With about two months to go, Malaysia aims to launch commercial 5G services by the end of this year with initial coverage in Putrajaya, Cyberjaya, and selected areas in Kuala Lumpur. Unlike the traditional rollout by private telcos, Malaysia is deploying 5G through Digital Nasional Berhad (DNB), a state-owned single wholesale network (SWN). As a result, existing 4G telcos including Celcom, Digi, Maxis, U Mobile, TM and Yes, will need to depend on DNB in order to provide 5G services to consumers.
In a recent interview with The Star, DNB CEO Ralph Marshall has provided more details about what consumers can expect, how Malaysia can catch up with its neighbours and how much would the deployment cost.
100Mbps speeds at cell edge
5G is the next-generation mobile technology that not only provides faster speeds but also lower latency and higher capacity to support more devices. With 5G, it is possible to deliver gigabit speeds and it has the potential to hit 5Gbps on higher mmWave bands. In Malaysia, the designated 5G bands are 700MHz, 3.5GHz and 28GHz.
Of course, the real-world speeds would depend on how the network is designed and if it has the capacity and bandwidth to support the ever-growing data needs of consumers. DNB said it pledges to deliver 100Mbps speed at the cell edge, which is the furthest spot where you can still receive a 5G signal.
However, Ralph Marshall shared that although they can transfer 100Mbps at the cell edge, the end-user may not enjoy the same speed as it could be capped by telcos. He said the telcos would have control over their product and services, and they could cap the speed levels at the core to minimise operating expenditure. He added that DNB is working towards stopping this potential problem and are working with the MCMC to mandate all access seekers that use DNB’s 5G network to agree to a “complete pass-through of the speed”.
DNB aims to overtake most ASEAN countries in 5G coverage by 2024
Due to the change of administration, Malaysia has been lagging behind its neighbours when it comes to 5G rollout. Just recently, Maxis has announced that its postpaid and prepaid users can already enjoy 5G services but only when they travel to Singapore, Indonesia, and Thailand on data roaming.
DNB hopes that its approach to deploy 5G will speed up deployment and it aims to have the widest 5G coverage second only to Singapore in the region. DNB said previously it planned to deploy 5G in 5 major cities and districts in Selangor, Pulau Pinang, Johor and Sabah in 2022, before expanding to 17 cities and rural areas in 2023. It also targets to achieve 80% 5G population coverage in 2024 with over 7,500 sites, which is significantly faster than the time it takes to roll out 4G in Malaysia.
Ralph Marshall said its Bukit Tunku 5G site has been switched on and it aims to deliver 500 5G-enabled sites in Kuala Lumpur, Cyberjaya and Putrajaya by the end of this year which will provide about 10% population coverage. It expects to have more than 10,000 5G sites to achieve 90% coverage in Phase 3 sometime between 2025 to 2030.
Total cost of 5G rollout may swell to RM20 bil
When Ericsson was appointed as their technology partner, DNB estimates that the national 5G rollout will cost RM11 billion. During the interview, Ralph Marshall said the total cost is expected to be around RM16.5 billion.
Breaking the cost down, he said the network cost is forecasted to be RM12.5 billion which covers network equipment and network infrastructure. Another RM4 billion will be spent on corporate costs will cover start-up costs, consultation fees, and staff compensation for over 600 employees for a period of 10 years.
It was also mentioned that the total cost may swell to RM20 billion between 2025 and 2030 and this is a rough estimate to anticipate any significant increase in capacity demand in the future.
However, the DNB CEO said the single-network approach will save the industry money in capital expenditure as 5G deployment requires RM30 billion to 50 billion if network operators were to roll out on their own. He also claimed that DNB can offer 5G access to mobile network operators at one-third of the cost of current 4G services.
He also said as a wholly-owned company of the Ministry of Finance, DNB is not profit-motivated and they will focus on cost recovery.
Under the previous administration, Malaysia was supposed to deploy 5G through a privately-led consortium in Q3 2020 with an open auction model. The 5G Task Force in 2020 had estimated that the total cost of network upgrades to 5G is RM7.5 billion which include RM5.1 billion required for 10,000 sites.
Concerns remain about single wholesale network approach
While Malaysians are still waiting to get commercial 5G services, there are still concerns about Malaysia’s approach of deploying 5G through a single network and a single vendor. GSMA has highlighted that SWN are risky and several countries have abandoned such projects. It added that SWN can be successful if adopted in the right situation such as areas where competitive networks are not commercially viable such as rural areas.
The GSMA reported said Malaysian telcos in the past few years have been focusing on deploying 5G by conducting trials, selecting vendors and raising CAPEX to support future deployment. However, the formation of DNB has disrupted their 5G deployment and commercial strategies especially plans for telcos to share infrastructure to speed up deployment. There are also concerns that the SWN approach would dull incentives for telcos to invest in new technologies since they are now limited to just 4G.
Recently, Pejuang Youth has also raised concerns that DNB could pose a risk to local industries and consumers as a single 5G network could lead to a single point of failure if the networks are not built and managed properly. The Youth Chief said Malaysia could lose a potential profit of RM5 billion by awarding spectrum without commercial terms. He shared that the sale of 5G spectrum to private telcos have benefited the Thai government RM12 billion and Bangladesh at RM3.5 billion.