PUTRAJAYA (March 16): Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said on Wednesday (March 16) that the Malaysian government via its 100%-owned company Digital Nasional Bhd (DNB) will maintain the single wholesale network (SWN) model in the country’s planned rollout of the fifth generation (5G) mobile telecommunication network and at the same time, offer 70%-ownership in DNB to mobile network operators (MNOs) in the country, under a move which demonstrates the government's firm stance on policy continuity.
Tengku Zafrul said that by maintaining the SWN model, there will be no additional financial implications in relation to DNB’s contract with appointed 5G network hardware provider Ericsson Malaysia Sdn Bhd.
“Ericsson has drawn up an implementation plan by optimising contract work and services for local vendors, with an estimated 61% prioritised for Bumiputera interest,” Tengku Zafrul said at a joint press conference at the Finance Ministry’s office here with Communications and Multimedia Minister Tan Sri Annuar Musa.
Tengku Zafrul said the implementation of the 5G network and infrastructure is a key pillar towards realising the country’s digital economic aspirations.
According to Tengku Zafrul, the government's proposed DNB stake sale to MNOs will have no impact on the existing contract between DNB and Ericsson.
Tengku Zafrul said DNB stake sale negotiations with the MNOs are expected to conclude by the end of June 2022.
Annuar said the proposed sale of a 70% stake in DNB to MNOs was brought forward from 2024 to encourage public private partnership for the nation’s 5G rollout.
Annuar said the government had previously mulled over a proposal for the DNB stake participation by 2024 by MNOs under the SWN model, in anticipation that 80% 5G coverage across the nation will be achieved.
"(DNB) Equity stake offering to be completed by end of June (2022), brought forward from 2024 to encourage public private partnership in 5G rollout,” Annuar said.
Annuar said the government has deliberated over different models for the 5G network rollout and has decided that the SWN model with accelerated equity participation by the MNOs will be the best option.
The government made its decision after taking into consideration numerous views from stakeholders such as the MNOs, Members of Parliament and the public, according to Annuar.
Annuar said the decision to maintain the SWN model which will allocate 5G network spectrum exclusively to DNB does not make DNB a monopoly because MNOs will be involved through stake acquisitions in DNB.
“The spectrum allocation for 5G will not be assigned to MNOs but to DNB exclusively, as DNB will manage the rollout of the infrastructure of the entire [5G] network.
“The MNOs can then lease the 5G spectrums from DNB separately at the retail stage,” he said.
In terms of wholesale pricing for the 5G network, Annuar said the price for 5G will cost less than 20 sen per gigabit, which is lower than the wholesale price for the 4G network.
He said the Communications and Multimedia Ministry will assume its regulatory functions for Malaysia’s 5G network, while the management of DNB is within the purview of the Finance Ministry.
“In the past rollouts of the 3G and 4G networks, we took eight to nine years to achieve an 80% coverage in the country.
“Based on our past experience, we are targeting within three years to achieve 80% coverage in terms of 5G network in the country. We have to do better this time,” Annuar said.
The Malaysian government has decided to maintain the SWN model for the 5G rollout, despite an earlier proposal by MNOs to implement a dual wholesale network (DWN) model for the nation’s 5G scheme.
Annuar said the SWN model is the best solution to accelerate the implementation of the 5G network with the objective of facilitating 5G usage among the people in the country.
“The rakyat (people) should be able to enjoy access to high quality 5G services in a fair, equitable manner, at an affordable price, especially to help expedite Malaysia’s post-pandemic economic recovery in the coming years.
“The SWN model will help bridge the urban-rural digital divide to enable all Malaysians to enjoy high-quality services and (ensure 5G services) be widely provided to them through telcos (telecommunication companies),” he said.
According to Annuar, the participation of telcos in DNB allows these companies to be involved in the implementation of the nation’s 5G network.
"The experience of the telcos in developing 3G and 4G networks in Malaysia can also help in launching the implementation of 5G in Malaysia,” he said.
According to DNB’s website, the company which is wholly owned by the Minister of Finance (Inc) has been mandated by the Government of Malaysia to be the single neutral party to undertake the deployment of 5G infrastructure and network nationwide.
DNB, which was established in 2021, said the company is licensed under the Communications and Multimedia Act 1998 to provide wholesale 5G coverage and capacity to other licensees under the Act.
"The 5G network rollout is expected to cost RM16.5 billion in total over the next 10 years, with tremendous benefits in store for the local economy,” DNB said.
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