The recently formed 5G Task Force, which aims to ensure a smooth transition to a Dual 5G Network model, has announced that it will be focusing on resolving issues related to DNB’s 5G access agreement and equity deals. The Task Force chairmen Datuk Johan Mahmood Merican and Datuk Mohamad Faudi Md Isa said both issues will be discussed in detail and are expected to be finalised as early as the end of this month.
According to Bernama’s report, the second task force meeting which was concluded last Thursday have agreed on the task force structure which includes five work groups from the Ministry of Finance, the Ministry of Communications and Digital, the Malaysian Communications and Multimedia Commission (MCMC), Digital Nasional Berhad (DNB) and service providers.
Interestingly, both Chairmen said that the immediate results of the 5G access agreement will enable service providers including Maxis to offer 5G services to users.
Following the government’s decision to switch from a Single Wholesale Network to a Dual Network model, both CelcomDigi and Telekom Malaysia have announced the termination of their share subscription agreements with the state-owned 5G network provider. However, DNB has been tasked to continue its rollout of 5G until it reaches 80% population coverage before a second 5G network is permitted.
With the equity deal termination, questions have been raised about DNB’s survivability and growth as the single wholesale network is running on a cost-recovery model. The current low 5G adoption rate of just 3.1% also raises concerns if DNB is financially able to expedite its 5G rollout if telcos aren’t increasing their monthly 5G wholesale capacity due to slow demand.
At the moment, only five telcos – Celcom, Digi, Telekom Malaysia, U Mobile and YTL Communications, are offering 5G services to consumers after signing their 5G access agreements with DNB back in October 2022 after months of pushback. A year ago, the big four telcos issued a joint statement raising concerns that DNB’s 5G access offer will not enable affordable and quality 5G services. As stated in DNB’s Reference Access Offer (RAO), telcos would have to pay DNB RM30,000 per Gbps for 5G wholesale access for usage of up to 1,200Gbps per month. A discounted rate of RM22,000 per Gbps will be charged for capacity above 1,200Gbps. The pricing is locked to a minimum service term of 10 years.
With the latest developments, DNB’s existing RAO needs to be relooked at if the government intends to have two competing 5G networks as early as next year. Locking all telcos to a 10-year service agreement with DNB will be counterproductive if the plan is to transition to a dual network model. If the objective is to privatise DNB and to allow telcos to have a participating stake, a proper due diligence process will need to be conducted as part of any Mergers and Acquisitions process.
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- Fahmi announces 5G Task Force to ensure smooth transition towards Dual Network model in Malaysia
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- Malaysia’s 5G adoption rate remains low at 3.1% despite DNB having 59.5% 5G population coverage
- Five reasons why Celcom, Digi, Maxis and U Mobile are reluctant to accept DNB’s 5G access offer
