .”

      Does that mean there is a plan for TM to provide such “200 hundred channels, free house to house calls for subscribers, speedy Internet service and communication”. Are they TV channels? Does that mean cable TV? Would that mean competition for Astro? If so, I’m for it.

      Excuse me for not knowing the plan. Or are you calling for such a service? Kindly explain in simple language. Thanks.

  7. they (Astro) can start by NOT forcing us to have combination of packages…

  8. Funny how everyone seems to be FORCED to subscribe to Astro and FORCED to get packages… And here I thought Astro’s a choice… a premium choice too.

    I’m more concerned over what BD pointed out: “This is an example that would impair Prime Minister Dato’ Seri Mohd. Najib Tun Abdul Razak’s hardwork to bring in FDIs, convincing the continuance to re-invest in existing successful corporations and expanding business projects”

    With all the ETP talk, we have Rais coming in and intervening in a commercial decision.

  9. Just a kind reminder to all of you that AK got his ASTRO licence during the reign of our longest PM.

  10. As we all read in newspapers on 2nd of July 2011 that the Malaysian Cabinet has instructed ASTRO not to increase its tariff. For most of Malaysians, it was a huge relief. For me, its really unwise for ASTRO, which monopolizing Pay TV services in Malaysia, to increase the tariff as all prices of necessities goes up.

    However, Malaysian relief was short lived as ASTRO has decided to go ahead with the price increase. I just receive my Astro bill today and to may surprise that my astro bill, increase from RM 66.00 to 79.45.

    I am quite baffled and speechless when i receive the bill that even the highest decision making committee in Malaysia Cabinet has been ignored by ASTRO !! . Does this unimaginable did occur in our beautiful countries.

    I really hope that government, The Ministry involved, especially MCMC can clarified on why ASTRO still ignoring Cabinets decision. I really hope that Government to act fast as it will give negative perception towards goverment as a whole as rakyat is watching.

    Thank you

  11. […] statements are coming out from the attention-craving-glamour-seeking Minister? A few months ago, his ‘Flip-Flop’ness on the Astro so called ‘price hike’ announcements, created another public […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

<span>%d</span> bloggers like this: