UMNO Youth leaders have submitted a memorandum to Deputy Communications and Multimedia Minister, Datuk Zahidi Zainul Abidin, expressing concerns about Malaysia’s 5G rollout through Digital Nasional Berhad. They have also lodged a report with the Malaysian Anti-Corruption Commission (MACC), urging them to investigate DNB to ensure good governance and transparency in the 5G rollout to prevent a potential financial scandal.
According to Free Malaysia Today’s report, UMNO Youth Wing has called for transparency including the actual cost to deploy 5G and a detailed explanation on the 5G wholesale rates to telcos. The memo said UMNO Youth does not want another massive corporate scandal that can tarnish Malaysia’s reputation. It also want MACC officers to be seconded to DNB to ensure that its procurement and expenses were vetted and for the company’s top management to submit asset declarations.
UMNO Youth also said Bumiputera firms were being sidelined in the 5G rollout, claiming the lack of programmes for such companies. It also called upon DNB to provide a clear Bumiputera entrepreneur plan to ensure participation of Bumiputera firms in Malaysia’s digital economy ecosystem.
During the memorandum handover ceremony, Zahidi Zainul has also reiterated calls for MACC to investigate DNB, claiming that they are using public funds. He also said DNB does not empower Bumiputeras as they lack locals among its top officials.
Zahidi Zainul, who is also an UMNO Supreme Council member, also said he doesn’t want DNB to be another issue like 1MDB while UMNO gets the blame for another financial scandal. He said the party must go into the next general election with a clean image in order to be accepted by the people.
Despite being a deputy minister, Zahidi Zainul has also expressed disappointment of being left in the dark when it comes to Malaysia’s 5G rollout. Besides the briefing on the decision to allow DNB to continue as Malaysia’s 5G single wholesale network, he was not invited to any other meetings related to DNB.
In December last year, he said in a Parliament press conference that both former Communications and Multimedia Minister Datuk Seri Saifuddin Abdullah, and current Finance Minister, Datuk Seri Tengku Zafrul Abdul Aziz had discussed the 5G project dealings in secret and the MCMC couldn’t explain why DNB is a monopoly for 5G. He said he was probably kept in the dark as Saifuddin was previously from a different party while he was with UMNO.
At the moment, YTL Communications’ Yes 5G remains the only telco to offer commercial 5G services in Malaysia. DNB’s 5G network currently covers select areas of the Klang Valley and they are expanding into other states such as Johor and Penang. DNB aims to achieve 80% 5G population coverage by 2024.
The big four telcos such as Celcom, Digi, Maxis and U Mobile have been pushing back on accepting DNB’s wholesale services due to pricing and transparency concerns. The big four have said that DNB’s current 5G wholesale offer will not ensure affordable 5G services to Malaysians.
One of the major issues with DNB’s Reference Access Offer (RAO) is the fixed 5G wholesale pricing of RM30,000 per Gbps per month that’s locked to a period of 10 years. It was also reported that the major telcos are expected to pay DNB between RM7.4 billion to RM8.4 billion each over 9 years. This forecasted amount for telcos to ”rent” 5G access from DNB is costlier than building and managing their own 5G network.
Despite claims that DNB will be highly regulated by the MCMC, there’s a lack of a proper framework to regulate a single wholesale network in the country. The current Mandatory Standard on Access Pricing (MSAP) and Mandatory Standard on Quality of Service (MSQoS) do not cover 5G services. MCMC’s latest MSQoS standard for mobile telcos is to deliver 2.5Mbps downloads over 90% of the time, which is 40 times below DNB’s promised 100Mbps download speed at the weakest point of coverage.
The Malaysian government has set a 30th June deadline for telcos to accept DNB’s 5G access and equity offer or risk being left behind. Communications and Multimedia Minister Tan Sri Annuar Musa recently said that he wants to issue licences to new players if telcos refuse to sign up with DNB.
In an interview with Singapore’s The Straits Times, Tengku Zafrul said the interests of Malaysia and Malaysians should take precedence over the commercial interests of telcos when it comes to 5G implementation. He said domestic and foreign investors have expressed interest to take up DNB’s shares that are not snapped up.
While the current deadline remains on 30th June, he said an extension will be given until early July and ”no later than that” if necessary. The government which currently owns DNB has revealed in March that it will reduce its stake to 30%, allowing telcos and other firms to take up 70% equity in the single wholesale network. According to Tengku Zafrul, no single investor will be allowed to own more than 20% each.
Reuters reported last month that the big four telcos have written to the Ministry of Finance, seeking for a majority stake in DNB of at least 51% stake. There were open to taking equity stake but it has to be done through a Mergers and Acquisition process. However, the proposal to acquire a majority stake was rejected by Tengku Zafrul.
Malaysia was previously seen as a forerunner in the 5G race in ASEAN with the aim to offer commercial 5G services by Q3 2020. Unfortunately, Malaysia is currently lags behind other countries in the region such as Thailand, Singapore, Indonesia and Philippines that have already started mass deployment of 5G earlier.
According to Ookla’s recent report, Thailand currently leads in 5G availability at 24.6%, followed by the Philippines at 18.1% and Singapore at 8.9%. In terms of 5G download speeds, Singapore currently leads at 246Mbps, followed by Thailand at 207Mbps, the Philippines at 163.51Mbps and Indonesia at 83.37Mbps.
[ SOURCE 2, IMAGE SOURCE ]
Related reading
- Zahidi Zainul: RM20 bil DNB 5G plan was discussed in secret, MCMC couldn’t explain why there’s a monopoly
- Zahidi Zainul seems clueless about direct award of 5G spectrum to DNB
- Zahidi Zainul blames MCMC for not improving connectivity in Malaysia
- Five reasons why Celcom, Digi, Maxis and U Mobile are reluctant to accept DNB’s 5G access offer
