Malaysia’s ambitious plans to roll out a nationwide 5G network are facing a major obstacle as negotiations between state-run telecoms operator Digital Nasional Bhd (DNB) and the country’s leading private telecoms companies have stalled. Channel News Asia (CNA) report.
The breakdown in talks is forcing Prime Minister Anwar Ibrahim’s government to reconsider licensing a second 5G operator to provide much-needed competition in the fast-growing mobile sector, according to industry sources who spoke to CNA on condition of anonymity.
Under a multi-layered settlement reached in December, Malaysia’s top five telecom operators — Maxis, Celcom Digi, U Mobile, YTL Communications and Telekom Malaysia — each paid RM230 million ($48.15 million) to DNB as an upfront payment for 5G network access. The second phase calls for due diligence on DNB’s operations, during which the operators can decide whether to take a stake in the state-owned company or set up a joint venture to operate the second network.
But more than four months later, the two sides are still yet to agree on key terms, including appointing a director representing the telcos to DNB’s board and completing a confidential audit of the company’s finances, contracts and technical infrastructure.
The impasse represents one of Prime Minister Anwar’s most complex economic policy challenges and could have a significant impact on the country’s investment climate as uncertainty scares off investors eager to take advantage of 5G’s benefits. It also raises financial concerns for DNB, which has borrowed heavily to fund its network rollout and could run into cash difficulties without new funding from the government.
Finding common ground will not be easy, given the deep distrust between DNB supporters and the carriers over the state carrier’s secrecy, especially regarding key contracts. But with some believing the best option is to work on a solution using DNB’s infrastructure, with 5G subscribers at about 10 million as of January and population coverage at more than 80%, according to a Maxis executive interviewed by CNA.
The current situation is clearly tense. DNB told CNA: response It disputed “several misleading claims.”
5G Rollout in Malaysia
Malaysia has adopted a unique approach to its 5G rollout by establishing Digital Nasional Berhad (DNB) in 2021 and implementing a single wholesale network model, where DNB was tasked with rolling out a nationwide 5G network, with all major service providers in the country signing access agreements to provide retail 5G services to end users.
be Recent Ookla Report Given Malaysia’s 5G landscape, this strategy has paid off with impressive results in terms of network performance: As of Q4 2023, Malaysia’s 5G network has a median download speed of 451.79 Mbit/s, outperforming regional peers such as Singapore (329.73 Mbit/s), Thailand (129.40 Mbit/s), and the Philippines (125.14 Mbit/s).
Malaysia also topped the global 5G consistency score rankings, with 97.3% of samples meeting the minimum standard of 25 Mbit/s download speeds and 3 Mbit/s upload speeds.
However, Ookla’s report notes that despite steady improvements, the actual availability of 5G services in Malaysia remains at 1.2%.(percentage of 5G active devices that spend most of their time connected to 5G networks) It will be just 27% in Q4 2023, still lagging behind neighbouring countries Singapore (53.7%) and Thailand (45.5%). This shows that while the single wholesale network model is enabling strong 5G performance, more needs to be done, including launching and promoting affordable 5G service packages, improving the availability of 5G devices and further expanding 5G network coverage. Having a network in place is not enough.
– By Joana Bagano, Contributing Editor, TelecomTV