Malaysia govt weighs second 5G network: reports

Malaysia appears finally about to break its 5G impasse, with plans underway to licence a second national network.

The government hopes to launch the new network by January 2024 to provide competition to state-backed Digital Nasional Bhd (DNB), the sole 5G provider, Reuters reports, citing four sources close to the plan. A proposal is expected to go to the Malaysian Cabinet on Wednesday.

< Figure 1: Malaysian government is reportedly hoping a second network would speed up 5G rollout.
(Source: Davidovich Mikhail/Alamy Stock Photo)

The rejection of the single wholesale network scheme follows a review that began soon after the Anwar government took office last November. Prime Minister Anwar Ibrahim said the creation of the project had lacked transparency. It is one of a number of government-led initiatives, worth billions of dollars, that have come under scrutiny by the new administration.

Additionally, the DNB rollout has been beset by delays and a lack of support from the operators, who have complained about the high interconnection costs and the limitations of a single network.

Only three operators – state-invested Telekom Malaysia, YTL and CelcomDigi – have taken stakes in DNB, acquiring 65% between them. The government owns the remaining 35%. Two other operators, Maxis Communications and U Mobile, have stayed on the sidelines, saying they would await the outcome of the review.

DNB network to cost $3.7 billion

The decision to build a second network is not a complete surprise, given the delays and the tepid support of the telecom industry. Early last year the operators proposed building an alternative 5G network, but the government rejected the idea.

If approved, the second network will end the bottleneck and accelerate the deployment of 5G services. But the government will have to make a decision on how the competitor will be structured. The easiest course would be to put it in the hands of Maxis and U Mobile, the two operators that declined to invest in DNB.

DNB has said its network would cost 16.5 billion Malaysian ringgit (US$3.7 billion) over ten years, funded by commercial loans and equity. It issued a MYR11 billion ($2.49 billion) contract to Ericsson in July 2021, rejecting a bid from Huawei.

It says its rollout had reached nearly 50% of populated areas by the end of 2022 and would reach the 80% mark some time in 2024.

Reuters said the government would require DNB and the telcos to accelerate rollout to ensure coverage reaches 80% of populated areas by the end of this year.

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— Robert Clark, Contributing Editor, special to Light Reading