DNB is expected to spend between RM16.5b and RM20b in the next 10 years to build the connectivity

by FAYYADH JAFFAR / pic by TMR FILE

DIGITAL Nasional Bhd (DNB) 5G rollout comes under scrutiny again, this time from DAP lawmaker Dr Ong Kian Ming (picture) who questioned the lack of transparency over the matter.

He asked why the government had chosen to award a concession to DNB, a state-owned company, to operate the 5G network instead of allowing other companies to bid for the project.

The Bangi MP, who is also the former International Trade and Industry deputy minister said that when Pakatan Harapan (PH) was in charge, the first plan was for a consortium-led model in which telco companies would own the majority stake in a single company that would be in charge of the rollout of 5G. The government would only own a small percentage of this company.

“Why did the Perikatan Nasional (PN) and now Keluarga Malaysia (KM) governments change this model to one where the government owns 100% of the entity responsible for the 5G rollout? Wouldn’t the existing telco players in Malaysia, with their many years of managing capital expenditure for the rollout of telco infrastructure and services, including the rollout of 4G, be in a better position to be responsible for the 5G rollout compared to DNB?” he said in a statement yesterday.

Citing Mexico’s 5G network as an example, Ong said the Mexican government had chosen a 100% government-owned operator to manage their 5G network, but that it had failed miserably.

“The only other country in the world that is using the SWN (single wholesale network) model for 5G rollout is Mexico, through a 100%-owned government entity called Altan Redes, which was given the responsibility of deploying a 4.5G network infrastructure as a path towards full 5G rollout. In July 2021, this company filed for bankruptcy because it was not able to meet its rollout targets and secure enough customers,” he said, adding that this is a very serious issue that should be addressed by the government.

DNB was appointed as the special purpose vehicle for the 5G spectrum in the country and is expected to spend between RM16.5 billion and RM20 billion in the next 10 years to build the connectivity, which is expected to cover 80% of the country by 2024.

On Nov 20, 2021, DNB clarified that extensive discussions have been and are taking place with telcos on the country’s 5G rollout.

DNB said telcos’ feedback, particularly their readiness, has been taken into consideration in the planned rollout of the nationwide 5G network.

A draft Reference Access Offer for 5G wholesale services was shared with the Malaysian Communications and Multimedia Commission and the telcos last September.

Ong also pointed out that public auctioning of the 5G spectrum would have been a much fairer way of awarding the contract than giving it to DNB and could raise more funds for the government.

Another concern raised by the MP is that DNB has been slow to roll out 4G coverage to rural areas.

“How will the SWN model ensure that there will be proper 5G coverage in the urban areas in the shortest time possible, and how will the 5G deployment be rolled out to the rural areas in a manner that significantly improves on the current 4G deployment?”

Prior to this, Former Jaring Communications Sdn Bhd CEO Dr Mohamed Awang Lah said costly items within the development such as tower and fibre networks should be shared if it would not affect the end products.

For example, he said, if an area has five communication towers, it would cost more for each telco player but most consumers only use one service provider.

“Usually, the expensive items are those underground. There needs to be competition in other aspects. When there is competition, it would lead to innovation and that could move the country forward,” he said in a forum titled “5G: What is the best way forward for Malaysia” held by the University of Malaya recently.

He noted that Malaysia is a 5G laggard compared to neighbouring countries like Thailand which has introduced 5G commercially.