Should MCMC Sell 5G Spectrum Directly To Mobile Operators?

Digital infrastructure will be developed for schools and remote areas in East Malaysia

By Azuan Muda

Is it possible for MCMC to relax the rules that would allow major mobile network operators (MNOs) to operate 5G independently early next year?

At present, a special purpose vehicle (SPV) created under the Ministry of Finance known as Digital Nasional Berhad (DNB) is responsible to deploy a single wholesale network (SWN) nationwide. Under the SWN model, DNB will solely own spectrum, which will offer wholesale 5G access to all MNOs. 

Given the existing regulatory framework, the Malaysian Communications and Multimedia Commission (MCMC) has acted, fostered and regulated a competitive wholesale and retail mobile market in Malaysia since 1998. As a regulator, the MCMC will need to develop a new regulatory framework to govern the DNB, as a monopoly entity. 

In fact, it is particularly important for MCMC to ensure equal access to wholesale 5G services for all MNOs as the spectrum pricing is still unclear. This would lead to potential market competition distortions among the operators.

And while the government is confident the SWN model would lower the cost of deploying 5G, the implications of DNB may disrupt the operator’s own 5G deployment and commercialisation strategies.

According to a report ‘Safeguarding the road to 5G in Malaysia, – An economic risk assessment of Malaysia’s 5G plan’, produced by DT Economics LLP, one of the key potential risks associated with the introduction of the DNB in Malaysia includes the risk of having an unclear regulatory approach to wholesale prices. 

As such, the decision to make spectrum directly available to the existing MNOs would make sense, according to the source, considering the readiness of operators like Maxis to deploy 5G after investing considerable capital expenditure over the past few years. 

Azuan Muda is co-founding and bootstrapping several media and technology startups on a local and international scale.

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