With the Finance Minister, Tengku Zafrul who leads MOF Inc which directly owns Digital Nasional Berhad, making it clear that the 4 telcos who have taken part in the equity stake proposal will move ahead with the rollout of 5G in the country, will the renegade Maxis and U Mobile users be left out?
As it stands, the four telcos who have agreed to the terms laid out by the ministry are YTL (Yes), Telekom Malaysia, Celcom, and Digi, together making up two-thirds of the mobile user base in the country. With Maxis and U Mobile abstaining from the model proposed by the ministry, 16 million of the combined user base of these two telcos could possibly miss out on 5G. According to Tengku Zafrol DNB is on track to achieving 80% 5G coverage in populated areas by 2024, this would mean that regardless of who is on board the government will continue with its rollout plan.
Needless to say, 5G is an important evolutionary process in mobile telephony, the next generation of electronics will be powered by 5G- from devices to mega infrastructures like buildings, trains, and industrial equipment will all use 5G to link up to the central management systems via cloud. Could we afford to miss this out, certainly not! Malaysia is already behind many countries, according to Global Mobile Suppliers Association, 205 network operators have already launched 5G services in 80 countries, what was supposed to be a late 2021 rollout for us is already 12 months behind schedule, in technology terms that’s a decade!
Maxis and U Mobile have stated that they rejected the DNB equity stake as they found the terms against investment returns not viable at this moment. U Mobile in an official press statement said “after taking into consideration the terms of the investment as it currently stands has decided that it will not pursue the investment option” further noting that the decision not to invest does not affect its ability to provide 5G services to customers as the access to DNB’s 5G network infrastructure is governed by a separate access agreement, which is not linked to the equity investment. This means the operators do not need to take up equity to roll out 5G, Maxis, and U Mobile could subscribe to DNB’s wholesale leasing of the 5G spectrum just like an MVNO. But is this a viable option?
This could possibly lead to both telcos getting leftover bandwidth after the 4 equity shareholders get to pick their choice, after all, what’s the point of investing in DNB if there is no preferential treatment? For instance, as a government-owned entity, all public initiatives and programs that involve 5G will be managed by DNW which then will either equally distribute to the 4 telco partners or rotate the projects based on capability.
On the consumer front, Maxin and U Mobile will also be left out. DNB is tasked to lay out the infrastructure based on its evaluation taking into consideration population coverage and addressing the digital gap that led to this whole scenario. With the 4 telcos on board, DNB will have their interest as parties will share insights on coverage, weakness, and adoption. The two outsiders labeled ‘untrusted’ will unlikely be invited to the table.
Hence, 5G coverage will be first prioritised for Celcom, Digi, TM, and YES occupied areas, users will be able to ride on the bandwidth before those using the Maxis or U Mobile. The concept is similar to when TM was the appointed telecommunication entity to roll out the High-Speed Broadband (HSBB) rolling out network nationwide. Other service providers could only offer their land fibre once TM had laid the fibre cable in the area and promoted its own Unifi service.
If the situation sounds dim for Maxis and U Mobile users, there is still time for the two telcos to renogotiate with DNB, things have taken a different turn with the pullout and the deadline has now been extended for another month or two as mentioned by the Communication Minister.
