In line with the USP Regulations, it is mandatory for telecommunication services companies that record a net revenue of more than RM2 million for the financial year under review to contribute 6% of the determined net revenue to the USP Fund each year. This is an annual obligation and licensees are required to submit the Return of Net Revenue (RONR) and their audited financial statements of the previous calendar year by 30 June of each year.
For the year ended 31 December 2022, USP Fund generated a total revenue of about RM1.75 billion, which was mainly comprised of RM1.51 billion from core income and RM0.24 billion from non-core income. The core income, which was represented by contributions to USP Fund showed a slight increase of 2% or RM34.30 million compared to the previous year of RM1.48 billion.
The non-core income, which is mainly the interest income recorded at RM240.32 million with an increase of 9% compared to the previous year of RM219.90 million.
The increase was attributed to the raise in the Overnight Policy Rate (OPR), decided by Bank Negara Malaysia since May 2022 totaling 100 basis points in response to the strengthening economic post pandemic and to support the weakening currency, as well as upside risks to inflation persist. The latest revision announced in November 2022 resulted to the OPR for 2022 stood at 2.75%, leading the higher weighted average interest rate of 3.22% against 2.23% in 2021.
USP Fund is the most effective tool to accelerate the deployment of the project by providing such a fund to support the digital inclusion initiative. The main expenditure of the USP Fund is attributable to the costs of USP projects implemented by the Designated Universal Service Provider (“DUSP”). The total expenditure significantly increased by more than 100% to RM2.37 billion as compared to RM870.36 million in the year 2021.
The components that make a huge impact on the expenditure were due to the ongoing USP projects (75%) and a new project, Jalinan Digital Negara (“JENDELA”), which starting to rollout in year 2022.
The continuation of the ongoing USP projects were in relation to the project such as initiatives by Major Contributors, Broadband Wireless Access, Time 3 Extension, National Fiberisation and Connectivity Plan (“NFCP”), and 1 Pusat Ekonomi Digital Keluarga Malaysia (“PEDi”).
The deficit after tax recognised for the financial year ended 2022 was RM618.24 million as compared to the surplus after tax of RM559.95 million in the previous year. This was mainly due to the huge increase in the USP claims submitted by the DUSPs.
The USP Fund ended the financial year 2022 with total assets of RM10.78 billion compared to RM10.88 billion at the end of the previous financial year. There was an increase in other investments which comprised of term deposits with licensed banks of RM10.06 billion compared to the previous year of RM10.04 billion.
Contribution receivables are managed within the ambit of USP Regulations to minimise its credit risk with a total Contributions and Other Receivables of RM453.21 million compared to RM752.69 million in 2021, respectively.
Liabilities as at 31 December 2022 increased compared to previous year. This was due to the increase in accruals in respect of USP claims submitted by DUSPs by RM516.20 million, from RM229.90 million recorded in the previous year to RM746.10 million.
For the financial year ended 2022, due to the deficit after tax of RM618.24 million, the USP Accumulated Funds recorded a decrease of 6% or RM0.62 billion to RM10.03 billion from RM10.65 billion recorded in the previous year.
The Communications and Multimedia (“C&M”) sector remained resilient despite the Covid-19 crisis. This was due to the continuing demand for essential services provided. Covid-19 has shifted our lifestyle to a new norm. It is envisaged that with quality coverage and exposure to the latest innovations, Malaysians would be more inclined to embrace the global digital era.
In line with the Government’s efforts in bridging the digital divide, for the financial year 31 December 2022, the USP Fund implemented the USP programs with a cumulative commitment of RM10.90 billion.
This indicates that MCMC continues to be committed to empowering connectivity and strengthening the Malaysian ecosystem across the sectors of industry and Malaysian citizens through the USP Fund initiatives.
1 currently known as Pusat Ekonomi Digital (“PEDi”)
