Malaysian telcos demand a second 5G provider

[ASEAN NOW Content Team]

 

According to three individuals and documents seen by Reuters, Malaysia's major wireless carriers have urged the government approve the establishment of a second 5G service, ahead of a cabinet decision on whether to proceed with a proposal for a single wholesale network.

Following business concerns that a single state-run network could stifle competition, Communications and Multimedia Minister Annuar Musa stated last week that the cabinet will decide by January whether to allow multiple 5G carriers.

 

In November, Reuters reported that mobile operators and Digital Nasional Berhad (DNB), the government agency in charge of 5G deployment, had reached an impasse over pricing and transparency issues.

On Wednesday, DNB aims to undertake an early 5G deployment in three core districts.

 

Three people familiar with the situation told Reuters that representatives from the country's six mobile operators met with ministry officials on Monday to suggest solutions to the gridlock and their ideas for delivering 5G.

Because the meetings were confidential, the people, including two telecoms company officials, sought anonymity.

 

According to the sources, four operators - Axiata Group's Celcom (AXIA.KL), DiGi.com (DSOM.KL), Maxis (MXSC.KL), and U Mobile (IPO-UMOB.KL) - suggested that the government allow the government to allow two wholesale 5G networks, each to be created and controlled by a consortium of carriers.

According to a presentation viewed by Reuters, the operators proposed that the consortia start building the two networks simultaneously next year and then split them in 2023, "offering Malaysia a quick initial deployment and then the security of dual competing networks going forward."

 

According to the slides, the two companies will use existing telco assets to "coordinate implementation and collaborate in the first 12-18 months to enable faster 5G rollout across Malaysia than any single party."

According to the sources, the carriers are also open to suggestions that would allow them to own equity in DNB and have requested more engagement in the government's deployment plans.

"Given the substantial ramifications for the country's digital economy objectives," one of the people said, "we hope there will be continued engagement on the topic."

 

Another carrier, YTL Communications, has expressed opposition to the idea and support for a single 5G network, while Telekom Malaysia (TLMM.KL) has stated that it will support whatever government decision, according to the sources.

U Mobile, DiGi.com, and YTL all declined to comment.
Reuters' inquiries for response to the communications ministry, Axiata, Maxis, and Telekom Malaysia were not immediately answered.

DNB stated that it was not aware of the discussions that took place.

 

"We will respect the government's procedure and express our representations in the appropriate forum," DNB CEO Ralph Marshall told Reuters in an email.

In February, the government rejected a proposal to assign spectrum to carriers, choosing instead for a single shared network to save money, enhance efficiency, and speed up infrastructure development.

 

Carriers are concerned that the plan will result in a nationalised monopoly that will be more expensive than installing 5G on their own, while DNB has stated that it will charge operators less for access to its 5G network than for 4G.

In order to finalise long-term wholesale deals with operators, DNB has also given complimentary 5G services to carriers until March 31.

Telekom Malaysia was the first operator to sign up for 5G testing with DNB earlier this month, but it did not clarify whether it had inked a long-term agreement.