Monday, November 08, 2010

USP - What it is supposed to do and where it is now

Yesterday at the Malaysian Communication and Multimedia Commission, some time was spared to provide a detailed (as detailed as possible that 2 hours in the morning can be...) briefing to members of the media and bloggers on the USP (Universal Service Provision) and specifically on the effective management of the USP fund, a question which was raised both by bloggers as well as Wangsa Maju member of parliament YB Wee Choo Keong sometime last week.

Zulkarnain Mohd Yasin, Acting Senior Director, USP Division, had the task to conduct the briefing and credit must be given to this man, who is only two months into his current position, to provide as much details as possible to those present.

To recap;
The USP Objective:
1. To achieve communication penetration to communities living in areas with low coverage
2. To encourage and increase the use of ICT in communities to achieve knowledge based community
3. To support social-economic development in local communities
4. To bridge the digital divide

And to achieve the objective, the following are strategies adopted;
5. To develop communication infrastructure and basic utilities (by expanding basic telephony and cellular capabilities to those in remote and low coverage areas)
6. Provide broadband facilities to communities (to provide ICT centres that are equipped with broadband ability to individuals and communities & providing a platform through these community broadband centres for knowledge and human capital development)
7. Providing basic equipment to enable individuals who are less fortunate to connect to the cyberworld
(by providing netbooks or computers as well as basic systems application as an incentive for the community to achieve the broadband initiative)

The funds used to finance this program is part of the funds generated from profits that are gained from the license holders (Telcos) with the exception of content providers (broadcasters). The funds generally grow between RM800 million to Rm1 billion annually (which is derived from 6% of the nett profit of these telcos) from these telcos and is guaranteed by law by virtue of Section 204 of the Multimedia and Communication Act of 1998 (AKM 1998)

The objectives are met through the following projects;
basic telephony, cellular penetration, community broadband centres, broadband library, 'Kampung Wifi (only in proof of concept stage), netbook ownership, affordable broadband affordability and the exemption of tax for mobile telephones.

Now, so far it is quite easy to understand, and all this is predetermined by first finding out about which community qualifies and who gets these assistance.

In order to ensure that the target group is reached, the clarification of these communities are based on the following;
1. 'Low coverage area', which basically means that in order for that community to qualify even before some proposal is received, the area must be;
a. The area of CBC must be below the National Average for Broadband penetration
b. Low cellular penetration by definition of population per square km lower than 80 people
c. Area where low basic telephony is available that is 20% below national average

and the target community must also be;
2. Community where they are considered to be the less privileges by means
a. A community that has the same perspective of social and economic factors but has not acheieve the collective means in terms of community or as an individual
b. Physically challenged
c. Children in protective communities
d. Women in rehabilitation
e. People in low cost communities

In all honest, the program seems to be well thought out and there is a benchmark in terms of where this NBI (National Broadband Initiative) is aimed at..all good so far

As such the target USP has defined above is further narrowed down to
And to achieve all those set out in the USP plan, it simply comes down to this;
If questions were not asked, we wouldn't have been told of whats in the pipeline, delivered or delayed.

We are now told that between 2002-2008 a total of Rm1,501,300,000.00 (1.501.3 Billion) was used to
i. Provide basic telephony - RM629.2 million
ii. To build communication towers along the East-West highway - RM64.7 million
iii. Community Broadband Centres - RM527.7 million
iv. Broadband Library - RM46.0 million
v. 'T-3' Phase 1 - RM233.7 million
all the above has been done and delivered

And now between 2009 - 2011, the following is to be delivered
vi. 1 million netbooks - RM1 billion (in progress)
vii. Mini Community Broadband Centres - RM10 million (in progress)
viii. Community Broadband Centres for homes - RM150 milllion (delayed)
ix. Network expansion - RM40 million (Planning)
x. 'T-3' Phase 2 - RM1.571.4 billion (in progress)
xi. Kg.Wifi - RM520 million (Planning)

The broadband initiative is actually a good plan to raise the level of playing field especially to the communities in the low coverage areas. The horizon for those learning in rural communities must surely increase with this initiative.

But the real question remains how such a gigantaum task is managed and delivered and how much leakage is pre-empted?

Having sat down for half a day, taking it all in, and given the opportunity to see a commnuity broadband centre in operation is too much of a PR exercise, where MCMC could have provided all this well ahead of the question raised both in blogs and parliament. And this is for the other government departments to take heed, look at your KPIs, and provide details of management and scrutiny before it is scrutinised!

When I asked about the delivery details of the netbook, I was simply told that there are several pipelines, and the task is not demand driven, but more of supply driven. Basically, the task lies with the regional offices that deals with the suppliers. In other words, the manufacturers are given (presumably) an order (for example, the next delivery is scheduled in December, and MCMC has committed that around 300k units of netbook will be delivered, although no details as to whom and where was provided except for a chart that lays out the communities by state)

I have also found out that a long list of SMEs (that was not given to us) has been given the task of working with MCMC to do this dissemination.

Right. All good.

So how then did this net book reach this blog, and it certainly wasn't from somebody that
a. lives in a remote coverage area
b. falls into the definition of any of those that has been spelled out above

The NBI plan, and the USP funds, which is specifically designed to benefit the community through a well though out roll out has not been delivered in totality. In the presentation yesterday. Zulkarnain Yasin specifically mentioned that it is wrong if the USP funds is used for anything not laid out in the USP program.

It is precisely these kinds of blemish in delivery that affects the government machinery and instead of wasting time with police reports and bothering bloggers, more time should be spent to ensure that the commission delivers what it was set out to achieve in the Multimedia Communications Act of 1998 (AMK98)

So for those who have not seen what the netbook could be, presenting the Mutiara, by Mutiara Smart Computing Sdn Bhd
A little info about Mutiara Smart Computing Sdn Bhd (formerly known as MIMOS Smart Computing Sdn Bhd) name changed since January 2010. MSCSB is w wholly owned subsidiary of MOF Inc. Its board of Directors are; the company is managed by;
  1. Mimos Smart Computing Sdn Bhd was established in 1998. It is a wholly owned subsidiary of Mutiara.Com under JKP Sdn Bhd and Telekom Malaysia.
  2. MSCSB is directly involved in providing total ICT solutions in the field of service, production, hardware maintenance and distribution of ICT.
  3. MSCSB’s main business activities include the production, assembly and distribution of computing devices, ICT equipment rental services, hardware maintenance and support services and project management.
  4. They produce other business machines, but only 1 netbook for the MCMC USP NBI. The Netbook is called MUTIARA.
  5. since Januray 2009, Mimos Smart Computing (now known as Mutiara Smart Computing Sdn Bhd) has been working with TISS MSC(Manufacturers and developers of T3 Security products) in promoting the T3 SecurityKey as a collaboration in securing the MIMOS Smart Computers. With this collaboration, MSCSB is now actively creating the awareness in many government agencies by conducting presentations and seminars throughout Malaysia
Mutiara is just one of the companies (presumably) benefiting from this exercise, and I am certainly not faulting it. In fact, I am all for home grown businesses and industries, and if Mutiara is committed to following guidelines and not play to the tune of the person right at the top of the Ministry tasked to deliver the NBI, so be it.

It is certainly helping a list of local resellers and support that will provide the all important after sales service to the recipients of the netbook (presumably).

But the million ringgit question is how did the netbook above that was supposed to get to the low income, under privileged who live in the 'low' coverage areas end up with someone who showed it to me?

UPDATE:10 Nov 2010

In my posting yesterday, I asked questions of the Mutiara Netbook that was featured. I have now received confirmation that it was part of a batch of 40 Netbooks delivered to MCMC. The batch were all Mutiara Netbooks. The question then is ;
1. Why were the 40 so special that they had to be delivered to MCMC?
2. Who received it?
3. Who were they meant for?
4. What was the objective?

One reader who commented as 'Ron' cited that he has one in his possession. It is wrong for me to accuse anyone of having it as being in the wrong position of having it in the first place. What if the one in Ron's possession was part of a CSR gift from MCMC? If so, why in the first place did MCMC choose to give away the very same netbook for a gift in the first place?
So many questions, so little answers......

also read:
Big Dog's 'Virtuoso or deceit?'
MACC probes Netbook purchase
NST Farah Naz's report
Deputy Minister of MOIC & C response to YB Wee Choo Keong's question on USP Funds
YB Wee's response to MCMC's press briefing
Meet the idol....


ron said...

i got one too. should i return it ?

what the heck can any kids do with the netbook when there is not even a wordprocessor (eg Microsoft Word).

It's gonna be an expansive jukebox for mp3, avi and 3gp.

reducing digital divide my ass.

Bridge to Jelebu said...

This is what happened if minister does not understand technology. He thinks of computers in terms of bicycles. Remember, last time it was trendy to give bicycles away to kampong folks to win their votes. So this ,inister thinks by giving netbooks he can get the villagers to vote Umno.

Freddie Kevin said...

Hi Tony,

Could we do the maths? As I recall reading, only rm500mil of the USP fund is remaining.

From what you have posted, 2002-2008 rm1.5bil was spent in 7 years.

2009 and todate (ongoing) rm3bil spent in two years!

Freddie De Souza

Tony Yew said...


Please see updates on the original posting. Thanks for your comments

Hello Freddie (YNWA)
The Funds according to Deputy Minister MOIC&C is still 'intact'.
Basically they r saying, they planned to spend it and keep about RM400m (which they are sure will grow again by year end).

So technically, the Deputy Minister is right. As for the expenses Phase 2 is ongoing, and disbursement is according to provisions according to the law (which means that the USP funds are for USP projects, and in this case the NBI)

And yes, the posting about figures is derived fro the presentation by USP division coupled with hard copies of the presentation.

(But from my sources, there could be a hood over our eye...more to come!!)

BTW, a good past 7 days for the reds don't you think?

Anonymous said...

I think in general, the country has adopted amazing programmes and the initiative taken to bridge the digital divide is a good one.

My problem isn’t in the programmes devised but in the execution phase. We could not have devised more thorough and well planned programmes. I applaud the people who came up with the programmes.

But the execution is really pathetic.

Most of the time, greed is our biggest enemy. We lose focus and the programmes take a different form.

What we need is for some change and to remove all the cancerous individuals immediately. We should exercise zero tolerance for people who mismanage funds and execute unprofessional work conduct.

This is the case because people who are key management staff are not behaving in an exemplary manner. So it is difficult to inculcate such perfect work order. Can you imagine in a company where the key managers are also the people involved in mismanagement of funds. These are people with no work integrity preaching to their subordinates on principled work culture.

This is where we have allowed ourselves to be. When a staff reaches the age of fifty in a Government, Semi-Government or Corporatised Department, the one thing on their mind is a retirement plan. The days of my parents, retirement plan is the pension that they get or their life saving.

Nevertheless we must start somewhere and in some way. It is not an easy path.

Yes, the USP funds are meant to be spent and not kept in the bank but it does warrant prudent and well thought spending. Also, if the money could not be spent, maybe TELCOs should not charge the stakeholder exorbitant fees.
So what should we do? So many things to be done but unfortunately, you got to rake out all the bad individuals to get it back going – if it was going once.

All looks good on paper, but let's do site visit and audit the infrastructure.

Same a company can make their account looks great but not necesarily reflecting what is on the ground.

Fed Up

bull gates said...

no microsoft word? use openoffice la!

Freddie Kevin said...

Dear Tony (YNWA2Yew2),

I am a bit curious about the maths again. Which begs answers for the following:

1. When did the USP get its initial payment?

2. When rm1.501 Bil was spent from 2002-2008, was the sum amassed by 2002, rm4.79 bil? My reading is that this is so.

Reason I'm asking is cos from 2002 onwards, as you alluded.. "The funds generally grow between RM800 million to Rm1 billion annually..." then from 2002-2010, the USP would have accumulated another rm800mil x 7 years (using 2003-2009 financial years) = rm5.6bil. Right?

3. Is the funds in cash or by way of contra or both? By saying rm400 mil is still remaining, implies it is in cash (but it could still be by contra or both).

Why am I asking cash or contra? By contra, Telcos will spend on the infrastructure (which they need to utilise anyway) and deduct from the sum due to the USP. See where I'm getting at? If it is cash, then please clarify 1 & 2 above?

Getting old la. Understanding and maths deteriorating.

Best regards

Am now 'Red' faced after getting Stoked.