While Malaysia is currently in the process of appointing telcos to build the second 5G network, opposition MP Wan Fayhsal raised concerns about a potential conflict of interest with the new 5G rollout model. During a recent Parliament session debating about the audit, he alleged that the government’s push for a second network is a clear violation of Section 133 of the Communications and Multimedia Act (CMA) 1998.
Section 133 under CMA is about the prohibition of anticompetitive conduct. It is stated that a licensee shall not engage in any conduct which has the purpose of substantially lessening competition in a communications market.
Responding to the allegations, Communications Minister Fahmi Fadzil said the issue of conflict of interest did not arise during the Malaysian Communications and Multimedia Commission’s (MCMC) meeting on Monday with all the mobile network operators interested in participating in the tender process for the second network.
Fahmi has elaborated that the MCMC will act as a regulator to ensure no dominance by one particular entity or mobile network operator and to ensure a level playing field.
Telco for second 5G network to be appointed by end of this year
Digital Minister Gobind Singh recently said that the processing of selecting telcos for the shift from a Single Wholesale Network to a Dual Network model is expected to be completed by the end of this year. On 1st July, the MCMC issued the tender documents for interested parties to apply to be part of the development of Malaysia’s second 5G network.
The decision to have two competing networks was decided in May 2023 and the transition could only begin after Digital Nasional Berhad achieves 80% 5G population coverage and full participation of telcos by taking up equity in DNB. Originally, the shift to the Dual 5G network model was supposed to start as early as January 2024, however, the telcos only signed the Share Subscription Agreement (SSA) in December 2023 to acquire a collective 70% stake in DNB.
After over half a year, the four major telcos – CelcomDigi, Maxis, U Mobile and YTL, have finally completed their SSA, collectively acquiring 65% in the first 5G network. TM is expected to complete their SSA by August after acquiring the necessary shareholders’ approval.
It is the MCMC’s role to ensure that DNB can sustain and continue its 5G rollout despite having a second 5G network. If the intention is to encourage competition, there shouldn’t be a situation where one entity is more dominant than the other.
As we’ve seen during the CelcomDigi merger, the telco had to agree to several undertakings with the MCMC to address anti-competitive behaviour in the industry. Following the merger, the telco had to return 70MHz of spectrum to MCMC, removing exclusive rights for certain business operations and divesting Yoodo.
The three big telcos – CelcomDigi, Maxis and U Mobile have publicly expressed their eagerness to participate in building the country’s second 5G network.
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