In May 2023, the Malaysian government announced that the country’s 5G deployment would move from a single wholesale network (SWN) to a dual network model. The transition was scheduled to begin in January 2024 once Digital Nasional Berhad (DNB) achieved his 80% 5G population coverage. However, two months after achieving the stated coverage target, the 2 There is still no sign of his 5G network.
Malaysia ends DNB monopoly with dual network model
As announced last year by Communications Minister Fahmi Fazil (former Communications and Digital Minister), DNB was tasked with continuing 5G deployment to achieve 80% 5G population coverage by the end of 2023. This was a hasty development, just as DNB had originally planned. By the end of 2024, with 7,509 sites he will achieve his 5G population coverage of 80%.
Fahmi said in the announcement that the dual network model will be implemented on conditions consistent with global best practices to provide multiple networks not only to consumers but also to industries that are included in the target segments of 5G technology deployment. said.
The minister added that this decision was taken with a focus on the comprehensive expansion of 5G adoption and innovation. Fahmi said the dual network model takes into account Malaysia’s current telecommunications industry capabilities and will end the monopolistic element associated with DNB.
He said the move to dual networks will fully encompass all carriers without affecting existing 5G contracts. DNB (Entity A) will continue to deploy and operate his 5G network, and the second network (entity B) will start building his new 5G network. As early as January 2024. A 5G task force was formed to ensure a smooth transition to a dual network model.
At the time, Fahmi said details of the second network would be revealed once DNB reaches its coverage targets. With her two competing 5G networks, Malaysia can expect competitive pricing, better innovation, and ultimately faster deployment.
Two months after DNB achieved its 5G goal, details about the second 5G network are still not clear
As announced by Fahmi early last month, DNB has already achieved its 80% 5G coverage target. However, there is still no clear indication of how the transition will take place.
To date, the Malaysian Communications and Multimedia Commission (MCMC) has not released any details or criteria regarding the formation of Entity B. Since DNB currently holds all the 700MHz, 3.5GHz and 28GHz spectrum available for 5G, there should be a directive from MCMC to: Free up half of the allocated spectrum to the upcoming second 5G network.
As previously revealed, DNB holds a 40MHz block of 700MHz spectrum, a 200MHz block of 3.5GHz spectrum, and a 1600MHz block of 26/28GHz (mmWave) spectrum.
Assuming that DNB has utilized more than half of the allocated spectrum for 5G, MCMC will need to issue a notification and provide a grace period for the national 5G network to surrender its spectrum. Delays in spectrum reallocation could delay the rollout of a second 5G network.
SSA with DNB continues
Last December, five telecommunications companies (CelcomDigi, Maxis, U Mobile, TM, and YTL Communications) jointly signed a share subscription agreement (SSA) to acquire 70% of DNB shares. He needed to invest RM233 million for each telco to get a 14% stake each. Pending the SSA’s necessary due diligence processes, the funds will be utilized to meet DNB’s funding requirements.
The due diligence process is said to be ongoing and SSA is expected to be completed between February and April 2024. It is worth pointing out that this is the government’s second attempt to force a telecom company to acquire DNB shares.
Back in October 2022, four telecom companies – Celcom, Digi, YTL Communications and Telekom Malaysia – entered into a conditional share subscription agreement with DNB, giving them a 65% stake, with the Ministry of Finance taking a 35% stake. and will own golden shares. The SSA was terminated by Celcom, Digi, and TM as the long standstill date for satisfying all the conditions precedent under the SSA had passed. Currently, five carriers, including Maxis, can provide 5G through separate 5G access agreements.
In Malaysia, 5G implementation by companies is still slow.
Although Malaysia is proud of achieving 80% 5G population coverage, 5G penetration remains low. According to Fahmi, there are currently more than 10 million 5G users, an increase of 2400% from December 2022. However, it is not clear whether this number is based on users with 5G plans or actual users with 5G devices who are actively using 5G. Within 5G coverage area.
The majority of 5G services in Malaysia are essentially consumer data plans and wireless broadband. The game changer of 5G is in the enterprise sector. Unfortunately, there is very little enterprise 5G deployment in Malaysia, including private 5G networks.
As the GSMA emphasizes, successful 5G deployment should be based on innovation, rather than simply pursuing population coverage. The organization representing the telecommunications industry said in a report that the propensity for innovation is reduced in a SWN environment where there is no infrastructure competition. The GSMA believes that infrastructure competition, whether in private networks, edge computing, or open RAN, is a key foundation for innovation and is being used extensively as a means to reduce costs, increase agility, and increase vendor competition. We believe it is gaining momentum in the following countries.
5G does not exist indoors. Where is 5G SA?
While DNB is proud to have accelerated its deployment to achieve 80% population coverage, the 5G network is primarily focused on outdoor coverage. The reality is that his 5G coverage indoors is virtually non-existent at the moment, and he couldn’t even get 5G reception in most popular malls, including The Exchange Mall, the newest shopping spot next to DNB’s headquarters. Simple tasks like paying with an e-wallet will be difficult if your carrier doesn’t have extensive 4G coverage both outdoors and indoors.
In case you didn’t know, 5G in Malaysia is still based on non-standalone (NSA) architecture and relies on the 4G core as the anchor. 5G Standalone (SA) is considered a genuine 5G with a 5G core and promises ultra-low single-digit latency. DNB has not yet provided a clear roadmap for deploying his 5G SA on its network.
700MHz spectrum released to fix 4G coverage issues
As mentioned earlier, the 700MHz spectrum is currently allocated to DNB. To immediately address connectivity issues in both rural and urban areas, MCMC should release its unused 700MHz spectrum to telcos directly or via Entity B, which can be used for both 4G and 5G . In lower frequency bands, a single 700MHz tower can provide wider coverage and can better penetrate walls and improve indoor reception compared to 900MHz or 1800MHz. His 700MHz network improvements for consumers can be realized quickly, as the majority of users are still using 4G devices at the moment.
As shared by TM during the 5G demonstration project in Langkawi Island in 2020, 700MHz can provide high-speed wireless broadband of over 200Mbps to areas without fiber access.
It’s time to restore spectrum neutrality
As governments move towards a dual network approach, carriers will need to be able to use existing spectrum for 5G deployments. In 2021, MCMC revoked the frequency neutrality of the current spectrum allocated to telcos, preventing them from deploying 5G using existing resources.
The move was controversial because carriers pay for spectrum based on spectrum neutrality, which allows them to use the spectrum for 5G, 6G and beyond. The restriction of limiting carriers to his 4G was to ensure that DNB would be the only operator offering 5G in his SWN model.
With DNB no longer required to be protected as a 5G monopoly, restoring spectrum neutrality in line with global best practices can accelerate 5G deployment and encourage capital investment by telcos.
Using existing 4G frequency bands such as 2300MHz and 2600MHz for 5G is not new and is being done in several countries. For example, Thailand currently uses 2600MHz for 5G, and Australia uses 2300MHz of spectrum for his 5G. To ensure that 4G users are not ignored, the existing spectrum allocated to carriers can be optimally used for both 4G and 5G using Dynamic Spectrum Sharing (DSS).
According to GSMA’s public policy position, 5G requires spectrum across low, medium and high bands. The report states that the 2.3GHz and 2.6GHz bands should also be licensed to operators for 5G use, with all existing and new licenses being technology neutral to enable evolution to 5G services. He said it must be.
