KUALA LUMPUR: The government should auction off spectra of different frequencies to encourage the development of broadband in the country, said DiGi.Com Bhd’s new CEO Henrik Clausen.

“I hope there is going to be an auction and I think there’s a good chance that we will take that route, because it is the most fair in terms of giving access and distributing frequencies,” he said at a media briefing here yesterday.

Clausen noted that most countries had moved away from “beauty contests” — a selection process where the authorities will review proposals on the spectra usage submitted by bidding parties — to embrace auctioning off blocks of frequencies.

He added that DiGi.Com’s parent company Norway-based Telenor Group had experience in participating in auctions, and Clausen himself had participated in a few.

DiGi.Com is eyeing the 900MHz spectrum, which was very appropriate for 3G network coverage, he said. “Over time, it is necessary to acquire more spectrum from the perspective of national coverage.”

It had been reported that the Malaysian Communications and Multimedia Commission (MCMC) is currently working with the telecommunications industry to work out a blueprint on spectrum planning and refarming.

In a research note, CIMB Research said in Malaysia, the 800-900MHz blocks were used in 2G mobile telephony, trunk radio and fixed wireless.

The research house said it expected DiGi to aggressively bid for the refarmed 800-900MHz spectra. DiGi had only 2X4MHz at the 900MHz level, it said.

Meanwhile, Clausen said the group was expecting a relatively strong growth in its postpaid segment, underpinned by the growing popularity of smartphones among consumers which in turn drives down their prices.

“The smartphones and handsets can get cheaper, and it is important as it will help to drive growth,” he said.

Clausen added that the group would also defend its average revenue per user (ARPU) in the prepaid segment going forward by offering consumers more minutes and other services to go along with their prepaid plans.

DiGi expected this strategy to sustain its subscriber number growth, he added.

This article appeared in The Edge Financial Daily, June 8, 2010.