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PUTRAJAYA (May 3): After nearly five months since announcing the 5G rollouts review, the unity government has decided to maintain status quo and continue with the single wholesale network (SWN) model under Digital Nasional Bhd (DNB) until 80% coverage of populated areas (CoPA).
Communications and Digital Minister Fahmi Fadzil told the press on Wednesday (May 3) that upon reaching 80% CoPA by-end 2023, the rollout will shift to a “Phase 2” where the nation will move to a dual wholesale network (DWN) model.
Under the DWN shift, a separate entity, which Fahmi merely dubbed as an unidentified “Entity B”, will start developing the nation’s second 5G spectrum network as early as January 2024.
“This decision was made with a shift in focus to elements of adoption and innovation based on comprehensive 5G technology,” the minister said, adding that the model also takes into account the sustainability of the telco industry in Malaysia, thus ending the monopoly element that is often associated with DNB.
According to Fahmi, the nation's 5G network CoPA has reached 57.8% currently, from 54.7% as at end-February, leaving only 22.2% or another 2,000 sites to be covered to achieve the 80% milestone. In contrast, DNB had previously said it aimed to achieve the 80% CoPA target by end-2024.
“What is important is that the government ensures the rollout achieves the 80% CoPA as what we have signed in the contract [between DNB and Ericsson (Malaysia) Sdn Bhd], and beginning here the government and all parties involved will begin discussions, including those that provided financing,” he added.
Fahmi continued that the transition could enhance coverage through the participation of another service provider, without affecting the existing 5G services under DNB.
“Having a multiple network ecosystem, it will allow for avoiding the problem of a single point of failure, and this redundancy will also enable the entire capacity to be increased more than what has been projected under SWN. But we do not believe that there will be a reduction or deleterious effect on network speed, if anything, with the presence of another network, we are ensuring interoperability,” he added.
“(The) Ministry of Communication and Digital is always working with the Ministry of Finance (MoF) and DNB as well as service providers to ensure the transition to a DWN model will run smoothly without affecting the interests of the people and investor confidence,” he said.
Touching on the government's involvement in Entity B's 5G network, Fahmi said the government will not be involved in commercial considerations — such as network equipment used, staff employed, and corporate structure. However, he noted that the 12 sen to 13 sen wholesale price per GB under DNB will serve as a benchmark for the entity, while its retail price to consumers will be influenced by tools like the Mandatory Standards on Access Pricing (MSAP).
According to DNB, the total cost of its 5G rollout is RM16.5 billion, comprising RM12.5 billion for the network equipment and infrastructure — to be provided by Ericsson — as well as RM4 billion in corporate costs.
“To be fair, the Ericsson contract was given through a tender process, I think that has to be reemphasised,” Fahmi said.
Shortly after ascending to the premiership in November last year, Prime Minister Anwar Ibrahim announced that the unity government would review the nation’s state-owned 5G network introduced by previous administrations as it was allegedly not formulated transparently.
On Tuesday (May 2), foreign envoys from the European Union (EU) and US warned Malaysia over the risks to national security and foreign investments amid concerns that the 5G review would potentially allow China’s Huawei Technologies Co Ltd to bid for a role in the telco infrastructure.
Addressing the concerns, Fahmi said he will meet with all foreign ambassadors interested in the issue, but emphasised that Malaysia is a sovereign nation which “has its rights and power to decide its internal affairs without the intervention or involvement of external parties”.
Citing sources, Reuters reported in March that the government planned to switch to a DWN model by 2024.
Later that same month, Anwar announced that the unity government is to review all monopolies to ensure that the public is provided better and fairer services. This followed the unravelling of Puspakom Sdn Bhd’s monopoly on vehicle inspections.