Mvno in malaysia legal and regulatory requirement

eMMa Project
Establishing MVNO in Malaysia
I Nyoman Wisnu Wardhana - 740062
PT. Telekomunikasi Indonesia, Tbk.
July, 2013
Kuala Lumpur – Malaysia
ASSIGNMENT
2013 Final Job
Regulatory and Legal Environment
Company Setup, MVNO Agreement, and Licensing

Telkom Corporate University
Global Talent Program 2013
Supporting the project, in which my
competences are relevant, for instance:
 Company setup and other derivative
acts should be taken
 Partnership approach
 Company (MVNO) establishment
 Administering the Licenses
From legal, governance, and business aspects
The project objective is to form a company to
deliver Telkom group’s product and to
expand its business related in Malaysia,
whereas many Indonesian citizen are lived
and stayed, visited, or worked on that place
as Telkom’s strategy ‘Business Follows
People’ be considered.
Rationale
Conception

Contents
Greeting
Malaysia Highlight
The States
Telco Recent Trend
Telco Regulatory Authority
The Law of Malaysia
Company Setup
MVNO Agreement
Joint Venture Company
License Application
Start-up an MVNO
Strategic
Technical
Closing and Insight
4 Months at Malaysia
01
02
02
04
05
09
13
19
25
31
37
37
38
41

I n t e r n a t i o n a l E x p a n s i o n
To Provide TIMES with Excellent Quality & Competitive Price
To be the Role Model as the Best Managed Indonesian Corporation
To Become a Leading TIMES Player in the Region
Telkom 2013
Masterpieces

Telkomsel’s Revenue Double Digit
King of Digital Media
International
Expansion

Greeting
Behind its own comfort zone
will tragically defeat
Those who are not aware of this would become a static motionless entities, whilst others are
squirming to find an opportunity in order to continue their growth. Those who are not survive
might end-up with tragically defeat in their own home.
The most fundamental motives to conduct international expansion is growth. Companies who
seeking for expanding its business have two options and should choose between organic
growth and inorganic growth. In the former case, if a company seeks to expand within its own
business, the company could face that the market growth is reluctant to be a satisfaction
alternative. For instance, the company may find difficulty in maximizing the opportunity
because of a limited period of time and the fast growing of technology, whereas this type of
growth may not suffice. As the company grows slowly, the competitors could respond very
quickly and might be taken as dominant in given market share that a company may have
dissipated over time by the actions of competitors .
Thus to balance this condition, a company could choose international market growth by
distribute its own capability and experiences in delivering the products and services into new
market segment the company has not penetrated yet, fetching the market that have tied up
with its brand.
i nyoman wisnu wardhana
Nowadays, the overall development has become an urgent
priority for every company to advance its business internationally,
following many recent progress of global change, i.e. the
implementation of regional free trade, World Trade Organization
(WTO ), and the ASEAN Free Trade Area (AFTA ) in the regionalism
corridor.
Telkom Corporate University 1

Malaysia Highlight
States and federal territories of Malaysia
The states and federal territories of Malaysia are the
principal administrative divisions of Malaysia.
Malaysia is a federation comprising thirteen states
(Negeri) and three federal territories (Wilayah
Persekutuan).
Eleven states and two federal territories are located
on the Malay Peninsula, collectively called Peninsular
Malaysia (Semenanjung Malaysia) or West Malaysia.
Two states are on the island of Borneo, and the
remaining one federal territory consists of islands
offshore of Borneo; they are collectively referred to
as Sabah and Sarawak (Sabah and Sarawak), East
Malaysia or Malaysian Borneo.
The governance of the states is divided between the
federal government and the state governments,
while the federal territories are directly administered
by the federal government.
The specific responsibilities of the federal and the state
governments are listed in the Ninth Schedule of the
Constitution of Malaysia.
The 13 states are based on historical Malay kingdoms,
and 9 of the 13 states, known as the Malay states, each
has a hereditary ruler as titular head of state and an
executive Chief Minister or Menteri Besar as politically
responsible head of government. The rulers of Johor,
Kedah, Kelantan, Pahang, Perak, Selangor and
Terengganu are styled Sultans. Negeri Sembilan's
elective ruler holds the title of Yamtuan Besar, whereas
the ruler of Perlis is titled Raja. The federal head of
state, the Yang di-Pertuan Agong (commonly referred
to as "King" in English) is elected (de facto rotated)
among the nine rulers to serve a 5-year term.
Former British settlements and crown colonies of
Penang and Malacca (both peninsular) and Sabah and
Sarawak (both on Borneo) each have a titular Governor
(styled Yang di-Pertua Negeri) appointed by the Yang
di-Pertuan Agong and an executive Chief Minister or
Ketua Menteri.

Sabah and Sarawak have additional powers as part of
the terms when they joined Malaysia, such as
immigration controls. They have separate immigration
policies and controls and a unique residency status.
Passports are required even for Peninsular Malaysians
for travelling between either state and Peninsular
Malaysia, or between the two states, however those
who are on social/business visits up to three months
are allowed to produce a My-Kad or birth certificate
and obtain a special printout form in lieu of a
passport.
Each state has a unicameral legislature called Dewan
Undangan Negeri (DUN, State Assembly). Members of
DUN are elected from single-member constituencies
drawn based on population. The state leader of the
majority party in DUN is usually appointed Chief
Minister by the Ruler or Governor. The term of DUN
members is five years unless the assembly is dissolved
earlier by the Ruler or Governor on the advise of the
Chief Minister. Usually, DUN of the states in
Peninsular Malaysia are dissolved in conjunction with
the dissolution of the federal parliament, to have state
elections running concurrently with the parliamentary
election. However, Rulers and Governors hold
discretionary powers in withholding consent to
dissolve the DUN. Each state sends two senators
elected by the DUN to the Dewan Negara (Senate),
the upper house of the federal parliament.
The Parliament of Malaysia is permitted to legislate on
issues of land, Islamic religion and local government to
provide for a uniform law between different states, or
on the request of the state assembly concerned. The
law in question must also be passed by the state
assembly as well, except in the case of certain land
law-related subjects. Non-Islamic issues that fall under
the purview of the state may also be legislated on at
the federal level for the purpose of conforming with
Malaysian treaty obligations. Each state is further
divided into districts, which are then divided into
mukim. In Sabah and Sarawak districts are grouped
into "Divisions".
The 3 federal territories were formed for different
purposes: Kuala Lumpur is the national capital,
Putrajaya is the administrative centre of the federal
government, and Labuan serves as an offshore
financial centre. Kuala Lumpur and Putrajaya were
carved out of Selangor, while Labuan was ceded by
Sabah.
The territories fall under the purview of the Ministry
of the Federal Territories, and the Parliament of
Malaysia legislates on all matters concerning the
territories. Each federal territory elects
representatives from single-member constituencies
drawn based on population to the Dewan Rakyat
(House of Representatives) of the Parliament. The
Yang di-Pertuan Agong appoints senators to represent
the territories in the Dewan Negara; Kuala Lumpur has
two senators, while Putrajaya and Labuan each has
one.
The local governments for the territories varies: Kuala
Lumpur is administered by the Kuala Lumpur City Hall
(Dewan Bandaraya Kuala Lumpur), headed by an
appointed mayor (Datuk Bandar), while Putrajaya is
administered by the Putrajaya Corporation
(Perbadanan Putrajaya) and Labuan by the Labuan
Corporation (Perbadanan Labuan); each corporation is
headed by a chairman.
The states of Sabah and Sarawak merged with Malaya
pursuant to the Malaysia Agreement in 1963 to form
the independent state of Malaysia. Representatives
from Sabah and Sarawak demanded a higher degree
of autonomy as part of the bargain which were
included in the 20-point agreement and 18-point
agreement respectively. It has also been argued that
Sabah and Sarawak have equal status to that of
Malaya as a whole, however the Constitution of
Malaysia have listed both these entities as merely 2 of
the 13 states of Malaysia, suggesting an equal status
with the states of Malaya. Sabah and Sarawak still
retains a relatively higher degree of autonomy
compared to Peninsular states in areas such as
immigration, some control over state revenue and
legislative power over land and local government.
City Mosque - Kota Kinabalu (Capital City), Sabah

According to the latest figures published by
Malaysia's three mobile operators, there were
34.956mn mobile subscribers in total at the end of
June 2012, up by 3.5% y-o-y. However, Maxis
Communications changed its definition regarding
active subscribers in Q111, reducing its reported
customer base by around 1.4mn. That said, the
operator has provided its subscriber base under the
old definition. Using this figure, there would have
been 36.060mn mobile subscribers in Malaysia at
the end of June 2012.
The figures used for our forecasts come from the
national regulatory authority, the Malaysian
Communications and Multimedia Commission
(MCMC), which offers a more complete assessment
as it draws in customer numbers from 3G operator/2G
reseller U Mobile as well as MVNOs. The MCMC
has recently restated its year-end 2010 mobile
subscriber figure, down to 33.859mn. It has not
provided previous year data for comparison, so it is
unclear whether the 2009 figure presented here is
totally accurate.
At the end of June 2012, the MCMC reported
38.446mn mobile subscribers in the country, up from
35.301mn in June 2011. The prepaid subscribers and
the growing number of MVNOs should continue to
help fuel growth in Malaysia's mobile sector, and
should also help Maxis recover some of its lost
subscriber base. After reporting a net loss of 129,000
prepaid subscribers in Q311, Maxis has since
recovered 175,000 in the subsequent three quarters.
However, it is believe that the operators will maintain
efforts to increase the number of postpaid subscribers
and will focus on migrating low-value prepaid
subscribers to the more expensive contract price
plans.
Data from the MCMC showed that there were
12.022mn 3G subscribers in Malaysia at the end of
June 2012, up by 23.2% from 9.756mn in June 2011.
The strong growth trajectory is due to the increasing
affordability of smartphones and data services. Like
the broader mobile market, the prepaid segment is
largely responsible for the momentum. We continue
to see 3G growth gaining traction given that data
service accounts for only about 31% of the total
mobile market, along with consumers' relatively
strong purchasing power and the availability of low-
cost devices.
Meanwhile, Malaysian operators continue to push for
the launch of next generation LTE services, having
gained the requisite spectrum and operating licenses
in Q411. While LTE is likely to become commercially
available in Malaysia in 2013, operators have already
started trialing the technology and are in the midst of
forming network sharing agreements to reduce capital
expenditure and accelerate service roll-out times.
However, the five newcomers will struggle to finance
their network roll-outs as the existing mobile
operators will win most of the new customers
attracted to LTE. We expect consolidation among
those players and - possibly - U Mobile in 2012.
Telco Recent Trend
Telecom Sector – Mobile Historical Data and Forecast
2010 2011 2012f 2013f 2014f 2015f 2016f 2017f
No. of mobile phone subscribers (‘000) 33.86 36.66 38.68 40.11 40.99 41.44 41.73 41.86
No. of mobile phone subscribers/100 119 127 132 135 135 135 134 132
No. of mobile phone subscribers/100 fixed 769 896 1,000 1,070 1,112 1,141 1,161 1,170
No. of 3G phone subscribers (‘000) 9,202 10,33
5
13,952 16,882 19,415 21,162 22,326 22,772
No. of 3G Market (%) 27.2 28.2 36.1 42.1 47.4 51.1 53.5 54.4
f= BMI forecast, Source: BMI, MCMC, Operators

Telco Regulatory Authority
The Ministry of Information Communications and
Culture (KPKK) combines the previous Ministry of
Information, Ministry of Unity, Culture, Arts and
Heritage and the Communications component from
the Ministry of Energy, Water and Communications.
The Information Communications and Culture
Ministry is divided into three sectors : Information
Sector, Culture Sector and Communications Sector.
Ministry of Communication and Multimedia Malaysia
The Ministry has vision of “To be spearhead of the
creation of a nation state, grounded on the ideals of
1Malaysia and Rukun Negara, through information,
communication and culture”
The Mission:
 To enhance national unity and harmony based on
the principles of Rukun Negara through
information, communication and culture;
 To mould and nurture a sense of belonging and
national pride among all Malaysians through arts,
culture and heritage;
 To develop and strengthen the national
communication industry; and
 To stimulate the national economy through the
development of the creative industry.
Implementation
The creation of Ministry Communication and
Multimedia is highly relevant because Malaysia is
surging ahead to be a developed nation and a digital
platform is critical. Besides, it is also wanting to be the
creativity and innovation hub in the region.
Strategic Direction
The Communication Content and Infrastructure
ecosystem is comprised of a wide base with many
distinct sub-industries. The leading participants in
Malaysia are the network operators, i.e. Telekom
Malaysia, Maxis, Celcom and DiGi Communications.
In addition, there is a broad base of other companies
(e.g. Astro, TIMEdotCom, PacketOne, and Axiata),
multiple emerging players (e.g. U Mobile, YTL
Communication, XOX) and small and medium
enterprises (SME) active in the industry.
Konsep 1-Malaysia menurut penjelasan
YAB Dato' Sri Mohd Najib Tun Abdul Razak:
Ini bukan bererti kita mengetepikan dasar
afirmatif, dasar untuk menolong kaum
Bumiputera asalkan dasar itu dilaksanakan
dengan cara yang adil dan memberi
pertimbangan kepada golongan Bumiputera
yang layak mendapat sesuatu
pertimbangan daripada kerajaan. Kita keluar
daripada cara bertindak dalam tembok
etnik yang kita amalkan sejak sekian lama".
Before then he was Minister of Youth and Sports from
10 April 2009 to 5 May 2013, where he did several
changes to the "concept" in organizing the Ministries
programms including in Hari Belia Negara 2010, which
saw a very huge turnout of youth. He had previously
served as Parliamentary Secretary in the Foreign
Ministry. Dato Sri Shabery was born in Terengganu,
December 10th, 1958. He holds a Bachelor’s degree in
Economic from University of Malaya, and has Master
Degree in Political Science from University of Leeds,
UK. His hobbies are playing Golf & Tennis.
"Kita Berdiri, kita berfikir dan
bertindak sebagai bangsa
Malaysia. One People. Dan
kita mengambil tindakan-
tindakan berdasarkan
kehendak semua kumpulan
etnik dalam negara kita;
Dato' Sri Ahmad Shabery
Cheek was appointed Minister
of Communication and
Multimedia in 16 May 2013
from the Barisan Nasional
coalition government, and sits
in Parliament as the member
for Kemaman, Terengganu.

SURUHANJAYA KOMUNIKASI DAN MULTIMEDIA MALAYSIA
MALAYSIAN COMMUNICATIONS AND MULTIMEDIA COMMISSION
A new paradigm requiring new approaches in media
policies and regulation became a necessity.
In line with this, Malaysia adopted a convergence
regulation model with regards to the communications
and multimedia industry in November 1998.
Two legislations were enacted to give effect to the
new regulatory model: the Communications and
Multimedia Act 1998 and Multimedia Commission Act
(1998) which created a new regulatory body,
the Malaysian Communications and Multimedia
Commission.
Head Office Address
Suruhanjaya Komunikasi dan Multimedia
Malaysia
Off Persiaran Multimedia –
63000 Cyberjaya
Selangor Darul Ehsan, Malaysia
Tel: +60 3 8688 8000
Fax: +60 3 8688 1000
Email : ccd@cmc.gov.my
Website : www.skmm.gov.my
Strategic Highlight
VISION
Towards a globally competitive, efficient and
increasingly self-regulating communications and
multimedia industry generating growth to meet the
economic and social needs of Malaysia.
MISSION
We are committed to :
 Promoting access to communications and
multimedia services;
 Ensuring consumers enjoy choice and a satisfactory
level of services at affordable prices;
 Providing transparent regulatory processes to
facilitate fair competition and efficiency in the
industry;
 Ensuring best use of spectrum and number
resources
 Consulting regularly with consumers and service
providers and facilitating industry collaboration.
10 National Policy Objectives:
1. Establish Malaysia as a major global center and
hub for communications and multimedia
information and content services
2. Promote a civil society where information-based
services will provide the basis of continuing
enhancements to quality of work and life
3. Grow and nurture local information resources and
cultural representation that facilitate the national
identity and global diversity;
4. Regulate for the long-term benefit of the end
user;
5. Promote a high level of consumer confidence in
service delivery from the industry;
6. Ensure an equitable provision of affordable
services over ubiquitous national infrastructure;
7. Create a robust applications environment for end
users;
8. Facilitate the efficient allocation of resources such
as skilled labor, capital, knowledge and national
assets;
9. Promote the development of capabilities and
skills within Malaysia's convergence industries;
and
10. Ensure information security and network
reliability and integrity
Under the Communications and Multimedia Act 1998
instruments can be issued either by the Minister or
the Commission in the form of a Direction or a
Declaration.
Ministerial Directions are issued to the Malaysian
Communications and Multimedia Commission on the
exercise of the Malaysian Communications and
Multimedia Commission's powers and the
performance of the Malaysian Communications and
Multimedia Commission's functions and duties under
the Communications and Multimedia Act 1998,
whether of general character or otherwise.
The Minister may issue a Determination on any matter
specified in the Communications and Multimedia Act
1998 as being subject to Ministerial Determination
without consultation with any licensees or persons.

MCMC
Instrument
The Minister may also make a Declaration that an individual license,
or a class of individual license, or a class license is subject to such
conditions or enjoys such benefits, as the Minister deems fit.
Malaysian Communications and Multimedia Commission's Directions
empowered to write to any person regarding the compliance or non-
compliance of any license conditions, and including but not limited to
the remedy of a breach of a license condition, and the provisions of
the Communications and Multimedia Act 1998 and its subsidiary
legislation.
The Malaysian Communications
and Multimedia Commission may
determine any matter specified in
the Communications and
Multimedia Act 1998 as being
subject to the Malaysian
Communications and Multimedia
Commission's determination.

OVERVIEW OF TELECOMMUNICATION
STATISTICS IN MALAYSIA
Year Population Households Current
price
Constant
prices
Consumer
Index
2012 29.00 6,744 937.532 749.070 105.5
2013 (Q1) 29.60 6,873 - - 106.2
Malaysia Basic Indicators
 Base year is 2010
 The CPI reported against a quarter, refers to the average index for the period spanning
1st January to the end of that quarter.
Year No. of Licenses
Individual Class Total
NFP 122 22 144
NSP 118 24 142
ASP - 941 941
CASP 37 27 64
Total 277 1,014 1,291
Number Of License as at 31 December 2012
 NFP: Network Facility Provider
 NSP: Network Service Provider
 ASP: Application Service Provider
 CASP: Content Application Service Provider
Year Wired Wireless Netbook Total (‘000)
2012 2,215.8 3,785.6 279.2 6,280.6
2013 (Q1) 2,401.8 3,986.5 - 6,388.3
Total Populations 28,748.0
Populations Penetration Rate 21.6%
Malaysia Number of Broadband Subscriptions
Year Postpaid Prepaid Total Penetration
2012 7,375 33,950 41,325 142.5%
2013 (Q1) 7,471 34,974 42,445 143.4%
Malaysia Number of Cellular Subscriptions (‘000)
A penetration rate is over 100% can
occur because of multiple
subscriptions (includes 3G)
2012
2013
Q1
28,75 Mio
Wired
Wireless
Wired
Wireless
2012
2013
Q1
28,75 Mio
Postpaid
Prepaid
PostpaidPrepaid
BroadbandCellular

The Law of Malaysia
The law of Malaysia is mainly based on the common
law legal system. This was a direct result of the
colonization of Malaya, Sarawak, and North Borneo
by Britain between the early 19th century to 1960s.
The supreme law of the land—the Constitution of
Malaysia—sets out the legal framework and rights of
Malaysian citizens. Federal laws enacted by the
Parliament of Malaysia apply throughout the
country.
There are also state laws enacted by the State
Legislative Assemblies which applies in the particular
state. The constitution of Malaysia also provides for
a unique dual justice system—the secular laws
(criminal and civil) and sharia laws.
History
Prior to the independence in 1957, most of the laws
of United Kingdom were imported and either made
into local legislation or simply applied as case laws.
Malaysian law is also based on other jurisdictions
namely Australia and India. The criminal law in
Malaysia—the Criminal Procedure Code—was based
on the Indian criminal code. Similarly, the Contracts
Act is based on the Indian model. Malaysian land law
is based on the Australian Torrens system.
The Federal Constitution is the supreme law of the
land. It provides the legal framework for the laws,
legislation, courts, and other administrative aspects
of the law. It also defines the government and
monarch, and their powers, as well as the rights of
the citizens.
Dual Justice System
The dual system of law is provided in Article 121(1A)
of the Constitution of Malaysia. Article 3 also
provides that Islamic law is a state law matter with
the exception for the Federal Territories of Malaysia.
Islamic law refers to the sharia law, and in Malaysia it
is known and spelled as sharia. The court is known as
the Syariah Court. Looking at the Malaysian legal
system as a whole, sharia law plays a relatively small
role in defining the laws on the country. It only
applies to Muslims.
With regards to civil law, the Syariah courts has
jurisdiction in personal law matters, for example
marriage, inheritance, and apostasy. In some states
there are sharia criminal laws, for example there is the
Kelantan Syariah Criminal Code Enactment 1993. Their
jurisdiction is however limited to imposing fines for an
amount not more than RM 5000, and imprisonment
to not more than 3 years. In August 2007, the then
Chief Justice of Malaysia proposed to replace the
current common law application in Malaysia with
sharia law.
Federal law and state law
Federal laws are made by legislators (members of
Parliament and senators) sitting in the Parliament of
Malaysia and applies nationwide. Federal laws are
known as Acts (of Parliament). State laws are made by
assemblymen sitting in the State Legislative Assembly
(Dewan Undangan Negeri) and only applies in the
particular state. State laws are often referred to as
enactments or ordinances. Article 75 of the
Constitution states that a federal law shall prevail over
any inconsistent state laws, including sharia laws.
Common Law in Malaysia
The laws of Malaysia can be divided into two types of
laws—written law and unwritten law. Written laws
are laws which have been enacted in the constitution
or in legislations. Unwritten laws are laws which are
not contained in any statutes and can be found in case
decisions. This is known as the common law or case
law. In situations where there is no law governing a
particular circumstance, Malaysian case law may
apply. If there is no Malaysian case law, English case
law can be applied. There are instances where
Australian, Indian, and Singaporean cases are used as
persuasive authorities.
The Malaysian Parliament Building

Law Enforcement
gathering. Its headquarters is located at Bukit Aman,
Kuala Lumpur. The police force is led by an Inspector-
General of Police (IGP).
The post is held by Tan Sri Khalid Abu Bakar. The
constitution, control, employment, recruitment, fund,
discipline, duties and powers of the police force is
specified and governed by the Police Act 1967.
In carrying out its responsibilities, the regular RMP is
also assisted by a support group of Extra Police
Constables, Police Volunteer Reserves, Auxiliary
Police, Police Cadets and a civilian service element.
Rakan Cop is a community outreach program
launched in 9 August 2005. The RMP constantly co-
operates closely with police forces worldwide, which
include those from the four neighboring countries
Malaysia shares border with: Indonesian National
Police, Royal Brunei Police Force, Royal Thai Police and
Singapore Police Force.
Attorney General of Malaysia
The Attorney General of Malaysia, also referred to as
the A-G (Malay: Peguam Negara), is the principal legal
adviser to the Government of Malaysia. The Attorney
General is also the highest ranking public prosecutor
in the country and is also known as the Public
Prosecutor, or simply PP. The powers with regards to
prosecution is contained in Article 145(3) of the
Federal Constitution. Unlike a number of other
Commonwealth common law jurisdictions, the head
of the prosecuting authority in Malaysia is simply
known as the Public Prosecutor, or PP, instead of the
Director of Public Prosecutions, or DPP. In Malaysia, a
prosecuting officer is known as a Deputy Public
Prosecutor, also known as DPP, and it should not be
confused with the previous meaning.
The A-G is also the head of the Attorney General's
Chambers. There are separate chambers for the state
of Sabah and Sarawak which deals with civil law
matters affecting the respective state government.
Criminal prosecution duties in Sabah and Sarawak are
handled by the Malaysian A-G. The other states in
Peninsular Malaysia does not have separate
chambers.
Judiciary of Malaysia
The Judiciary of Malaysia is largely centralized despite
Malaysia's federal constitution, heavily influenced by
the British Common Law and to a lesser extent Islamic
law, and is mostly independent from political
interference.
There are generally two types of trials, criminal and
civil. The hierarchy of courts begins from the
Magistrates' Court, Sessions Court, High Court, Court
of Appeal, and finally, the Federal Court. The
jurisdiction of the courts in civil or criminal matters
are contained in the Subordinate Courts Act 1948 and
the Courts of Judicature Act 1964.
Article 121 of the Constitution provides for two High
Courts of coordinate jurisdiction, the High Court in
Malaya, and the High Court in Sabah and Sarawak.
Thus this creates two separate local jurisdiction of the
courts – for Peninsular Malaysia and for East Malaysia.
The highest position in the judiciary of Malaysia is the
Chief Justice of the Federal Court of Malaysia (also
known as the Chief Justice of Malaysia), followed by
the President of the Court of Appeal, the Chief Judge
of Malaya, and the Chief Judge of Sabah and Sarawak.
The superior courts are the High Court, Court of
Appeal, and the Federal Court, while the Magistrates'
Courts and the Sessions Courts are classified as
subordinate courts.
The Royal Malaysia Police
(Abbreviation: RMP; Malay:
Polis Diraja Malaysia
(PDRM), is a part of the
security forces structure
in Malaysia. The force
is a centralized
organization with
responsibilities
ranging from traffic
control to intelligence
The Malaysian Palace of Justice

Creating
Global talent program has common objectives: to attract, retain,
motivate and develop employees, and to create alignment between
employee actions and the behaviors required to support the
employer’s business strategy.

A
Sustainable
In periods of relatively stable business growth, organizations typically
rely on minor, adaptive changes to their reward and employee talent
programs in order to better meet these objectives.
But the recent financial crisis and subsequent recession have
forced organizations out of their “business as usual” mode,
both from a strategic perspective and in the way they design
and manage their reward and employee talent management
programs. – TOWER WATSON

Company Setup
The Companies Commission of Malaysia - CCM,
(Malay:Suruhanjaya Syarikat Malaysia (SSM)) is a
statutory body formed under an Act of Parliament
that regulates corporate and business affairs in
Malaysia. The SSM was formed in 2002 under the
Companies Commission of Malaysia Act 2001,
assuming the functions of the Registrar of
Companies and Registry of Business..
The main purpose of SSM is to serve as an agency to
incorporate companies and register businesses as
well as to provide company and business information
to the public. The commission launched SSM e-Info
Services to allow information on companies and
businesses obtainable via its website.
As the leading authority for the improvement of
corporate governance in Malaysia, the commission
also handles monitoring and enforcement activities
to ensure compliance with business registration and
corporate legislation.
In 2003, the SSM began a review of the Companies
Act 1965, with the aim of simplifying the process of
incorporation in Malaysia and reducing businesses'
costs of compliance with Malaysian corporate law.
Acts and Regulations
SSM is responsible for the administration and
enforcement of the following legislation:
 Companies Act 1965 (Act 125);
 Registration of Businesses Act 1956 (Act 197);
 Trust Companies Act 1949 (Act 100);
 Kootu Funds (Prohibition) Act 1971 (Act 28);
 Limited Liability Partnerships Act 2012 (Act 743);
 any subsidiary legislation made under the Acts
specified above such as:
- Companies Regulations 1966; and
- Registration of Businesses Rules 1957
SSM Services:
1. Corporate Information Supply
2. Corporate and Business Information Data (CBID)
3. Commemorative Certificate
4. Company Incorporation Tender Number
5. Publication
Starting a Sole Proprietorship or Partnership
Business includes every form of trade, commerce,
craftsmanship, calling, profession or other activity
carried on for the purpose of gain, but does not
include any office or employment or any charitable
undertaking or any occupation specified in the
Schedule of the Registration of Businesses Act 1956
(ROBA 1956) & ROBA Rules 1957
Two type of Business
 Sole proprietorship: Business wholly owned by a
single individual using personal name as per his /
her identity card or trade name.
 Partnership: Business owned by two or more
persons but not exceeding 20 persons. Identity
card name can’t be used as business name.
How to start a business?
1. Registration of a new business to be done within
30 days from the date of commencement of the
business.
2. Registration can be done at any SSM counter or
through the e-Lodgment services
3. Complete the Business Registration Form (Form
A) . Refer to Guidelines For New Business
Registration
Business may be registered using personal name
or using a trade name.
i. Personal Name - Business name using
personal name as stated in the identity card
is not required to apply for business name
approval.
ii. Trade Name - Complete business name
approval form (Form PNA.42). Refer to
Guidelines for Business Name Application.
4. Business names approval is according to Rules 15,
Rules of Business Registration 1957.
5. Business Registration can be made for a period of
one (1) year and not more than five (5) years.

SURUHANJAYA SYARIKAT MALAYSIA
COMPANIES COMMISSION OF MALAYSIA
Starting a Limited Liability Partnership (LLP)
Limited Liability Partnership (LLP) is an alternative
business vehicle regulated under the Limited Liability
Partnerships Act 2012 which combines the
characteristics of a company and a conventional
partnership.
The LLP business structure is designed for all lawful
business purposes with a view to make profit. LLP may
also be formed by professionals such as Lawyers,
Chartered Accountants and Company Secretaries for
the purpose of carrying on their professional practice.
The LLP concept will also support start ups, small and
medium enterprises (SMEs) to grow their businesses
without having to worry too much on their personal
liabilities, personal assets and strict compliance
requirements.
Salient features
Amongst others, LLP is featured with the protection of
limited liability to its partners similar to the limited
liability enjoyed by shareholders of a company
coupled with flexibility of internal business regulation
through partnership arrangement similar to a
conventional partnership.
Any debts and obligations of the LLP will be borne by
the assets of the LLP and not that of its partners’. An
LLP has the legal status of a body corporate which is
capable of suing and being sued in its own name,
holding assets and doing such other acts and things in
its name as bodies corporate may lawfully do and
suffer.
LLP also offers flexibility in terms of its formation,
maintenance and termination while simultaneously
has the necessary dynamics and appeal to be able to
compete domestically and internationally. With the
introduction of LLP, entrepreneurs will have more
options to choose the most preferred form of business
vehicle.
Accessing the MyLLP Portal (For Registration)
Services available through the MyLLP Portal are as
follows:
 Registration As User Of MYLLP Portal
 Application For Reservation Of Name
 Application For Registration Of New LLP
 Application For Registration Of LLP For Professional
Practice .
Starting a Company
APPLICATION OF NAME SEARCH - THE PROVISIONS OF
THE LAW
The Companies Act 1965 (the Act) provides that
before a company or its change of name is registered,
the Minister of Domestic Trade, Co-operatives and
Consumerism or the Registrar of Companies must first
approve the name or the new name of the company
respectively accordingly.
The statutory provision under section 22 of the Act
provides that :
1) Except with the consent of the Minister, a company shall not
be registered by a name that, in the opinion of the Registrar, is
undesirable or is a name, or a name of a kind, that the
Minister has directed the Registrar not to accept for
registration.
2) The Minister shall cause a direction given by him under
subsection (1) to be published in the Gazette. Government
Gazette No. 716 dated 30 January 1997 and Gazette
(Amendment) dated 11 October 2001.
3) A limited company shall have "Berhad" or the abbreviation
"Bhd." as part of and at the end of its name.
4) A private company shall have the word "Sendirian" or the
abbreviation "Sdn." as part of its name, inserted immediately
before the word "Berhad" or before the abbreviation "Bhd."
or in the case of an unlimited company, at the end of its
name.
5) It shall be lawful to use and no description of a company shall
be deemed inadequate or incorrect by reason of the use of .
The applicant for registration shall apply in the
prescribed form to the Registrar for a search as to the
availability of the proposed name of the intended
company, company or foreign company and for
reservation of that name, if available. Please refer to
Government Gazette No. 716 dated 30 January 1997,
Gazette (Amendment) dated 11 October 2001,
Guidelines For Naming A Company and Guidelines For
Application Of A Company Name.
Similar provision which is applicable for foreign
companies is contained in section 341(1) of the Act.
------------------------
On early July, 2013 the name of
TELEKOMUNIKASI INDONESIA
INTERNATIONAL (MALAYSIA), SDN. BHD.
is approved by SSM.

LOCAL COMPANY INCORPORATION GUIDELINES
INCORPORATION OF A COMPANY MALAYSIA
The two types of companies that can be
incorporated under the Companies Act 1965 (CA 65)
are:
 A company limited by shares
 An unlimited company
I. COMPANY LIMITED BY SHARES
A company having a share capital may be
incorporated as a private company (identified
through the words ‘Sendirian Berhad’ or ‘Sdn. Bhd.’
appearing together with the company’s name) or
public company ‘Berhad’ or ‘Bhd’ appearing together
with the company’s name).
The requirements to form a company are:
i. A minimum of two subscribers to the shares of
the company (Section 14 CA);
ii. A minimum of two directors (Section 122); and
iii. A company secretary who can be either :
 An individual who is a member of a
professional body prescribes by the Minister
of Domestic Trade Cooperative and
Consumerism; or
 An individual licensed by the Companies
Commission of Malaysia (SSM)
Both the director and company secretary shall have
their principal or only place or residence within
Malaysia.
A. INCORPORATION PROCEDURES
1. Application of Name Search
A name search must be conducted to determine
whether the proposed name of the company is
available. Refer to Government Gazette No. 716
dated 30 January 1997, Gazette (Amendment) dated
11 October 2001, Guidelines For Naming A Company
and Guidelines For Application Of A Company Name.
The steps involved are:
i. Completion and submission of Form 13A CA
(Request For Availability Of Name) to SSM; and
ii. Payment of a RM30.00 fee for each name
applied.
Where the proposed company’s name is approved by
SSM, it shall be reserved for three months from the
date of approval.
2. Lodgment of Incorporation Documents
Incorporation Documents (as further explained in Part
B below) must be submitted to SSM within 3 month
from the date of approval of the company’s name by
SSM, failure of which a fresh application for a name
search must be done. (Steps (i) and (ii) above shall
have to be repeated).
B. INCORPORATION DOCUMENTS TO BE LODGED
WITH SSM
1. Memorandum and Article of Association
An original of the Memorandum and Article of
association shall each be stamped at RM100.00.
Stamps are affixed at the Inland Revenue Board’s
stamp office.
 The first directors and secretaries shall be named
in the Memorandum and Article of Association.
 The subscribers to the company’s shares shall sign
the Memorandum and Articles of Association in
front of a witness.
 Table A of the Fourth Schedule in the CA can be
adopted as the Article of Association of the
company (Section 30 CA).
*NOTE: For incorporation of a private company, the
articles of association shall contain the following
stipulations.
i. Restriction on the right to transfer the company’s
shares;
ii. Limitation on the number of members to not
exceed fifty;
iii. Prohibition to any invitation to the public to
subscribe the shares/debentures of the company;
and
iv. Prohibition on public invitation to deposit money
with the company.
Incorporation Guideline

2. Form 48A (Statuary Declaration By A Director Or
Promoter Before Appointment)
The director or promoter declares under oath that:
 He/ She is not a bankrupt; and
 He/ She has not been convicted and imprisoned
for any prescribed offences.
3. Form 6 (Declaration of Compliance)
This declaration states that all the requirements of the
CA have been complied with. It must be signed by the
company secretary who handles the registration and
is named in the Memorandum and Articles of
Association.
4. Additional Documents:
 Original copy of Form 13A.
 A copy of the letter from SSM approving the
name of the company.
 A copy of the identity card of each director and
company secretary.
C. REGISTRATION FEES
Each application for the incorporation of a company
shall be accompanied with payment as per the
schedule following:
D. CERTIFICATE OF CORPORATION
A Certificate of Incorporation will be issued by SSM
upon compliance with the incorporation procedures
and submission of the duly completed Incorporation
Documents.
2. UNLIMITED COMPANY
The procedures and Incorporation Documents for the
incorporation of an unlimited company is the same as
company limited by shares. The only difference is that
for an unlimited company, the liability of its members
must be stated in the Memorandum of Association as
unlimited.
Upon incorporation, the company is advised to obtain the
required license/permit/approval from other relevant
authorities prior to carrying on any business outlined in the
Memorandum of Association.
FOREIGN COMPANY REGISTRATION GUIDELINES
A foreign company may carry on business in Malaysia
by either:
 Incorporating a local company with the Companies
Commission of Malaysia (SSM); or
 Registering the foreign company in Malaysia with
SSM.
Foreign company is defined under the Companies Act
1965 (CA 65) as:
a) a company, corporation, society, association or
other body incorporated outside Malaysia; or
b) an unincorporated society association, or other
body which under the law of its place of origin
may sue or be sued, or hold property in the name
of the secretary or other officer of the body or
association duly appointed for that purpose and
which does not have its head office or principal
place of business in Malaysia.
A. REGISTRATION PROCEDURES
1. Application of Name Search
A name search must be conducted to determine
whether the proposed name of the company is
available for registration.
Refer to Government Gazette No. 716 dated 30
January 1997, Gazette (Amendment) dated 11
October 2001, Guidelines For Naming A Company and
Guidelines For Application Of A Company Name. The
steps involved are:
i. Completion and submission of Form 13A of the
CA (Request for Availability of Name) to SSM.
ii. Payment of an RM30.00 fee for each name
applied.
AUTHORISED SHARE CAPITAL (RM) FEES (RM)
Up to 400,000 1,000
400,001 – 500,000 3,000
500,001 – 1 million 5,000
1,000,001 – 5 million 8,000
5,000,001 – 10 million 10,000
10,000,001 – 25 million 20,000
25,000,001 – 50 million 40,000
50,000,001 – 100 million 50,000
100,000,001 and above 70,000

The name to be used to register the foreign
company should be the same as registered in its
country of origin. Where the proposed company’s
name is approved by SSM, it shall be reserved for
three months from the date of approval.
2. Lodgment of Registration Documents
Registration documents (as further explained in Part
B below) must be submitted to SSM within 3 months
from the data of approval of the company’s name by
SSM, failing which a fresh application for a name
search must be done (i.e. steps (i) and (ii) above shall
have to be repeated).
B. REGISTRATION DOCUMENTS
The following documents shall be submitted to SSM
for registration:
i. A certified copy of the certificate of incorporation
or registration of the foreign company.
ii. A certified copy of the foreign company’s charter,
statute or Memorandum and Articles of
Association or other instrument defining its
constitution.
iii. Form 79 (Return by Foreign Company Giving
Particulars of Directors and Changes of
Particulars).
*NOTE: If the list includes directors residing in
Malaysia who are members of the local board of
directors of the foreign company, a
memorandum stating their powers must be
executed by or on behalf on the foreign company
and submitted to SSM.
iv. A memorandum of appointment or power of
attorney authorizing the person (s) residing in
Malaysia, to accept on behalf of the foreign
company any notices required to be served on
such foreign company.
v. Form 80 (Statutory Declaration by Agent of
Foreign Company).
vi. Additional documents consisting of:
The original copy of Form 13A; and A copy of the
letter from SSM approving the name of the foreign
company.
C. REGISTRATION FEES
Registration fees shall be as per the payment
schedule below:
1. In determining the amount of registration fees,
the nominal share capital of the foreign company
should first be converted to the Malaysian
currency (Ringgit Malaysia) at the prevailing
exchange rate.
2. In the event a foreign company does not
prescribe any share capital, a flat rate of RM
1,000.00 shall be paid to SSM.
D. CERTIFICATE OF REGISTRATION
A certificate of registration will be issued by SSM upon
compliance with the registration procedures and
submission of duly completed Registration
Documents.
If any of the described registration documents are in
languages other than Malay or English, a certified
translation of such documents in Malay or English
shall be required.
------------------------
On July 2nd , 2013 the company
TELEKOMUNIKASI INDONESIA
INTERNATIONAL (MALAYSIA), SDN. BHD.
is established.
AUTHORISED SHARE CAPITAL (RM) FEES (RM)
Up to 100,000 1,000
100,001 – 500,000 3,000
500,001 -1 million 5,000
1,000,001 – 5 million 8,000
5,000,001 – 10 million 10,000
10,000,001 – 25 million 20,000
25,000,001 – 50 million 40,000
50,000,001 – 100 million 50,000
100,000,001 and above 70,000

Incorporation means,
a corporation being a legal entity that is
effectively recognized as a person under
the law Telkom Corporate University 18

MVNO Agreement
According to Chairman of MCMC (Datuk Dr. Halim
Shafie) , it is said that: “Mobile Virtual Network
Operators (MVNOs) have gained a lot of foothold in
the global mobile telecommunication industry and
have even attracted much interest in Asia lately”.
MVNOs are basically resellers who do not own any
network facilities, purchase airtime at wholesale
rates from Mobile Network Operators (MNOs) and
then resell wireless subscriptions to consumers
through its own branding and other value added
services.
As widely observed, there appears to be three
generic categories of MVNOs – resellers, enhanced
service providers and full MVNOs, with each having a
different mix of infrastructure and operational tasks
depending on the breadth and depth of its
relationship with its host network, the MNOs.
However, MVNOs today go beyond being a simple
reseller (first generation model). MVNOs now have
taken the approach of being a full MVNO (second
generation model) capable of providing a
more compelling service mix to the end users than
simply discount voice only.
Comparative studies have shown that, MVNOs also
have four generic classification models
based on their marketing strategies :
 discount MVNO
 lifestyle MVNO
 advertisement-based MVNO, and
 ethnic MVNO.
Each marketing strategy leverages on the niche
market it targets and the service and product
differentiation opportunities. While the MVNOs
greatest strength is,
“being able to identify and
target markets in need of
their services, their greatest
weakness is the lack of
economies of scale as
compared to MNOs”.
Nevertheless, with mobile technological advances,
higher bandwidth and more applications that spur the
demand for wireless usage, the MVNO model remains
attractive for new players with potential entrants
cutting across industries with majority non-telco
based operators, such as retailers, financial
institutions and media companies. As several non-
telco based MVNOs have demonstrated, United
Kingdom (UK) leads success in MVNO business.
There are many other industry drivers contributing to
the development and proliferation of MVNOs
which include market opportunity, technology
evolution and competitive dynamics. In addition, to be
a successful MVNO, service providers not only need a
good business model, they have to have an appealing
value proposition that is not only going to attract, but
hold on to customers that are unique.
In terms of regulation, different countries have
differing approaches in their regulatory regime
towards MVNO business. Industry trends indicate that
a supportive regulatory environment is important for
the developments of the MVNO industry. In fact,
MVNOs in US and UK are observed thriving due to
unregulated environment, where regulators
take a non-interventionist, but “watchdog” or
monitoring stance towards the voluntary
MNO-MVNO relationships.
However, markets like Hong Kong have MVNO-related
regulation that requires 3G licenses to open up to 30%
of their network capacity to unaffiliated MVNOs
while in Italy, there is strict prohibition towards MVNO
entry.
Like many other countries, the Malaysia landscape
shows readiness for MVNOs. Factors such as
increasing mobile subscribers, high number of prepaid
subscribers, diversified demographic structure such as
different ethnic communities and so far non-intrusive
regulatory regime are encouraging developments in
the MVNO market in Malaysia.
Recently, there are four pioneering MVNOs in
Malaysia, namely Merchantrade Asia Sdn Bhd,
REDtone International Bhd, TuneTalk Sdn Bhd and
XOX.com Sdn Bhd.

These open windows of opportunities for non-telco
operators to add more mobile applications and
services. It will be interesting to see how MVNO
developments unfold and enhance the
telecommunications landscape in Malaysia.
DEFINING MVNOs
At present, there is no common and agreed definition
on what constitutes an MVNO. Regulatory bodies
around the world have come to adopt various
definitions and different forms of regulatory
intervention depending on the extent to which an
MVNO relies on the facilities of the Mobile Network
Operator (MNO).
Generally, MVNOs are companies that do not own a
licensed communication band, but resell wireless
services under their own brand name, using the
network of another Mobile Network Operator (MNO).
DIFFERENT CATEGORIES OF MVNO
There is a wide range of MVNO models, from simple
Reseller to Enhanced Service Providers (ESP) and
even to full MVNOs. Even then, there is yet to be a
sustainable winning formula, although there has been
mixed success of MVNOs across countries.
Source: Adapted from “Mobile Virtual Network Operator White
Paper” by Nokia Siemens Networks, 2006
The appropriate business models in positioning,
branding, marketing and partnership appeals as key
factors for success. How far an MVNO has control and
ownership over its business depends on the working
relationship it establishes and builds with its MNO.
In general, there are three categories of MVNOs,
namely reseller, enhanced service providers and full
MVNO.
Each category has a different mix of network
infrastructure and operational tasks in respective
areas such as branding, ownership of SIM, network
infrastructure including billing and customer care.
While MVNOs typically do not have their own
infrastructure, some leading providers do deploy their
own Mobile Switching Centers (MSC), and in some
cases, even Service Control Points (SCP).
Leading MVNOs deploy their own mobile Intelligent
Network (IN) infrastructure in order to facilitate the
means to offer value-added services. In this way,
MNVOs can treat incumbent infrastructure such as
radio equipment as a commodity, while the MVNO
offers its own advanced and differentiated services
based on exploitation of their own intelligent network
infrastructure.
The goal of offering value-added services is to
differentiate versus the incumbent mobile operator,
allowing MVNO customer acquisition not oriented to
compete on the basis of price alone. While sometimes
offering Operational Support Systems (OSS) and
business support systems for MVNOs, the incumbent
mobile operators usually keep their own OSS/
Business Support System (BSS) processes and
procedures separate and distinct from those of the
MVNO.
All three MVNO, MNO, and Mobile Virtual Network
Enabler (MVNE) where these occur elements create a
dynamic ecosystem structure that enables operational
efficiency across different components providing
support to the MVNO business.
Over the years, the MVNO model itself has evolved,
from the first generation model (reseller) to a second
generation model or full infrastructure model. To
date, the MVNO model scouts sophisticated approach
towards consumers and potential target segments by
providing compelling service mix to end users
usually more than simply discount voice.
What is MVNO?

Infrastructure and
Operation Task
Full MVNO Enhance Service Reseller
SIM, National
Destination Code
(NDC)
Able to secure their own
numbering range, offer own
SIM card and have full
flexibility on the design of the
services and tariff structures.
Have the ability to secure their own
numbering range, operate own Home
Location Register
(HLR) and offer SIM card with its own
mobile network code.
Do not have own SIM
card but still able to
offer their own branded
packages.
Network
Infrastructure
Own or provide network
facilities and network
services such as towers,
mobile switching centers, HLR,
and cellular mobile
services.
Do not own or provide network
facilities. Dependent on MNOs
for network facilities and radio
network; able to maintain some
independence from MNOs as enhanced
service providers are
able to differentiate their
products.
Rely on MNOs for access to
the radio network and
network facilities.
Billing and customer
care
Carry out their customer
care and billing in house.
Branding Fully independent branding
and customer
ownership.
Independent branding, billing and high
level of customer ownership.
Bundled branding and
possible own billing.
Pricing Own pricing Own pricing, negotiation
based
Own pricing, negotiation
Based
License*  * NFP (I) license for
network facilities
 * NSP (I) license for
network services
 * ASP license to provide
public cellular service to
end users.
 * NSP (I) to provide bandwidth
services, cellular mobile services or
mobile application services
 * ASP license to provide public
cellular services to end users.
 * ASP license for
providing public
cellular services.
* MVNO in Malaysian environment as per Guideline on Regulatory Framework for 3G Mobile Virtual Network Operators, dated 16
February 2005.
Source: Various websites, Industry, SKMM
First Generation MVNO
Reduce Capital Expenditure (CAPEX) and
risk
Builds brand
Lead to price competition and niche
Specificity
Limited service creation capabilities and
differentiation
Mostly rely on MNO’s core network
infrastructure and service platforms
Second Generation MVNO
Decrease dependence on MNO network
Total subscriber ownership
Service creation and deployment agility
Harder for other resellers to enter market
MVNO service differentiation drives MNO
success

Factors to Avoid
By the looks of the numbers of MVNOs coming into
the worldwide market, there has not been a slow
down in the developments and progress of MVNO
industry overall. Nevertheless, there are factors to
avoid for MVNOs.
According to MCMC, the basic lack of customer base
reduces the success of MVNO to stay competitive in a
market.
Finding the right MNO partnership can also make or
break an MVNO company:
1. MVNOs target customers that carriers themselves
are finding it hard to get;
2. Launch of a not-very-distinctive product
proposition that focuses on all the same things
that carriers themselves are offering;
3. Builds expensive new product platforms with
loads of capex and opex;
4. Ignores basic retailing such as big media launching
with no or little store availability;
5. Acquires customer expensively; and
6. Gets distracted by the “high” ARPU that people
will spend a vast amount of money with your
service.
----------------------------------
eMMa Project finally decided to
cooperate with Maxis Berhad (Maxis)
as the MNO partner to deliver MVNO
business in Malaysia, thru vehicle
company namely Telekomunikasi
Indonesia International (Malaysia)
Sdn. Bhd.
As a MVNO enters into a business agreement with a
mobile network operator (MNO) to obtain bulk access
to network services at wholesale rates, then sets retail
prices independently. Many actions should be taken
in order to finalize the commercial agreement.
Theoretically, there are several stages to conduct an
agreement. In accordance with business goal, the
stage should be done sequentially as:
 Preliminary meeting
 Non Disclosure Agreement (NDA)
 Memorandum of Understanding (MoU)
 Head of Terms discussion (HoTs)
 Long form (Commercial) Agreement
A Preliminary Meeting is necessary and will be held
on the initiative of the MVNO, or even at the request
of both the MVNO and MNO as the parties.
After much of the preparatory work has been done, to
review the desire of the parties and to enable
directions to be made or agreed for further
preparation for, and the conduct of, the meeting in
accordance with the business objectives.
Non Disclosure Agreement, or A non-disclosure
agreement (NDA), also known as a confidentiality
agreement (CA), confidential disclosure agreement
(CDA), proprietary information agreement (PIA), or
secrecy agreement, is a legal contract between at
least two parties that outlines confidential material,
knowledge, or information that the parties wish to
share with one another for certain purposes, but wish
to restrict access to or by third parties. It's a contract
through which the parties agree not to disclose
information covered by the agreement.
An NDA creates a confidential relationship between
the parties to protect any type of confidential and
proprietary information or trade secrets. As such, an
NDA protects nonpublic business information.
NDAs are commonly signed when two companies,
individuals, or other entities (such as partnerships,
societies, etc.) are considering doing business and
need to understand the processes used in each
other's business for the purpose of evaluating the
potential business relationship.
Engaging the MVNO Agreement

The NDA between Maxis and Telkom signed by both
parties on May 3rd , 2013. Mr. Budi Satria as VP
Wholesale International Network Service represents
PT. Telkom, and Mrs. Shanti as Head of Marketing
Strategy from Maxis.
Memorandum of Understanding is a document
describing a bilateral or multilateral agreement
between two or more parties. It expresses a
convergence of will between the parties, indicating
an intended common line of action. It is often used
in cases where parties either do not imply a legal
commitment or in situations where the parties
cannot create a legally enforceable agreement. It is a
more formal alternative to a gentlemen's
agreement.
Whether or not a document constitutes a binding
contract depends only on the presence or absence of
well-defined legal elements in the text proper of the
document (the so-called "four corners"). The
required elements are: offer, consideration,
intention (consensus ad idem), and acceptance.
In international relations, MoUs fall under the broad
category of treaties. In practice, MoUs are
sometimes kept confidential. As a matter of law, the
title of MoU does not necessarily mean the
document is binding or not binding under
international law. A careful analysis of the wording
will clarify the exact nature of the document.
By June 12th , 2013 Telkom and Maxis signed the MoU.
In this regard, Mr. Ririek Adriansyah and Mr. Suren J.
Amarasekera represented both parties to extend the
agreement into the discussion of HoTs (Head of
Terms).
Head of Terms (HoTs), or usually called as a heads of
agreement is a non-binding document outlining the
main issues relevant to a tentative (partnership or
other) agreement. A heads of agreement document
will only be enforceable when it is adopted into a
parent contract (commercial) and subsequently
agreed upon. Until that point, a heads of agreement
will not be legally binding.
The main purpose of the heads of terms is to identify
and highlight the requirements of both parties. There
are a number of advantages of using the heads of
terms. For instance, by carrying this out, both parties
will fully understand what they are subject to, and
reduce or abolish any misunderstandings from either
party. The heads of terms normally contains the
following information: Details of the both properties,
Details of the commercial properties, The price both
parties have agreed to, The payment information, Any
special conditions, Transaction completion date, etc.
Entering the Agreement

Until this report is prepared, the HoTs between
Telkom and Maxis is still under discussion and
negotiation due to detail price to be agreed. It is
planned that the HoTs will sign by the middle-end of
July 2013.
Long Form (as Commercial) Agreement
A commercial agreement is a contract typically
between two business entities. It states its terms in
plain language but includes warranties and boilerplate
that have usually been reviewed by a business
attorney in advance.
Business-to-business transactions have a different
legal character than business-to-consumer sales.
There are fewer default legal protections built into
business-to-business transactions that are designed to
protect uninformed or uneducated parties, or will
allow such parties to escape from a properly executed
deal. The law assumes that the average business is
aware of its legal obligations and will rely on the
specific terms of a contract to resolve disputes.
A contract is an agreement having a lawful object
entered into voluntarily by two or more parties, each
of whom intends to create one or more legal
obligations between them. The elements of a contract
are "offer" and "acceptance" by "competent persons"
having legal capacity who exchange "consideration" to
create "mutuality of obligation."
Contract law varies greatly from one jurisdiction to
another, including differences in common law
compared to civil law, the impact of received law,
particularly from England in common law countries,
and of law codified in regional legislation.
The negotiated terms of a commercial agreement are
particularly important. Basic contract law will look to
the written terms of the agreement to identify the
intentions of the parties, and will not consider outside
circumstances unless there is a claim of fraud.
Businesses are expected to know how to protect their
interests, and part of that responsibility is to
understand what constitutes a valid and enforceable
commercial agreement.
Generally, a MVNO commercial agreement is formed
between two parties, whereas the first party is the
MNO (The owner of Network, Spectrum, and
Infrastructure) and the other is the MVNO company
who seek the business cooperation with MNO to
deliver mobile and cellular services.
As reference, following is the content of MVNO
agreement.
Commercial Agreement

A joint venture (JV) is a business agreement in which
the parties agree to develop, for a finite time, a new
entity and new assets by contributing equity. They
exercise control over the enterprise and
consequently share revenues, expenses and assets.
There are other types of companies such as JV
limited by guarantee, joint ventures limited by
guarantee with partners holding shares.
With individuals, when two or more persons come
together to form a temporary partnership for the
purpose of carrying out a particular project, such
partnership can also be called a joint venture where
the parties are "co-ventures".
The venture can be for one specific project only -
when the JV is referred to more correctly as a
consortium or a continuing business relationship.
The consortium JV (also known as a cooperative
agreement) is formed where one party seeks
technological expertise or technical service
arrangements, franchise and brand use agreements,
management contracts, rental agreements, for one-
time contracts. The JV is dissolved when that goal is
reached.
A joint venture takes place when two parties come
together to take on one project. In a joint venture,
both parties are equally invested in the project in
terms of money, time, and effort to build on the
original concept. While joint ventures are generally
small projects, major corporations also use this
method in order to diversify. A joint venture can
ensure the success of smaller projects for those that
are just starting in the business world or for
established corporations. Since the cost of starting
new projects is generally high, a joint venture allows
both parties to share the burden of the project, as
well as the resulting profits.
Since money is involved in a joint venture, it is
necessary to have a strategic plan in place. In short,
both parties must be committed to focusing on the
future of the partnership, rather than just the
immediate returns. Ultimately, short term and long
term successes are both important. In order to
achieve this success, honesty, integrity, and
communication within the joint venture are
necessary.
While the following offers some insight to the process
of joining up with a committed partner to form a JV, it
is often difficult to determine whether the
commitments come from a known and distinguishable
party or an intermediary. This is particularly so when
the language barrier exists and one is unfamiliar with
local customs, especially in approaches to
government, often the deciding body for the
formation of a JV or dispute settlement.
The ideal process of selecting a JV partner emerges
from:
 screening of prospective partners
 short listing a set of prospective partners and some
sort of ranking
 due diligence – checking the credentials of the
other party
 availability of appreciated or depreciated property
contributed to the joint venture
 the most appropriate structure and invitation/bid
 foreign investor buying an interest in a local
company
Companies are also called JVs in cases where there are
dominant partners together with participation of the
public. There may also be cases where the public
shareholding is substantial but the founding partners
retain their identity. These companies may be 'public'
or 'private' companies.
---------------------------------
Telkom decided to choose its partner
(local partner in Malaysia - Bumiputera)
to form a Joint Venture company due to
foreign restriction of ownership in
applying MVNO License (as stated on
Licensing Guideline – The MCMC):
Individual License
The following persons or classes of persons shall be
ineligible to apply for an individual licensee:
 a foreign company as defined under the
Companies Act 1965 [Act 125];
 an individual or a sole proprietorship;
 a partnership; and
 such other persons or classes of persons as may be
decided by the Minister from time to time.
JV Company

Class License
The following persons or classes of persons shall be
ineligible to be registered as a class licensee:
 a foreign individual who is not a permanent
resident; and
 a foreign company as defined under the
Companies Act 1965.
It should be noted that in the case of class licenses,
the Minister may, for good cause or as the public
interest may require, permit either of the above to
apply to be registered as a class licensee.
--------------------------------
A JV can be brought about in the following major
ways:
 Foreign investor buying an interest in a local
company
 Local firm acquiring an interest in an existing
foreign firm
 Both the foreign and local entrepreneurs jointly
forming a new enterprise
 Together with public capital and/or bank debt
In many Common Law countries - a joint-venture (or
else a company formed by a group of individuals) must
file with the appropriate authority the Memorandum
of Association. It is a statutory document which
informs the outside public of its existence. It may be
viewed by the public at the office in which it is filed.
The Articles of Association regulate the interaction
between shareholders and the directors of a company
and can be a lengthy document. It deals with the
powers relegated by the stockholders to the Directors
and those withheld by them, requiring the passing of
ordinary resolutions, special resolutions and the
holding of Extraordinary General Meetings to bring
the Directors' decision to bear.
A Certificate of Incorporation or the Articles of
Incorporation is a document required to form a
corporation. The Articles of Incorporation is again a
regulation of the Directors by the stock-holders in a
company.
By its formation the JV becomes a new entity with the
implication:
 that it is officially separate from its Founders, who
might otherwise be giant corporations, even
amongst the emerging countries
 the JV can contract in its own name, acquire rights
(such as the right to buy new companies), and
 it has a separate liability from that of its founders,
except for invested capital
 it can sue (and be sued) in courts in defense or its
pursuance of its objectives.
On the receipt of the Certificate of Incorporation a
company can commence its business.
Shareholders' agreement
This is a legal area and is fraught with difficulty as the
laws of countries differ, particularly on the
enforceability of 'heads of' or shareholder
agreements.
Some of the issues in a shareholders' agreement are:
 Valuation of intellectual rights, say, the valuations
of the IPR of one partner and, say, the real estate
of the other
 the control of the Company either by the number
of Directors or its "funding"
 The number of directors and the rights of the
founders to their appoint Directors which shows as
to whether a shareholder dominates or shares
equality.
 management decisions - whether the board
manages or a founder
 transferability of shares - assignment rights of the
founders to other members of the company
 dividend policy - percentage of profits to be
declared when there is profit
 winding up - the conditions, notice to members
 confidentiality of know-how and founders'
agreement and penalties for disclosure
 first right of refusal - purchase rights and counter-
bid by a founder.
Joint Venture Agreement

To have a Joint Venture company agreement done,
the issues must be settled between the parties.
commonly, there are many issues to discuss:
 Scope/Purpose of the Joint Venture (“JV”) ,
Identify scope/purpose of the JV—consider
implications of such scope in connected
 Form of Joint Venture , identify form of the JV;
jointly owned corporation, or group of
corporations, partnership—either general or
limited
 Regulatory , identify current and any anticipated
changes to regulatory issues (including industry
specific regulatory issues and general foreign
ownership, antitrust, export control issues, etc.)
 Implications of JV on Existing Operations and
Reporting Requirements
 Tax Considerations
 Internal Preparation
 Confidentiality Agreement
 Letter of Intent/Term Sheet
 Parties
 SPECIFIC TERMS – Governance
 Management Board (Management Committee or
Board of Directors)
 Meetings of Co-ventures
 Management
 Managers/Directors’ and Officers’ Liability
Insurance
 Auditors
 Reporting and Access to Information
 Actions Requiring Consent – Either Management
Board or Co-ventures
 Business Plans and Budgets
 Disputes
 Business of the Joint Venture - Scope of the
Business
 Distributions
 Financing
 Third Party Debt Financing
 Financing Provided by the Co-Venturers
 Co-ventures Support
 IP or Technology
 Corporate Opportunity
 Non-Compete/Non-Solicitation
 Breaches
 Share Transfer Restrictions and Related Provisions
 Transfer to Affiliates
 Pledge of Shares
 Exit and Termination Rights
 Determination of Triggering Events and Exit and
Termination Provisions
 Put Right
 Call Right
 Right of First Offer and Right of First Refusal
 Tag-along
 Drag-along
 Buy-Sell Right or Shotgun
 Other Issues to Think About in Drafting Exit Rights -
Treatment of JV Debt
 Regulatory Aspects of Exit Transactions
 Pricing; Valuations
 Closing Process
 Termination/Dissolution
 Miscellaneous
---------------------------------
Telkom through its subsidiary PT.
Telekomunikasi Indonesia International
(PT. Telin) formed a Joint Venture
Company with Local Malaysia Partner
namely, Compudyne Telecommunication
Systems Sdn. Bhd.
The joint venture company granted by CCM (SSM)
as incorporated on July 02nd , 2013.
Telekomunikasi Indonesia International (Malaysia)
Sdn. Bhd., the name reflected PT. Telin’s subsidiary
with its principle place of business in Malaysia
(Telin Malaysia).
Issues of the JV Agreement

TERM SHEET IN RESPECT OF THE PROPOSED JOINT
VENTURE BETWEEN PT TELEKOMUNIKASI INDONESIA
INTERNATIONAL ("TELKOM"), COMPUDYNE
TELECOMMUNICATION SYSTEMS SDN. BHD.
("COMPUDYNE") AND TELEKOMUNIKASI INDONESIA
INTERNATIONAL (MALAYSIA) SDN. BHD.
("COMPANY") ("JOINT VENTURE TERM SHEET")
…..
32. the consolidation, sub-division, conversion or
cancellation of any share capital of the Company;
33. implement any proposal for listing on a stock
exchange; or
34. the implementation of any proposal for the status
of the Company to be changed from a private
company to a public company.
Articles of Association
The Articles of Association determine how a company
is run. It is a set of 'by-laws' which form the
'constitution' of the Company. It is often required by
Law to be part of the Joint- Venture agreement. Some
clauses relating to the following may be absent.
Where this the case, it is assumed that the provisions
as laid out in the in Company Law apply. The Articles
can cover a medley of topics, almost all of which is
required in a country's law. Although all will not be
discussed, it can cover:
 Valuation of intellectual rights, say, the
valuations of the IPR of one partner and, say, the
real estate of the other
 The appointments of directors - which shows
whether a shareholder dominates or shares
equality.
 directors meetings - the quorum and percentage
of vote
 management decisions - whether the board
manages or a founder
 transferability of shares - assignment rights of
the founders or other members of the company
 special voting rights of a Chairman, and mode of
election
 dividend policy - percentage of profits to be
declared when there is profit
 winding up - the conditions, notice to members
 confidentiality of know-how and founders'
agreement and penalties for disclosure
 first right of refusal - purchase rights and
counter-bid by a founder.
Dissolution
The JV is not a permanent structure. It can be
dissolved when:
 Aims of original venture met
 Aims of original venture not met
 Either or both parties develop new goals
 Either or both parties no longer agree with joint
venture aims
 Time agreed for joint venture has expired
 Legal or financial issues
 Evolving market conditions mean that joint
venture is no longer appropriate or relevant
 One party acquires the other
MEMBER FIRM OF BAKER &
MCKENZIE INTERNATIONAL
The Parties agree that
the list of Reserved
Matters set out in this
Schedule 1 is not
exhaustive and is
subject to further
discussions between
the Shareholders prior
to the execution of the
JV Agreement.

is a business agreement in which the
parties agree to develop, for a finite
time, a new entity and new assets by
contributing equity.
a

Joint Venture

License Application
To ensure sustainable growth and competition,
SKMM formulates and develops policies, as well as
standards, codes of practices and advisory guidelines
pertaining to issues such as licensing which is an
important mechanism to regulate industry to ensure
healthy competition.
Our Clients’ Charter outlines our commitment
towards the successful implementation of the
Communications and Multimedia Act 1998 (CMA).
Our undertakings to the license applicants
including ensuring the license applications are being
processed timely and to ensure that we promote fair
competition and market development through
transparent regulatory processes as outlined in the
CMA.
In view of the increasing demand for various services
and applications from the communications and
multimedia industry, SKMM recognizes the need to
inform and update the industry of existing licensing
application procedure and criteria.
The aim is to facilitate the application process with
clear deadlines and help to improve the
understanding of potential license applicants on the
criteria and process.
TAN SRI KHALID RAMLI
CHAIRMAN, MALAYSIAN COMMUNICATIONS
AND MULTIMEDIA COMMISSION (SKMM)
16 May 2011, Cyberjaya, MALAYSIA
The Communications and Multimedia Act 1998 (CMA)
establishes a framework to promote Malaysia’s
national policy objectives for the communications and
multimedia industry and seeks to provide a generic set
of regulatory provisions based on generic definitions
of market and service activity.
The licensing provisions under the CMA are designed
to allow flexibility with respect to licensing structures
as the licensing requirements vary over time with the
evolution of the communications and multimedia
industry. As the industry evolves towards
convergence, licenses under the CMA are formulated
to be both technology and service neutral. The
licensing regime allows a licensee to undertake
activities that are market specific. This creates
opportunities for expansion into the industry and
provides for a more effective utilization of network
infrastructure.
Under the CMA, there are four categories of
licensable activities. Within the activity categories,
there are two key types of licenses:
a) individual license requires a high degree of
regulatory control which is for a specified person
to conduct a specified activity and may include
special conditions; and
b) class license is a “light-handed’ form of regulation
which is designed to promote industry growth
and development with easy market access.
Standard license conditions apply to both individual
and class license and these conditions are set out in
the Schedule to the CMA.
Policies and
Regulations are the
tools which SKMM
uses to create a
conducive
communications
and multimedia
(C&M) environment
that is both pro-
consumer and pro-
business.
LICENSE TYPES OF license
Individual  Network Facilities Provider (NFP)
 Network Services Provider (NSP)
 Content Applications Service
Provider (CASP)
Class  Network Facilities Provider (NFP)
 Network Services Provider (NSP)
 Content Applications Service
Provider (CASP)
 Applications Service Provider (ASP)

Individual licenses must be applied for and are
granted by the Minister. Special or additional
license conditions may be imposed and such license
conditions are declared by the Minister.
The Minister also has the power to modify, vary,
revoke or impose further special or additional
conditions at any time. However, the affected
licensees will be notified of the intention to do
so to enable them to make the appropriate
submissions.
The Minister may grant a class license in respect of
any matter requiring a license under the
CMA. Unlike an individual license, a class license
merely requires registration, which is an
administrative process.
Application Procedure
Individual license
An applicant who wishes to provide network facilities
and or, network services and or content application
services which require an individual license will have
to submit the following to MCMC:
a. A duly completed Form A (Annexure 1) together
with an application fee of RM10,000.00;
b. Details as per the checklist attached (Annexure 2);
and
c. Such additional information or document as may
be requested by MCMC; failure to submit within
the stipulated timeline given, the application shall
be deemed to be withdrawn and shall not be
further proceeded with, but without affecting the
right of the applicant to make a fresh application.
MCMC is deemed by the CMA to complete processing
an individual license application and make a
recommendation to the Minister within sixty (60) days
of receipt of all relevant and complete3 information
from the applicant. If the Minister agrees with the
recommendation, the Minister will grant an individual
license to the applicant. MCMC will register the
individual license upon payment of the approval fee of
RM50, 000 per license and inform the applicant.
Under the CMA, if the Minister neither grants, nor
refuses to grant, an individual license within thirty (30)
days from the receipt of the recommendation by
MCMC, the Minister is deemed, at the end of the
period, to have refused to grant the individual license
unless the applicant receives a written notice
approving the application for an individual license
after the period.
If the Minister rejects the application for an individual
license, the applicant will be informed of the rejection
in writing and reasons for the rejection.
MCMC will endeavor to complete processing
individual license applications and make a
recommendation to the Minister within fourteen (14)
days4. This is provided that the applicant has
furnished a proper application, with complete and
relevant information furnished.
Class license
An applicant who wishes to provide network facilities
and or, network services and or applications service or
content applications services which are subject to a
class license will have to submit the following to
MCMC:
a. Two copies of the duly completed Form D
(Annexure 3);
b. A registration fee of RM2,500.00;
c. Details as per the checklist attached (Annexure 4);
and
d. Such additional information or document as may
be requested by MCMC.
Model Characteristics
License
Requirement
Full
MVNO
 Owns or provides network facilities and
network services (Tower, HLR, etc.)
 Able to operate independently of the MNOs
 Able to secure their own numbering ranges,
offer its own SIM card etc.
 Have full flexibility on the design of the
services and tariff structures
 NFP individual
license
 NSP individual
license
 ASP class license
Enhanced
Service
Provider
 Do not own or provide network facilities
 Have the ability to secure its own numbering
range, operate its own HLRs, offer its own
SIM cards with its own mobile network code
 Dependent on MNOs for network facilities
and access to radio network
 NSP individual
license
Enhanced
Reseller
 Distributors who resell services provided by
MNOs
 Dependent on MNOs for network facilities
and access to radio network
 Do not have own SIM cards
 Likely to carry out customer care and billing
in house
 NSP individual
license
Reseller
 Merely resell subscription to end users
 Completely dependent on MNOs for every
aspect of service provision, billing and
customer care

Administering License
According to the goal and objective the management
set-out, Telkom decided to apply Enhance
Service Provider, which is the
optimum MVNO model considering the
flexibility on providing service, characteristics of
Telkom requirement, and spending of capital.
In this concern, the company will need
to apply: NSP individual and ASP class
licenses.
--------------------
Licensing Under The Communications And
Multimedia Act 1998
The CMA licensing regime provides an activity based
licensing regime which is technology neutral. Part IV
of the CMA 1998 contains provisions relating to
licenses. There are two types of licenses within four
categories of licensable activities under the CMA
1998. A licensee therefore, may choose to provide
services between eight possible types of licenses.
Section 126 of the Act prohibits any person from
owning or providing any network facility, network
service or applications service except with an
individual or class license. Under the Act any person
who owns a network facility, provision of network
service or applications services that is solely on the
customer side of the network boundary is exempted
from licensing requirement under the Act.
Individual license
An individual license is granted to a person who
conducts an activity which requires a high degree of
regulatory control. Section 6 of the CMA defines an
individual license as a license for a specified person
to conduct a specified activity and may include
conditions to which the conduct of that activity shall
be subject. Section 27(1) further provides that a
person who wants to operate under an individual
license may apply in writing to the Communications
and Multimedia Commission and the Commission
shall make recommendations to the Minister within
sixty days of receiving the application whether or not
that person should be granted an individual license.
These provisions merely provides the procedures for
an application of an individual license. It does not
however, differentiate it with class license.
Nevertheless, it could be said that an individual license
is similar to any type of license whereby the applicant
has to apply in writing to the regulator concerned or
in other words it refers to a license to operate an
activity where there is the highest degree of
regulatory control. Examples of local companies
holding an individual licenses are Digi
Telecommunications, Telekom Malaysia Bhd., Celcom
(Malaysia) and Maxis International. These companies
have each been granted three types of individual
licenses i.e. network facility individual license, network
service individual license and applications service
individual license. They provide services like
earth stations, fixed links and cables, public
payphones facilities, radio communications
transmitters and links, satellite hubs, towers, poles,
ducts and distribution services, cellular mobile
services and IP telephony.
Class license
Class license is a type of license introduced into the
industry by the CMA 1998 to cater for the needs of
small operators. It has a lighter form of regulatory
control and minimal procedural requirements. In class
license, the minister sets out the rights and
obligations which apply generally to persons engaged
in a particular activity. Section 6 defines a class license
as a license for any or all persons to conduct a
specified activity and may include conditions to which
the conduct of that activity shall be subject. Section
131 further provides that a person shall not operate
under a class license in respect of any network
facilities, network or applications service unless
registered by the Commission.

The Minister may grant a class license in respect of
any activity requiring a license under the CMA and a
person who falls within a class license that has been
granted by the Minister under section 44(1) may
operate an activity by submitting a registration notice
to the Commission. This simply means that a Minister
will grant class licenses and lists what services fall
under these different types of class licenses. An
operator therefore needs to check whether the type
of service he intends to provide fall under any of the
services that is listed by the Minister. If the service is
not listed in the determination then the operator
needs to apply for an individual license for that same
activity.
The Communications and Multimedia (Licensing)
Regulations 2000 restrict a foreign individual who is
not a permanent resident and foreign company (as
defined under the Companies Act 1965) from
registering a class license.
Licensable Activities
Within the two-abovementioned license types, there
are four licensable activities. A person who wishes to
provide a service to the industry must provide service
that falls within these four categories i.e. network
facility, network service, applications service and
content applications service.
Network Facilities
Network facility is an activity which provide facilities
or infrastructures to the industry upon which network,
applications and content applications services depend
for example earth stations, broadband fiber optic
cables, telecommunications lines and exchanges,
radio communications transmission equipment,
mobile communications base stations and
broadcasting transmission towers and equipment. In
addition to this, section 130 provides that the Minister
may determine that a licensed network facilities
provider, other than the owner of any network
facilities, be a nominated facilities provider for the
network facilities and thereby exempting the owner of
the network facility from the provisions of the Act.
Network Service
The services that fall under this category are services
that provide basic connectivity and bandwidth to
support a variety of applications services for example
broadcasting distribution services, cellular
mobile services, customer access services and mobile
satellite services. In other words, network services
enable connectivity or transport just like a car on a
road. Most of the network service provider in this
country are also the owner to a network facility,
however, a network service provider who does not
own a network facility may provide network service
using a network facility owned by another provider.
Applications Service
Applications services provide particular functions or
capabilities delivered to end-users such as voice
services, data services, electronic commerce and
other transmission services. The Act also contains
provisions on required applications service. Section
192 provides that the Minister may determine a list of
required applications services which may include,
 emergency services;
 directory assistance services;
 operator assistance services; and
 services for disabled consumers.
Content Applications Service
Content applications services provide a type of
applications service which contains content. In other
words, it is a subset of applications service. Examples
of content applications services are traditional
broadcasting, online publishing and information
services. Section 205 prohibits a person from
providing a content applications service unless with an
individual or class license. Further, section 207 and
209 contain provisions for closed content applications
service and limited content applications service
respectively. Section 207 exempts from licensing
requirement any closed content applications service.
In the absence of any determination made by the
Minister, a closed content applications service is a
closed content applications service is confined to a
single dwelling or a content applications service
provided only to the employees or officers of a single
body corporate. A limited content applications service
provider is also exempted from holding an individual
license though he may be subject to a class license.
Lastly, section 208 provides that any content
incidental to the service is exempted from licensing.

Applying The License
Telin Malaysia is a newly formed Joint Venture
Company owned by Compudyne Telecommunication
Systems Sdn. Bhd. (Compudyne) and PT.
Telekomunikasi Indonesia International (Telin).
--------------------
Telin Malaysia will provide wide range of services
allowed under Network Service Provider (NSP)
License in accordance to The Communications and
Multimedia Act 1998 (CMA), such as bandwidth
Services, Cellular mobile services, access application
services, switching services, gateway services and
other network services. However, Telin Malaysia will
be more focus on two services categories: cellular
mobile services and bandwidth services which will be
described further in this application.
Cellular Mobile Services is retail services which will
be delivered by Telin Malaysia in the form of Mobile
Virtual Network Operator (MVNO) Services. Telin
Malaysia will take the Enhance Service Provider
business model for the MVNO services in Malaysia
where Telin Malaysia will manage its own product,
provide its own SIM Card and in the future will have
the ability to manage its own numbering range and
operate its own HLR. Telin Malaysia will work with
the MNO for the network facilities, as well the access
to radio network.
Bandwidth services is targeting for enterprise and
wholesale market where Telin Malaysia will provide
wide range of bandwidth services starting layer 1 to
layer 3 bandwidth services which include leased line,
virtual private network (VPN), or even extended to IP
Transit services. All of these services will cover both
domestic Malaysia and international where Telin
Malaysia will get the infrastructure form other
facilities provider in Malaysia and also to leverage
Telkom Indonesia Group partnership with Malaysian
operators.
Telin Malaysia will deliver three product portfolios to
our customers in Malaysia, these are;
 Consumer Services
 Enterprise Services , and
 Wholesale Services
Customer services category is our main product
portfolio to be delivered to the market, as a mobile
cellular provider, Telin Malaysia will provide Basic
Services (Voice, SMS, and Data), Value Added Services
(VAS; Remittance, Ring Back Tone, Short Messages
Services Premium, and Top Up).
Telin Malaysia also has the capability to provide
enterprise services, for instance; Mobile Based
Services, Software as a Services (SaaS; E-Office, M-
force, e-scheduler, Freight Forwarding), Integrating
LAN & System, IP VPN Connectivity, and Customer
Premises Equipment (CPE) Managed Services. These
products and services will be elaborated with
Malaysian companies who have the best experiences
in conducting wholesale and enterprise services.
Our products and services in wholesale category are
listed as; Data Services International Private Leased
Circuit (IPLC), International Ethernet Private Line
(IEPL), Network to Network Interface (NNI), Virtual
Private Network (VPN-IP base), IP Transit, Voice
Services, Traffic Termination, Traffic Origination, and
Hubbing Service.
In order to propose products and services will
be provided, Telin Malaysia has an obligation
to apply such a necessary license required.
According to the guideline from MCMC, Telin
Malaysia has to apply both NSP Individual
and ASP Class licenses.
Applying NSP Individual License, several documents
should be prepared are as follow:
1. Form 9 (Incorporation of company) from Register
of Companies.
2. Anticipated operating and capital expenditure,
proposed financing plan including the sources of
financing, whether domestic or foreign. The
minimum requirement for paid-up capital is
RM500,000. This minimum requirement is based
on previous approved applications as this is one
criteria to indicate the financial capability of an
applicant.
3. The proposed operating procedures including a
disaster recovery plan .

4. Any other licenses held by the applicant under
the Act, its group of companies and any company
which is deemed to be associated with a director
of the applicant by virtue of section 122A of
Companies Act 1965.
5. Corporate information including the particulars of
the companies referred to in Sub regulation (7)(d)
and particulars disclosing the ultimate beneficial
shareholders of the applicant and any company
referred to in Sub regulation (7)(d) which hold a
license together with information detailing the
direct and indirect shareholdings of all their
shareholders.
6. Latest audited accounts, memorandum and
articles of association and certified true copies of
Forms 24, 44 and 49 under the Companies
Regulations 1966 [P.U. 173/1966] of the applicant
which have been filed with the Registrar of
Companies.
7. The proposed technical and service roll-out.
8. A description of the nature of the facilities,
service, applications or content and area of
coverage and the types of technology to be used.
9. Copies of any documentation on details of
spectrum assignment, apparatus assignment,
apparatus assignment or a class assignment
Particulars of the above must be stated in the
form (item no.5).
10. Copies of details of the application (if any) on
spectrum assignment, apparatus assignment or
class assignment submitted to the Commission
Particulars of the above must be stated in the
form (item no.6).
11. Joint venture (if applicable)– copies of
documentation on compliance with the Foreign
Investment Committee requirements.
12. A copy of any letter and supporting documents
from the relevant authority on the suspension or
revocation of the license as per item no.9.
13. Attachments must be initialed by the signatory.
14. A crossed cheque for the amount of
RM10,000.00 payable to Suruhanjaya Komunikasi
dan Multimedia Malaysia – being the application
fee for each license applied.
Note : All photocopies must be certified by the Director or the
Company Secretary. Company rubber stamp must be affixed on the
last page of the application form.
On the other side, for ASP license application, the light
fulfillment of documents should be prepared are:
1. Two (2) sets of the Registration Notice
2. Certified copies* of relevant documents in
support of the legal status of applicant
(company/partnership/individual/society/others)
3. A crossed cheque for the amount of RM2,500.00,
made payable to Suruhanjaya Komunikasi dan
Multimedia Malaysia.
4. Organization profile (for
companies/partnership/society) inclusive of
current number of staff and new job
opportunities to be created
5. A proposal on the facilities/services should
include:
a) Introduction – brief description of
network/service/facility to be offered
and other related information.
b) Operating procedures including a
network topology, details of equipment
to be used, connectivity to be obtained.
c) Other related information.
6. Each page of annexure should be initialed by the
above signatory.
Note: Certification must be by Director/Company Secretary or any
other person as authorized by
the Commission.

Based on many scholar studies, it is said that an
MVNO benefit from a thorough upfront screening of
the chances for success of business in the target
market, as well as of the projected financials and the
associated risks.
Some also recommend promising approaches and
strategies and investigate the market for potential
MNOs right from the start.
There are 3 streams for an MVNO to be defined as
the starting project business, these are:
1. Strategy, commercial, and contracts, work
stream
2. Telecom/IT platforms and operations work
stream
3. Content platforms and handsets work stream
Those streams will be aligned with three steps of
phase will be thorough by the common processes of
MVNO business.
Strategy, commercial, and contracts:
1st phase:
 Market forecast and pricing
 Regulatory aspects
 Negotiations with MNOs
 Draft business plan
 Risk assessment
 Sales/distribution concept
Telecom/IT platforms and operations
1st phase:
 Network concept
 Operations concept
 Assessment of existing OSS environment
 Sourcing concept
 Requirements specification
Start-up an MVNO
2nd phase:
 RfP/RfQ commercial
lead
 Partner selection
 Governance concepts
 Contracts finalization,
incl. content contracts
 Final business plan
3rd phase:
 Contracts sign-off
 Setup of reporting
and controlling
organization
 Market campaign
implementation

Mvno in malaysia legal and regulatory requirement

Mvno in malaysia legal and regulatory requirement

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