The government has rejected appeals by the telcos to issue a second 5G wholesale license, but it will allow them to own as much as 70% of the wholesale network owner, Digital Nasional Berhad (DNB).

Robert Clark, Contributing Editor, Special to Light Reading

March 18, 2022

3 Min Read
Malaysia wins telcos' backing for 5G wholesale network

The Malaysian government has given the final go-ahead for its 5G wholesale network plan and, crucially, has won the backing of the big four operators.

The government has rejected appeals by the telcos to issue a second 5G wholesale license, but it will allow them to own as much as 70% of the wholesale network owner, Digital Nasional Berhad (DNB) (see Malaysian telcos call for second 5G network – report).

Finance Minister Zafrul Abdul Aziz announced the decision Wednesday, arguing that the single wholesale network (SWN) model was a strong public-private financing model that tapped into the established financing ecosystem, Soyacincau reported.

In a joint statement, the four 4G MNOs – Celcom Axiata, Digi, Maxis and U Mobile – said that they welcomed the single wholesale network and the opportunity to invest in DNB.

"We believe that a successful 5G deployment for Malaysia will be built on the principles of transparency, sustainability and security," they said.

Figure 1: The Malaysian government has given the final go-ahead for its 5G wholesale network plan. (Source: mkjr_ on Unsplash) The Malaysian government has given the final go-ahead for its 5G wholesale network plan.
(Source: mkjr_ on Unsplash)

The big decisions on the DNB ownership and the SWN suggest that the government and operators have made some significant progress in a short period. Just a month ago, DNB chief Ralph Marshall complained that "posturing" network operators were holding back the 5G rollout (see Malaysia 5G network boss blames 'posturing' MNOs for delays).

The operators had been concerned about DNB's high interconnection fees and the transparency of the SWN process.

It appears that those issues have been dealt with, but they are about to be replaced by a new set of problems.

The government has not decided how or when it would sell off its DNB stake, how it would be priced or what role the MNOs would play in the DNB operations.

Scope of involvement

Public Investment Bank said the decision to sell down its DNB ownership was a compromise between the government's insistence on the SWN and the operators' preference for two networks.

"However, there may be issues around such arrangements, [such as] what is the scope of involvement of each of the MNOs and will any disagreement or differences in opinion result in a potential delay in 5G rollout," it said in a research note.

Communications and Multimedia Minister Tan Sri Annuar Musa, who oversees industry regulator MCMC, said that the government did not want to create higher costs that would burden consumers.

He said that the deployment of multiple networks in previous mobile generations had caused inefficiencies and additional costs.

"Now, there is the multi-operator core network (MOCN) technology that allows one tower to be shared by six companies," he said.

"Imagine how much savings can be made and the cost reduction that will be enjoyed by consumers. Our target is for the cost of 5G to be cheaper than 4G."

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DNB, set up by the Finance Ministry and funded primarily through commercial loans, aims to provide 5G coverage for 80% of the main population areas by 2024.

It has signed Ericsson as its main supplier in a ten-year $2.7 billion deal (see Ericsson beats out Huawei to win Malaysia 5G contract).

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— Robert Clark, contributing editor, special to Light Reading

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Asia

About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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