Malaysia Cabinet to decide whether to continue 5G rollout via Single or Dual wholesale network this Friday

Putrajaya will decide on Friday if Malaysia will proceed with its 5G rollout via its Single Wholesale Network (SWN) model or weigh proposals by several mobile network operators (MNOs) for two wholesale networks or Dual Wholesale Networks (DWN) to be developed. 

In a note by SWN model operators Digital Nasional Berhad (DNB) sighted by Malay Mail ahead of its meeting with the Ministry of Finance and Ministry of Multimedia and Communications, it said that should the government choose to move forward with the proposed DWN, it would mean significant delays of the implementation of the 5G network in Malaysia. 

“Change, particularly at such a fundamental policy level, as to whether the SWN should continue would require the resetting of strategic and management plans, renegotiation of key supplier agreements, reconsideration by all employees of their continued participation in the venture and refinancing arrangements. 

“Existing customer relations and pilot trials would be rendered meaningless. In addition, the DWN would require 5G spectrum to be reassigned, the two consortia to be agreed, and the Ericsson contract to be terminated or reassigned. All these tasks would take time and are avoided by continuing with the SWN,” the note said. 

For context, the Malaysian government last year selected Ericsson to develop the country’s 5G network infrastructure, simultaneously going with a single wholesale network (SWN) model operated by DNB, which is a wholly-owned unit of the Finance Ministry.

The note also took into account that it would take longer to roll out two wholesale networks at once and that wholesale cost and charges would likely be higher even though material differences between the two models in terms of 5G network capacity, technical efficiency, resilience, or incentives for cost efficiency are at the bare minimum. 

It also said that Malaysia might face some limitations in terms of skilled manpower, and that developing both the SWN and DWN concurrently would only delay the rollout even further as more base stations for masts would have to be built to support both networks. 

“A network may require several thousands of base stations each requiring a site to be found, procured, cleared, a mast constructed, power and backhaul supplied and then equipment deployed, although in some cases existing sites can be used for shortening this process. In principle, all sites could be developed in parallel if there were sufficient manpower. 

“Malaysia has a certain number of people with these skills and can augment this by employing overseas contractors. These people and contractors are broadly equally available under the SWN and DWN. 

“Since the DWN requires substantially more sites, and since there is a fixed pool of manpower, the duopoly of the DWN would inevitably take longer,” it noted. 

Currently, around 25 per cent of the masts available in Malaysia are owned by tower company Edotco, who provides access to any entity on a commercial basis. 

It said that even with existing masts, new masts would still be needed for 5G, as there is not enough space on the existing masts to deploy large 5G mMIMO antennas or because their location is not optimal for the higher frequencies used for 5G. 

“Indeed, the DWN would deploy twice the number of 5G antennas, exacerbating the problems of congested masts, and as a result are likely to end up having to construct more sites than DNB.

“In rural areas, it is less likely that masts will exist and hence all entities will need to construct new masts,” it said. 

The DNB note also pointed out that it took four years for MNOs to deploy 4G services across Malaysia, questioning the credibility of these operators to match the three year target to roll out its 5G network to over 80 per cent of the population. 

Late last year, it was reported that Malaysia’s big four telcos — Celcom, Digi, Maxis and U Mobile — had recommended to the government to allow an additional 5G network that will run in parallel with DNB. 

According to a report by Reuters, Celcom, Digi, Maxis and U Mobile have recommended the government to allow two wholesale 5G networks, each to be built and operated by a consortium of carriers. 

They proposed to commence the two networks in parallel next year and separate them from 2023, to speed up initial deployment and then have the security of dual competing networks going forward.

On February 18, the four MNOs officially submitted a proposal to the government for the establishment of DWN for 5G rollout in Malaysia, which would be formed by a consortium of private-led telcos.

In a joint statement, the telcos expressed their full support towards the government’s agenda throughout the MyDigital initiative and the development of the digital economy in Malaysia where 5G networks are among the critical infrastructure.

On the same day, Communications and Multimedia Minister Tan Sri Annuar Musa said his ministry, along with the Finance Ministry will table a Cabinet Ministers’ memorandum next month to resolve the issues relating to Digital Nasional Berhad (DNB) “once and for all”.  —  Malay Mail

Related reading

• GSMA: DWN may encourage telcos to build 5G network faster, MCMC must provide Regulatory Impact Assessment of SWN
• DAP MP asks MCMC if proposed Dual Wholesale Network for 5G would see private telcos focusing in cities while DNB is left with rural areas
• 5G Malaysia: Celcom, Digi, Maxis and U Mobile want to form a new consortium to deploy 5G
• Why Samsung and iPhone devices can’t connect to 5G in Malaysia? Here’s DNB’s response