As announced by Prime Minister Muhyiddin Yassin during the MyDigital launch, Malaysia aims to offer 5G services by the end of this year. This is a surprising change in direction after the government had previously decided to put 5G plans on hold for at least two years. Malaysia had initially planned to roll out commercial 5G services by Q3 2020 under the previous administration.
Government entity will own and manage 5G infrastructure
As mentioned by the Prime Minister, the 5G implementation will be handled by a special purpose vehicle (SPV) which is owned by the government. An investment of RM15 billion will go into the 5G implementation for a period of 10 years.
During today’s briefing by the Malaysian Communications and Multimedia Commission (MCMC), its Chairman Dr. Fadhlullah Suhaimi Abdul Malek explained that the SPV is fully owned by the Ministry of Finance (MoF). Instead of assigning spectrum to individual telcos or to a consortium of private companies, he added that the 5G spectrum will be allocated to the SPV. This entity will be tasked to roll out the 5G infrastructure and network nationwide.
According to the Chairman, having a single entity will ensure an efficient rollout and use of spectrum. Since the government owns the network assets, he added that the approach will help reduce the investment burden on telcos and they can offer 5G services through a transparent wholesale agreement. Telcos will gain equal access to 5G while they maintain its JENDELA plan commitments of expanding 4G population coverage to 96.9% by 2022.
On top of that, having a single entity would also reduce duplication of networks and to promote infrastructure sharing. Although the SPV belongs to the government, it will be subject to MCMC’s regulatory oversight. The MCMC has also assured that there are access and competition framework under the Communications and Multimedia Act 1998 to ensure there’s no anti-competitive behaviour and the pricing is fair.
He said that since this is a direct award to a government entity, the cost of awarding won’t be high and the savings will be passed back to licensees. As a result, consumers would be able to enjoy improved services and better pricing.
SPV may utilise existing infrastructure to deploy 5G
When asked if this means 5G will be running on a fully brand new network, Dr. Fadhlullah said that it would also utilise existing infrastructures including fibre connectivity from providers such as Telekom Malaysia, Time and Allo. He shared that there will be brand new elements and the SPV will also work with existing networks.
To accelerate the rollout of 5G, there’s a need for 5G first policies to facilitate the adoption of the technology in both private and public sectors. This would require the support of both federal and state governments to reduce barriers of infrastructure deployment. Treating internet a public utility by state governments and local councils is just one of the initiatives.
3 Spectrum bands to be assigned
In terms of spectrum, the MCMC had previously identified 700MHz, 3500MHz, 26GHz and 28GHz for 5G use, with the lower two bands to be assigned to a single consortium. During today’s briefing, it was revealed that the MCMC is looking at assigning three spectrums to the SPV, namely 700MHz, 3500MHz and a new 2800MHz spectrum.
2800MHz is a quite an odd choice for 5G but we reckon this could be referred to 28GHz, which is better suited for mmWave. This would provide higher bandwidth and lower latency but the coverage will be very limited compared to sub-6GHz.
As announced previously, 3G networks will be switched off by the end of this year to free up spectrum for 4G use. The MCMC said that existing spectrum that are already assigned to mobile operators can’t be use for 5G and this is to ensure that they will continue to focus on 4G expansion.
More questions remain unanswered
There are still a lot questions on the SPV that need to be answered. For example, how will MoF fund the SPV? Will there be investments from private companies and will it utilise the Universal Service Provision (USP) fund? When we asked the MCMC, they told us that more details will have to come from the MoF. They did share that the SPV must own all assets and there will be no change of ownership throughout the duration.
From the looks of it, the single-entity arrangement could be somewhat similar to the current HSBB network that was rolled out by TM. Telcos will tap into a national network and they would have to pay the agreed and regulated wholesale price.
While the entity is owned by the MoF, we still don’t know who will get the job to do the actual network deployment. Will they appoint a single company like TM or will they assign the implementation works to several telcos and infrastructure providers? What would happen to 5G-ready network infrastructures that have been invested heavily by telcos in the past few years?
With just 10 months left in the year, there’s a lot of work that needs to be done if the government aims to enable full range of commercial 5G services by Q4 2021. At the moment, MCMC has not shared any 5G coverage targets and Dr. Fadhlullah said that this would require a separate discussion. He added that the 5G approach will be supply driven.