DNB is also a public-private-partnership — where the public part is spectrum, while the private sector funds the rollout—so that it is not a burden on taxpayers.
Ending decades of dominance, Malaysia’s recent elections have ushered in a new political party and sent a clear message: Malaysians want a government that is growth-oriented, innovative and creates a technology-driven future for their country.
Now the hard part: meeting expectations. All new governments want to change course. Some solutions are counterintuitive, to lean in and not “throw out the baby with the bath water.” The answer is already there and done right, Malaysia will be transformed from a regional actor to being a global leader in 5G. Yes, Malaysia.
All governments are facing three concurrent global trends: closing the digital divide, harnessing the power of new technologies such as 5G to develop policies that actually create new jobs. Covid bitterly revealed that the digital divide in all
countries is much wider and deeper than anyone thought. Throughout the world, governments are funding new telecom infrastructure projects to address this divide. Malaysia created an incredibly innovative solution to 5G — which will create jobs and address the digital divide. It is the determination of a single wholesale 5G network and the creation of Digital Nasional Bhd (DNB) which is mandated to ensure deployment that was a bold stroke — it will transform Malaysia and make it a global 5G innovator.
Fifty years ago, in 1972, Malaysia put itself on the global high-tech map when it welcomed the construction of Intel’s factory in Penang — the tech giant’s first production facility outside the US. Semiconductors represent 36% of Malaysia’s
total exports today. But the nation cannot afford to lean on its past.
Communications technology is the lifeblood of a modern economy, and the DNB can help make Malaysia a leader in the field going forward, just as Penang helped set Malaysia up for high-tech growth five decades ago.
Communications networks connect the world, but ironically they’ve long been thought of as a fundamentally local affair. That’s changing; international businesses are seeking global solutions to their communications needs, and the networks of the future are not just for voice communications or email. Businesses are looking to connect their factories and facilities, and to run them on private networks, connecting their facilities to the cloud and to their operations all over the globe.
To meet these goals, countries and companies need global 5G capability. According to Deloitte, “5G technology marks the beginning of a new era in connectivity that will impact almost every element of daily life. First-adopter countries embracing 5G could sustain more than a decade of competitive advantage".
To realise 5G’s potential, you need spectrum — and lots of it. And it needs to be aggressively priced so that it encourages real sustainable innovation. Spectrum cannot be so expensive that spectrum auction “winners” end up saddled with enormous debt and little capital for new innovation. DNB has both of these key factors. It is the largest holder of 5G spectrum in the world, with exceptionally low cost. DNB is also a public-private-partnership — where the public part is spectrum, while the private sector funds the rollout—so that it is not a burden on taxpayers.
On their part, carriers have made capacity commitments — which in turn enabled DNB to offer lower cost for spectrum, nearly 80% lower than current 4G. Carriers throughout the world are shedding their infrastructure. Why: because the capital cost is too high. DNB’s cost recovery model removes the burden of infrastructure competition so that carriers and others can focus on service sector competition. All of this translates into a simple but powerful fact: Malaysia is poised to be a global 5G leader.
The DNB was designed to be a catalyst for connectivity. It offers a flexible, dynamic platform for communications innovation, aiming to show that 5G is not just a faster network, but a fundamentally different way of connecting a whole range of devices, operations and business processes. This opens up other possibilities such as open-access wholesale, which could be a catalyst to creating new services. The combination of spectrum availability with low prices creates clarity and gives confidence to international firms that DNB will give them the capability to develop new 5G applications.
In doing so, DNB will create jobs, innovative new services, and make Malaysia an international model. The transformative potential of 5G cannot be overstated.
Accenture estimates that 5G will create 16 million new jobs in the United States. What’s more, every ICT 5G job will create an additional 1.8 jobs. These jobs are high-tech, well-paid, and provide a road to prosperity for future generations.
To achieve all this, the DNB must not just be a resource for Malaysia’s incumbent operators — although it is that too — but a platform for technology companies from around the world to build new applications and rethink how communications can drive innovation.
There are several key attributes of a platform that enables innovation. Inexpensive spectrum is a necessary — but not sufficient — condition for innovation in 5G. Additional efficiency — and further reduction in cost — can be gained from this spectrum using emerging technologies such as spectrum multipliers. The cloud has already transformed the computing industry and is rapidly doing the same with telecommunications. This move to the cloud not only drives better economics for operators, but also makes it fundamentally easier for innovation to happen to extend this platform, enabling a third-party ecosystem. To enable this ecosystem, this platform needs to be inherently open with well-defined and stable access points. For example, to leverage the continuous breakthroughs in Artificial Intelligence (AI), AI innovators will need deep, secular access to the platform — both to enhance the platform itself and also build new solutions. In addition, new applications need permissive regulatory environments where innovations can test, pilot, and prove the viability of their ideas. These applications include innovations in autonomous vehicles, spectrum sharing, and more.
Predictably perhaps, forces of reaction, even wireless industry groups halfway across the world, howled in protest at the creation of the DNB. In a perverse way, this was a sign that DNB was on the right track; in Silicon Valley, if one isn’t being disruptive, then you’re not living up to the real potential. Malaysians have clearly said that they want a vision for an innovative, growth-focused Malaysia. Now, the new government can transform Malaysia making it a world leader in communications innovation in 5G and beyond.
Amit Mital served as Special Assistant to the President and as Senior Director, National Security Council from 2021 to Aug 2022.