MCMC Responds To 5G Spectrum Allocation Criticism

There has been a storm brewing ever since the government announced the 5G rollout scheduled for year end, this is due to the reversal on spectrum allocation process promised by the previous governments. As it stands now, the new method will be for the Ministry of Finance forming a Special Purpose Vehicle (SPV) and placing 5G under the company which will then lease the network to operators, however details of the process has yet to be unveiled. Many have voiced out their concerns including Fitch, which claimed the method to be stifling innovation for the industry, in response to this negative view, MCMC has issued a reply clarifying on the 5G initiative.

According to the statement, the Commission is looking at the private sector to focus on areas that truly needs addressing, that is to ensure the digital divide is kept to a minimum. That’s why a SPV regulated by MCMC will focus in rolling out the 5G network and leaving the existing service providers can continue to roll out fiber and improve 4G coverage. The Jendela program was devised last year after MCO 1.0 showed much disparity in network coverage, especially for the suburban and rural community. With the government taking over, the burden of 5G will not be on the service providers, keeping the digital divide risk at a minimum throughout the implementation of 5G, the operators can continue with their fiber and 4G network rollout.

On the question for the lack of private sector involvement for 5G, MCMC assures there will be however it will be explained in greater detail by the SPV in due course. It is illustrated that the spectrum is provided to SPV to build the network and offer capacity via wholesale and that the non-auction model adopted is part of the effort to not burden cost on a new network. The government also went on to add that the it will maximise the readily available network elements instead of laying new ones. But this was contested by industry players and Fitch, which argued that operators were already willing to invest with hardware vendors already agreeing to partner on cost.

MCMC also claimed that this way there will an open, fair and equal access to the new network effectively reducing infrastructure-based competition and enhancing a service based competition that can benefit end users. There is also a potential that we will reduce foreign outflow for new equipment purchase compared to if multiple players were to build out a network.

With RM15 billion allocation, Malaysia is aiming to kick-start its 5G initiative in third quarter of the year as part of the MyDigital national agenda, that will transform the nation into a progressive technologically ready powerhouse.

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