KUALA LUMPUR (Nov 1): U Mobile Sdn Bhd has been selected to implement Malaysia's second 5G network, the Malaysian Communications and Multimedia Commission (MCMC) announced on Friday.

"U Mobile Sdn Bhd, subject to the approval of MCMC, is allowed to collaborate with other MNOs (mobile network operators) in the implementation of Malaysia’s Second 5G Network.

"MCMC will continue to oversee the progress of the implementation of Malaysia’s second 5G network to ensure total compliance with all regulatory requirements as provided for in the Communications and Multimedia Act 1998 (Act 588)," it said in a statement.

It said the MNO was selected after it had "rigorously undertaken processes encompassing detailed deliberations on technical and commercial aspects", and that the selection was made in the interest of "maximising the true potential of 5G technology for the benefit of rakyat, the industry, and the nation".

U Mobile, linked to Tan Sri Vincent Tan Chee Yioun, won the bid against Maxis Bhd (KL:MAXIS) and CelcomDigi Bhd (KL:CDB). The tender closed at end-July.

Previously, Telekom Malaysia Bhd (KL:TM) had also expressed its intention to lead the second network but failed to complete its subscription of shares in Malaysia's first 5G network operator Digital Nasional Bhd (DNB) within the stipulated deadline. The share subscription was a prerequisite to bid for the second network.

Most Malaysian telcos have proposed for the second network ever since the setting up of DNB, a Ministry of Finance-linked company that was set to roll out Malaysia's 5G infrastructure across populated and rural areas to be leased out to the MNOs.

Currently, Maxis, CelcomDigi, U Mobile and YTL Communications Sdn Bhd own a 16.3% stake each in DNB.

The latest development could spell the exit of U Mobile from DNB. It remains to be seen whether the other MNOs will remain in DNB or join hands with U Mobile instead.

U Mobile had earlier signed memorandums of understanding with telco tower operator Edotco Group Sdn Bhd, as well as Chinese digital network equipment provider ZTE in relation to the proposed second 5G network roll-out.

There is a concern that once the second network is set up, the players would just focus on the densely populated centres where demand for 5G is expected to be high, leaving DNB to invest in building up the 5G infrastructure in rural areas, where the demand does not always justify the investment.

In a recent interview with The Edge, Digital Minister Gobind Singh Deo said that despite this possibility, the sustainability of DNB will remain intact if it is able to "provide 5G to industries" and thus remain commercially viable.

“I’m fully confident that it [DNB] will not only survive but also play an integral role in how Malaysia develops its digital economy moving ahead," Gobind said at the time.