A media statement by former deputy trade and industry minister Professor Dr Ong Kian Ming on Oct 9, 2023:
I, like many others in the corporate and diplomatic sectors in Malaysia, was surprised and somewhat taken aback by the statement made by Prime Minister Datuk Seri Anwar Ibrahim on Sept 27, 2023, that introducing a second 5G network in Malaysia would allow for more effective participation by China’s Huawei with a provision of both “Western and Eastern” technology.
I was surprised for many reasons.
Firstly, if there was a need for a second 5G network, according to the principles of openness and transparency espoused by Anwar himself via his Madani vision, the award of this contract should be done via an open tender and not by directly negotiating with any single entity, Huawei included. Upon assuming office in November 2022, one of the first things he did was to order an investigation into the way the current 5G network contract was awarded to Ericsson via Digital Nasional Bhd (DNB). Subsequent investigations found that the contract was indeed awarded transparently. It would be a disservice to the Madani way of governing if the second 5G network was awarded in a manner where only one bidder was involved.
Secondly, the case for a second 5G network has not been firmly established, especially since DNB seems to have done a good job in rolling out coverage of the 5G network, and has been ranked by Opensignal as one of the countries with the fastest 5G speeds in the world. Importantly, the same ranking also shows that “Malaysia tops the table for the uplift in users’ average download speeds using 5G over 4G, with a staggering 25.7-fold increase”. While this is partly caused by the relatively low number of existing 5G users in the country, it cannot be denied that the single wholesale network model adopted by DNB has not only been effective in rapidly rolling out 5G coverage, but that the speeds which it has achieved are much better than 4G, especially when international comparisons are made. If both the speed and coverage of the existing 5G network are more than sufficient, is there a need then for a second network?
Thirdly, the agreement on the shareholding structure of DNB by the mobile network operators (MNOs) has not yet been signed. This shareholding agreement is necessary to ensure commitment of the main MNOs, especially Maxis and Digi/Celcom to DNB. Some industry watchers speculate that the two “big boys” harbour intentions of “killing off” DNB, so that its assets can be bought on the cheap and they no longer have to pay the same access fees to DNB. The consequence of this is that the Ministry of Finance (MOF) will be left holding the debt of DNB, without having the major telcos paying their share of 5G access fees which will be used to service DNB’s debt. This would lead to the experience of “socialisation of losses” and “privatisation of profits”, which Malaysia has seen many times in past administrations, which I’m sure Anwar would been keen to avoid, especially since it will be his ministry, the MOF, which will end up holding the bad debts.
We should be keenly aware of the geopolitics surrounding the 5G issue, but we should make decisions firmly based on our own national interest.
Professor Dr Ong Kian Ming can be reached at [email protected] or via Linkedin (https://www.linkedin.com/in/imokman/).