Communications and Multimedia Minister (Men-Komm) Tan Sri Annuar Musa revealed that only two telcos have signed an agreement to own an equity stake in Digital Nasional Berhad (DNB), Malaysia’s single wholesale network for 5G. In an attempt to solve the 5G stalemate with the big four telcos (Celcom, Digi, Maxis and U Mobile), the Ministry of Finance had offered to reduce its stake in DNB, allowing the telcos to take an equity stake of 70%.
Govt aims to settle DNB’s equity stake deal to telcos by 30th June 2022
According to Annuar Musa, only Telekom Malaysia and YTL Communications had taken up the offer, and he hopes other telcos will expedite their move to finalise an agreement with DNB before the 30th June 2022 closing date. He added that by 30th June, any telco that has yet to take up their equity stakes will be left out and they will move on because the focus now is on ensuring the actual rollout takes place.
As reported by Bernama, the Minister said TM and YTL will “roll out 5G” in three areas namely Kuala Lumpur, Putrajaya, and Cyberjaya. He previously said the issue of DNB being a monopoly in the implementation of 5G did not arise anymore as the government will offer up to 70% equity stake to all telcos.
Why are the big four telcos holding back from signing up with DNB?
DNB has recently published its Reference Access Offer (RAO) which outlines the cost, deliverables, requirements, and terms and conditions for telcos to get 5G access on a wholesale model. According to the RAO, telcos will have to pay DNB RM30,000 per Gbps for monthly 5G usage capacity for usage up to 1,200Gbps, and any subsequent usage will be charged at RM22,000 per Gbps. The pricing is based on a minimum service term of 10 years.
Celcom, Digi, Maxis and U Mobile have jointly issued a statement highlighting that the RAO published by DNB has failed to address the majority of concerns and issues previously raised and discussed with the Malaysian Communications and Multimedia Commission (MCMC). The big four telcos emphasised that the RAO in its current published form will not enable affordable and quality 5G services for the rakyat and businesses in Malaysia, and will impede the acceleration of 5G services and penetration in the country.
According to an industry source, the cost is one of the biggest concerns as the DNB’s pricing is locked to a 10-year period. Looking at the past trend for 4G services, data traffic has been increasing year on year while the cost has gone down significantly yearly. As a comparison, telcos used to charge RM30 per GB for postpaid when 4G was introduced in 2013 but consumers these days even on prepaid can get 1GB of data for RM1 or less.
The big four have also said that they were open to taking an equity stake in DNB but it has to be done in a Mergers and Acquisition process. They recommended to setup up project teams to align on the processes such as due diligence, transaction timelines, and other administrative matters.
What is MCMC doing to resolve the issue?
In a recent online forum held on 20th April, MCMC COO Dato Mohd Ali Hanafiah Mohd Yunus said the cost concerns of DNB’s RAO are expected to be settled in a week or two. On the issue of wholesale pricing, he said there’s an instrument called Mandatory Standard Access Pricing (MSAP) which is revised in a 3-year cycle, however, the latest version that was released in 2018 didn’t include 5G.
When it comes to the quality of 5G services, there’s a tool called Mandatory Standard of Quality of Service (MSQoS). The MSQoS was last revised in 2021 and like the current MSAP, it didn’t cover 5G. The current MSQoS standard is for telcos to deliver 2.5Mbps downloads 90% of the time for wireless broadband access service and 25Mbps for fixed wireless broadband. The MCMC said it aims to revise the MSQoS to include 5G services by the end of Q3 or Q4 this year.
At the moment, DNB is offering free 5G access to telcos until 30th June 2022. Although both TM and YTL have signed up to tap on the network since December, YTL’s Yes 5G is the first and only telco to offer commercial 5G services to the public. DNB is operating on a cost-recovery and supply-driven model, which promises to offer cheaper and faster 5G deployment. However, they will definitely need the big four telcos on board which currently command over 90% of the mobile telco segment.
[ SOURCE, IMAGE SOURCE ]
Related reading
- MCMC: Cost concerns of DNB 5G access offer to telcos to be settled in a week or two
- 5G in Malaysia: Why are we so far behind?
- Annuar Musa says Selangor will be prioritised for 5G after making same promises for Melaka and Sarawak
- DNB publishes Reference Access Offer, 5G wholesale to cost telcos RM30K per Gbps monthly
