Fahmi: No decision yet whether to break DNB’s “monopoly” on 5G

Last Friday, Prime Minister Anwar Ibrahim announced the government would be reviewing all monopolies in the country, in line with its recent actions to end the reigns of Touch ‘n Go and Puspakom as sole approved providers in their respective fields.

Since then, a lot of attention has turned towards Digital Nasional Berhad (DNB), the single 5G network provider in the country. This could be considered a monopoly, but the company can breathe a sigh of relief—for now. According to the New Straits Times, Digital and Communications Minister Fahmi Fadzil said the government has yet to make a decision regarding DNB’s role.

“We have yet to make a policy decision and I hope we will be able to do so in a week or two,” he said. “We may not necessarily look only from the monopoly point of view, as there are many things we need to consider. Insya-Allah, we will announce it soon.”

It’s worth noting that DNB is fundamentally different from TnG and Puspakom. Whereas the others are independently-operated firms owned by government-linked companies (GLC)—TnG by CIMB, Puspakom by DRB-Hicom—DNB is itself owned by the government through the Ministry of Finance. That means the rollout of the 5G single wholesale network is being handled by the government itself rather than being assigned to a company with close ties to it.

This, of course, doesn’t mean that DNB is out of hot water. The government is currently reviewing the company’s controversial deployment of 5G, with Anwar promising it would be “run more transparently” to ensure full participation by telcos. Maxis has still yet to sign with DNB for 5G access, pledging to do so only after the said review has been completed.

Recently, DNB saw the departure of CEO Ralph Marshall, who stepped down after his contract expired earlier this month. The company has yet to replace Marshall, whose role is reportedly divided between two personnel. Fahmi has made clear that the appointment of his successor will be decided by its parent, the Ministry of Finance.

The industry has raised concerns about Malaysia’s approach of rolling out 5G via a single state-owned network. Despite achieving close to 50% 5G population coverage by the end of 2022 (which DNB then clarified to be 38%, based on the number of sites that have been onboarded by telcos), the 5G adoption rate in Malaysia remains low at 1% according to GSMA Intelligence.

The GSM Association (GSMA) has raised concerns about Malaysia’s single wholesale network model for 5G as it believes infrastructure competition will drive innovation. In their report, it highlighted that the propensity to innovate is reduced in an SWN environment where no infrastructure competition exists.

At the moment, Malaysia aims to expedite 5G deployment to achieve 80% population coverage by the end of this year, which is one year ahead of DNB’s original timeline.

There have also been calls to liberate the 5G deployment by reinstating the technology neutrality for the existing spectrum. During the last administration, the MCMC revoked technology neutrality which prevents telcos from repurposing their existing 4G spectrum to roll out 5G services.