This article first appeared in The Edge Malaysia Weekly on March 6, 2023 - March 12, 2023
FOR the last couple of weeks, I have struggled, deciding whether to write this article. Would I improve on the quality and depth of the ongoing deliberations with regard to Digital Nasional Bhd (DNB) and the Single Wholesale Network (SWN) strategy for rolling out 5G nationwide or would I foster already hardened views and biases? I am biased, as I have invested time and intellect. I was a party to past discussions, as a member of the Economic Action Council (EAC), the Digital Council and other committees, when deliberations were held before the then government made the decision.
It appears to me that many of the ongoing discussions, the criticisms and scepticism, may have arisen due to the lack of knowledge on how and why the decision was made to proceed with the “out of the box” SWN strategy. Without understanding the overall context, the debates centred on either specific issues or very broad dogmatic statements, like having competition is better or the government should stay out of business when private enterprises are more efficient.
Let me start off by stating the obvious. It is the right and responsibility of every government to review past decisions, to improve upon and to evaluate, and make better decisions to serve the people.
I am under no delusion that I will be able to provide the full comprehensive facts and analysis in a single article. It is a complicated industry, highly technical, with ever-evolving innovations. And the basis of arriving at any decision is multi-faceted, from costs to efficiency to quality of service, bridging the urban-rural divide, the social implications, and inclusions, of jobs, of new investments and business opportunities. And because any decision is also predicated on assumptions — of the future, of demand for 5G, of the risk of lost opportunities, of reactions and actions of market players domestically and overseas such as global cloud and solution providers as well as local telcos — judgements are necessary. In other words, one cannot be certain Decision A is 100% right while Decision B is 100% wrong.
I hope, by articulating the facts of what transpired, over a period of defined time, providing this context will help the decision makers of today to be better informed. And it is for this reason that I feel compelled to write, even as I am certain many people, especially my friends in the private sector, will be offended.
Why do we make decisions? To achieve what we set out as our objectives. What are those objectives with regard to this 5G rollout?
5G is a critical foundational infrastructure that can quickly enable the digital ecosystem and therefore help accelerate the digital transformation plan for the nation. To attract investments, both foreign and local, to promote innovations and R&D, all 5G access seekers should expect a level playing field, absent of rent-seekers and “gatekeepers”. This will provide better-paying jobs and opportunities, especially for the young, and reduce the brain drain and attract talents from abroad. Possibly, some of these companies may grow to become global and regional champions. Faster availability of 5G and lower cost per GB will create these digitalisation opportunities.
In May 2020, the EAC appointed a Digital Malaysia Vision committee to develop a digitalisation vision and plan. It was obvious that Malaysia needed to catch up with our neighbours, and that digitalisation of the economy was a critical path towards accelerating economic growth and job creation.
By controlling the foundational infrastructure, the telcos are oligopolists, making excessive returns with no fear of new competition
I was appointed to chair this committee. Others in the committee were Tan Sri Jamaludin Ibrahim (former president and group CEO of Axiata Group Bhd), Ralph Marshall (who held directorships in companies including Usaha Tegas Sdn Bhd, Maxis Bhd, Astro Malaysia Holdings Bhd and Tanjong plc), Peter Tan (chief technology officer of CTC Global Sdn Bhd), Afzal Abdul Rahim (commander-in-chief of TIME dotCom Bhd), Tan Hooi Ling (co-founder of Grab Holdings Ltd) and senior officers from the Ministry of Communications and Multimedia, Ministry of Science, Technology and Innovation, MIMOS (Malaysian Institute of Microelectronic Systems) and MAMPU (Malaysian Administrative Modernisation and Management Planning Unit). Others engaged included MITI (Ministry of International Trade and Industry), MCMC (Malaysian Communications and Multimedia Commission), MDEC (Malaysia Digital Economy Corporation) and many from the private sector, including Fusionex, Aerodyne Group, Securemetric Bhd, Brandt Inc, 123RF Technology Sdn Bhd, Microsoft Corp, Huawei, AWS and Alibaba Group Holding Ltd.
There existed then at least 25 digital and digital-related blueprints and plans in the various ministries and agencies of the government. And 160 initiatives were to be implemented, coordinated and tracked.
The Digital Malaysia Vision committee’s findings were presented to the EAC in August 2020. If the outcomes were to create higher-paying jobs, reduce the cost of living, help businesses grow, make Malaysia globally competitive and meet the aspirations of younger Malaysians, we needed to address digital infrastructure (or the lack thereof), people with digital skills, money to fund ideas and a government that is catalytic and proactive. And results are best achieved by focusing on a few needle movers.
And the biggest challenge was coordination within the government. The proposed solution was to create a Digital Council, a single decisive council to drive Digital Malaysia, supported by a secretariat.
The five highest-priority needle movers were creating a data-rich society (with a Digital First, Cloud First strategy), education and learning (through a digital literacy and digital skills framework), SME digitalisation (SME onboarding and digital hubs), connectivity (5G, infrastructure sharing, national digital ID and low affordable costs), and public-private partnerships (government to act as a catalyst and facilitator, providing policy clarity and consistency, and private sector to invest and implement).
I was involved in two subsequent decisions of the National Digital Economy and 4IR Council, of which I was also a council member. One was the Committee to Recommend a Facilitative Legislative and Regulatory Framework to enable the Digital Economy and 4IR in Malaysia. I co-chaired this committee with Tan Sri Jamaludin Ibrahim. Others in the committee included representatives from MCMC, the Attorney General Chambers (AGC), Bank Negara Malaysia, MDEC, MAMPU, Chief Government Security Office (CGSO) and National Registration Department (NRD). Among the deliveries were the Data Classification, Data Sharing and Cloud Policy, public sector data sharing and a proposed omnibus law to enable data sharing within the public sector, a national data-sharing policy with equal access to all private sector (no rent-seeking) and proposed Personal Data Protection Act (PDPA) amendments.
The other was on the 5G rollout.
At a working group meeting at the Economic Planning Unit (EPU), chaired by Minister Datuk Sri Mustapa Mohamed, I proposed that we consider the SWN model for the rollout of 5G. Representatives of the private sector and the relevant ministries and agencies were present. There were those who opposed. A series of discussions and engagements followed over the months.
Diagram 1 summarises how far Malaysia has fallen behind since the launch of the Multimedia Super Corridor (MSC) in 1996, when Malaysia was clearly ahead of most nations globally. I should know. In 1995, I launched an internet platform for banking and stock trading in Malaysia (PalDirect), and in 1996, an e-commerce platform (PalWorld). To put things into perspective, Google was launched only in 1998 (although their search algorithm was developed in 1996) and Alibaba was founded only in 1999.
Indeed, the Pakatan Harapan government in 2018/2019 recommended an SWN approach to roll out 5G, presumably sensing the urgency. It was to be owned and implemented by the telcos (mobile network operators, or MNOs) as a consortium. This would have reduced capital cost of investments (plus outflow of ringgit) and prevent duplication of infrastructure. But it was not to be, as the telcos could not come to an agreement.
The Malaysia Digital Economy Blueprint was launched in February 2021, which included a call to expedite 5G rollout. On March 1, 2021, DNB was formed to accelerate 5G rollout via an SWN model. Instead of being owned by a consortium of private telcos, it was to be owned initially by the government, with the intention to partly divest to private telcos subsequently. But the government would remain a shareholder and hold a “golden share”, to drive 5G as a catalyst and a facilitator to digitally transform the economy through the enterprise applications of digital technology, such as artificial intelligence, Internet of Things (IoT), connected vehicles, robotics and drones.
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