Communications and Digital Minister Fahmi Fadzil said telcos are expected to announce several good news related to the current 5G rollout in Malaysia. He said this during a monthly meeting in his ministry.
As reported by Bernama, Fahmi said there will be good news and major announcements from the telcos by 30th June. He added that the telcos will be together with Digital Nasional Berhad (DNB) and other equity holders.
To recap, the Malaysian government recently announced the policy shift from a 5G single wholesale network model to a dual network approach. State-owned Digital Nasional Berhad is given the target to achieve 80% 5G population coverage by the end of this year before a second 5G network can begin its rollout in early 2024.
To ensure a smooth transition, the Communications and Digital Ministry announced a 5G Task Force chaired by the Chief Secretary of the Treasury and the Secretary-General of the Communications and Digital Ministry. As revealed early this month, the 5G Task Force is currently looking at resolving issues related to DNB’s 5G access agreement and equity deals. Once these issues are addressed, it will enable more service providers including Maxis to offer 5G services to its users.
At the moment, Malaysia’s 5G rollout is reported to be at 62.1% population coverage. Despite the increased coverage, Malaysia’s 5G adoption rate remains one of the lowest in the region. The Malaysian Communication and Multimedia Commission (MCMC) revealed recently that the 5G adoption rate stood at just 3.1% as of 30th April 2023 which is approximately 1.2 million users.
Despite the high 5G population coverage claims, the real-world 5G experience leaves much to be desired as in-building 5G coverage remains virtually non-existent. On top of that, several 5G providers including Celcom, Digi and even Yoodo have started charging users access fees in order to use DNB’s network.
Under the dual network 5G rollout, the government assures that it won’t allocate additional public funds as it will pass the baton to private telcos to manage the two competing 5G networks. As mentioned by MCMC COO Dato Mohd Ali Hanafiah Mohd Yunus, the government aims to withdraw its stake in DNB once 80% 5G population coverage is achieved.
Since DNB is operating on a cost-recovery model with the aim of providing equal access to all providers, the 5G access pricing must be fair without restrictive lock-in contracts in view that a competing second 5G network will be allowed starting next year. As the government aims to privatise DNB, it will need telcos to participate and acquire a larger controlling stake. A year ago, the big four telcos said they were open to taking an equity stake in DNB but it has to be done through a mergers and acquisitions process.
Three of the four telcos (Celcom, Digi and TM) that signed up to take up an equity stake in DNB last year, have recently announced the termination of their share subscription agreement (SSA). As announced by CelcomDigi, the termination of the SSA will clear the path for the newly merged telco to participate in any new process including Equity participation, together with the industry.
With just six months remaining before Malaysia switches to a dual network model, it is time for the Communications and Digital Ministry to provide a clearer pathway to allow the transition to happen. Several questions need to be answered including which telco will participate in Entity A and Entity B? How much does DNB require to achieve its 80% 5G population coverage? How can current telcos participate in DNB to help improve cost savings and expedite the 5G rollout, especially indoor coverage?
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Related reading
- Maxis may soon offer 5G services after 5G Task Force addresses DNB access agreement issues
- Maxis CEO highlights one of the biggest issues with Malaysia’s 5G coverage
- Yoodo users will have to pay extra for 5G starting from 5 July
- Malaysia’s 5G adoption rate remains low at 3.1% despite DNB having 59.5% 5G population coverage
