KUALA LUMPUR (Oct 6): The government will provide an update “within the next few weeks” on whether the additional charge by major mobile network operators (MNOs) for the public to upgrade existing subscription plans to 5G can be waived.
Speaking to reporters after launching the country’s first private 5G network on Friday, Communications and Digital Minister Fahmi Fadzil said the ministry is engaging with the Malaysian Communications and Multimedia Commission (MCMC) and MNOs on this matter.
“We hope within the next few weeks that there is some update on this matter. The request is for them (MNOs) not to have an additional charge for anyone to take up 5G, just like how we migrated [from 3G to 4G] — we started using 4G without having to opt in. One of the suggestions that the ministry has put forward is rather than having to opt in, we can opt out. For example, in order to use 5G, you need to have a 5G-ready device.
“Out of about 45 million accounts in Malaysia currently, I am informed there are more than seven million 5G-ready devices. Even if we have immediate opt-in, not everyone can use 5G right away. So that's why programmes such as 5G Rahmah would be helpful, particularly for the B40 (bottom 40% income group) to purchase and procure 5G devices, so that they can use 5G,” he said.
Major MNO brands in Malaysia like Maxis, Digi and Celcom have required customers to pay up to RM20, depending on their subscription plan, to access the 5G network, which Fahmi revealed that even his wife was baffled by such a requirement.
Earlier on Friday, Fahmi was attending the launching ceremony of the nation’s first private 5G network that meant to serve Petroliam Nasional Bhd (Petronas) for its 5G deployment at the Sungai Udang Regasification Terminal facilities in Melaka.
Petronas did not reveal the cost of investment or any monetary requirements to deploy this private network at its facilities, with support from Telekom Malaysia Bhd and Digital Nasional Bhd (DNB).
The ceremony was also attended by Deputy Prime Minister Datuk Seri Fadillah Yusof, who updated that as of September, Malaysia's 5G network coverage in populated areas stood at 70.2%, with 5G subscriptions totalling 2.49 million, translating into a 7.4% penetration rate.
“We are on track to achieve the target of 80% 5G network coverage in populated areas by the end of 2023, before transitioning from the single wholesale network (SWN) to a dual network model,” he said.
DNB equity agreement to be signed by mid-October
Subsequent to the event, Fahmi told reporters here that the government’s 5G task force is still deliberating on a dual network model, and “have not yet come to a decision as to which MNO will be in which entity”.
“We anticipate the signing of the share subscription agreement for the take-up of equity in DNB to take place first, before further discussions on the second network at a more advanced stage.
“So the first step is signing [the agreement] — which we hope, I am informed by the task force, that if all things go well — before the middle of this month,” he said.
Fahmi also said for the establishment of 5G Entity B, the government is considering allocating 100 MHz of spectrum under the 3.5GHz band to the second network.
“This is one of the things that we are discussing. In order to make full use of 5G, the International Telecommunication Union, or ITU, stipulated that you need a minimum of 100 MHz of the 3.5 GHz bandwidth, 3.5 GHz spectrum, for efficient use. That is what is recommended.
“So it is not impossible that we may allow DNB to have 100 MHz of that spectrum band, and Entity B to possibly take up the second 100 MHz block,” he said.
Fahmi also assured that this does not violate the agreement to build up 5G networks between Ericsson (Malaysia) Sdn Bhd and DNB.
“Bandwidth has nothing to do [with the agreement]. As far as we are concerned, this is the prerogative of the regulator, which is the MCMC,” he said.
Under the current SWN model for 5G, DNB is the sole entity that manages the country’s RM11 billion 5G infrastructure. It has entered into an agreement with Ericsson, which has undertaken to arrange the financing as part of the agreement to supply, deliver and manage the entire 5G network.
DNB will securitise the future cash flow from its wholesale business with MNOs, via sukuk programmes to finance its other network operating expenditures, and meet its obligations to repay financiers when they become due.
Hence, no government funding is required for the 5G network roll-out under the current model.
With the government now deciding to build a dual network model, it is unclear whether DNB will still be capable of generating the same future cash flow as projected under the SWN model.