MCMC proposes accounting separation for communications, multimedia industry to improve transparency

10 Sep 2012

The Malaysian Communications and Multimedia Commission (MCMC) has published a press release outlining its proposal to launch a consultation on an ‘Accounting Separation Framework and Implementation Plan’, which it hopes will improve operational transparency in the domestic communications and multimedia industry. Under the plan, the MCMC says that local telecommunications service providers will soon have to prepare separate wholesale and retail financials for the regulator. The watchdog’s proposals are designed to ‘reduce information asymmetry, enhance transparency and complement the existing regulatory instruments to address and prevent anti-competitive behaviour in the telecommunications industry. Once accounting separation is implemented, service providers will be required to produce regulatory financial statements for wholesale and retail services as if they were separate businesses.’ As such, the MCMC aims to establish accounting separation using historical cost accounting in 2013, and then progress to current cost accounting from 2014 onwards.

Commenting on the strategy plan MCMC chairman Dato Mohamed Sharil Tarmizi said: ‘We believe that a robust accounting separation framework will propel the industry to a higher level of competition which, in the long run will benefit consumers.’ He added, ‘Service providers will also reap strategic benefits from accounting separation by gaining a better understanding of unit costs, profitability of different services and the impact of technological change on profitability.’