Energy, Communications and Multimedia Minister Leo Moggie said the three companies would be picked via a "beauty contest" or restricted tender process beginning February.
He was quoted in The Star as saying that the successful candidates would get a 2x15MHz block of spectrum for a 15-year period.
The Minister added that the three telcos picked would have to pay RM50 million (US$13.15 million) for each 2x15MHz block of 3G spectrum, payable in installments. On top of that, the successful candidate is also required to pay an annual fee for the upkeep of the spectrum.
There are five mobile operators in Malaysia--Telekom Malaysia, Celcom, Digi Telecommunications, Maxis Communications and Time dotCom. The county has about six million mobile phone users.
Observers say the government plans to use the 3G telco license issue as "the big stick" to prod network operators to consolidate.
The message from the authorities is that they have been patient with the industry, but telcos have persistently expressed reluctance to merge despite government advice to do so.
Some of the criteria used for the "beauty contest" include:
• the degree of infrastructure sharing of both current and new infrastructure.
• good corporate performance and financial strength.
• proposed network service and roll-out backed by service coverage guarantees.
• domestic roaming to 2G, and vice-versa.
Moggie was speaking to reporters in Penang after launching the Malaysian Communications and Multimedia Commission office in the northern island state on Monday.
3G services are expected to be introduced in the country by late 2003, or in the first half of 2004, Moggie added.
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