This article first appeared in The Edge Malaysia Weekly on June 24, 2024 - June 30, 2024
Last week, the Ministry of Communications directed the Malaysian Communications and Multimedia Commission (MCMC) to initiate the process of selecting mobile network operators (MNOs) to develop the second 5G network.
The directive is for MCMC to issue on July 1 the applicant information package for eligible MNOs to submit their bids to participate in the development of the second 5G network.
In the announcement, Communications Minister Fahmi Fadzil stressed that the transition to a dual-network 5G model is “an effort to end the monopoly of 5G services” and that it will result in a “more competitive and sustainable telecommunications industry”.
Digital Nasional Bhd (DNB) is currently the sole party that builds and operates 5G infrastructure. DNB is offering 5G coverage at 13 sen/GB to the telcos, enabling all players to price their service at RM1/GB, which is half the price of 4G services as redundancy is removed.
Each of the four MNOs — CelcomDigi Bhd (KL:CDB), Maxis Bhd (KL:MAXIS), U Mobile Sdn Bhd, and YTL Communications Sdn Bhd, a unit of YTL Power International Bhd (KL:YTLPOWR) — hold 14% equity interest in DNB.
Telekom Malaysia Bhd (KL:TM) is the one telco that has yet to fulfil the conditions precedent for the share subscription agreement to take up a stake in DNB.
The development of a second 5G network has created uncertainty over the continuation of the rollout of 5G infrastructure by DNB.
Fahmi has been in office for nearly 18 months. As such, he is expected to have done sufficient research and analysis on the single wholesale network model — that is, the model will only work when all telcos have subscribed to the sole 5G infrastructure.
Will the country’s 5G rollout be affected if DNB’s financial sustainability is in doubt? It is clear that the 5G network is an essential infrastructure to attract high-tech investments.
Hopefully, the Ministry of Communications will be able to address this, knowing that while DNB isn’t under its purview, telecommunications infrastructure is.
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