MCMC vs Astro plc

MCMC released a public reprimand yesterday to barred Astro barred from increasing the number of channels until it improves its services to the satisfaction of the Malaysian Communication and Multimedia Commission (MCMC). MCMC has also given Astro a deadline to comply with the Multimedia Communications Act 1998.

Let’s analyse this news at a different point of view with facts and figures:

Astro’s license was issued in 1997 under Telecoms Act and Broadcasting Act. This Act was abolished and replaced by the newer Act namely, Multimedia Communications Act 1998. Logically saying, Astro currently was not governed by any Act and thus it is a free media until it join the new Act. MCMC tries to lure Astro to accept the new Act by extending Astro’s license from 2017 to 2022. This is only additional 5 years extension. Will it be able to lure Astro to take the rope and tight itself?

We know what agenda which constitutes the new Act. The new Act wants to control Astro, just like how it controlled Media Prima, STAR, NST, THE EDGE and other media/press. MCMC is afraid of Astro since it has grown from nothing to big giant, just like Airasia compares to MAS. Let’s think logically for one moment, after 2017, does Astro need license anymore to protect its business? Astro has able to build its brand in majority of the minds of Malaysians. Since its inception, it spent billions in branding and marketing to strengthen its position in Astro. This effort eats into the revenue of Media Prima and now the government wants to use the law to tight down Astro.

Let’s put ourselves in two situations.

Scenario 1: One morning, you and your family switch on the TV and there is no Astro anymore. Astro Malaysia has to be shut down because of intense control and pressure. So, Astro in Malaysia has to be shut down but Astro will still continue its service in our region. How do you feel?

Scenario 2: You and your family switch on the TV and there is no TV3, TV2, TV1, NTV 7, 8TV, TV9. How do you feel?

My analysis on the situation:

1. MCMC really cannot do anything to Astro because it is not controlled by any Act. The old Act has been abolished and Astro has yet to migrate to the new Act.

 2. MCMC can only bark at Astro using newspaper and free TV to tarnish Astro’s image. But this will not affect Astro severely because it has monopolised 40% of households in Malaysia considering Malaysia has 5.5 millions households. In another words, the brand Astro lives in at least 11 million Malaysians’ minds (5.5 million households x 40% x 5 person per household). It is not impossible to ask the 11 million subscribers to ban Astro.

3. Media Prima and Telekom will start IPTV. But this type of business requires huge start up capital, attractive and new contents, and cheap subscription fee. It is a very risky venture/to come in and fight with Astro. How do you convince a 5 year Astro subscriber to shift to IPTV? What type of programme does IPTV can offer to its customers when almost all content has been monopolised by Astro? IPTV need at least 10MB broadband (Please read my previous post on Astro) but our country internet penetration is only 12% currently. How many subscribers can you steal from Astro to achieve economies of scale? Unless IPTV can offer pornography (but this is against the Act), it cannot beat Astro.

4. If Astro does not want to comply with MCMC’s request, what the government can do? Of course we can charge Astro using Sedition Act and National Security Act but this would be too obvious and not so popular when Malaysia still has a low Foreign Direct Investment.

I’ve been an Astro subscriber for almost 10 years. If compare with TMNET and Streamyx, Astro’s service is relatively better. I wonder why MCMC did not reprimand TELEKOM for its bad service. I want to quote from a Minister, ”KALAU TAK SUKA, JANGAN TENGOK LAH” !   







8 Responses to MCMC vs Astro plc

  1. StockGuru says:

    As I keep saying .. the day the govt allows people to put up satellite dishes .. its all over for astro … besides there are many other online avenues which currently outdo what Astro shows …

    While I respect your love for this stock but I really think MCMC would be able to impose decisions since it is the regulatory authority ..

  2. jy says:

    i agree with u…it’s a really good stock…way undervalue….moreover..sun direct in india is doing really well…on ave abt 100k subscribers per month…think of it….after 10 yrs we got 2.2m…but only 3 months they got 350k…the growth is tremendous!!’s due for a re-rating…

  3. StockTube says:

    the conclusion – astro would still give the authorities the run around … can’t blame astro for any of this … but it also gives astro the perception that they’re immortal and guess who get sucked up?

    cheers …

  4. antique says:

    i want to recall ur statement in patrick teoh’s blog. i dun think u read the history of malaysia. even Perak won by DAP, they cannot become the menteri besar for that state. i think u know lah..because they r chinese! ini tanah melayu la encik..paham kan?

  5. Kokokai says:

    I do agree with you BBC. M’sia ‘s FDI is so pathetic and now the government still want to restrict the operations of Astro.If one day, Astro cabut…what happen to us? I can’t live without Astro!!!

  6. Durai says:

    Well written article.

  7. elfhi says:

    Ya’ll talking about supporting astro because ya’ll have a lot of time to waste sitting in front of tv…get up & do somethhing that contribute to everyone…ya’ll make me sick

  8. elfhi says:

    and since you’re in tanah melayu, act like you supposed to…tolerate with others…dont just say ‘ini tanah melayu…’
    Ini tanah Malaysia if you don’t go to school…ya’ll make me sick..again..

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