5G deployment remains under scrutiny

by AZREEN HANI / pic by AFP

THE government’s single wholesale network (SWN) approach for the 5G rollout nationwide remains contentious, despite Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz’s clarification that the SWN model has been discussed by the Cabinet before.

Tengku Zafrul denied that the Finance Ministry (MoF) has been making unilateral decisions on the 5G implementation via Digital Nasional Bhd (DNB), saying that the Communications and Multimedia Ministry (KKMM) has been involved in the process of planning for a national 5G network since 2019.

“All this time, MoF has been in close cooperation with KKMM and its agency SKMM (Malaysian Communications and Multimedia Commission) in every effort to enhance the digital connectivity in Malaysia.

“I have always discussed with the KKMM minister, past and present, and I will continue to work closely with the KKMM minister to ensure that the country’s digital economy thrives,” he said in a statement posted on his official Facebook page last week.

“However, due to the difference in interests between telcos, efforts to share networks, cut costs and launch, the 5G network could not be implemented as hoped for.”

He said this in response to Deputy KKMM Minister Datuk Zahidi Zainul’s statement, who said that the 5G rollout was awarded to DNB despite objections from the ministry.

KKMM, Zahidi said, was instructed to award the contract to DNB without any consultation.

Opposition leader Datuk Seri Anwar Ibrahim said that the lack of transparency on the matter could potentially pave the way for DNB to be another 1Malaysia Development Bhd (1MDB) scandal.

“The point is, there are no tenders, the process is irregular and the cost is uncertain, sometimes it is RM15 billion and (it is) up to RM18 billion,” he said on Saturday.

To date, only Telekom Malaysia Bhd has confirmed its participation in conducting 5G trials with DNB to optimise the services.

Media reports have stated that another government-linked company (GLC) Celcom Axiata Bhd — which is under the government-linked multinational telecommunication corporation Axiata Group Bhd — is likely to follow suit.

Former Prime Minister Tan Sri Muhyiddin Yassin has warned the government that a change of SWN model would result in reputational risks to the government, which include loss of investor confidence, serious financial and legal implications, loss of economic generation amounting to RM122 billion by 2030, loss of opportunity cost and the loss of up to 15,000 jobs related to the development of the 5G network.

“I hope the government will consider this matter in determining the implementation model that is most suitable for the people as a whole. This includes aspects of inclusiveness and people’s ability to enjoy 5G services at a low cost.

“In addition, I would also like to remind people that this supply-based model is also important to ensure that 5G services can be enjoyed by residents living in rural areas,” Muhyiddin said in a statement.

However, Malaysian United Democratic Alliance or Muda information chief Zaidel Baharuddin said if we are worried about the sentiment of foreign investors, opening the 5G spectrum licensing process openly will create much better sentiment compared to monopolies by state-owned companies.

“Enough of us returning to this monopoly system, if we want this monopoly to be given to GLCs that have to borrow and owe, it’s akin to 1MDB,” he said.

“If it is true that the government wants to focus more on rural infrastructure and extensive coverage, then put these conditions into an open auction scheme. This means that any company that wants to get a licence or 5G spectrum must comply with certain conditions, otherwise, their licences will be revoked,” he added.

In September, The Malaysian Reserve (TMR) reported that Malaysia’s deployment of 5G may have several challenges to overcome mainly due to the size of its spectrum.

DT Economics associate partner Dr Lara Stoimenova highlighted risks that are associated with the deployment of the 5G network in Malaysia, including lack of clarity in policy objectives and its adverse impact on economic efficiency.

Recently, Fitch Solutions’ ICT research head Andrew Kitson told TMR that a more viable approach would be if the government allows operators to build their own networks, while establishing some ground rules.


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