Telecommunications companies and users will not have to pay more or be at a disadvantage in terms of the wholesale price arising from the nation’s transition to the Dual Network (DN), says Communications and Digital Minister Fahmi Fadzil.

“The wholesale price per gigabyte will not be worse or more expensive than what it is currently. The internet speed will also be maintained,” Fahmi says in a briefing at the ministry’s headquarters in Putrajaya.

The minister announced on May 3 that upon reaching 80% coverage of populated areas (CoPA) by the end of the year, the rollout of the Single Wholesale Network (SWN) under Digital Nasional Bhd (DNB) would move to Phase 2, in which a DN model would be implemented.

“The government’s role, in spite of two entities coming into existence from next year onwards, is to ensure that there will not be a price increase at the wholesale level. That is the commitment of the government as well as that of the telcos. The cost per gigabyte will not be any worse or more expensive than what is being offered currently,” assures the member of parliament for Lembah Pantai, who adds that users will not see a degradation in internet speed following the implementation of the DN model.

Fahmi explains that the Ministry of Communications and Digital has been working hard to achieve 80% CoPA, after which the transition to DN will take place.

“As for the reason behind the transition to DN, as part of our review, we took in ideas from at least eight different models. These were variations, hybrids and augmentations of past models. In the end, the Cabinet decided this is the model we will use,” he says.

“I understand there are arguments about monopoly and also the sustainability of the telecommunications industry. For the government and Cabinet, the chief concern is to honour whatever contracts that have been signed, while addressing concerns that were raised by Cabinet ministers or industry experts. So, we took into consideration numerous issues from many parties in various sectors,” he adds, pointing out that there are countries that have at least “three or four 5G networks such as the US and some European countries”.

Coming months crucial to complete 80% CoPA, task force in place

Data provided by the Malaysian Communications and Multimedia Commission (MCMC) shows that implementation of the 5G network in the country was 59.5% completed as at April 30.

“There are three phases to the network towers — the built-up, on-air and on-board stages. The built-up stage has reached 59.5%, following which it will progress to the aforementioned stages. There will be some technical aspects to getting the towers to the on-board stage,” says Fahmi.

“From a total of 7,509 network towers, we have built 4,827 towers. There are still more than 2,500 towers to be built,” he says, adding that there will be many processes involved in the rolling out of the 5G network until the end of the year.

To this end, Putrajaya has formed a task force for the transition to the DN model following the Ministry of Communications and Digital’s meeting with telecommunications service providers on May 8.

Fahmi explains that the task force, which will be chaired by the ministry’s secretary general as well as the secretary-general of the Treasury, with MCMC as the secretariat, will see to the implementation of the 5G network under DNB, so that it successfully reaches 80% of CoPA by the end of the year and paves the way for a smooth transition to the DN model from a legal, technical and financial standpoint in early 2024.

The task force will include representatives from DNB and other service providers such as CelcomDigi, Maxis, Telekom Malaysia (TM), YTL Communications and U Mobile, as well as other parties that “will be determined later on”.

“They will report to me, and I will present to the Cabinet. If the telecoms providers can make decisions on matters concerning their equity holding, the DN can be operational by as early as Jan 1. The DN’s readiness will also depend on its composition of MNOs (mobile network operators),” says Fahmi.

For context, although 4G coverage in the nation stands at 96.92%, not every telco has 96.92% coverage.

“The reality is that each telco has varying degrees of coverage. The most important aspect of the rollout of 5G coverage is that Entity B will build up its own network separately. Both networks will have more or less the same amount of coverage,” says Fahmi.

As for what happens to the subscribers of telcos in Entity B, of which the “composition has yet to be decided”, Fahmi says there will likely be a commercial arrangement between Entity A and Entity B. “Users who subscribe to Entity B’s network will continue to receive 5G coverage and ride on Entity A’s network. This is made possible by the multi-operator core network,” he explains, citing enterprise solutions as the government’s reason for establishing two separate networks.

“Some telcos may be looking at refineries, offshore platforms. And for some, retail. So, different customers will require different enterprise solutions and equipment. For these telcos, having a second network means they can make certain decisions depending on the nature of their business,” says Fahmi.

“There will be companies that may join DNB in equity shareholding. Concurrently, telcos have discussion on the Entity B formation. Entity B will be operational if all of the MNOs can come to a decision on their equity take-up. It could be as early as Jan 1 next year,” he reiterates.

Meanwhile, when asked what will happen to DNB once the government withdraws its stake from the outfit following the scheduled achievement of 80% CoPa, Fahmi says “the intent to dilute the 70% of the government’s shareholding will go as planned”.

“This was the original idea. The dilution of the government’s stake in DNB was supposed to take place after equity take-up by as many MNOs as possible prior to the dissolution of Parliament last year. There were four MNOs prepared to take it up [but] certain conditions were not met, which caused the entire share agreement to be unresolved,” he adds.

“Therefore, we are not changing the model concerning DNB. For those who felt that we were cancelling our contracts, we are not. With regard to government ownership, the intent to dilute the shareholding will be as planned. But whether there will come a time when the government will fully and completely exit DNB, that is a decision for us to make at a later date. For now, equity take-up for the MNOs [needs to be done] while the government’s priority is to ensure that DNB continues to roll out the 5G network so that 80% CoPa is achieved.”