(AFP) Malaysia will allocate third generation (3G) mobile telecommunications licences through a 'beauty contest' rather than an auction, the government said today.

The 3G spectrum will be allocated to just three network facility providers, Energy, Communications and Multimedia Minister Leo Moggie said.

Licences will be for 15 years and will be priced at RM50 million.

Tender documents will be issued in February next year, detailing the 'beauty contest' criteria, which will include corporate experience, financial strength and guarantees.

Licenses will be issued by July 2002 and it is expected that 3G services will be launched by the successful applicants by late 2003 or during the first half of 2004.

Get money upfront

Prime Minister Mahathir Mohamad indicated last month that Malaysia was unlikely to auction 3G licences because high bids at auctions in other countries had been too costly for the companies that secured the licences.

"The government believes that getting money upfront is not all that important. It is what we get all the way through in the future that is important to us..," he said.

"We want to make sure that once the telco gets this licence to operate then they can make money and if they make money, then as you know government makes money."

Third-generation mobile phone services allow speedy access to data and video through the Internet.