(Nov 8): I have been consistent in raising policy questions related to the Single Wholesale Network (SWN) model under Digital Nasional Bhd (DNB), a 100% government owned entity then, when I was still a Member of Parliament, in 2022. I asked 15 questions to the then chief executive officer of DNB, Ralph Marshall, on the SWN model, to which he replied. I also issued a list of questions to the mobile network operators (MNOs), most of whom were not in favour of the SWN model, as seen in the joint reply of Celcom, Digi, U Mobile and Maxis. GSMA, an industry association representing MNOs, issued a longer and more technical reply to my questions, questioning the SWN model, while Greg Coombs of Cognitio Consultants published a reply that largely supported the SWN model.

I have also been consistent in calling for an open and transparent tender process for the second 5G network, and a proper evaluation of the impact of a second network on the operational performance and financial condition of DNB.

The Malaysian Communications and Multimedia Commission (MCMC) issued a statement on Nov 1, 2024 announcing U Mobile as the MNO in charge of implementing the second 5G network. This was followed by a longer statement on Nov 6, which tried to explain the rationale of this selection.

I direct the following questions on the award of the second 5G network to the MCMC, to the minister of communications, to the minister of digital, and to the ministers of finance.

My questions are the following:

1. Is the MCMC willing to publicly disclose the terms of the tender for the second 5G network that was issued to the MNOs in June 2024 via the applicant information package (AIP) for the 700 MHZ and 3.5 GHz frequencies? This is necessary, so that industry experts, policymakers and interested members of the public can properly evaluate the terms and conditions of this “beauty contest”.

2. Is the MCMC willing to publicly disclose their “scoring method”, under which U Mobile was judged to have provided the best bid for the second 5G network? This scoring method should include evaluations of detailed business plans for: i) the network design; ii) rollout and planned coverage; iii) service requirements; iv) enterprise and industry development; and v) finance and funding. 

For each of the categories listed above, there should have been detailed assessments and scoring for the:

i) Network design category 

ii) Rollout and planned coverage category 

iii) Service requirements category 

iv) Enterprise and industry development category 

v) Financial and funding

3. Is the MCMC willing to confirm that copies of the tender/AIP documents and specifications were given to the Ministry of Digital and the Ministry of Finance for their perusal, especially for these ministries to evaluate the possible impact of the second 5G network on the operational and financial sustainability of DNB? 

4. Is the MCMC willing to disclose the key performance indicators, which U Mobile has to meet as part of its second 5G rollout? For example, DNB was given the target of reaching 80% of COPA by 2024, which it reached in early 2024.

5. Can the MCMC explain why U Mobile was given the option of working with the other MNOs for the rollout of the second 5G network? Was this part of U Mobile’s 5G proposal, and does this indicate financial constraints faced by U Mobile in terms of the financial expenditure needed for the second 5G rollout as indicated by certain analysts?

6. What processes will the MCMC put in place to ensure that the award of the network provision contract for the second 5G network will be done transparently? For example, in a briefing to Members of Parliament in July 2021, DNB disclosed the process by which EY, a consultancy, went through to evaluate the tenders by network equipment providers, which was ultimately won by Ericsson.

1. Will the ministry organise a briefing session by the MCMC to the government backbenchers as well as to the opposition MPs on why U Mobile was chosen to implement the second 5G network, and to show the detailed proposal by U Mobile with regard to its 5G rollout plan and also its financial proposal? For example, in DNB’s briefing to the opposition MPs in July 2021, a timeline showing three phases of deployment of 5G coverage was shown, and this was the timeline which DNB exceeded by reaching 80% of COPA in early 2024.

2. Will the ministry explain the need for U Mobile to pare its foreign shareholding stake from the 48.3% currently owned by Straits Mobile Investments, which is owned by Singapore’s Temasek Holdings, to 20%? Is this a requirement, which is part of the appointment of U Mobile as the owner of the second 5G network? Fahmi had already explained in Parliament that the shareholding of U Mobile is currently in line with the government’s policy that holders of individual network facility provider (NFP) and network service provider (NSP) licences cannot exceed 49%. How does reducing this shareholding to 20% help U Mobile with its 5G deployment? If the valuation of U Mobile increases because of its 5G appointment, wouldn’t the sale of the 29% stake owned by Straits Mobile largely benefits the foreign shareholder?

1. There have been recent complaints about the 5G service under DNB, as more and more subscribers start to shift over to the 5G network with their new smartphones. In a recent Ookla report, the following was stated:

“Despite initially achieving some of the fastest 5G speeds in the region, Malaysia, with its unique 5G deployment strategy through a nationwide SWN, has experienced a decline in speed as 5G services and availability have increased. Overall, the country’s 5G download speed has fallen from 506.96 Mbps in the second quarter of 2023 (2Q2023) to 387.39 Mbps in 2Q2024, as 5G service increased significantly from 9.4% in 2Q2023 to 26.5% in 2Q2024. The 100 MHz C-band spectrum allocated to the SWN provider, shared among five 5G providers, appears constrained as 5G service and availability increase, leading to declining median speeds. GSMA Intelligence data estimates that the adoption of 5G technology in Malaysia was 10.1% in 2Q2023 and increased to 37.0% in 2Q2024. The rapid adoption of 5G technology is impacting performance and will continue to do so, as adoption rates increase and traffic demand per connection rises. This underscores the importance of ongoing spectrum management to maintain high-performance 5G networks and effectively address the increasing demands and new 5G use cases.”

How will you work together with the Ministry of Digital and MCMC to ensure that DNB’s operational performance in terms of 5G speeds can be maintained if not increased, and that the rollout of enterprise solutions under DNB’s spectrum will continue, especially under Malaysia’s chairmanship of Asean in 2025, as you stated in a speech in June 2024?

2. Are there plans for DNB to transition fully to a 100% MNO-owned entity, so that it can compete fairly with U Mobile once the second 5G network is rolled out to a high enough area of coverage? How will this impact the push by the government for greater 5G deployment, especially in the enterprise solutions space? And how will this affect the rollout of 5G coverage to rural areas?

1. How will you ensure that the rollout of the second 5G network will not impact the financial sustainability of DNB, especially if one or more of the MNOs decides at a future date to leave the DNB's 5G network for U Mobile’s 5G network? Will the government have to “write-off” some of DNB’s existing debts as part of the condition to sell DNB fully to one or more of the MNOs?

Without a clear and coherent policy on the part of the relevant ministries and the regulator, the gains we have made in the 5G space can easily be lost.

Professor Dr Ong Kian Ming is a former MP and former deputy international trade and industry minister.