Finance Minister: Malaysia’s RM15 bil 5G infrastructure cost to be borne by private sector

Malaysia will accelerate its 5G rollout with the target of launching full commercial services by the end of 2021. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has revealed that the RM15 billion infrastructure cost will be borne by the private sector. He said this during the 16th Kuala Lumpur Islamic Finance Forum (KLIFF) yesterday.

He added that the government-owned special purpose vehicle (SPV), Digital Nasional Berhad (DNB) will roll out Malaysia’s 5G network and they will be launching an open tender for the infrastructure development which will cost RM15 billion across 10 years. As mentioned by the MCMC, the 5G services will be offered through a wholesale model and it will be regulated to ensure better transparency and implementation.

Two weeks ago, MCMC Chairman had told Bernama in an interview that the private sector will fund the government-driven 5G rollout. The approach of having a single government entity to handle the spectrum and infrastructure will reduce the burden of 5G investments from existing telcos, so that they can focus on improving their existing 4G networks under the JENDELA plan.

Interestingly, newly appointed DNB CEO, Augustus Ralph Marshall, had told The Star in a recent interview that the government will fork out the RM15 billion to fund the 5G rollout. He said that this will be inclusive of maintenance charges and also capital expenditure.

The CEO said that the SPV is expected to spend about 25% of the RM15 billion in the first two years, followed by about 15%-20% in the next few years. He also told The Star that once the infrastructure building is completed in the urban areas, it will become less intense to rollout. He added that the focus is to achieve fast rollout while making sure Malaysia doesn’t compromise on 5G connectivity nationwide.

The question remains, who is actually footing the RM15 billion bill for Malaysia’s 5G rollout? If the telcos will not be burdened with 5G investments, which private sector will bear the cost of building the network?

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