What is Malaysia’s 5G Conflict?

The introduction of 5G technology will revolutionise key industries such as healthcare, business, manufacturing and smart infrastructure, significantly boosting Malaysia’s economy. In the manufacturing sector, 5G has already enhanced production processes using autonomous robotics, augmented reality and virtual reality.

However, the government’s 5G deployment strategy has sparked a host of concerns, with critics warning that a second network risks wasting billions in taxpayers’ money due to disorganisation and redundancy. They also claim it could result in lower quality services being offered at higher prices. (FMT examined this on 27 August 2024 article).

Source: https://en.wikipedia.org

In 2021, the government awarded Swedish telecommunications giant Ericsson a contract worth RM11 billion to develop Malaysia’s 5G infrastructure under a single wholesale network (SWN) model. Digital Nasional Berhad, a government entity, was set up to build and own the 5G network and sell access to telecommunications companies (telcos) to provide 5G services to consumers. In response, the government decided to divest 70% of DNB’s shares to telcos under a shared subscription agreement. Telcos would collectively hold a 70% stake while the government retains a golden share of 30%.

In December 2022, newly sworn-in Prime Minister announced that the government would review the 5G rollout strategy. Following that review, communications and digital minister Fahmi Fadzil announced in May last year that Putrajaya had decided to transition to a dual network model and introduce a second 5G service provider – to be selected through a tender process – once DNB has achieved 80% coverage in populated areas.

The second network would improve coverage, foster competition and ensure affordable and quality 5G services for the people, as well as provide redundancy to avoid single points of failure. However, critics have questioned the methodology used to select the developer of the second network, saying it would potentially give rise to conflicts of interests, anti-competitive practices, and inefficient use of public funds.

Will RM900 million worth of equipment meant for the current network will go unused? 

And will DNB require an additional RM1.6 billion to maintain its services due to spectrum changes?

The Federation of Malaysian Consumers Associations, recently called for a 

strategic pause in the second 5G network rollout to allow for a reassessment of the financial implications and ensure cost-effective deployment.

The digital divide between rural and urban areas could widen if the second network prioritises more profitable regions.

After RM11 billion and a strategic review, can we afford another operator or a second 5G network rollout? What is going on? The rakyat needs to understand this better. Could the relevant Ministry present a White Paper in Parliament? Why is there a need for another network? Couldn’t the existing telcos buy-in into DNB? Is it about ego, money or other political agenda?

Reference:

Malaysia’s 5G conflict explained, Danish Raja Reza, FMT, 27 August 2024