The committee says the monopoly of 5G spectrum by DNB is putting the country at risk of losing income

by ASILA JALIL / pic by BLOOMBERG

PAKATAN Harapan (PH) communication, digital and multimedia committee calls for the government to debate on the implementation of 5G in Parliament which it claims is posing various risks to the country.

The committee said the monopoly of 5G spectrum by government-owned Digital Nasional Bhd (DNB) is putting the country at risk of losing income from the sale of the spectrum to telecommunication companies, which is estimated to be worth between RM7 billion and RM12 billion.

“At a time where the federal government’s annual revenue has been severely affected by the Covid-19 pandemic, it is certain that this measure will have a negative impact on its revenue. This matter should be revised again,” said the committee.

DNB was appointed as the special purpose vehicle for the nationwide rollout of 5G spectrum in the country.

DNB is expected to spend between RM16.5 billion and RM20 billion in the next 10 years to build the 5G connectivity which is expected to cover 80% of the country by 2024.

The committee highlighted the expenditure for 600 DNB employees is projected to be RM2.5 billion or an average of RM34,733 per employee per month within the 10-year period.

The committee is made up of Lembah Pantai MP Ahmad Fahmi Mohamed Fadzil, Shah Alam MP Khalid Samad, Segambut MP Hannah Yeoh, Kluang MP Wong Shu Qi, Alor Setar MP Chan Ming Kai and Wanita Keadilan communication director Lor Ker Chean.

It also stated that based on an interview dated Oct 16, 2021, DNB CEO Augustus Ralph Marshall said the company may make a series of bank loans issue sukuk by next year which will amount to RM8 billion.

“As DNB is fully owned by the government, these loans are contingent liability which is risky and will be borne by the public eventually if DNB fails to settle the payments.

“This should be reconsidered given that the government’s debt burden is expected to increase,” it said.

In terms of technical implementation, the committee said there are several major risks including legacy issues which may arise once telecommunication services shift to more advanced technology in the future.

Based on the Malaysian Communication and Multimedia Commission’s guideline dated July 9, 2021, telcos are only allowed to use the existing spectrum to provide 4G services only and not 5G or beyond.

The committee said this issue is an unreasonable technological constraint which removes the nature of “technology neutrality” and must be reconsidered.

“Therefore, given the risks outlined above, we are of the view that the DNB and the entire 5G network implementation must be discussed in Parliament, and be brought to the Infrastructure Development Select Committee before its implementation.

“There is no need for the government to take these risks if the network can be implemented in a way that generates revenue instead of becoming a contingent liability like this,” it added.

The 5G network rollout will kick start its Phase 1 in Kuala Lumpur (KL), Putrajaya and Cyberjaya by year-end.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said Phase 1B will follow, covering nearly 40% of the population in major cities in Selangor, Johor, Penang, Sabah and Sarawak by the end-2022 while the rollout for the rest of the country will be done in stages with 80% national coverage targeted by 2024.