With 15 days remaining until the 30th June 2022 deadline, Communications and Multimedia Minister Tan Sri Annuar Musa said he will issue new licences to new players if the number of companies participating in the 5G rollout is not enough. The government has issued an ultimatum to the big four telcos such as Celcom, Digi, Maxis and U Mobile to take up Digital Nasional Berhad’s (DNB) 5G wholesale offer or risk being left behind.
As reported by Bernama during the 2021 K-KOMM Excellence Service Awards (APC) ceremony held yesterday, Annuar said negotiations on a service agreement between the telcos and DNB for the implementation of the country’s 5G Network were still ongoing. He said, “I have high confidence that all telco companies do not want to be left behind in providing 5G, which is why we take the policy of inviting everyone to come on board, but we cannot force them to join.
“Any company that participates to roll out 5G, we will continue. If the number of companies is not enough, I will issue licences to new players. I’m not going to wait for anybody. I did say, please think about the importance of the national interest.”
The Minister added, “We want to roll out 5G according to plan and the government has given space for existing players to come on board. Hence, we have set a deadline that we feel is more than enough. Let them complete the negotiation.”
At the moment, only YTL Communications and Telekom Malaysia have apparently agreed to sign up and take an equity stake with DNB’s 5G wholesale access offer but YTL’s Yes 5G remains the first and only telco to provide commercial 5G services in Malaysia. DNB’s 5G network currently covers select areas of Kuala Lumpur, Cyberjaya and Putrajaya, and they are expanding into more states including Johor and Penang.
The big four telcos have been reluctant to sign up with DNB highlighting concerns that the current reference access offer (RAO) does not enable affordable and quality 5G services to consumers. Some of the pressing issues include wholesale pricing that’s locked to a 10-year period and the overall cost to “rent” from DNB is higher than building their own 5G network. It was also reported that the government will consider opening equity stakes for DNB to private equity both private and foreign if the big four telcos are not interested in taking up the offer.
Does Malaysia need more telcos?
The suggestion to increase the number of telcos doesn’t seem to address the current 5G stalemate as the big four telcos currently command over 90% of total mobile subscriptions and collectively offer 95.5% 4G population coverage throughout the country. Malaysia already has a vibrant and competitive mobile landscape with a total of 9 companies being allocated spectrum to run mobile services. This includes Celcom, Digi, Maxis, U Mobile Asiaspace, Altel, Redtone, YTL Communications and TM. On top of that, there are dozens more mobile network virtual operators (MVNO) that tap on existing networks to offer retail mobile services.
If there’s a new player in town, it will be tough to sway consumers from the big four telcos if they don’t provide coverage improvements. Even with YTL and TM having access to 4G spectrum and 5G via DNB, they are still considered small players in the field as their mobile coverage especially for indoors and rural areas is limited compared to Celcom, Digi, Maxis and U Mobile. Since the government has announced the single wholesale network approach, there’s no opportunity for new players to compete in network coverage and they would have to rely on DNB’s network which will take years for it to achieve a substantial 5G footprint nationwide.
- Five reasons why Celcom, Digi, Maxis and U Mobile are reluctant to accept DNB’s 5G access offer
- 5G in Malaysia: Will single wholesale network be successful? | Let’s Talk About #94
- Yes claims to offer the world’s cheapest and fastest unlimited 5G plan, priced from RM58/month
- MOF rejects telcos’ demand for controlling stake in DNB, 30 June deadline remains for 5G agreement