(Updated)

Govt appoints Ericsson Malaysia to build 5G infrastructure at lower cost of RM11b

Govt appoints Ericsson Malaysia to build 5G infrastructure at lower cost of RM11b
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KUALA LUMPUR (July 1): Following a rigorous tender exercise initiated in March, Digital Nasional Bhd (DNB) announced that it has appointed Ericsson (Malaysia) Sdn Bhd to design and build the National 5G Network at a total cost of RM11 billion. 

Noticeably, the RM11 billion cost of the 5G infrastructure development, which will not be borne by the government, is much lower than the previously budgeted cost of RM15 billion. 

In terms of financing, DNB said Ericsson has undertaken to arrange financing for the supply, delivery, and management of the entire 5G network. 

On the other hand, DNB will securitise future cash flows from its wholesale business via Sukuk programmes to finance all other network operating expenditure and to repay all the vendor financing arrangements.

DNB, the government-owned special purpose vehicle (SPV) that is undertaking the deployment of the 5G infrastructure and network nationwide, said the revised cost includes tower rental and fibre leasing, of which more than 60% is expected to benefit Bumiputera and other Malaysian contractors over the next 10 years. 

"Ericsson will undertake the design and development of the end-to-end 5G network comprising core, radio access and transport network (RAN), operation and business support systems (OSS/BSS) and managed services. 

"Ericsson will also undertake capacity building and innovation programmes to support local vendor development and participation, as well as to boost 5G adoption amongst the public. This is in addition to developing use cases to accelerate industry participation," DNB said in a statement. 

DNB clarified that the 5G adoption in Malaysia will focus on serving three key service offerings, namely enhanced mobile broadband (eMBB), ultra-reliable, low latency communication (URLLC) and massive machine type communications (mMTC) — targeted at Malaysia’s industries such as oil and gas, ports, airports, government services, healthcare, power and utilities, manufacturing, banking and finance, education, retail, and agriculture.

Equally important is the need to safeguard users and platforms through enhanced security, which is a critical element of 5G technology and services, it added. 

DNB on track to launch 5G network by end-2021

DNB chairman Datuk Asri Hamidon said the plans remain on track as the 5G network and ecosystem is scheduled to be launched by end-2021 in Kuala Lumpur, Putrajaya, and Cyberjaya. 

By 2022, Asri said DNB will start deploying 5G to five major cities and districts in the states of Selangor, Penang, Johor, Sabah and Sarawak; and thereafter, nationwide to cover 17 cities as well as rural areas from 2023 onwards.

"The goal is to bring about inclusive prosperity to the rakyat through 5G connectivity. We achieve this in two parts: the first is through the immediate impact on the local vendor ecosystem. This is amplified by Ericsson’s committed value-creation activities in Malaysia’s knowledge economy through varied initiatives such as 5G-related knowledge building and technology transfers, which is estimated at a value of RM4 billion over the period of the contract. 

"The second is to achieve significant coverage by making available 5G services in the targeted areas by end-2021, and achieving the 80% population coverage goal by 2024," he said. 

Meanwhile, Ericsson president and chief executive officer Börje Ekholm said his team is delighted to partner with DNB for the deployment of 5G in Malaysia as the company brings leading 5G solutions and global experience in deploying 86 live 5G networks, as well as strong market knowledge — having been part of shaping the information and communication technology industry in Malaysia since 1965.

"As a platform for innovation, 5G will also enable Malaysian entrepreneurs to create future applications for the benefit of consumers and businesses in the country. To this end, we will collaborate with DNB on a 5G Experience and Innovation Lab, to fast track the adoption of 5G use cases," Ekholm said.

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Kathy Fong