MCMC Chairman: Private sector to fund RM15 billion government-driven 5G rollout

Malaysia aims to roll out full 5G services by the end of 2021 and it will be done through a Special Purpose Vehicle (SPV) under the government. As announced be the Prime Minister, the rollout for 5G will require an investment of RM15 billion across a period of 10 years.

As clarified by the Malaysian Communications and Multimedia Commission (MCMC), the approach of having a government entity to handle the spectrum and infrastructure will reduce the burden of 5G investments from existing telcos and to ensure that they can continue to roll out fibre and improving existing 4G coverage and quality under the JENDELA plan.

The direct-award to the SPV will reduce cost associated to spectrum auction, reduce network duplication and it will promote infrastructure sharing. The MCMC had said that there will be private sector involvement in the 5G rollout and more details will be shared in due course.

During an interview with Bernama, MCMC Chairman Dr Fadhlullah Suhaimi Abdul Malek explained that the current JENDELA plan requires an investment of RM21 billion to increase fiberisation and to make 4G highly available. He shared that 60% will come from the private sector and the remaining 40% will be funded by the government via the Universal Service Provision (USP) fund.

For 5G infrastructure, Dr Fadhlullah said the “RM15 billion will actually come from the private sector, although it is worked through a government-owned special purpose vehicle”.

At the moment, it isn’t clear which private firms will fund the 5G deployment as the MCMC had earlier said that service providers will not be burdened by investments for 5G. If it is going to be private-funded, why can’t the 5G spectrum be assigned to a consortium consisting of private companies?

The question which we have raised earlier is how did the government come out with the RM15 billion figure? According to the 5G Task Force report by the MCMC which was released in January 2020, the overall cost to upgrade existing networks to 5G is estimated to be about RM7.5 billion.

At the moment, there’s also no 5G coverage targets mentioned under MyDigital. As a comparison, Singapore targets to cover 50% of the island with 5G by 2022 and full coverage by end 2025.

The commission has promised that the wholesale agreement with telcos will be done in a transparent and regulated manner to ensure that everyone will have access to open, fair and equal access to the 5G network. It added that the MCMC has regulations in place to ensure quality of service and to prevent anti-competitive behaviour.

With 10 months left in the year, the Ministry of Finance which is supposed to handle the government-driven SPV has yet to provided more info on the actual network implementation.

[ SOURCE ]

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